(a) Definition. An ownership change is defined in §19.210(c) of this title (relating to Temporary Change of Ownership). For purposes of this section, prior owner is defined as the legal entity with a Medicaid contract for the facility before the change of ownership. The new owner is the legal entity to which DADS has assigned the contract (in accordance with 42 CFR §442.14 and subsection (d) of this section). The effective date of the ownership change is the effective date of the new owner's license for the facility.
(b) Notice of ownership change. The prior owner must give DADS written notice of a change of ownership at least 30 days before the effective date of the change. If written notice of the change is not received 30 days before the agreed change date, DADS is not responsible for payments made to the prior owner or new owner that do not reflect the established change date. DADS will not make a duplicate payment. It is the responsibility of the prior and new owner to make arrangements between themselves for such contingencies.
(c) Vendor holds based on a change of ownership.
(1) Holds on payments due to a prior owner.
(2) Waiving holds on payments due to a prior owner.
(3) Holds on payment due to the new owner.
(d) Contract assignment. When a change in ownership occurs, DADS automatically assigns the agreement to the new owner by issuing a new contract. By signing the contract, the new owner is representing to DADS that the new owner meets the requirements of the contract and the requirements for participation in the Medicaid program. The new owner's contract is subject to the prior owner's contract terms and conditions that were in effect at the time of transfer of ownership, including the following:
(1) any plan of correction;
(2) compliance with health and safety standards;
(3) compliance with the ownership and financial interest disclosure requirements of 42 CFR §§455.104, 455.105, and 1002.3;
(4) compliance with civil rights requirements in 45 CFR Parts 80, 84, and 90;
(5) compliance with additional requirements imposed by DADS; and
(6) any sanctions as specified in this chapter relating to remedies for violations of Title XIX nursing facility provider agreements, including deficiencies, vendor holds, compliance periods, accountability periods, monetary penalties, notification for correction of contract violations, probationary contracts, and history of deficiencies.
(e) Medical assistance payments nontransferable. Neither medical assistance nor amounts payable to vendors out of public assistance funds are transferable or assignable at law or in equity. DADS will not allow non-split agreements in the case of ownership changes. Non-split agreements are arrangements where DADS does not interrupt payments to prior and new owners but continues reimbursements as though no ownership change has occurred. A split in pay agreement ensures that payments to the prior owner stop on a certain date and payments for services thereafter go to the new owner.
(f) Owner agreements. The new owner and the prior owner of a nursing facility may reach any agreement they wish, but DADS will not participate in a non-split procedure which would allow the new owner to receive the prior owner's accrued vendor payments.
(g) Financial records. The prior owner of the facility may remove the financial records pertaining to his period of ownership from the facility, but must maintain them for the time period prescribed by law or until such time as all audit exceptions are reconciled, whichever period is the longer. The original copies of the trust fund records, including ledger cards, may be removed by the prior owner if an exact duplicate of the trust fund records, including ledger cards, remains with the new owner.
Source Note: The provisions of this §554.2308 adopted to be effective May 1, 1995, 20 TexReg 2393; amended to be effective April 1, 1996, 21 TexReg 1432; amended to be effective March 1, 1998, 23 TexReg 1314; amended to be effective April 1, 2002, 27 TexReg 2060; amended to be effective February 1, 2003, 27 TexReg 12009; amended to be effective April 2, 2007, 32 TexReg 1916; transferred effective January 15, 2021, as published in the Texas Register December 11, 2020, 45 TexReg 8871