Change of Ownership (CHOW)
Frier Levitt’s attorneys counsel healthcare providers, including owners and investors within the healthcare industry, to meet the regulatory and contractual requirements surrounding change of ownership (“CHOW”) transactions, corporate restructuring, and similar acquisitions. With our guidance, these stakeholders have used our streamlined process to accomplish their business goals.
Entities that Require Change of Ownership (CHOW)
Frier Levitt’s healthcare attorneys represent clients in a spectrum of CHOW-related matters while also serving as lead regulatory counsel. We oversee a range of transactions including stock and convertible debt transactions, corporate restructuring, mergers and acquisitions, and other organizational changes that require CHOW applications. Our attorneys are adept at handling, or assisting with, notifications to pertinent state and federal entities, as well as contracted third-party payors as required throughout the CHOW application process.
The providers and suppliers we represent in CHOW matters include:
- Physician Groups
- Nursing Homes
- Skilled Nursing Facilities (“SNF”)
- Assisted Living Facilities (“ALF”)
- Comprehensive Outpatient Rehabilitation Facilities (“CORF”)
- Continuing Care Retirement Communities (“CCRC”)
- Hospice Groups Participating in Medicare
- Home Health Agencies
- Behavioral Health and Developmental Disabilities Providers
- Wholesale Distributors
- Ambulatory Surgery Centers
Importance of Meeting Change of Ownership Requirements for Pharmacies & Licensed Facilities
Pharmacies that undergo a sale and/or change of ownership must adhere to specific state requirements, which vary significantly. Some State Boards of Pharmacy (“BOPs”) require simple post-closing notification, whereas others require the submission of a new pharmacy application 30 days prior to closing, and some pharmacies may even need to wait for approval prior to proceeding. In other states, no notification is required if the entity that holds the pharmacy license remains unchanged. A State BOP’s processing of an ownership change will directly impact the change notification that must be submitted to the pharmacy’s local Drug Enforcement Administration (“DEA”) office and any other required licenses (e.g., Medicare/Medicaid).
Additionally, many pharmacies must ensure they meet their contracted Pharmacy Benefit Managers’ (“PBM”) unique notification and credentialing requirements contained in their respective Provider Agreements/Manuals. Similar to the differences between various State BOPs, PBM requirements can vary greatly, with some PBMs demanding notifications of the change of ownership before closing, while others require notification within a certain period after the closing. In addition to the change of ownership notification to the PBM, some PBMs will require that the pharmacy undergo the credentialing process with the new or additional owners. Of note, such notification and credentialing requirements may also be triggered during any corporate restructuring.
It is crucial that pharmacies that undergo a change of ownership or corporate restructuring satisfy their obligations under relevant rules and regulations of their respective State BOPs, the DEA, the National Council for Prescription Drug Programs (“NCPDP”), National Provider Identifier (“NPI”), Medicare/Medicaid, and contracted third-party payors. The failure to comply with the required notifications and credentialing can result in discipline on the pharmacy’s license, loss of license or registration, and network termination by PBMs or other payors.
Contact an Experienced Attorney
If you are looking to purchase or sell a pharmacy or a healthcare practice, it is important to contact an attorney who is experienced in handling such transactions. The regulatory and contractual complexities involved demand seasoned guidance. Contact Frier Levitt to speak with one of our experienced healthcare and life sciences attorneys and let us navigate the intricacies of CHOW transactions for you. Your success is our priority.