Home and Community Based Service Provider (HCBS)
Change of Ownership Procedure
The Louisiana licensing regulations for Home and Community Based Service Providers (HCBS) found at Section 5013 (D), states that a change of ownership (CHOW) of an HCBS provider shall be reported in writing to the department within five days of the change. The license of an HCBS provider is not transferable or assignable and cannot be sold. If the CHOW is accepted and processed by the LDH Health Standards Section, the new owner will be issued a new license. The new owner is not eligible to bill Medicaid for services until their license is issued and they have submitted the necessary provider enrollment forms to the Molina provider enrollment section.
It is important to note that if a Home and Community Based Service Provider (HCBS) is providing PCA, SIL or Respite services and wishes to undergo a change of ownership (CHOW), the prospective NEW owner shall be required to do the following two procedures simultaneously (at the same time):
1. The prospective NEW owner of an HCBS agency shall submit a new Facility Need Review (FNR) application to the department’s FNR program manager. The FNR application shall be accompanied by a letter of intent to purchase an HCBS agency. The specific HCBS agency shall be identified on both the FNR application and in the letter of intent and the required FNR application fee of $150. FNR approval for the new owner shall be granted upon submission of the new application and proof of the change of ownership, which must show the seller’s or transferor’s intent to relinquish the FNR approval the current owner possesses.
A copy of the FNR application, instructions and a copy of the FNR rule can be found at http://new.dhh.louisiana.gov/index.cfm/newsroom/detail/1687
2. Additionally, the prospective NEW owner shall submit to Health Standards the following documents:
· A letter of intent to purchase the agency;
· The legal transaction between the buyer and seller;
· All documents required for a new license to include:
§ HCBS license application and non-refundable fee;
§ Proof of financial viability to include:
Workman’s compensation insurance
$50,000 line of credit issued from a federally insured, licensed lending institution
General and professional liability insurance of at least $300,000
· If center based services such as Adult Day Care or Center Based Respite are also being acquired in the change of ownership then the perspective NEW owner will be required to submit approval from the Office of Public Health and the Office of the State Fire Marshall approvals for occupancy. Such approvals from these agencies shall contain the new name of the center based services.
· Floor plans if center based services are to be provided
Once all application requirements are completed and approved by the department, a new license shall be issued to the new owner.
An HCBS provider that is under license revocation may not undergo a CHOW.
If the CHOW results in a change of geographic address, an on-site survey may be required prior to issuance of the new license.
An agency that has ceased to operate and does not meet operational requirements to hold a license as defined by Section 5031, Business Location, of HCBS licensing standards may not be sold or purchased.
Due diligence on the part of all prospective buyers is expected prior to signing an act of sale. Failure to do so may result in the department’s denial of the CHOW. Buyers must assure that the current owner is:
· Not under license revocation;
· Not under investigation by the State Attorney General’s office;
· Not excluded from participation in the Medicaid program or under vendor hold and
· Not under penalties imposed by the IRS or other federal or state agency.