The September 2022 Terms and Conditions for Phase 4 and ARP Rural payments requires recipients to notify HHS of a merger with, or acquisition of, any other healthcare provider during the Payment Received Period within the Reporting Time Period. HRSA considers all of the ownership changes described below to be reportable events.
Providers may, but are not required to, apply the definitions found in this guidance for reporting on PRF distributions in any reporting period. Only providers required to report on Phase 4 and ARP Rural payments will be required to apply this requirement and associated guidance when reporting on funds.
Ownership Changes Reporting Guidance
For purposes of PRF and ARP Rural Payments, a Change of Ownership (CHOW) typically occurs when a selling provider has been purchased (or leased) by another organization. The CHOW results in the transfer of the seller’s Tax Identification Number (TIN) to the purchaser or lessee.
- Reporting Entities that received General Distribution payment(s) in Phases 1, 2, or 3 and/or a Targeted Distribution payment who acquired or divested of related subsidiaries (CHOW) must indicate the change in ownership that occurred during the period of availability.
- Reporting Entities that received an ARP Rural payment and/or Phase 4 General Distribution payment must indicate a change in ownership that occurred during the Payment Received Period.
- If the Reporting Entity itself was acquired or divested, it should self-report the CHOW to HRSA by contacting the Provider Support Line (866) 569-3522; for TTY, dial 711. Hours of operation 7 a.m. to 10 p.m. Central Time, Monday through Friday. Hours are subject to change.
If the purchaser (or lessee) elects not to accept a transfer of the TIN, then its use of any of the seller’s unused PRF funds is not permitted, and the purchaser or lessee must apply as a new applicant for future PRF funds.
An acquisition/merger occurs when a provider is purchasing or has been purchased by another provider, and only the purchaser’s TIN remains.
- Acquisitions/mergers are distinct from CHOWs. In the case of an acquisition/merger, two entities combine and the seller’s TIN dissolves. The TIN of the purchasing entity remains intact. (In the case of a CHOW, the seller/former owner’s TIN typically remains intact and is transferred to the new owner.)
A consolidation occurs when two or more providers consolidate to form a new business entity.
- Consolidations are distinct from acquisitions/mergers. During a consolidation, the TINs of the consolidating entities dissolve and a new TINs is assigned to the new, consolidated entity.
In the case of any of the above transactions, responsibility for PRF reporting lies with the filing TIN that received the funds.
Ownership Change Scenarios
|When Did the Seller Receive a PRF Payment?||Scenario||Can the Seller/Acquired Entity Use the Funds?||Can the Purchaser/Acquiring Entity Use the Funds?|
|PRF Payment Received After Transaction||Seller received a payment based on its previously owned TIN, which is now closed||No, the Seller must return the funds||No, the Purchaser may not use the funds|
|PRF Payment Received After Transaction||Seller received a payment based on its previously owned TIN that transferred to the Purchaser||Yes, the Seller may use the funds||Yes, the Purchaser may use the funds|
|PRF Payment Received After Transaction||Purchaser, of which Seller is now a subsidiary, received a payment under a new TIN||Yes, the Seller may use the funds||Yes, the Purchaser may use the funds|
|PRF Payment Received Before Transaction||Seller received a PRF payment; a transaction then occurred and the Seller’s TIN is closed||Seller may use the funds until the date of the sale. If the Seller still has other eligible entities, they may continue to use funds; otherwise, the Seller must return the unused funds||No, the Purchaser may not use the seller’s PRF funds|
|PRF Payment Received Before Transaction||Seller received a PRF payment; a CHOW occurred and the Seller’s TIN was transferred to the Purchaser||Yes, the Seller may use the funds||Yes, the Purchaser may use the funds|