Whenever a change of ownership is pending, it is the responsibility of the existing owner to notify the Wisconsin Division of Quality Assurance (DQA) of the anticipated change of ownership. Failure to follow this requirement places the present operator in considerable jeopardy from the standpoint of ongoing responsibility for the care of residents until the license is officially transferred.
When a facility is transferred from the person or persons named in the license to any other person or persons, the applicant must obtain a new license. The following information explains the process for a potential change of ownership of a nursing home. The Department of Health Services (DHS) shall issue a license for a nursing home if it finds the applicant to be "fit and qualified." DHS has up to 60 days to give the approval for the transfer of license once they have received a completed application.
To assist in the completion of the Change of Ownership application, providers may use the Change of Ownership Checklist (PDF) to ensure all of the required documents are completed.
Definition of Ownership
For licensure and certification purposes, the owner is the party ultimately responsible for operating the business enterprise. The party is legally responsible for decisions and liabilities in a business management sense. The same party also bears te final responsibility for operational decisions and for the consequences of these decisions.
Under Wis. Stat. §§ 50.03(3)(b) and (13)(a), a new owner/operator must notify the DHS of the potential transfer of ownership, and file an application under sub. (3)(b) for a new license at least 30 days prior to final transfer of ownership. Please note, however, that Wis. Admin. Code § DHS 132.14(5), allows DHS 60 days after receiving a complete application for a license, to conduct its review and either issue a license or deny the application. It is essential that the licensure packet you submit to this office include all required documentation in order for the application to be considered complete. To avoid any unnecessary delays, it would be helpful to submit your application at least 60 days, and as many as 90 days prior to the anticipated license transfer date.
Upon receipt of the completed application for licensure and additional required forms, the Bureau of Nursing Home Resident Care (BNHRC) will review the information in accordance with all requirements under Wis. Admin. Code § DHS 132.14. DHS also reviews the facility's previous survey history (including outstanding violations, plans of correction and forfeitures – see Wis. Stat. §§ 50.03(13)(c) and (d).), and documentation provided to substantiate the applicant's financial stability. Inaccurate or incomplete information may result in a delay in processing the transfer.
A completed application must include all required documentation. Once this documentation is received the 60 day time period for review by the BNHRC will begin.
If DHS approves the transferee's application for license, DHS will issue the license following receipt of written confirmation from both the applicant and the current licensee that the closing has been finalized as specified in Wis. Stat. ch. 50. This document must be signed by both parties and include the actual date of transfer. The new licensee may be issued a probationary, conditional, or regular license.
Existing and/or Outstanding Forfeitures
If the facility has existing Class A or B violations or federal deficiencies which indicate that the facility is not in substantial compliance with federal requirements, DHS will not issue a new license until the violations/deficiencies are corrected. We urge you to review the last survey conducted at the facility.
If the facility has any outstanding forfeitures, these forfeitures should be paid prior to the transfer of the license. The transferor is liable for all forfeitures assessed for violations occurring prior to the transfer of ownership. Statements of Deficiencies and Plans of Correction for survey and complaint investigations are available:
- Online using DQA Provider Search.
- From the appropriate DQA regional office.
- From the DQA Records and Forms Management Specialist at PO Box 2969, Madison, WI 53701-2969, or by calling 608-266-8368.
Prepayment for search and copy fees may be required.
Effective Date of Transfer
It is preferable to make transfers effective on the first day of the month. If the facility's license is effective the first of the month, the Title XIX (Medical Assistance) provider agreement will also be effective the first of the month. For Title XIX, a monthly patient liability amount is established for each Medical Assistance patient who has excess income. If the effective date of the new provider agreement falls during the month, you will need to contact the local certifying agency which grants Medical Assistance eligibility (e.g., County Social Service Dept., or Social Security Office) in order to have the patient liability prorated for the dates of residence under the two provider numbers. However, if the provider agreement begins on the first of the month, you do not need to take this action. Contact Forward Health if you have any questions. The telephone number for Forward Health Provider Services is 1-800-947-9627 . Please be advised that once the license transfer is official and the new license has been issued, the effective date will not be changed.
Please also be reminded that if the ownership of a facility changes, the medical records and indexes shall remain with the facility.
Documents to be Submitted
- Application for Nursing Home License, F-62019 (Word).
- Resident's Rights Report, F-62151 (Word). This form is being sent to make you aware that all facilities are required to establish a system of reviewing complaints and allegation of violations of residents' rights. This form will be sent to the facility annually for completion. Please sign and return the original of form. By doing so, you will have indicated to us that you understand the requirements for establishing such a system.
- Authorization to Accept Personal Services and to Receive Registered and Certified Mail, F-62308 (Word). The person named should be someone who is located on-site, at the facility.
- Projected Cash Flow Statement and Projected Balance Sheet, F-01022a-e (Excel). Complete all five sheets in this spreadsheet. Projected Cash Flow Statement and Projected Balance Sheet. Wis. Admin. Code § DHS 132.14(3)(c) requires that a new licensee submit evidence to establish that it has sufficient resources to permit operation of the facility for a period of 6 months. DHS will make a determination of financial stability for this 6 month period based on the figures provided on the enclosed Projected Cash Flow Statement and Projected Balance Sheet. Other types of financial documentation demonstrating sufficient resources to cover operating losses will also be considered (e.g., letters of credit, personal financial statements together with a signed affidavit committing personal resources).
- Background Information Disclosure (BID) and Background Information Disclosure Appendix – Refer to the DQA Regulated Entity Caregiver Background Check Process web page for completion of these forms. These forms need to be submitted by the signatory and any of the interested parties that may come into contact with the residents at the facility.
Additional Items to be Submitted
- A cover letter should accompany the completed application forms and should include: (1) a detailed description of the proposed transfer, (2) the name, address and telephone number of a contact person, and (3) the date on which the license transfer is expected to occur.
- The fee for the processing of the change of ownership should equal the number of nursing home beds of the facility times $6.00. For example if the nursing home has 100 beds the amount of the processing fee would be 100 beds X $6.00 = $600.00. The check should be made payable to the Department of Health Services. This fee will be applied only towards the processing of the change of owner/operator and will not be used to cover any required annual fee, which is due on or before October 1. This fee is nonrefundable.
- Copy of Articles of Incorporation and bylaws or copy of Articles of Organization and the Operating Agreement (for LLCs) or partnership agreement (if applicable).
- Submit a copy of the final signed legal document (e.g. closing statement, purchase agreement, lease agreement, etc.) at the time of the actual transfer. A copy of the draft should be submitted prior to the actual transfer.
- Written notification of transfer from the transferor pursuant to Wis. Stat. § 50.03(13)(b), of the anticipated change of ownership. This notification must be received at least 30 days prior to the final transfer.
- If the applicant is a foreign corporation this office will require a copy of a Certificate of Authority for the corporation to transact business in the State of Wisconsin. (Foreign non-profit corporations must only provide a copy of their Articles of Incorporation and bylaws). General partnerships are not required to file Certificates of Authority. If the applicant is a domestic corporation or a foreign or domestic limited liability company, this office will require a copy of a Certificate of Status. These certificates must be obtained through the Department of Financial Institutions, Division of Corporations, 201 West Washington Ave., Suite 500, Madison 53703, 608-261-9555.
- A copy of the current organizational chart identifying the parent company and its subsidiaries (if applicable). If not applicable, please so indicate in your cover letter.
- Provide a copy of the management agreement/contract if the applicant will be contracting services with a management company after the change of ownership occurs. Also indicate what other facilities the management company has owned, operated or managed within the previous 5-year period. Please note: Regardless of what a management contract may say, the licensed entity will continue to be held responsible for regulatory concerns.
If the facility is currently Medicare certified, the existing provider agreement will remain in effect. A new provider number will not be issued for changes of owner/operator. The following forms must be submitted to DHS BNHRC before the change of ownership application can be sent to CMS. CMS will review and notify the fiscal intermediary with a “tie-in” notice that will change the ownership information to the new owners.
- Skilled Nursing Facility and Intermediate Care Facility Application Form, CMS-671 (PDF)
- Resident Census and Conditions of Residents, CMS-672 (PDF)
- Health Insurance Benefit Agreement, CMS-1561 (PDF)
- A copy of the Transfer Agreement between Hospital and Nursing Home. The new owner will have to negotiate and submit a hospital transfer agreement relating to the new owning entity.
- Office for Civil Rights – Online Submission
In addition the following form must be submitted directly to the fiscal intermediary for their review:
- The Medicare Health Care Provider Enrollment Application, CMS-855A (PDF). This is the document used to collect information and documentation that must be verified to assure that the applicant is qualified and eligible to participate in the Medicare program. The applicant should complete the form and return it directly to the fiscal intermediary. Please note: it is not necessary to provide DHS BNHRC with a copy of the completed form. When the fiscal intermediary has completed their review they will send DHS a copy of the approved form.
The new owner also may refuse to accept assignment of the previous owner's provider agreement. If this is the case, then the provider agreement will be terminated effective with the change of ownership date. The refusal to accept assignment should be put in writing by the new owner and forwarded to the Centers for Medicare and Medicaid Services (CMS), 233 N. Michigan Ave., Suite 600, Chicago, Illinois 60601-5519. This request must be made 45 days prior to the change of ownership date to allow for the orderly transfer of any beneficiaries that may be patients of the provider. If the new owner would then wish to participate in the Medicare program, the new owner would need to re-apply for certification and this request would be treated as any initial applicant to the Medicare program including the completion of an initial survey for Medicare certification.
If the facility is a skilled care facility currently participating in the Medicare program, but the applicant wishes to voluntarily terminate participation in the Medicare program, written notice must be provided to the DQA.
According to 42 CFR 489.52:
(2) The notice may state the intended date of termination, which must be the first day of a month.
(b) Termination date. (1) If the notice does not specify a date, or the date is not acceptable to CMS, CMS may set a date that will not be more than 6 months from the date on the provider's notice of intent.
(2) CMS may accept a termination date that is less than 6 months after the date on the provider's notice if it determines that to do so would not unduly disrupt services to the community or otherwise interfere with the effective and efficient administration of the Medicare program.
(3) A cessation of business is deemed to be a termination by the provider, effective with the date of which it stopped providing services to the community.
(c) Public notice. (1) The provider must give notice to the public at least 15 days before the effective date of termination.
(2) The notice must be published in one or more local newspapers and must- (i) Specify the termination date; and (ii) Explain to what extent services may continue after that date, in accordance with the exceptions set forth in s489.55.
If the facility is a skilled care facility and is not currently certified in the Title XVIII (Medicare) program but wishes to participate, please send a written request for Medicare certification to:
Department of Health Services
Attn: Elizabeth Laubenstein
1 W. Wilson, P.O. Box 2969
Madison, WI 53701-2969
The Bureau of Financial Management, Division of Long Term Care, certifies facilities for participation in the Title XIX program. New Medical Assistance provider agreements and an application will be sent to the new licensee for completion and signature before a new Medical Assistance provider number can be assigned. The Bureau of Financial Management reserves the right to make a final interpretation as to whether a change of ownership has actually occurred for the purpose of calculating Title XIX daily accommodation rates. Once the transfer of ownership has been finalized and a new license issued by the Bureau of Nursing Home Resident Care, the new licensee will not be allowed to bill the Wisconsin Medical Assistance Program for reimbursement using the previous operator's provider number.
If the facility has T19 Medicaid certification, go to the following website to the ForwardHealth portal to obtain the Medicaid application. If you need assistance with the Medicaid application, contact Forward Health Provider Services at 800-947-9627.
If the facility is Medicaid certified only the following form will also need to be completed and submitted to the Division of Quality Assurance, Bureau of Nursing Home Resident Care:
Wisconsin Medical Assistance Program (WMAP) certified providers who sell or otherwise transfer their business or business assets are liable for repayment to Department of Health Services (DHS) of any erroneous payments or overpayments made to them by the WMAP. Pursuant to Wis. Stat. §. 49.45(21), the person or persons to whom a "transfer of ownership" is made shall also be held liable by the DHS for repayment. Therefore, prior to final transfer of ownership, transferees are responsible for contacting the DHS to ascertain if the owner is liable under this provision. Inquiries regarding the determination of any pending liability on the part of the owner should be in writing and made at least twenty days prior to the transfer. Written notices should include the following information:
- Name and address of: Transferee and Transferor
- Facility name and provider number
Inquiries should be made by calling 608-266-9746 or writing:
Division of Long Term Care
Bureau of Financial Management
P. O. Box 309
Madison, WI 53701
The WMAP has the authority to enforce these provisions within four years following transfer of a business or business assets.
Please return all completed forms to:
Department of Health Services
Attn: Elizabeth Laubenstein
1 W. Wilson, P.O. Box 2969
Madison, WI 53701-2969
Questions can be directed to Elizabeth Laubenstein, 608-266-2966.