Definition
A Tie-in Notice is the function within a Medicare Change of Ownership (CHOW) filing that connects the seller’s existing provider transaction access number (PTAN) to the buyer’s new PTAN. Think of it like setting up mail forwarding with the post office when you move. You are formally telling Medicare to send all future payments intended for the practice to the new owner, ensuring you do not have a gap in collections after the sale closes.
This is not a specific government form but an outcome of correctly filing the required CHOW paperwork, primarily the CMS-855 series of applications, as defined under federal regulation 42 CFR § 489.18.
Why This Matters to Healthcare Providers
Your practice’s Medicare billing privileges do not automatically transfer to the new owner upon a sale. Without a properly executed Tie-in Notice as part of your CHOW filing, your practice’s Medicare payments will stop, leading to a direct and immediate interruption of your largest revenue source.
Example in Healthcare M&A
Scenario: Dr. Evans, a solo practitioner, is selling her practice to a regional medical group. The sale is structured as an Asset Purchase, meaning the medical group is a new legal owner and must obtain its own Medicare provider number for the practice location.
Application: As part of the closing process, the buyer’s advisory team submits a CHOW application to Medicare. The application clearly indicates that the buyer’s new provider number is succeeding Dr. Evans’s old provider number. This action serves as the Tie-in Notice, linking the two numbers in Medicare’s system.
Outcome: Because the notice was filed correctly, Medicare continues to process claims for the practice without interruption. The new medical group begins receiving payments for services rendered the day after the transaction closes, protecting the practice’s cash flow and financial stability during the transition.
Related Terms
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Frequently Asked Questions
What is a Tie-in Notice in the context of Medicare Change of Ownership?
A Tie-in Notice is the function within a Medicare Change of Ownership (CHOW) filing that connects the seller’s existing provider transaction access number (PTAN) to the buyer’s new PTAN. It ensures Medicare sends all future payments intended for the practice to the new owner, preventing any gap in collections after the sale closes.
Is the Tie-in Notice a specific government form?
No, the Tie-in Notice is not a specific government form. It is an outcome of correctly filing the required CHOW paperwork, mainly the CMS-855 series of applications, as defined under federal regulation 42 CFR § 489.18.
Why is a Tie-in Notice important for healthcare providers during a practice sale?
A Tie-in Notice is crucial because Medicare billing privileges do not automatically transfer to the new owner upon a sale. Without a properly executed Tie-in Notice as part of the CHOW filing, Medicare payments will stop, causing an immediate interruption of the practice’s largest revenue source.
How does a Tie-in Notice work in a real healthcare M&A scenario?
In a healthcare practice sale, such as when a solo practitioner sells to a medical group through an Asset Purchase, the buyer submits a CHOW application to Medicare indicating their new provider number is succeeding the seller’s old number. This acts as the Tie-in Notice, linking the two numbers, allowing Medicare to continue processing claims without interruption and ensuring the new owner receives payments immediately after the transaction closes.
What are some related terms to understand alongside the Tie-in Notice?
Related terms include Change of Ownership (CHOW), Provider Enrollment, and Asset Purchase. These concepts are linked to the Medicare provider number transfer process during healthcare practice sales.