Under the terms of a Durable Medical Equipment, Prosthetics, Orthotics, and Supplies (DMEPOS) Competitive Bidding Program (CBP) Contract, an entity that is awarded a DMEPOS CBP Contract (contract supplier) may not transfer any portion of a DMEPOS CBP Contract, unless the Centers for Medicare & Medicaid Services (CMS) approves the transfer through the process described in this fact sheet. Consistent with 42 CFR § 414.422(d) and Section 1847(b)(6) of the Social Security Act, CMS may permit the transfer of an entire contract or a portion of a contract if, among other requirements, the successor entity assumes all rights, obligations, and liabilities of the DMEPOS CBP Contract.
The following are examples of circumstances that may trigger the need for CMS approval:
- Contract supplier merges with or is acquired by another entity
- Sole proprietorship or partnership incorporates
- Contract supplier sells all or substantially all of the assets involved in contract performance
- The contract supplier sells a distinct company (e.g., a subsidiary) that furnishes a specific product category or that provides services to a specific area within a competitive bidding area (CBA) (i.e., state, territory, or the District of Columbia), including any locations and assets associated with that product category or area
The following are examples of circumstances that may not require CMS’s prior approval:
- Entity converts from an S corporation to a C corporation
- Stock purchases that do not result in a change in majority ownership or otherwise affect the contract supplier’s ability to perform its DMEPOS CBP Contract1
Contract suppliers who seek to have their entire contract transferred or a portion of their contract transferred to a successor entity should refer to the applicable fact sheet:
- Transfer of Entire Contract fact sheet
- Transfer a Portion of a Contract fact sheet
Notwithstanding the above, a contract supplier may subcontract for services in accordance with 42 CFR §§ 424.57 and 414.422(f). Mandatory disclosure of subcontracting arrangements must be completed in Connexion, the DMEPOS CBP's secure portal.
1To ensure proper claim payments and to maintain accurate records, contract suppliers shall comply with all CMS enrollment requirements, and also notify the Competitive Bidding Implementation Contractor (CBIC) when any CHOW or stock transfer occurs. If a stock purchase results in an ownership interest totaling at least five percent of the contract supplier, the contract supplier must notify the respective Medicare Enrollment Contractor as specified in 42 CFR § 420.206, with a courtesy copy of the documentation to the CBIC.