Over my career, I have done a fair amount of merger and acquisition (M&A) work, including:
- Continuing care retirement communities (CCRC)
- Skilled nursing facilities (SNF)
- Home health agencies (HHA)
- Physician practices
While each deal has many nuances and issues, none can be as confusing to navigate as the federal payer issues—specifically, the provider number. For SNFs, HHAs, and hospices, an acquisition that is not properly vetted and structured can have severe repercussions post-closing, if provider liabilities existed pre-close and were unknown and/or unknowable. Even the best due diligence cannot ferret out certain provider number–related liabilities.
The Medicare provider number is the unique reference number assigned to a participating provider. When initially originating as a provider, the organization must apply for provider status, await accreditation (for SNFs, this is done via a state survey; for HHAs and hospices, it is via private accreditation), and then get ultimate approval by Medicare/HHS. As long as the provider that has obtained the number remains in good standing with CMS—meaning it hasn’t had its provider status/agreement revoked—the provider may participate in, and bill, Medicare and Medicaid (as applicable).