​​​​​Purchase or Sale of a Medi-Cal Enrolled Business FAQs

1. What is the process for ​​buying a Medi-Cal enrolled business? If you purchase a Medi-Cal enrolled business and you have entered into and submitted to PED (within 5 days of the purchase transaction completion) a valid Successor Liability with Joint and Several Liability Agreement , you are considered to be a transferee applicant. "Transferee Applicant" means an individual or entity that joins a provider transferor’s Medi-Cal provider agreement including the use of the provider number issued for that location when any of the following occur:

(1) A sale or transfer of 50 percent or more of the assets owned by the corporation at the location for which a provider number was issued;

(2) A cumulative change in the person(s) with an ownership or control interest of 50 percent or more that has occurred since the information provided in the last complete application package approved for enrollment;

(3) When a new Taxpayer Identification Number is issued by the IRS;

(4) When the Board of Pharmacy requires a new site permit, pursuant to chapter 9 (commencing with Section 4000) Division 2 of the Business and Professions Code;

(5) A change of ownership as defined in California Code of Regulations (CCR), Title 22, Section 51000.6.

If you have any of the above circumstances and the transferor (seller) elects to complete a Successor Liability with Joint and Several Liability Agreement , you, the transferee (buyer), must also submit to DHCS, within 35 days of the occurrence of any event listed above, a complete application package pursuant to CCR, Title 22, Section 51000.30.

N.B. A provider number is not transferable pursuant to CCR, Title 22, Section 51000.52(b), except when a transferee applicant meets the successor liability with joint and several liability requirements set forth in CCR, Title 22, Section 51000.32. Therefore, without completion of the agreement, the transferor (seller) remains solely liable after the close of the sale, until such time that the transferee (buyer) becomes an enrolled provider. Should the buyer subsequently fail to become enrolled as a Medi-Cal provider, the seller continues solely to carry all liability to DHCS for all amounts paid for services, goods, supplies, or merchandise, provided directly or indirectly, to Medi-Cal beneficiaries.

2. What is the process for ​selling a Medi-Cal enrolled business? If you sell a Medi-Cal enrolled business and you have entered into and submitted to PED (within 5 days of sales transaction completion) a valid Successor Liability with Joint and Several Liability Agreement you would be considered to be a transferor. As the transferor, upon the sale of the business, you may elect successor liability with joint and several liability by meeting both of the following conditions:

(1) By letter postmarked no later than five days after the occurrence of any event listed in CCR, Title 22 Section 51000.30(b), the provider transferor and the transferee applicant shall submit to DHCS the Successor Liability with Joint and Several Liability Agreement (DHCS 6217), signed and dated by both, which includes the following information:

• The legal name of the provider transferor which shall be the name currently on file with the IRS;

• Current provider number for the location affected;

• Fictitious business name of the provider transferor, if applicable;

• The legal name of transferee applicant, which shall be the name currently on file with the IRS;

• Current provider number(s) of transferee applicant, if applicable;

• Fictitious business name of the transferee applicant, if applicable;

A statement signed and dated by both the provider transferor and the transferee applicant wherein they accept joint and several liability for all debt arising from the Medi-Cal provider agreement applicable to the location for which a provider number was issued by DHCS.

(2) The transferee applicant (buyer) shall submit to DHCS within 35 days of the occurrence of any event listed in CCR, Title 22, Section 51000.30(b), a complete application package pursuant to CCR, Title 22, Section 51000.30.

N.B. A provider number is not transferable pursuant to CCR, Title 22, Section 51000.52(b), except when a transferee applicant meets the successor liability with joint and several liability requirements set forth in CCR, Title 22, Section 51000.32. Therefore, without completion of the agreement, the transferor (seller) remains solely liable after the close of the sale, until such time that the transferee (buyer) becomes an enrolled provider. Should the buyer subsequently fail to become enrolled as a Medi-Cal provider, the seller continues to solely carry all liability to DHCS for all amounts paid for services, goods, supplies, or merchandise, provided directly or indirectly, to Medi-Cal beneficiaries.

​3. Why should providers consider completing a Successor Liability with Joint and Several Liability Agreement (DHCS 6217)? A provider number is not transferable (Title 22, Section 51000.52(b)), except when a transferee applicant meets the successor liability with joint and several liability requirements set forth in CCR, Title 22, Section 51000.32. Therefore, without completion of the agreement, the transferor (seller) remains solely liable after the close of the sale, until such time that the transferee (buyer) becomes an enrolled provider. Should the buyer subsequently fail to become enrolled as a Medi-Cal provider, the seller continues to solely carry all liability to DHCS for all amounts paid for services, goods, supplies, or merchandise, provided directly or indirectly, to Medi-Cal beneficiaries.

"Successor Liability with Joint and Several Liability" means a provider transferor (seller) joins a transferee applicant (buyer) to its Medi-Cal agreement, including its rights to use the provider number issued for that location. Through this process, the transferor (seller) and the transferee (buyer) become jointly liable for all debts that are incurred for the period of time that it takes to determine if the transferee (buyer) will be enrolled with his/her own new provider number and/or until the new number is active. Completion of the form is elective on the part of the provider. However, if he/she elects to utilize this provision, he/she must strictly comply with its provisions.