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ASK THE EXPERT: If there is an ownership change do I need to report it to AAAHC?

AAAHC Connection, March 21, 2007

AAAHC's "Maintaining Accreditation" policy on page 10 of the AAAHC Handbook and, Chapter 2.I, standard C.3 says: "Accredited organizations must notify AAAHC within 30 days of any significant organizational, operational, or financial changes including but not limited to mergers, change in majority interest, consolidation, name change, additional services or locations, death or incapacitation of physician or dentist in solo physician or dental organizations, changes in state license or federal certification or qualifying status, significant change in managed care enrollment, significant changes in a managed care delivery system or staff membership, bankruptcy, or other significant changes in the financial viability of the organization, or any government investigation, criminal indictment, guilty plea or verdict in a criminal proceeding (other than a traffic violation) involving directly or indirectly the organization or any of its officers, administrators, physicians/practitioners or staff. An organization's duty to provide this information continues during the entire accreditation process."

The policy contains a multitude of situations that require notification to AAAHC, including change of ownership. Although many of these changes appear to be routine business transactions, AAAHC wants to ensure that they don't impact the organization's accreditation status.

Most organizations know that the AAAHC needs to closely examine criminal activities, financial non-viability, death of principal practitioners, and changes in licensure. But some may wonder why they need to notify AAAHC of ownership changes.

New ownership often means new administration, changes in financial situations, and other operational changes that may have significant impact, making it a different organization than the one that was surveyed, even though the name stays the same. To determine if these changes will have an impact on the organization's accreditation status, AAAHC requires notification within 30 days of the change.

The notification should explain the purpose of the change and how it may affect operations. This information will then be sent on to the Accreditation Committee for review to see if the current accreditation should remain in place. If the Accreditation Committee needs additional details, the action on the request for continued accreditation will be delayed until this information is received. Therefore, include all the information that you think may be pertinent. The Accreditation Committee could determine one of the following: 1. The current accreditation will be transferred to the new ownership; 2. A survey is required in order to transfer accreditation to the new ownership; or 3. The new entity must apply for its own accreditation survey.

If a survey is required, the AAAHC scheduling office will contact the organization to schedule one. A survey fee will be assessed at the prevailing rate. This may be a complete survey or a limited survey based on the information received.

As a reminder, in addition to AAAHC, Medicare and state licensing bodies require notification of change in ownership in a timely fashion.

Answered by: Jack Egnatinsky, MD AAAHC surveyor