Change of Ownership Applications for Health Care Facility Licenses in Florida

Whether you are buying or selling a health care facility in Florida it’s important to understand that there’s more involved than simply signing a buy/sell agreement. The State of Florida has specific requirements for change of ownership applications for health care facilities. How you approach these requirements can have a big impact on opening your doors.

In Florida, health care providers and their investors must use caution when preparing an application for initial licensure, renewal, or change of ownership with the Agency for Health Care Administration (AHCA).  In preparing an application for submission to AHCA the focus must be on:

1. Who can be an owner or have a controlling interest in the health care entity;
2. Are there any background problems with the principal investors or participants;
3. What information must be disclosed on the application; and
4. What steps must be taken to assure that a well-prepared Proof of Financial Ability Form (with supporting documentation) is submitted that is acceptable to AHCA.

Getting Licensed as New Health Care Facility

Getting a license from Florida’s Agency for Health Care Administration (AHCA) in most cases requires detailed financial information and criminal background checks for employees, managers, officers of a corporation, and owners, including potential owners whether you reside in-state or not.

• Criminal Background Checks. If a potential owner or administrator has a criminal background they should seek counsel to help apply for and obtain an exemption from disqualification. The AHCA’s Background Screening Unit processes background screening results for health care providers in Florida currently licensed by AHCA. Processing includes making a determination of eligibility and evaluating applications for exemption. Learn more about criminal background checks and crimes that can bar you from getting a license.
• Proof of Financial Viability. For certain licensees, AHCA requires what is known as “Proof of Financial Viability” documentation, including spreadsheets and financial statements, to prove the buyer has the financial ability to operate the facility or clinic.
  • Planning to use a CPA or accountant? You should hire one familiar with the AHCA requirements.
  • Don’t rely on AHCA employees. The common problem that buyers and sellers have is relying on AHCA employees for advice on license applications. This often results in misinformation and guidance and denied applications.

Change of Ownership Licensing Experts

Our firm has extensive experience with the licensing process and AHCA. The location of our Tallahassee office (one block from AHCA headquarters) means we have daily dealings and experience with AHCA. It’s much more cost-effective to have talented and experienced professionals help you at the front end of the process.

We offer the ability to file an appeal or legal challenge to any effort by AHCA to deny a license to an applicant, something that sets us apart from health care consultants.

Dealing with AHCA takes expertise. We know the law, how to get the license, and how to appeal mistakes by AHCA – and AHCA knows that! By working with lawyers and CPAs the AHCA recognizes as experienced with the change of ownership license process for facilities in Florida to submit organized and often footnoted or annotated documentation, clients have an upper hand in providing the details AHCA demands for licensing. Our law firm helps provide the skilled personnel to put your application on the right track.

Cases That Dive Deeper

A recent case, Roberto Marrero v. AHCA is instructive on this issue.

Mr. Marrero owned 100% of the stock in Trust Care Health Services, a home health agency in which he purchased shares.  The company was required to file a CHOW (Change of Ownership Application) in order to obtain a new license.  He had previously served as Administrator of All Med Network Corp., a home health agency, which AHCA had terminated. This company was terminated from Medicare sometime around 2006.  Because AHCA determined that the CHOW application did not correctly disclose certain information concerning Mr. Marrero’s prior role in that company, AHCA denied the application.  Marrero appealed to the Third District Court of Appeal and argued that although Medicare terminated his former company, he was never personally sanctioned. The Third District Court of Appeal held in favor of AHCA and indicated that the AHCA did not abuse its discretion.

The Marrero case demonstrates the power of AHCA to deny an application based on officers and/or investors who have previously been affiliated with health care entities that were disqualified from participation in certain governmental programs, namely Medicare and Medicaid. Similarly, other background problems can also disqualify an individual from serving as an officer, investor, or in management. Discover more about AHCA Licensing Investigations.

Have Questions? Let’s Talk

Contact the law offices of Howell, Buchan & Strong, Attorneys at Law for your free consultation at any one of our locations:

Orlando (407) 717-1773 |Tallahassee (850) 877-7776 | Tampa (813) 833-6726 | Sarasota (941) 779-4348