Glossary

Change of Ownership (CHOW)

Also known as: CHOW, operator transfer, CHOW

The regulatory process, distinct from a standard real estate closing, by which a healthcare facility's operating license and Medicare/Medicaid provider agreement are transferred to a new owner or operator.

A CHOW filing must typically be submitted to state licensing agencies and CMS in advance of or concurrent with closing, and approval timelines -- which can run from weeks to many months depending on the state -- routinely become the long pole in a healthcare real estate transaction's timeline, driving deal structures such as operating leases or interim management agreements that let a buyer take economic control before licensure formally transfers. Failure to properly sequence CHOW approval can leave a facility unable to bill Medicaid or Medicare for a period post-closing, a cash-flow risk that sophisticated buyers price into escrow holdbacks or purchase price adjustments.