(a) Definition. For purposes of this section only, a change in majority ownership occurs when an individual or organization acquires more than a 50 percent direct ownership interest in a DMEPOS supplier during the 36 months following the DMEPOS supplier's initial enrollment into the Medicare program or the 36 months following the DMEPOS supplier's most recent change in majority ownership (including asset sale, stock transfer, merger, and consolidation). This includes an individual or organization that acquires majority ownership in a DMEPOS supplier through the cumulative effect of asset sales, stock transfers, consolidations, or mergers during the 36-month period after Medicare billing privileges are conveyed or the 36-month period following the DMEPOS supplier's most recent change in majority ownership.

(b) General principle. Unless an exception in paragraph (c) of this section applies, if there is a change in majority ownership of a DMEPOS supplier by sale (including asset sales, stock transfers, mergers, and consolidations) within 36 months after the effective date of the DMEPOS supplier's initial enrollment in Medicare or within 36 months after the DMEPOS supplier's most recent change in majority ownership, the Medicare billing privileges do not convey to the new owner. The prospective owner of the DMEPOS supplier must instead do both of the following:

(1) Enroll in the Medicare program as a new DMEPOS supplier under the provisions of § 424.510.

(2) Undergo a survey by, and obtain a new accreditation from, a CMS-approved DMEPOS accrediting organization in accordance with §§ 424.57 and 424.58.

(c) Exceptions. The following situations are exceptions to the requirements of paragraph (b) of this section:

(1) A DMEPOS supplier's parent company is undergoing an internal corporate restructuring, such as a merger or consolidation.

(2) The owners of the existing DMEPOS supplier are changing the DMEPOS supplier's current business structure (for example, from a corporation to a partnership (general or limited); from a limited liability company (LLC) to a corporation; or from a general or limited to an LLC) and the owners remain the same.

(3) An individual owner of the DMEPOS supplier dies.