The difference is because it was a 100% stock sale instead of an asset sale. The old owner was completely removed from the NSC record through the CHOW application. With an asset sale, NSC does require a new PTAN to be applied for. The tax ID is issued to the entity, i.e. My DME Company, Inc., not to an individual, therefore the IRS does allow the TIN to transfer on a 100% stock sale. This is directly from NSC's site regarding CHOWs:
While there may be a variety of legal definitions and purchase options, most of the changes of ownership received by the NSC are completed using one of the following methods, which are defined as follows:
An asset purchase is the purchase of the assets of a business only. The buyer will be operating the business under a new tax identification number (TIN).
A stock purchase is the purchase of all assets and liabilities where the buyer will retain and operate the business under its existing TIN.
Suppliers should keep the following in mind with regards to changes in ownership:
- Supplier Standard #2 requires a supplier to report to the NSC any change in information within 30 days of the change
- Supplier numbers are associated with the TIN. If the buyer chooses to purchase the assets and liabilities, retaining the TIN, then the supplier file only needs to be updated. If there is a change in TIN, then the new owner must obtain a new supplier number.
Both parties had very good, seasoned attorneys. Part of the sales contract dictates that the previous owner is responsible to pay the new owners for any recoupments on claims with dates of service up to the sale date. He had to legally accept that responsibility or he would not have been able to sell. CMS will not go after him on any recoupments, they will go after the entity who is responsible to pay whether they get reimbursed from the previous owner or not. However, they have a bound contract that now allows them to sue the previous owner if need be. Given my knowlege of the previous owner I do not see that happening.