- Who handles it
- The Texas Health and Human Services Commission, which licenses home and community support services agencies
- What gets filed
- An initial license application from the buyer for the change of ownership, plus branch and delivery site applications if the agency has them
- Timing
- File well before closing, because the seller must keep an active license until the state issues the buyer's license
Watch for: Assuming the license moves with the sale. In Texas the buyer applies for its own license, and the seller keeps the current one active until it is issued.
This guide is general information and is not tax or legal advice. Rules change, so confirm every step with your attorney, your CPA and the state before you act.
A change of ownership is a new license
Texas licenses home and community support services agencies through the Health and Human Services Commission. When ownership changes, the incoming owner generally applies for an initial license.
The effective date of the new license marks the change of ownership. The state has also proposed rule changes, so check the current rule text.
No gap in service
The current license holder must keep an active, valid license until the state issues the buyer's license. Letting it lapse before then can create a gap in the ability to serve clients.
Tell your clients and staff on a schedule that protects confidentiality until the deal is firm.
Branches and delivery sites
An agency with branches or alternate delivery sites generally needs applications for each of them, submitted at the same time as the parent agency. Count the locations early so no filing is missed.
After the new license
The agency should notify the state regional office within a set period after the new license takes effect. Confirm the period that applies with the state.
Medicare and Medicaid
If the agency bills Medicare or Medicaid, a change of ownership also involves federal and state enrollment steps and decisions about whether the buyer assumes the old provider agreement and its liabilities. Your attorney should advise on this part.
Questions to bring to your attorney
- Does the buyer assume past billing liabilities?
- How are client charts and employee files transferred?
- What happens to referral agreements and physician relationships?
Ask the agency how long its review takes, because that timeline shapes your closing date.
Staff, charts and referral sources
Clinical staff and nurses hold the relationships with clients and referral sources, so buyers ask who stays and whether the agency can keep its census. Keep personnel files and client charts complete and organized.
Referral sources such as hospitals and physician offices can drift if they hear too early, so plan how and when they are told.
Practical steps for sellers
- Ask your attorney to review the license, branch and billing questions.
- Build a timeline that starts the application before signing.
- Keep records, staff files and client charts organized for the buyer.
- Plan how employees and referral sources will hear the news.
See keeping the sale quiet and broker fees, then request a price range.