---
kind: "section"
citation: "42 C.F.R. § 412.125"
title: "42"
number: "412.125"
heading: "Effect of change of ownership on payments under the prospective payment systems."
url: "https://uscodex.org/cfr/42/412.125"
---

# §412.125. Effect of change of ownership on payments under the prospective payment systems.


When a hospital's ownership changes, as described in [§ 489.18](/cfr/42/489.18.md) of this chapter, the following rules apply:

- (a) Payment for the operating and capital-related costs of inpatient hospital services for each patient, including outlier payments, as provided in [§ 412.112](/cfr/42/412.112.md), and payments for hemophilia clotting factor costs under [§ 412.115(b)](/cfr/42/412.115.md?p=b), are made to the entity that is the legal owner on the date of discharge. Payments are not prorated between the buyer and seller.
  - (1) The owner on the date of discharge is entitled to submit a bill for all inpatient hospital services furnished to a beneficiary regardless of when the beneficiary's coverage began or ended during a stay, or of how long the stay lasted.
  - (2) Each bill submitted must include all information necessary for the intermediary to compute the payment amount, whether or not some of that information is attributable to a period during which a different party legally owned the hospital.
- (b) Other payments under [§ 412.113](/cfr/42/412.113.md) and payments for bad debts as described in [§ 412.115(a)](/cfr/42/412.115.md?p=a), are made to each owner or operator of the hospital (buyer and seller) in accordance with the principles of reasonable cost reimbursement.

## Notes

### Amendments

[50 FR 12741, Mar. 29, 1985, as amended at 56 FR 43449, Aug. 30, 1991]

### Authority

Authority: 42 U.S.C. 1302 and 1395hh.

### Source

Source: 50 FR 12741, Mar. 29, 1985, unless otherwise noted.

### Amendments

[50 FR 12741, Mar. 29, 1985, as amended at 56 FR 43449, Aug. 30, 1991]