---
kind: "section"
citation: "42 C.F.R. § 423.892"
title: "42"
number: "423.892"
heading: "Change of ownership."
url: "https://uscodex.org/cfr/42/423.892"
---

# §423.892. Change of ownership.

- (a) **Change of ownership.** Any of the following constitutes a change of ownership:
  - (1) **Partnership.** The removal, addition, or substitution of a partner, unless the partners expressly agree otherwise as permitted by applicable State law.
  - (2) **Asset sale.** Transfer of all or substantially all of the assets of the sponsor to another party.
  - (3) **Corporation.** The merger of the sponsor's corporation into another corporation or the consolidation of the sponsor's organization with one or more other corporations, resulting in a new corporate body.
- (b) **Change of ownership, exception.** Transfer of corporate stock or the merger of another corporation into the sponsor's corporation, with the sponsor surviving, does not ordinarily constitute change of ownership.
- (c) **Advance notice requirement.** A sponsor that has a sponsor agreement in effect under this part and is considering or negotiating a change in ownership must notify CMS at least 60 days before the anticipated effective date of the change.
- (d) **Assignment of agreement.** When there is a change of ownership as specified in [paragraph (a)](#a) of this section, and this results in a transfer of the liability for prescription drug costs, the existing sponsor agreement is automatically assigned to the new owner.
- (e) **Conditions that apply to assigned agreements.** The new owner to whom a sponsor agreement is assigned is subject to all applicable statutes and regulations and to the terms and conditions of the sponsor agreement.

## Notes

### Authority

Authority: 42 U.S.C. 1302, 1306, 1395w-101 through 1395w-152, and 1395hh.

### Source

Source: 70 FR 4525, Jan. 28, 2005, unless otherwise noted.