When a Florida health care business changes hands, the focus usually lands on negotiations, financing, and transition plans. Yet for providers licensed by the Agency for Health Care Administration (AHCA), the legal turning point is not the purchase agreement. It is the change of ownership (CHOW) application and the date AHCA approves the new license.
If that step is rushed, misunderstood, or simply pushed to the end of the deal checklist, the consequences can be serious: exposure to unlicensed activity, delays in billing, and avoidable regulatory scrutiny. On the other hand, when buyers and sellers plan for AHCA’s requirements early, the licensing transition can be orderly and predictable.
This article walks through the core elements of Florida’s AHCA change of ownership process, with a focus on practical timing, documentation, and financial requirements. The goal is to help owners, buyers, and advisors integrate licensure strategy into the transaction plan rather than treating it as an afterthought. Leveraging professional expertise is essential to avoid common mistakes and ensure a smooth, compliant AHCA change of ownership application process.
Introduction to Health Care Administration in Florida
Health care administration in Florida is governed by the Agency for Health Care Administration (AHCA), the state agency responsible for licensing, regulating, and overseeing a wide range of healthcare businesses. Whether you are launching a new home health agency, acquiring an existing facility, or restructuring your healthcare business, understanding the AHCA licensing process is essential for legal operation and long-term success.
The AHCA’s application process is designed to ensure that every healthcare provider meets specific requirements before being granted the authority to operate. One of the most critical components of both the initial application and the change of ownership (CHOW) process is demonstrating proof of financial ability to operate. This requirement is not just a formality—it is a safeguard that helps the Florida agency confirm that new and existing owners have the financial resources necessary to maintain quality care and comply with regulatory obligations.
Proof of financial ability typically involves submitting detailed financial statements, projections, and supporting documentation that show the business can meet its ongoing obligations. The agency for health care uses this information to assess whether the applicant is prepared to operate responsibly and sustainably. Failing to provide adequate proof can delay or even derail the licensing process, making it crucial for applicants to understand and prepare for these specific requirements from the outset.
By approaching the AHCA licensing process with a clear understanding of what is required—including the need for robust financial documentation—healthcare businesses can position themselves for a smoother application experience, whether they are seeking an initial license or navigating a change of ownership.
What AHCA Considers a Change of Ownership
The starting point is understanding when Florida law considers a transaction to be a change of ownership. Under section 408.803, Florida Statutes, a change of ownership generally occurs when the licensee sells or otherwise transfers its ownership to a different individual or entity, as evidenced by a change in federal employer identification number or taxpayer identification number, or when 51 percent or more of the ownership, shares, membership, or controlling interest of a licensee is transferred or assigned. An acquisition, whether through a stock or asset purchase, is a common event that triggers a change of ownership and requires careful attention to legal and financial documentation. Publicly traded entities are treated differently, and a change solely in the management company or board of directors is not a change of ownership.
This same framework appears in multiple AHCA FAQs and licensure pages, which consistently tie the definition to changes in tax identification or majority control rather than day‑to‑day management roles. In practice, that means a sale of membership interests or stock in which control passes to a new group will usually trigger CHOW requirements even if the entity name and operations look unchanged the next day. It is also essential to document the consideration (the purchase price or value exchanged) in the transaction, as this is a key element in the CHOW process and is required for regulatory compliance and accurate financial records.
Providers should not rely on informal assumptions about when a transaction is “just an internal restructuring.” It is important to map the proposed ownership structure against the statutory definition before documents are signed. If the deal results in a new FEIN or a transfer of 51 percent or more of the ownership or controlling interest, AHCA will treat it as a change of ownership and expect a new license application.
Why the CHOW Application Matters So Much
In Florida, licenses do not automatically follow the sale of a health care business. For many provider types, AHCA makes clear that the license does not transfer to the new owner; the transferee must apply for its own license associated with the new ownership, even when services and staff remain the same.
That approach reflects the broader purpose of Florida’s health care licensing framework under Chapter 408, Florida Statutes. Licensure is tied to who owns and controls the provider, not just to the building, equipment, or trade name. When ownership changes, AHCA effectively re‑underwrites the operation by confirming that the new owner meets all current requirements, including background screening, financial stability, and any program‑specific criteria.
For buyers, this has two immediate consequences. First, there is no guarantee that AHCA will issue a license on the schedule assumed in a purchase agreement if the application is incomplete or submitted late. AHCA may deny the Change of Ownership application if proper procedures are not followed, and if your application is rejected, you will receive a Notice of Intent to Deny the License. Second, operating or billing for services under the wrong license or without a valid license can be treated as unlicensed activity, with associated sanctions and financial risk.
For sellers, the implications are just as significant. Until AHCA issues a new license to the buyer, the transferor remains responsible for lawful operation and the welfare of clients served, and remains liable for penalties tied to pre‑closing violations. Florida’s change of ownership statute, section 408.807, codifies that responsibility and underscores that restrictions on a license, including a conditional license, do not disappear simply because ownership is changing.
Core Statutory Requirements and Timelines
Florida law sets out specific duties for both the transferor and the transferee when a change of ownership occurs. Section 408.807 requires the transferor to notify AHCA in writing at least 60 days before the anticipated date of the change of ownership, and the transferee to apply for a license within the time frames in section 408.806. AHCA’s rules on change of ownership, found in Rule 59A‑35.070, add important detail on how effective dates are handled.
Under those rules, the change of ownership application must include the effective date of the change, and that effective date cannot be earlier than the date AHCA receives the application. Failure to file before closing is treated as unlicensed activity. The rule also limits how far a change can be pushed out: the effective date cannot be extended more than 60 days from the date reported on the application, and if the change does not occur within that window, AHCA may deem the application withdrawn.
On various licensure pages, AHCA echoes this framework by instructing providers that change of ownership applications, fees, and all required forms must be received at least 60 days prior to the proposed effective date to avoid late fines or unlicensed activity concerns. Health care clinics, hospitals, home medical equipment providers, and other licensed entities see this same 60‑day expectation repeated across AHCA guidance.
For transaction planning, these timelines mean that the licensing work must start well before the anticipated closing date. Buyers and sellers should coordinate on a realistic effective date, then work backward at least two to three months to allow for gathering financial statements, proof of financial ability to operate, corporate documents, and any additional attachments the specific provider type requires.
Proof of Financial Ability to Operate in a CHOW
The financial component of a change of ownership application is often one of the most time‑consuming pieces because it requires prospective, not just historical, information. Florida law authorizes AHCA to require proof of financial ability to operate for initial licensure and change of ownership applications for several provider types, including home health agencies, nursing homes, hospices, assisted living facilities, adult day care centers, prescribed pediatric extended care centers, and home medical equipment providers.
Rule 59A‑35.062, Florida Administrative Code, implements this requirement by directing applicants to complete AHCA Form 3100‑0009, Proof of Financial Ability to Operate. The proof is a two-year financial projection that must be compiled and signed by a certified public accountant. The financial information should include the most recently available financial statements. The Proof of Financial Ability to Operate must follow a templated format and be accompanied by an accountant’s summary of assumptions and accounting policies. If the purchase has not occurred, documentation indicating the availability of funds to complete the purchase must be provided. An opening balance sheet of the acquired entity is also required for the Proof of Financial Ability to Operate. The form asks for projected income and expense statements, balance sheets, and cash flow projections that demonstrate the applicant has sufficient assets, credit, and projected revenues to cover liabilities and expenses. Each line item on the balance sheet or cash flow statement is important for demonstrating financial stability and completeness of the transaction documents. The rule also recognizes that some long‑standing providers can meet this requirement with a more limited set of projections under specific conditions.
There are narrow statutory exemptions. Section 408.810 allows certain change of ownership applicants to avoid submitting proof of financial ability to operate if the provider has been licensed at least five years and the ownership change fits within specified scenarios such as corporate reorganizations where controlling interest does not change or changes triggered solely by the death of a controlling owner with surviving interests maintaining at least 51 percent control. Even then, AHCA retains authority to require proof of financial ability later if there is evidence of financial instability.
From an accounting and advisory perspective, this proof of financial ability requirement functions as a forward‑looking stress test. Projected revenues need to be consistent with realistic payer mixes and reimbursement rates, and projected expenses must reflect actual staffing, occupancy, regulatory, and compliance costs. Our experience with Florida’s AHCA financial forms, including work on Proof of Financial Ability to Operate requirements for nurse registries and other providers, shows that rushed or optimistic projections can raise as many questions as they answer.
Integrating AHCA Licensing Into the Deal Timeline
Because AHCA does not accept change of ownership applications through its online licensing portal at this time, buyers and sellers must plan for a more traditional filing process. AHCA’s online system supports a wide range of application types, including initial and renewal submissions for home health agencies, hospices, nurse registries, and many other providers, but specifically excludes change of ownership and change of controlling interest from electronic submission.
That exclusion matters when you are building a transaction calendar. Unlike a renewal, which might be completed and paid online, a CHOW application will require careful assembly of paper or uploaded documents according to AHCA’s current instructions, including any required addenda, ownership charts, background screening attestations, and financial forms.
In practice, integrating AHCA licensing into a deal involves several parallel tracks. Corporate counsel and transaction advisors work on the purchase agreement, representations, and closing conditions. At the same time, the buyer and seller identify the responsible party for preparing the CHOW application, gathering the required signatures, and coordinating with AHCA on any follow‑up questions. Lenders often have their own requirements for seeing a clear licensure path before funding, so the quality and timing of the CHOW submission can affect financing as well.
For providers that rely heavily on Medicare or Medicaid, continuity of licensure is also a key piece of preserving billing privileges. While the Centers for Medicare & Medicaid Services and its contractors have their own enrollment and change of ownership rules, AHCA licensure forms part of the foundation; a lapse in state licensure can disrupt federal program participation or invite additional scrutiny.
Common Pitfalls We See in CHOW Applications
Common mistakes and mistakes frequently occur during AHCA change of ownership (CHOW) applications, often leading to delays, denials, or penalties. Although each provider type and transaction has its own nuances, certain themes arise again and again when AHCA reviews change of ownership applications. The first is timing risk. Applications that arrive too close to the target closing date leave little room to correct deficiencies or respond to follow‑up requests. When a deal schedule slips but the application is not updated, the 60‑day effective date window in Rule 59A‑35.070 can create additional complications.
A second recurring issue is misalignment between corporate records and application details. AHCA cross‑checks ownership information, controlling interest disclosures, and addresses against filings with the Division of Corporations. If corporate records have not been updated, or if the application uses names or structures that do not match those records, review may slow down while AHCA seeks clarification. Managing paperwork accurately is essential to avoid mistakes and costly delays during the application process.
The financial section can also create friction. AHCA’s Proof of Financial Ability to Operate form is not simply a restatement of tax returns or historical financials. It requires forward‑looking projections that reconcile with deal terms, planned staffing, and expected reimbursement. Providers that underestimate ramp‑up costs after a transaction or that do not account for realistic cash‑flow timing may have difficulty demonstrating that projected assets, credit, and revenues will cover projected liabilities and expenses.
Finally, buyers sometimes underestimate the operational impact of inheriting existing compliance issues. Section 408.807 makes clear that any restriction on licensure, including a conditional license, continues in effect after a change of ownership until AHCA determines that the grounds for the restriction have been corrected. A CHOW does not wipe the slate clean. Due diligence should include a careful review of existing survey findings, enforcement actions, fines, and repayment plans so that the new owner can plan for post‑closing remediation.
Practical Steps to Prepare a Strong CHOW Submission
While every situation is different, there are practical measures that tend to support a smoother AHCA review. The first is early communication between the buyer and seller about the intended transaction structure and effective date. Because both parties have statutory roles—the transferor in providing notice and maintaining lawful operation until the new license is issued, and the transferee in applying for the new license—coordinated planning reduces surprises.
It is also helpful to assign clear internal responsibility for licensure. In smaller organizations, this may fall to an administrator or executive with many competing duties. In those cases, building a simple internal checklist and timeline for assembling corporate records, financial projections, and required signatures can keep the process moving. In larger organizations, dedicated compliance or licensing staff may coordinate across departments to ensure the application reflects accurate ownership, addresses, insurance coverage, and service descriptions.
On the financial side, drawing from existing budget processes can simplify the preparation of Proof of Financial Ability to Operate forms. Many providers already prepare annual budgets and cash‑flow projections for lenders or boards. Aligning AHCA projections with those internal documents, while adjusting for any changes the new owner plans to implement, supports a more consistent financial story.
If the provider type is one that relies heavily on state financial standards, such as home health agencies, hospices, or facilities with significant Medicaid reimbursement, it may also be worth revisiting existing cost reporting and reimbursement analyses. Understanding the true cost structure and revenue profile of the operation can inform realistic projections, which in turn helps AHCA assess financial stability.
To further strengthen your AHCA change of ownership application, consider working with an experienced healthcare consulting firm. Their expertise can help you avoid costly delays and ensure that all Agency for Health Care Administration requirements are met accurately and efficiently.
Role of the Florida Agency in the CHOW Process
The Florida Agency for Health Care Administration (AHCA) plays a central role in the change of ownership (CHOW) process for healthcare businesses. When a CHOW application is submitted, AHCA acts as both a regulator and a gatekeeper, ensuring that the transition of ownership does not compromise the quality or continuity of care provided to patients.
Upon receiving a CHOW application, the agency initiates a thorough review to verify that all statutory and regulatory requirements are met. This includes confirming the accuracy of ownership disclosures, reviewing the asset purchase agreement or other transaction documents, and ensuring that the new owner meets all background screening and financial ability standards. The agency for health care also checks that the application aligns with corporate records and that the effective date of the ownership transfer is clearly documented.
Throughout the application process, AHCA may request additional information or clarification to resolve discrepancies or address concerns about the applicant’s financial ability to operate. The agency’s oversight extends to evaluating whether the new ownership structure maintains compliance with state laws, including those related to controlling interest and ongoing operational responsibilities.
By maintaining rigorous standards and a structured application process, AHCA helps protect patients, uphold public trust, and ensure that only qualified and financially stable entities are permitted to operate healthcare facilities in Florida. For applicants, understanding the agency’s role and being proactive in meeting its specific requirements can significantly improve the chances of a timely and successful change of ownership approval.
How CHOW Interacts With Broader Compliance and Operations
Change of ownership is not just a licensing exercise. It touches every part of the provider’s compliance framework. For example, records retention obligations do not disappear at closing. The transferee must maintain the transferor’s records as required by statute and rule, including client records, inspection reports, and, where applicable, Medicaid documentation required under section 409.913.
From a patient and family perspective, continuity of services and clear communication are critical. While AHCA’s focus is on licensure and regulatory compliance, providers must also consider how ownership changes intersect with Medicare Conditions of Participation, accreditation standards, and patient rights requirements. If the provider also participates in Medicare or Medicaid, patients must continue to receive required notices of rights, confidentiality protections, and complaint processes during and after the transition.
Data security is part of that continuum. Ownership changes can trigger shifts in information systems, data hosting, and access privileges. Providers should ensure that any transfer of control over clinical and financial systems maintains compliance with HIPAA and state privacy laws, and that staff understand revised access protocols. Treating CHOW as an opportunity to review and strengthen data governance can help limit the risk of unauthorized access during a time of organizational change.
Finally, the transaction may alter internal control structures. Changes in ownership often come with new leadership, new accounting practices, or new outsourced arrangements. Drawing on broader guidance about outsourced accounting and internal controls can be useful here. Whether accounting functions remain in‑house or move to an external firm, the new owner should confirm that financial reporting, billing, and compliance processes are clearly documented and aligned with both AHCA’s expectations and the organization’s strategic goals.
Connecting CHOW With Related AHCA and Financial Topics
For many Florida providers, a change of ownership application will not be the first or only interaction with AHCA’s financial standards. Proof of Financial Ability to Operate requirements, for example, apply not only at ownership change but also at initial licensure for several provider types. Understanding how cash‑flow projections, balance sheets, and income statements are evaluated can pay dividends across multiple regulatory settings.
If your organization operates a nurse registry, home health agency, or similar service, you may already have engaged with AHCA’s financial ability forms and the broader concept of demonstrating stability before licensure is granted. Those same principles apply when ownership changes. Reviewing prior filings, and any feedback AHCA provided on them, can offer insight into how to approach a new CHOW application.
Beyond licensing, change of ownership often intersects with reimbursement and cost reporting. While the mechanics differ from federal cost reports such as the Home Health Agency Cost Report, the underlying theme is similar: regulators rely heavily on accurate financial and operational data to set rates, oversee program integrity, and assess provider stability. In CHOW transactions, it is important to understand the difference between the sale price and the fair market value of acquired assets, as this difference can impact goodwill calculations and the overall valuation process. Approaching CHOW financial submissions with the same level of rigor and documentation you would apply to a cost report or audited financial statement tends to support a more predictable outcome.
If you are exploring whether to shift internal accounting functions to an outsourced model as part of a transaction, it is also worth considering how that change will affect the quality and timeliness of data AHCA and other regulators rely on. Clear service levels, defined responsibilities for maintaining licensure records, and an understanding of health care‑specific accounting needs can help avoid gaps during and after ownership transitions.
Finalizing the Application: What Happens After Submission
Once a change of ownership application is submitted to the Agency for Health Care Administration (AHCA), the process enters a critical review phase. During this period, AHCA carefully examines all submitted documentation, including financial statements, proof of financial ability to operate, and supporting materials related to the transaction and new ownership structure.
Applicants should be prepared for AHCA to request additional information or clarification if any part of the application is incomplete, inconsistent, or raises questions about the business’s ability to operate. Timely and thorough responses to these requests are essential to avoid delays in the licensing process. The agency may also conduct background checks and cross-reference information with other state records to ensure compliance with all regulatory requirements.
The review process typically culminates in one of several outcomes: approval of the change of ownership and issuance of a new license, a request for further documentation, or, in some cases, denial if the application does not meet statutory standards. It is important for applicants to monitor communications from AHCA closely and to be proactive in addressing any issues that arise.
After approval, the new owner must ensure that all operational, billing, and compliance systems are updated to reflect the change in licensure. This includes notifying payers, updating Medicare and Medicaid enrollment as needed, and ensuring that all staff and stakeholders are aware of the new ownership status. By staying engaged throughout the post-submission process and responding promptly to agency feedback, healthcare businesses can help ensure a smooth transition and maintain uninterrupted operations.
Conclusion
Change of ownership in a Florida health care business is more than a corporate milestone. It is a licensing event with its own timelines, documentation standards, and financial expectations. When AHCA’s requirements are understood early and integrated into the transaction plan, providers can navigate this transition with a clearer view of the regulatory landscape.
By aligning deal structure with statutory definitions, starting the CHOW application process well before closing, preparing realistic and well‑supported financial projections, and keeping compliance and patient obligations in view throughout, buyers and sellers can reduce risk and support continuity of care.
If you are planning or considering a change of ownership and want to discuss how AHCA’s licensing and financial requirements may apply to your situation, click the button below to schedule a time to chat. For legal or professional assistance with the AHCA change of ownership application process, contact our team today.
Appendix: Sources
Florida Statutes, Chapter 408.803 – Definitions (including change of ownership)
Florida Statutes, Chapter 408.807 – Change of ownership
Florida Administrative Code, Rule 59A‑35.070 – Change of Ownership
Florida Administrative Code, Rule 59A‑35.062 – Proof of Financial Ability to Operate
AHCA Online Licensing System – General Information and Application Types
