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Enrollment language to capture the people behind companies
If your state program has good enrollment language about applicant/providers disclosing who all the people are that are behind the companies, I’d love to know more about it. Consider that most states will say all 5% or greater owners must be disclosed. But if a provider is a company, and the company is owned by another company, and that other company is owned by a dozen more companies, and I own all of those dozen companies…I am really the 100% owner but not at all known to the program.
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5 Replies
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Directions: An “Owner” is a person or business entity which owns 5% or more of the assets, stock or profits of the Provider Entity. This 5% may be Direct ownership or Indirect ownership i.e, an individual might own 50% of a company that owns the actual Provider Entity meaning their indirect ownership is 50%. In addition to ownership of stock, an Owner is also a person who owns a legal obligation like a mortgage or loan that is secured by the assets of the Provider Entity.
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Dennis, the point here is that none of this gets us to the people. Company A enrolls. Company A is owned by Companies B, C, D, and E (25% each), Each of those companies has companies that own them. Behind all of it I own all of the companies. But I don’t have to be disclosed. We don’t ever get to the natural person because most laws don’t say that the disclosure has to go beyond (to a lesser %) the 5% if the owner is an entity. If I stack the companies so that eventually we get to where there is no company with 5% or more interest in Company A the enrollment complies with the federal law even though the program doesn’t know who the “real” owner is.
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Kentucky does specify direct and indirect owners, or controlling interest of 5% or more in our ownership disclosure question. They have to provide all the names, addresses, SSNs and FEINs for all individuals with that criteria. Additionally, we include the definitions of Indirect Ownership Interest, Ownership Interest, and Person with an ownership or control interest so there is no confusion about what we are asking them to provide.
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Yeah, I was thinking the indirect ownership aspect of the rule would reach the folks you were trying to include. It might be that further definition is needed to capture everyone.
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Not sure if this to what you are looking for; start at page 10.
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