The Expansion of the 36-Month Ownership Rule to the Sector

The Expanded 36-Month Rule: Ownership Changes Now Trigger Re-Enrollment

CMS has expanded the 36-month rule, fundamentally changing how ownership transitions are handled for DMEPOS suppliers.

Under this rule:

• If more than 50% ownership changes within 36 months of:

  • Initial Medicare enrollment, or

  • A prior ownership change

Then:

• Billing privileges do not transfer to the new owner

• The new owner must complete a full initial enrollment process

• This includes:

  • New accreditation survey

  • New Medicare application (CMS-855)

  • Issuance of a new PTAN (Provider Transaction Access Number)

This creates significant implications for:

• Business sales

• Partnerships and equity restructuring

• Acquisition strategies

Transactions that were once routine now require careful timing and regulatory planning.

The Shift to Annual Accreditation: From 3 Years to 12 Months

In addition to ownership restrictions, CMS has introduced a major operational change:

The traditional 3-year accreditation cycle has been replaced by an annual (12-month) requirement.

This means:

• Providers must undergo reaccreditation every year

• Accrediting Organizations may conduct unannounced surveys

• Compliance is now evaluated continuously, not periodically

This shift requires providers to:

• Maintain constant survey readiness

• Ensure documentation is always up to date

• Keep facilities, staff, and processes aligned with accreditation standards

The previous model allowed for preparation every few years. In 2026, compliance is now a year-round operational responsibility.

Why These Two Changes Are Connected

The 36-month ownership rule and the 12-month accreditation cycle are closely linked.

Together, they create a system where:

• Ownership changes require full revalidation and accreditation

• Ongoing operations require continuous compliance verification

This eliminates gaps where providers could previously:

• Delay updates

• Operate between survey cycles with less scrutiny

Now, both ownership structure and operational compliance are under constant review.

PECOS 2.0 and Provider Data Management (PDM): The System That Controls It All

To manage these requirements, CMS relies on the PECOS 2.0 Provider Data Management (PDM) system.

This system is used to track:

• Ownership percentages

• Managing employees

• Accreditation status and expiration dates

• Enrollment records tied to billing privileges

It is important to distinguish:

• PECOS/PDM → Medicare enrollment and compliance tracking

• Credentialing systems (CAQH, payer portals) → Insurance and provider network data

For DMEPOS providers, PECOS is the source of truth for:

• Whether your business is compliant

• Whether your billing privileges remain active

If data in PECOS is:

• Outdated

• Incomplete

• Inconsistent

It can trigger:

• Administrative flags

• Delays in claims processing

• Potential enrollment actions

The New Reality: Continuous Oversight and Zero Margin for Error

The combined effect of these changes is a shift toward continuous regulatory oversight.

Providers must now operate under:

• Ongoing accreditation readiness

• Real-time enrollment data accuracy

• Strict ownership compliance rules

This means:

• There is no longer a “safe window” between surveys

• Administrative errors can have immediate consequences

• Compliance must be embedded into daily operations

For many providers, this represents a transition from:

• Periodic compliance → Continuous compliance management

What DMEPOS Providers Should Do Now

To stay compliant and protect billing privileges, providers should take a proactive approach.

Key steps include:

• Review ownership structure and plan any transitions carefully

• Track accreditation timelines and prepare for annual surveys

• Audit all data within PECOS 2.0 / PDM for accuracy

• Ensure alignment between:

  • Enrollment records

  • Accreditation status

  • Operational reality

• Implement internal processes for ongoing compliance monitoring

These actions help reduce the risk of:

• Enrollment disruptions

• Claim denials

• Revenue interruptions

A Structural Shift in the DMEPOS Industry

The 2026 updates reflect a broader CMS objective:

• Strengthen program integrity

• Reduce fraud and inconsistencies

• Improve real-time oversight of providers

For DMEPOS suppliers, this means operating in a system where:

• Compliance is continuously evaluated

• Ownership and operations are tightly controlled

• Administrative accuracy is directly tied to revenue stability

Understanding these changes is essential not just for compliance—but for long-term business continuity.

How PACCS Helps DMEPOS Providers Stay Compliant

Managing ownership rules, accreditation cycles, and enrollment data across multiple systems can be complex and time-intensive.

PACCS (Pharmacy Administrative Credentialing & Compliance Services) helps DMEPOS providers navigate these changes by offering:

• Medicare enrollment and re-enrollment support

• Ownership change strategy and compliance planning

• Accreditation coordination and annual readiness support

• PECOS 2.0 / PDM data management and audits

• Ongoing compliance monitoring and issue prevention

• Payer communication and administrative support

By ensuring your data is accurate and your processes are aligned with CMS requirements, PACCS helps protect your billing privileges, revenue continuity, and operational stability.

To learn more, visit our Services page or contact PACCS to discuss how we can support your organization.

Sources

https://www.federalregister.gov/documents/2025/12/03/2025-21877/medicare-medicaid-and-childrens-health-insurance-programs-provider-enrollment-application-fee-amount

https://achc.org/dmepos/

https://www.cms.gov/medicare/enrollment-renewal/providers-suppliers/dme-accreditation/accrediting-organizations&authuser=1

https://pecos.cms.hhs.gov/providers/index.html

https://www.abcop.org/facility-accreditation/navigating-dmepos-accreditation-changes-with-abc