[Code of Federal Regulations]
[Title 42, Volume 2]
[Revised as of October 1, 2002]
From the U.S. Government Printing Office via GPO Access
[CITE: 42CFR420.202]

[Page 806-807]
 
                         TITLE 42--PUBLIC HEALTH
 
                             HUMAN SERVICES
 
PART 420--PROGRAM INTEGRITY: MEDICARE--Table of Contents
 
       Subpart C--Disclosure of Ownership and Control Information
 
Sec. 420.202  Determination of ownership or control percentages.

    (a) Indirect ownership interest. The amount of indirect ownership 
interest is determined by multiplying the percentages of ownership in 
each entity. For example, if A owns 10 percent of the stock in a 
corporation that owns 80 percent of the disclosing entity, A's interest 
equates to an 8 percent indirect ownership interest in the disclosing 
entity and must be reported. Conversely, if B owns 80 percent of the 
stock of a corporation that owns 5 percent of the stock of the 
disclosing entity, B's interest equates to a 4 percent indirect 
ownership interest in the disclosing entity and need not be reported.
    (b) Person with an ownership or control interest. In order to 
determine the percentage of ownership interest in any mortgage, deed of 
trust, note, or other obligation, the percentage of interest owned in 
obligation is multiplied by the percentage of the disclosing entity's 
assets used to secure the obligation. For example, if A owns 10 percent 
of a note secured by 60 percent of the provider's assets, A's interest 
in the

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provider's assets equates to 6 percent and must be reported. Conversely, 
if B owns 40 percent of a note secured by 10 percent of the provider's 
assets, B's interest in the provider's assets equates to 4 percent and 
need not be reported.