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Avoid Enrollment Delays by Disclosing Accurate Principals and Managerial Employees

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Texas Medicaid providers can avoid enrollment delays by accurately disclosing principals and managerial employees in the Provider Enrollment and Management System (PEMS). Every owner, principal, creditor, and subcontractor of the provider that is applying for enrollment must complete an owner, creditor, or principal entry.

For more information, refer to the Texas Medicaid Provider Procedures Manual (TMPPM), Provider Enrollment and Responsibilities, subsection, “Owner/Creditor/Principal Entry,” and the ACA Screening Requirements.

Providers must disclose all direct and indirect owners and principals in alignment with the Medicare enrollment record, if applicable. Managerial employees or staff who exercise operational control must have a principal entry in PEMS. This means that providers must do the following in PEMS:

  • Ensure that the organizational structure chart is attached to the application.
  • Verify that all managerial employees or staff who exercise operational control are listed as principals.
  • Verify that the disclosure of owners and principals matches the Medicare enrollment record for the organization, if applicable.


The definition of a managing employee, referred to as a “principal” in the Medicaid enrollment application, as defined by Code of Federal Regulations (CFR) 455.101 and 455.104 and Texas Administrative Code (TAC) 371.1005 (a) – (d), includes the following:

  • An owner with a direct or indirect ownership or control interest of 5% or more
  • Corporate officers and directors
  • Managing employee—e.g., a general manager, business manager, administrator, director, or other individual who exercises operational or managerial control over, or who directly or indirectly conducts the day-to-day operation of, an institution, organization, or agency
  • Limited or nonlimited partners
  • Shareholders of a professional corporation, professional association, limited liability company, or other legally designated entity
  • Any employee of the provider who exercises operational or managerial control over the entity or who directly or indirectly conducts the day-to-day operations of the entity
  • All individuals, companies, firms, corporations, employees, independent contractors, entities, or associations that have been expressly granted the authority to act for or on behalf of the provider
  • All individuals who can act on behalf of the provider because their authority is apparent
  • An individual or entity with a security interest in a debt that is owed by the provider if the creditor’s security interest is protected by at least 5% of property listed in Section III(c) of the Disclosure of Ownership

The definition of a subcontractor of the provider is defined as one of the following:

  • An individual, agency, or organization to which a disclosing entity has contracted or delegated some of its management functions or responsibilities of providing medical care to its patients
  • An individual, agency, or organization with which a fiscal agent has entered into a contract, agreement, purchase order, or lease (or leases of real property) to obtain space and supplies

Note: This includes the on-site manager, supervising licensed practitioner, or medical director for each physical location of the provider in Texas.

For additional assistance, please email TMHP Provider Relations at