Rule: Medicare: Physician Fee Schedule (CY 2007) Payment Policies and Relative Value Units Programs of All-Inclusive Care For Elderly Program Revisions

Friday,
December 8, 2006
Part II
Department of
Health and Human
Services
Centers for Medicare & Medicaid Services
42 CFR Parts 460, 462, 466, 473, and 476

Medicare and Medicaid Programs;
Programs of All-Inclusive Care for the
Elderly (PACE); Program Revisions; Final
Rule
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71244 Federal Register / Vol. 71, No. 236 / Friday, December 8, 2006 / Rules and Regulations
DEPARTMENT OF HEALTH AND d. Oversight of Direct Patient Care Services SFH State Fair Hearing
HUMAN SERVICES e. Waiver Process SPA State Plan Amendment
4. Medicare Prescription Drug SSA Social Security Administration
Centers for Medicare & Medicaid Improvement and Modernization Act of
2003, (MMA) Requirements for Issuance of
Services
II. Analysis of Public Comments Regulations
A. Summary of Comments on the 1999 Section 902 of the Medicare
42 CFR Parts 460, 462, 466, 473, and Interim Final Rule
476 B. Summary of Comments on the 2002
Prescription Drug, Improvement, and
Interim Final Rule Modernization Act of 2003 (MMA) (Pub.
[CMS–1201–F] L. 108–173 enacted on December 8,
III. Provisions of the 1999 Interim Final Rule
RIN 0938–AN83 With Comment and the 2002 Interim 2003, amended section 1871(a) of the
Final Rule With Comment, Analysis of Social Security Act (the Act)) requires
Medicare and Medicaid Programs; and Response to Public Comments and the Secretary, in consultation with the
Programs of All-Inclusive Care for the Final Rule Actions Director of the Office of Management
Elderly (PACE); Program Revisions IV. Provisions of the Final Rule and Budget, to establish and publish
V. Collection of Information Requirements timelines for the publication of
AGENCY: Centers for Medicare & VI. Regulatory Impact Statement
Medicaid Services (CMS), HHS. Regulation Text
Medicare final regulations based on the
ACTION: Final rule. Addendum—PACE Protocol (1999) previous publication of a Medicare
proposed or interim final regulation.
SUMMARY: This rule finalizes the interim ACRONYMS for the PACE Final Rule Section 902 of the MMA states that the
final rule with comment period ADLs Activities of Daily Living timelines for these regulations may vary
published in the Federal Register BBA Balanced Budget Act of 1997 among different regulations but shall
November 24, 1999 (64 FR 66234) and BIPA Medicare, Medicaid and SCHIP not exceed 3 years after publication of
the interim final rule with comment Benefits Improvement and Protection the preceding proposed or interim final
period published in the Federal Act of 2000 regulation except under exceptional
Register on October 1, 2002 (67 FR CAP Corrective Action Plan circumstances. Section 902 also directs
61496). The November 1999 interim CBRR Consumer Bill of Rights and the Secretary to establish an appropriate
final rule implemented sections 4801 Responsibilities period for finalizing those interim final
through 4803 of the Balanced Budget CMS Centers for Medicare & Medicaid regulations that were published before
Act of 1997 (Pub. L. 105–33) and Services the enactment of MMA on December 8,
established requirements for Programs COBRA Consolidated Omnibus Budget 2003. Pursuant to this requirement, we
of All-inclusive Care for the Elderly Reconciliation Act of 1985 published a notice in the Federal
(PACE) under the Medicare and COP Condition of Participation Register (69 FR 78442) establishing a
Medicaid programs. The interim final CHSPR Center for Health Services and publication deadline of 3 years from
rule with comment period published on Policy Research MMA enactment, that is December 8,
October 1, 2002 (67 FR 61496) CMS–HCC CMS Hierarchical 2006, for finalizing interim final rules
implemented section 903 of the Conditions Category published prior to MMA enactment.
Medicare, Medicaid, and SCHIP ESRD End-Stage Renal Disease This final rule finalizes provisions set
Benefits Improvement and Protection FFP Federal Financial Participation forth in the November 24, 1999 and
Act of 2000 (BIPA) (Pub. L. 106–554). HOS Health Outcomes Survey October 1, 2002 interim final rules with
DATES: Effective Date: These regulations HPMS Health Plan Management comment. These interim final
are effective on January 8, 2007. System regulations will be finalized within the
FOR FURTHER INFORMATION CONTACT: Jana IDT Interdisciplinary Team 3-year period after MMA enactment that
Petze, (410) 786–4533, or Carrie Smith, IRE Independent Review Entity was established under section of the
for State technical assistance, (410) 786– LCS Life Safety Code MMA 902. Therefore, we believe that
4485. MA Medicare Advantage (formerly this final rule is in accordance with the
SUPPLEMENTARY INFORMATION:
Medicare + Choice(M + C)) Congress’ intent to ensure timely
MA–PDP Medicare Advantage— publication of final regulations.
Table of Contents Prescription Drug Plan
M + C Medicare + Choice (now I. Background
I. Background
A. Program Description Medicare Advantage (MA)) A. Program Description
B. Legislative History MMA Medicare Prescription Drug
The Program of All-inclusive Care for
1. Demonstration Project Improvement andModernization Act
2. Balanced Budget Act (BBA) of 1997 the Elderly (PACE) program is a unique
of 2003
(Pub. L. 105–33) model of managed care service delivery
NF Nursing Facility
a. Use of the PACE Protocol for the frail community-dwelling
NPA National PACE Association
b. Consultation With States elderly, most of whom are dually
c. Consultation With State Agency on OBCQI Outcome-Based Continuous
eligible for Medicare and Medicaid
Aging Quality Improvement
benefits, and all of whom are assessed
d. State Medicaid Plan Requirement PACE Programs of All-inclusive Care
as being eligible for nursing home
e. Interaction with Medicare + Choice for the Elderly
(Now Medicare Advantage) PCA Personal Care Attendant placement according to the standards
f. Flexibility Under the BBA PCP Primary Care Physician established by their respective States.
3. The Medicare, Medicaid, and SCHIP PHS PACE Health Survey B. Legislative History
Benefits Improvement and Protection PO PACE Organization
Act of 2000 (BIPA) 1. Demonstration Project

a. Background
QAPI Quality Assessment and
b. Contracting for IDT Members and Performance Improvement Section 603(c) of the Social Security
Administrative Staff RAI Request for Additional Amendments of 1983 (Pub. L. 98–21), as
c. Contracting With Another Entity to Information extended by section 9220 of the
Furnish PACE Center Services SAA State Administering Agency Consolidated Omnibus Budget
Federal Register / Vol. 71, No. 236 / Friday, December 8, 2006 / Rules and Regulations 71245
Reconciliation Act of 1985 (COBRA) processing applications, and transition State representatives. The feedback
(Pub. L. 99–272) authorized the original from PACE demonstration program obtained during these meetings was an
demonstration PACE program for On status. invaluable source of information in
Lok Senior Health Services (On Lok) in As directed by section 4803 of BBA, understanding State operational
San Francisco. Section 9412(b) of Pub. we published an interim final rule on concerns and in constructing the
L. 99–509, the Omnibus Budget November 24, 1999, permitting entities regulation. We believed that this
Reconciliation Act of 1986 (OBRA, to establish and operate PACE programs approach would minimize operational
1986), authorized us to conduct a PACE under section 1894 and 1934 of the Act barriers that are frequently inherent
demonstration program to determine (64 FR 66234). when new programs are initiated. For
whether the model of care developed by The 1999 interim final rule was a this reason, CMS continues to regularly
On Lok could be replicated across the comprehensive rule that addressed consult and receive feedback from
country. The number of sites was eligibility, administrative requirements, States regarding PACE policy by means
originally limited to 10, but the application procedures, services, of teleconferences and forums.
Omnibus Budget Reconciliation Act of payment, participant rights, and quality
assurance. c. Consultation With State Agency on
l990 (Pub. L. 101–508) authorized an
Aging
increase to 15 PACE demonstration a. Use of the PACE Protocol
programs. Under the Older Americans Act, State
The PACE model of care includes as Throughout the 1999 interim final Agencies on Aging were charged with
core services the provision of adult day rule, when we referred to ‘‘the Protocol’’ the responsibility of promoting
health care and interdisciplinary team we meant the PACE Protocol, as comprehensive and coordinated service
(IDT) care management, through which published by On Lok, Inc., the parent systems for older persons in their States.
access to and allocation of all health company of On Lok Senior Health Consistent with this responsibility, State
services is managed. Physician, Services. A copy of the Protocol was Agencies on Aging oversee important
therapeutic, ancillary, and social included as an attachment to the 1999 programs for home and community-
support services are furnished in the interim final rule with comment period. based services which are funded
participant’s residence or on-site at a We were directed by sections through title III of the Older Americans
PACE center. Hospital, nursing home, 1894(f)(2) and 1934(f)(2) of the Act to Act, State revenues, and the Medicaid
home health, and other specialized incorporate into regulation the home and community-based waiver
services are generally furnished under requirements applied to PACE program.
contract. Financing of the PACE demonstration programs under the The State agencies also implement
demonstration model was accomplished Protocol, to the extent consistent with and oversee important planning,
through prospective capitation of both the provisions of sections 1894 and referral, case management, and quality
Medicare and Medicaid. PACE 1934 of the Act. We also were assurance functions. In addition, State
demonstration programs had been authorized to modify or waive certain agencies are responsible for
permitted by section 4118(g) of Pub. L. provisions of the Protocol in the administering the State Long Term Care
100–203 (OBRA 1987) to assume full development of the regulation, if the Ombudsman Program through which
financial risk progressively over the modification or waiver were not service quality in nursing homes and
initial three years. As such authority inconsistent with and would not impair board and care homes are monitored in
was removed by section 4803(b)(1)(B) of the essential elements, objectives, and every State.
the Balanced Budget Act of 1997 (BBA) requirements of sections 1894 and 1934 Each State agency that administers the
(Pub. L. 105–33), PACE demonstration of the Act. PACE program should regularly consult
programs approved after August 5, 1997 with their respective State Agency on
b. Consultation With States Aging in order to avoid service
had to assume full financial risk at start-
up. Sections 4801 and 4802 of Pub. L. duplication in the PACE service areas
The PACE demonstration program 105–33 clearly dictate a cooperative and to assure the delivery and quality of
was operated under a Protocol relationship between the Secretary and services to PACE participants. In our
established and published by On Lok, the States in the development, 1999 interim final rule, we indicated we
Inc. on April 4, 1995. implementation and administration of were considering the extent to which
the PACE program. In order to fulfill the State Long Term Care Ombudsman
2. Balanced Budget Act of 1997 (BBA) these requirements, we utilized the Program would be useful in promoting
(Pub. L. 105–33) American Public Human Services the rights of PACE participants and in
The BBA built on the success of the (formerly, the American Public Welfare monitoring the quality of care provided
PACE demonstration program. Section Association) as the conduit to solicit by PACE organizations (POs). We
4801 of the BBA, authorized coverage of States for volunteers to consult with received a number of comments on this
PACE under the Medicare program. It CMS staff. The participating State staff issue that we discuss in Subpart G
amended title XVIII of the Act by adding members represented States with a ‘‘Participant Rights’’ of this final rule.
section 1894, which addresses Medicare range of PACE experience. Each State
payments and coverage of benefits staff volunteer selected a specific target d. State Medicaid Plan Requirement
under PACE. Section 4802 of the BBA area to provide information. The State Medicaid plan is a
authorized the establishment of PACE as In order to efficiently and effectively comprehensive written statement
a State option under Medicaid. It obtain a large amount of feedback in a submitted by the State and approved by
amended title XIX of the Act by adding short period of time, CMS staff arranged CMS describing the nature and scope of
section 1934, which directly parallels a series of conference calls to discuss a the Medicaid program and giving
the provisions of section 1894. Section wide range of issues pertaining to PACE assurance that the Medicaid program
4803 of the BBA addresses including requirements on the will be administered according to
implementation of PACE under both application process, enrollment, and Federal law and policy. The State plan
Medicare and Medicaid, the effective payment and related financial data preprint sets forth the scope of the
date, timely issuance of regulations, collection. Each subject area discussion Medicaid program, including groups
priority and special consideration in included CMS staff and two to three covered, services furnished, and
payment policy. When a State Advantage (MA) program which Flexibility was limited to the
completes a new State plan preprint replaced the M+C program. requirements in the section on service
page because of changes in its Medicaid In this final rule, we are finalizing our coverage and arrangement. That section
program (called a ‘‘State plan regulations that implement the PACE includes the following requirements:
amendment (SPA)’’), the preprint page provisions of the BBA and BIPA • POs must provide all Medicare and
must be approved by CMS in order for statutes. We are limiting our discussion Medicaid services and provide care 7
the State to receive Federal matching of the effects of MMA provisions to days per week, 365 days per year;
funds. those issues that have been addressed in • A listing of required and excluded
Section 1905(a)(26) of the Act, as other MMA rulemaking. We think our services and minimum services;
added by section 4802(a)(1) of the BBA, regulations on Part D and MA provide • Each participant be assigned to an
provided authority for States to elect sufficient and appropriate guidance to IDT;
PACE as an optional Medicaid benefit. all affected entities, including POs. • The composition and duties of the
The State plan electing the optional However, we believe it is essential to IDT;
PACE program must be approved before highlight the impact of MMA,
• The assessment and reassessment
CMS and the State enter into a program particularly with respect to how
requirements.
agreement with a PO. To aid States in Medicare Part D relates to a PO.
modifying their State plans, the CMS Specifically, the MMA provides that Flexibility was not authorized for
Center for Medicaid and State POs electing to provide Part D coverage other sections of the Protocol, such as
Operations developed an interim State to their enrollees shall be treated in a participant rights, enrollment and
plan preprint for PACE. A State manner similar to Medicare Advantage disenrollment, and administration.
Medicaid letter dated March 23, 1998, Prescription Drug Plans (MA–PDPs). A Sections 1894(f)(2)(B) and
provided information and guidance to more detailed discussion of the relevant 1934(f)(2)(B) of the Act give the
State Medicaid agencies on how to MMA provisions is provided later in Secretary the authority to waive
satisfy the State plan amendment this section. regulatory provisions as follows:
requirement. Additional directions for Although the PACE program has In order to provide for reasonable
completing the State plan amendment certain fundamental similarities to M+C flexibility in adapting the PACE service
were provided in a State Medicaid (now MA), PACE is not a M+C plan. The delivery model to the needs of particular
Director letter that was issued BBA established separate and distinct organizations (such as those in rural areas or
November 9, 2000. The most current requirements for the PACE program. those that may determine it appropriate to
PACE is similar to some M+C options in use non-staff physicians according to State
version of the State Plan preprint is
licensing law requirements) * * * the
available on the CMS PACE homepage, these ways: it is capitated; it is risk- Secretary (in close consultation with State
http://www.cms.hhs.gov/PACE/ based; it provides managed care; and it administering agencies) may modify or waive
04_InformationforStateAgencies.asp. is an elective option. However, PACE provisions of the PACE protocol as long as
differs significantly from M+C plans in the modification or waiver is consistent with
e. Interaction With Medicare+Choice other ways such as: it is not available and would not impair the essential elements,
(Now Medicare Advantage) nationwide (only in a limited number of objectives, and requirements of this section
The BBA also established the sites); statutory waivers expand the * * *.
Medicare+Choice (M+C) program, scope of Medicare covered services; it is The statute also specifies the
which expanded the health care options not available to all beneficiaries (only to following essential elements that may
available to Medicare beneficiaries. a defined subset of frail elderly); and it not be waived:
Under the M+C program, beneficiaries is a joint Medicare/Medicaid program. • The focus on frail elderly qualifying
could elect to receive Medicare benefits However, the BBA directed us to
individuals who require the level of care
through enrollment in one of several consider some of the requirements
provided in a nursing facility.
private health plan choices beyond the established for the M+C program as we
original (fee-for-service) Medicare • The delivery of comprehensive,
developed regulations for POs in certain
program or choose a plan previously integrated acute and long-term care
areas common to both programs, for
available through managed care services.
example, beneficiary protections,
organizations under section 1876 of the payment rates, and sanctions. • The multidisciplinary team
Act. approach to care management and
The BBA set forth the requirements f. Flexibility Under the BBA service delivery.
for M+C organizations in a new Part C As noted above, the PACE • Capitated, integrated financing that
of title XVIII of the Act. The interim demonstration program was operated allows the provider to pool payments
final rule that implemented the M+C pursuant to a Protocol developed by On received from public and private
program was published June 26, 1998 Lok, Inc. The Protocol provided programs and individuals.
(63 FR 34968). The final regulation authority for CMS and the State • The assumption by the provider of
addressing comments was published on Administering Agency (SAA) (that is, full financial risk.
February 17, 1999 (64 FR 7968). the State Agency designated to To implement sections 1894(f)(2)(B)
Significant changes were made to the administer the PACE program) to waive and 1934(f)(2)(B) of the Act, in the 1999
M+C program by the Medicare specific requirements of the Protocol, if, interim final rule, we identified specific
Prescription Drug, Improvement, and in their judgment, the following criteria waivers that were intended to encourage
Modernization Act of 2003 (MMA) (Pub. were met: the development of PACE programs in
L. 108–173, enacted on December 8, • The intent of the requirements was rural and Tribal areas. The waivers
2003). The two final regulations that met by the proposed alternative and included the following three
implemented the MMA were published • Safe and quality care would be requirements:
January 28, 2005 (70 FR 4194 and 4588). provided. • A prohibition on members of the
The first regulation established the In addition, written requests for waivers governing body and their family
Medicare Prescription Drug Benefit or were required to be approved by CMS members from having a direct or
Medicare Part D and the second and the SAA before implementation of indirect interest in contracts with the
regulation established the Medicare the proposed alternative. organization (see § 460.68(c));
• A requirement that members of the 3. The Medicare, Medicaid, and SCHIP § 460.70 that must be met when the PO
IDT primarily serve PACE participants Benefits Improvement and Protection is contracting for services.
(see § 460.102(g)); and Act of 2000 (BIPA) A more detailed discussion of
• A requirement that the primary care a. Background § 460.60 and § 460.70 is located in
physician (PCP) must be employed by section III, subpart E of this final rule.
BIPA modified the PACE program in
the PO (see § 460.102(g)). c. Contracting With Another Entity To
the following three ways:
The regulation included specific • Section 901 extended the transition Furnish PACE Center Services
criteria for each waiver related to period for the PACE demonstration After publication of the 1999 interim
whether the PO’s service area is rural or programs to allow an additional year for final rule, we learned that in 1995, On
Tribal, the accessibility of individuals these organizations to transition to the Lok, Inc. had changed the Protocol to
who meet the three regulatory permanent PACE program. reflect a contractual arrangement they
requirements listed above, and a • Section 902 gave the Secretary the entered into with another organization
requirement that the proposed authority to grandfather in the to provide all PACE center services.
alternative does not adversely affect the modifications these programs had Under this arrangement, the IDT was
availability or quality of care furnished implemented as of July 1, 2000. This employed and managed by the
to PACE participants. provision allowed the PACE contracting organization but On Lok
Our rationale for this initial, limited demonstration programs to continue retained responsibility for all care
view of the flexibility provision was program modifications they had provided to and all risk entailed in
based on our belief that all PACE implemented and avoid disruptions in meeting the healthcare needs of the
demonstration programs were in participant care where these participants attending the center.
compliance with the Protocol, modifications were determined to be Through this contractual relationship,
necessitating only minor changes in consistent with the PACE model. These On Lok was able to expand PACE
their operations to meet the PACE sections were implemented services within their service area. As
regulatory requirements. Our intention administratively. this approach was reflected in the PACE
was to allow some flexibility to promote • Section 903 specifically addressed Protocol, we amended the PACE
PACE in rural and Tribal areas while flexibility in exercising the waiver regulations in the 2002 interim final
maintaining consistency of the authority provided under sections rule to allow POs to provide PACE
requirements for other PACE programs. 1894(f)(2)(B) and 1934(f)(2)(B) of the center services through contractual
We intended to provide more flexibility Act. It authorized CMS to modify or arrangements. We also revised § 460.70
to all POs once we had gained sufficient waive PACE regulatory provisions in a to identify the criteria that a PO must
experience in administering the PACE manner that responds promptly to the meet to contract out PACE center
program. needs of POs relating to the areas of services. A more detailed discussion of
However, after publication of the 1999 employment and the use of community- § 460.70 is located in section at IV.B. of
interim final rule, we learned that based PCPs. Section 903 of BIPA also this final rule.
although the early PACE demonstration established a 90-day review period for
d. Oversight of Direct Patient Care
waiver requests. As the flexibility
programs initially complied with the Services
language is part of the statutory section
Protocol, most of them modified the
dealing with regulations (sections As discussed above, in the 2002
Protocol requirements as they
1894(f) and 1934(f) of the Act), we interim final rule, we revised the
expanded, using the flexibility
believed it was intended that waiver requirements of the 1999 interim final
authorized in the Protocol. While many
requirements be incorporated into the rule to allow for the contracting of IDT
of these modifications were related to
PACE regulations. In order to members, program director, medical
the allowable areas of service coverage
implement section 903 of BIPA, we director, and all PACE center services.
and arrangement provisions, many
published the 2002 PACE interim final For this reason, we believed it was
others were not authorized by the
rule. essential to establish oversight criteria
flexibility clause in the Protocol.
that POs must implement for all
Furthermore, many of the later PACE b. Contracting for IDT Members and
employees and contracted staff who
demonstration programs also Administrative Staff
furnish direct patient care. This was
inappropriately exercised the flexibility In the 2002 interim final rule, we accomplished with the addition of
clause in the Protocol, especially with amended the PACE regulations to § 460.71. A more detailed description of
regard to direct employment of staff. replace the term ‘‘multidisciplinary’’ § 460.71 is located in section IV, subpart
Finally, very few of the waivers were with ‘‘interdisciplinary’’ to more E of this final rule.
requested in writing or approved by accurately reflect the interactive and
CMS or the SAA before implementation. collaborative approach of the PACE care e. Waiver Process
We subsequently revised our team. To implement section 903 of BIPA,
regulations on the waiver process in In the 2002 interim final rule, we we established a process for submission
response to comments on the 1999 responded to public comments and approval of waiver requests. The
interim final rule and in accordance regarding flexibility, including 2002 interim final rule amended the
with the requirements of section 903 of comments on § 460.102(f) of the 1999 1999 interim final rule by adding
the Medicare, Medicaid, and SCHIP interim final rule, which required that § 460.26, which specifies the
Benefits Improvement and Protection the PACE IDT members be employees of requirements for submission and
Act of 2000 (BIPA) (Pub. L. 106–554, the PO or PACE center. In the 2002 evaluation of waiver requests and
enacted on December 21, 2000), as interim final rule, we deleted § 460.28, which addresses requirements
discussed below. A detailed discussion § 460.102(f) and revised § 460.60 to related to CMS review of waiver
of waivers and the waiver process is allow the PO to employ or contract with requests. In the 2002 interim final rule,
located in section III, subpart B of this the program director and the medical we also removed the restrictive waiver
final rule. director. We also added requirements at provisions for rural and Tribal
organizations that were included in the including outpatient prescription drugs 411. Our PACE regulations at
1999 interim final rule. are provided to PACE enrollees, we § 460.180(d) specify that Medicare does
A more detailed description of indicated in the final rule that not pay for PACE services to the extent
§ 460.26 and § 460.28 is located in implements Part D (70 FR 4194) that that Medicare is not the primary payer
section III, subpart B of this final rule. POs would not be deemed to be MA–PD under part 411. The MSP interim final
4. Medicare Prescription Drug local plans, but rather, would be treated rule establishes our current policies
Improvement and Modernization Act of in a manner similar to an MA–PD local regarding the obligations of other
2003 (MMA) plan for purposes of payment under Part payers. If there are any provisions
D. We stated that this approach is specific to PACE organizations that
On December 8, 2003, the Congress consistent with section 1894(d)(1) of the result from issuance of the final MSP
enacted the MMA of 2003 (Pub. L. 108– Act, which provides that payments will rule, we will address those provisions in
173). Several sections of the MMA be made to POs ‘‘in the same manner a future PACE rulemaking.
impact POs. Most notably, section 101 and from the same sources’’ as Finally, as discussed above, under the
of the MMA affected the way in which payments are made to a MA rulemaking requirements of section 902
POs are paid for providing certain organization. of the MMA and our notice in the
outpatient prescription drugs to any Part The MMA allows CMS the flexibility Federal Register on December 30, 2004
D eligible participant. As specified in to deem POs as MA–PD plans or to treat (69 FR 78442), interim final regulations
sections 1894 and 1934 of the Act, POs POs that elect to provide qualified drug issued before enactment of MMA on
shall provide all medically necessary coverage in a manner similar to MA–PD December 8, 2003 must be finalized
services including prescription drugs, plans. Due to inconsistencies in the within 3 years of the date of enactment
without any limitation or condition as PACE and MMA statutes, we chose to or the regulations shall not continue in
to amount, duration, or scope and treat POs in a similar manner as MA– effect. This rule finalizes both the PACE
without application of deductibles, co- PD plans avoiding conflicting interim final rule with comment period
payments, coinsurance, or other cost requirements. The requirements that published in the Federal Register
sharing that would otherwise apply apply to POs that elect to provide November 24, 1999 (64 FR 66234) and
under Medicare or Medicaid. Up until qualified prescription drug coverage to the PACE interim final rule with
January 1, 2006, payment for drugs Part D eligible enrollees are set forth in comment period published in the
covered under Medicare parts A and B subpart T of the preamble to the Part D Federal Register on October 1, 2002 (67
was included in the monthly Medicare final rule (70 FR 4194). To the extent FR 61496).
capitation rate paid to POs for Medicare that we need to address additional
beneficiaries, while payment for issues regarding Part D as it applies to II. Analysis of and Response to Public
outpatient prescription drugs was POs, we will do so in a future Comments
included in the monthly Medicaid rulemaking. This final rule responds to public
capitation rate paid to POs for Medicaid In addition, section 236 of the MMA comments received on both the
recipients, or as a portion of the amount amended the Act to extend to POs the November 24, 1999 interim final rule
equal to the Medicaid premium paid by existing statutory Medicare and with comment (64 FR 66234) and the
non-Medicaid recipients. Medicaid balance billing protections October 1, 2002 interim final rule with
Consequently, in order for POs to that had previously applied to POs comment (67 FR 61496).
continue to meet the statutory under PACE demonstration program
requirement of providing prescription authority. Specifically, provisions of the A. Summary of Comments on the 1999
drug coverage to their enrollees, and to Act that limit balance billing against Interim Final Rule
ensure that they receive adequate MA organizations by non-contract We received 34 items of
payment for the provision of Part D physicians, providers of service, and correspondence containing more than
drugs, beginning January 1, 2006, POs other entities with respect to services 500 specific comments on the 1999
could begin to offer qualified covered under title XVIII now include interim final rule. In this document, we
prescription drug coverage to their PACE providers. Similarly, Medicaid will refer to this regulation as the 1999
enrollees who are Part D eligible billing limitations specified in the Act interim final rule. Commenters included
individuals. The MMA did not impact now apply to providers participating representatives of professional
the manner in which POs are paid for under the State plan under title XIX that associations, State and county
the provision of outpatient prescription do not have a contract or other governments, PACE demonstration
drugs to non-part D eligible PACE agreement with a PACE provider. Both programs, potential PACE programs,
participants. MMA provisions apply to services various health care providers, and
Section 1860D–21(f) of the Act, added furnished on or after January 1, 2004. advocacy organizations.
by section 101 of the MMA, provides Section 301 of the MMA amends the Consistent with the scope of the 1999
that POs may elect to provide qualified Medicare Secondary Payer (MSP) interim final rule, most of the
prescription drug coverage to enrollees provisions in section 1862(b) of the Act. commenters addressed multiple issues,
who are Part D eligible individuals. These amendments clarify the often in great detail. Some commenters
This section also provides that in the obligations of primary plans and expressed concerns about Medicare and
case of a PACE program that elects to primary payers, the nature of the Medicaid issues that do not pertain to
provide qualified Part D prescription insurance arrangements subject to the the PACE program.
drug coverage, the requirements under MSP rules, the circumstances under Numerous commenters disapproved
Part D apply to the provision of such which Medicare may make conditional of the limited flexibility provided in the
coverage in a manner that is similar to payments, and the obligations of regulation, stating that the regulation
the manner in which those requirements primary payers to reimburse Medicare. restricts programs from developing
apply to the provision of such coverage To implement section 301 of the MMA, innovatively and responsively to
under an MA–PD local plan. However, we issued an interim final rule with participant preferences, community
because we did not believe that comment period (71 FR 9466), needs, and the healthcare marketplace.
Congress intended for the MMA to alter published on February 24, 2006, They asked for operational and service
the way in which PACE services, revising our MSP regulations at part delivery flexibility, while permitting
liberal exceptions for established B. Summary of Comments on the 2002 Section 460.4 Scope and Purpose
programs that have proven success in Interim Final Rule We stated in the 1999 interim final
furnishing the PACE benefit. rule that the purpose of the regulation
We received 4 letters of public
Commenters also noted the regulatory was to set forth the requirements that an
comment on the October 1, 2002 interim
language was too prescriptive in several entity must meet in order to be
final rule (67 FR 61496) containing more
key areas (personnel qualifications) and approved as a PO under Medicare and
than 17 specific comments. Commenters
too vague in others (Medicare rate- Medicaid. It also sets forth how
included representatives of professional
setting), saying that prescriptive individuals may qualify to enroll in
associations, a State government, and an
language also reduces flexibility in PACE, how Medicare and Medicaid
advocacy organization. In this
organizational design and limits payment will be made for PACE
document, we will refer to this
innovative strategies for service services, provisions for Federal and
regulation as the 2002 interim final rule.
delivery. State monitoring of PACE programs, and
Commenters expressed opposing
Commenters indicated that the opinions on the flexibility permitted in procedures for sanctions and
application of M+C requirements was the 2002 interim final rule. In general, termination.
often made without considering the commenters expressed concerns about We stated the purpose of a PACE
differences between the PACE program flexibility related to all aspects of the program is to provide pre-paid,
and M+C plans and that the differences program, including waivers and the capitated, comprehensive health care
between PACE and nursing facilities waiver process, contracted services services that are designed to:
should be recognized in the final including staff and contractors, and • Enhance the quality of life and
requirements. oversight of direct participant care. autonomy for frail, older adults;
• Maximize dignity of and respect for
In addition, commenters indicated Listed below are the three areas that
older adults;
that the numerous written notices generated the most concern: • Enable frail, older adults to live in
required by the 1999 interim final rule Subpart B: PO Application and their homes and in the community as
were unduly burdensome. Waiver Process; long as medically and socially feasible;
Comments also indicated that in some Subpart D: Sanctions, Enforcement and
instances requirements from other Actions and Termination; • Preserve and support the older
programs (for example, the Outcome Subpart E: Administrative adult’s family unit.
Assessment Information Set (OASIS) for Requirements. This philosophy is based on Part I,
home health agencies) have been section A, of the Protocol. Adopting a
III. Provisions of the 1999 Interim Final
applied to PACE, thereby disregarding mission or philosophy statement that
Rule With Comment and the 2002
the differences between the programs includes these elements indicates that
Interim Final Rule With Comment,
and adding the burden of information an entity is guided by a set of values that
Analysis of and Responses to
collection. influence its structure, planning, and
Comments and Final Rule Actions
Finally, commenters opposed the day-to-day operations that is consistent
prescriptive language that they thought The purpose of this final rule is to with the purpose of PACE.
limited State discretion and usurped respond to public comments and No comments were received on this
traditional State regulatory activities finalize the regulations established in section.
rather than optimizing the opportunity the 1999 and 2002 interim final rules. Final rule actions:
Below we will list each PACE This final rule will finalize § 460.4 as
to encourage cooperation with the
regulation, note any comments and published in the 1999 interim final rule.
States. We respond to the particular
comments as they relate to specific responses, and then note our final Section 460.6 Definitions
provisions discussed in section III of action.
This section of the 1999 interim final
this final rule. Subpart A—Basis, Scope, and Purpose rule included the following definitions
Listed below are the six areas of the This subpart provides the basis for based on those in sections 1894(a) and
1999 interim final rule that generated this regulation, the scope and purpose, 1934(a) of the Act and other terms
the most concern: and defines terms specific to the PACE determined necessary by CMS.
Subpart D: Sanctions, Enforcement benefit. Contract year means the term of a
Actions and Termination including civil PACE program agreement, which is a
money penalties; Section 460.2 Basis calendar year, except that a PO’s initial
As stated in the 1999 interim final contract year may be from 12 to 23
Subpart E: PACE Administrative
rule, the regulations set forth in 42 CFR months, as determined by CMS.
Requirements including organizational Medicare beneficiary means an
structure, personnel qualifications, part 460 are based on Sections 1894,
individual who is entitled to Medicare
contracted services and marketing; 1905(a), and 1934 of the Act. Section
Part A benefits or enrolled under
Subpart F: PACE Services including 1894 of the Act authorizes Medicare
Medicare Part B, or both.
the interdisciplinary team and payments to and coverage of benefits
Medicaid participant means an
participant assessment; under PACE. Sections 1905(a) and 1934
individual determined eligible for
of the Act authorize the establishment of
Subpart G: Participant Rights Medicaid who is enrolled in a PACE
PACE as an option under the State
including the appeals process; program.
Medicaid plan to provide for Medicaid Medicare participant means a
Subpart I: Participant Enrollment and coverage of services furnished by the Medicare beneficiary who is enrolled in
Disenrollment which includes eligibility PACE program. a PACE program.
to enroll, enrollment process, No comments were received on this PACE stands for Programs of All-
continuation of enrollment, and section. inclusive Care for the Elderly.
involuntary disenrollment; Final rule actions: PACE center means a facility operated
Subpart J: Payment including This final rule will finalize § 460.2 as by a PO where primary care is furnished
Medicare payment. published in the 1999 interim final rule. to participants.
PACE organization (PO) means an define PACE, what constitutes a PO, and safety of participants, personnel, or
entity that has in effect a PACE program what constitutes a PACE center visitors and to ensure a safe and sanitary
agreement to operate a PACE program including clarification that a PACE environment is at § 460.72.
under this part. provider is considered a PACE program We believe the list of explicit services
PACE program agreement means an and may have more than one center. and benefits belongs in § 460.98 which
agreement between a PO, CMS, and the It was also recommended that we relates to ‘‘Service delivery,’’ and in
State administering agency for the adopt the definition of PACE center as § 460.72, which relates to ‘‘Physical
operation of a PACE program. contained in the Protocol, which environment.’’
Participant means an individual who explicitly addresses the full range of Comment: A commenter requested
is enrolled in a PACE program. services and benefits available at the that we add a definition of a ‘‘PACE
Services include both items and PACE center. program’’ and use the following
services. Response: In response to these language ‘‘all centers and service
State administering agency means the comments, in this final rule, we are provision by an approved PACE
State agency responsible for redefining ‘‘PACE center’’ to be more provider in an approved service area.’’
administering the PACE program consistent with the definition provided Response: ‘‘PACE program’’ is defined
agreement. in the Protocol and the statute by in the Act at sections 1894(a)(2) and
Trial period means the first 3 contract defining it as a facility which includes 1934(a)(2) as an entity that meets the
years in which a PO operates under a a primary care clinic, areas for statutory requirements to be a PACE
PACE program agreement, including therapeutic recreation, restorative provider and provides comprehensive
any contract year during which the therapies, socialization, personal care, health care services to PACE program
entity operated under a PACE and dining, and which serves as the eligible individuals in accordance with
demonstration program. focal point for coordination and the PACE program agreement and
In developing the definition of PACE provision of most PACE services. regulations. We have not included a
organization, we explained in the 1999 In addition, as noted below we are definition for ‘‘PACE program’’ in our
interim final rule that sections adding a definition of ‘‘PACE program’’. regulations at § 460.6. However, we
1894(a)(3) and 1934(a)(3) of the Act However, we disagree with the agree with the commenter that doing so
defined a ‘‘PACE provider.’’ We commenter who requested that we would help to clarify and standardize
changed that term to ‘‘PACE adopt the definition of ‘‘PACE center’’ PACE terminology. As noted above, we
organization’’ (PO) because we believed as contained in the Protocol which changed the term ‘‘PACE provider’’ to
that the term ‘‘PACE provider’’ would explicitly identifies the full range of ‘‘PACE organization’’ and defined that
be confusing. Medicare regulations (at services and benefits available at the term in the 1999 interim final rule.
42 CFR 400.202) and Medicaid PACE center. We believe that our Based on sections 1894(a)(2) and
regulations (at 42 CFR 400.203) define modification is more appropriate and 1934(a)(2) of the Act, we are defining a
the word ‘‘provider,’’ but the definitions less cumbersome than including every PACE program as a program of all-
are different and neither applies to required service in the definition. We inclusive care for the elderly that is
entities that operate PACE programs. also believe that by expanding the operated by an approved PACE
Those definitions denote individual definition of ‘‘PACE center’’ that was organization and that provides
providers of individual services under published in the 1999 interim final rule, comprehensive health care services to
conventional fee-for-service systems. we are clarifying that a PACE center is PACE enrollees in accordance with a
We selected the alternative term, PO, a facility where most PACE services are PACE program agreement. As noted
since ‘‘organization’’ is a term used in provided, not just primary care. above, we are defining a PACE center as
both titles XVIII and XIX when referring As noted earlier in this section, in the a facility which includes a primary care
to managed care organizations, which 1999 interim final rule, we defined clinic, areas for therapeutic recreation,
are more similar to entities under PACE. PACE center as ‘‘a facility operated by restorative therapies, socialization,
In the few places where we use the term a PO where primary care is furnished to personal care, and dining, and which
‘‘provider’’ in this regulation, we are participants.’’ This definition was based serves as the focal point for
using it in the broad generic sense to on section IV. B. 2 of the Protocol, coordination and provision of most
refer to an individual or an entity that which states: ‘‘The PACE center is the PACE services. We do not think the
furnishes health care services. Our use focal point for coordination and commenter’s language would be needed
of the term is not limited to the provision of most PACE services. The to ensure that PACE centers are
narrower Medicare definition in PACE center is a facility which includes included within the definition of a
§ 400.202. a primary care clinic, and areas for PACE program.
Also, in defining contract year, we therapeutic recreation, restorative Final rule actions:
explained that a PO’s initial (start-up) therapies, socialization, personal care In this final rule we are:
contract year may be from 12 to 23 and dining.’’ The Protocol identified • Replacing the term ‘‘center’’ with
months, as determined by CMS, to other requirements for a PACE center, the term ‘‘PACE center’’ throughout the
enable us to adjust the length of the which were included in other sections regulation.
initial (start-up) contract year so that of the 1999 interim final rule. Those • Redefining the term ‘‘PACE center’’
subsequent years are on a standard requirements are included in the as ‘‘a facility which includes a primary
annual calendar year cycle. following sections: The list of required care clinic, areas for therapeutic
Comment: One commenter suggested services is at § 460.98; the requirement recreation, restorative therapies,
that we clarify the term ‘‘center’’ by that POs operate at least one PACE socialization, personal care, and dining,
replacing it with the term ‘‘PACE center is in § 460.98(d)(1); the and which serves as the focal point for
center.’’ requirement that the frequency of coordination and provision of most
Response: We agree and have attendance is determined by the IDT PACE services.’’
replaced the term ‘‘center’’ with ‘‘PACE based on each participant’s needs is at • Defining ‘‘PACE program’’ to mean
center’’ throughout the regulation. § 460.98(e); and the requirement that the a program of all-inclusive care for the
Comment: We received several PACE center is designed, equipped, and elderly that is operated by an approved
comments requesting that we clearly maintained to provide for the physical PACE organization and that provides
comprehensive health care services to could collect capitation payments from services covered under this title.’’ In
PACE enrollees in accordance with a Medicare but bill fee-for-service under addition, to be eligible for PACE, an
PACE program agreement. Medicaid, not all financing would be individual must require the nursing
capitated, nor would financing be facility (NF) level of care covered under
Subpart B—PO Application and Waiver
integrated, nor would the organization the State Medicaid plan.
Process assume full financial risk. Section 1894(e) of the Act provides
Section 460.10 Purpose However, the law does not require that ‘‘CMS, in close cooperation with
We established in the 1999 interim that States offer the PACE benefit under the SAA’’ will establish program
Medicaid. As indicated by its title, agreements for ‘‘entities that meet the
final rule, that this subpart sets forth
section 4802 of BBA provides for the requirements for a PO under this
application requirements for an entity
‘‘Establishment of PACE Program as section, section 1934, and regulations.’’
that seeks approval from CMS as a PO.
Medicaid State Option.’’ If an entity A corresponding provision is found at
In the 2002 interim final rule, we
attempted to become a PO under section 1934(e) of the Act, referring to
amended § 460.10 to clarify that subpart
Medicare in a State which has not ‘‘entities that meet the requirements for
B also establishes a process by which a
included PACE program services as an a PO under this section, section 1894,
PO may request a waiver of certain
option under its Medicaid program, it and regulations.’’ We believe that the
regulatory requirements in order to
would not be possible for that entity to use of the correlative ‘‘and’’ indicates
provide for reasonable flexibility in
be both a Medicare and a Medicaid PO. that PACE entities would have to meet
adapting the PACE service delivery While this would curtail the availability
model to the needs of particular all three sets of requirements.
of PACE programs in those States, we A parallel provision provides for
organizations (such as those in rural have concluded that this result was
areas). termination of PACE program
intended because a Medicare-only agreements (see paragraphs (e)(5) of
PACE Under Both Medicare and program could not meet the sections 1894 and 1934 of the Act).
Medicaid fundamental concept of an all-inclusive, Termination of an agreement under both
integrated, capitated, full-risk program. sections 1894 and 1934 of the Act may
We require that each PO must enter Moreover, both sections 1894 and
into a program agreement under both be accomplished by either ‘‘CMS or a
1934 of the Act contemplate the active
sections 1894 and 1934 of the Act, that SAA.’’
collaboration of Federal and State
is, that each organization participate in Nonetheless, it is highly unlikely that
governments in the administration of
both Medicare and Medicaid. Most of any entity could be a viable PO without
PACE. Each State must have a SAA that
the text in those two sections is is responsible for administering PACE approval under both Medicare and
identical and our analysis indicates that program agreements in their State under Medicaid. The majority of potential
key language contemplates entities sections 1894 and 1934 of the Act. The participants are Medicare beneficiaries
acting as POs under both programs. SAA closely cooperates with CMS in who also are eligible for Medicaid.
Sections 1894(f)(2) and 1934(f)(2) of establishing procedures for entering Those who are not currently Medicaid-
the Act require that we incorporate in into, extending, and terminating PACE eligible may eventually exhaust their
our regulations the requirements program agreements. The SAA financial resources and become eligible.
applied to PACE demonstration cooperates with CMS and the PO in the Medicare participants who are not
programs under the PACE Protocol, to development of participant health status enrolled in PACE under Medicaid must
the extent consistent with the and quality of life outcome measures. pay premiums equal to the Medicaid
provisions of sections 1894 and 1934 of The SAA also cooperates with us in capitation rate. Aside from the
the Act. Under the Protocol, PACE conducting oversight reviews of PACE technicality that there would not be an
demonstration programs operated under programs and has the authority to established Medicaid capitation rate in
both Medicare and Medicaid. We terminate a PACE program agreement a State that does not elect the PACE
believe that the directive to incorporate for cause. If Medicare-only programs option, most of these participants would
the requirements in the Protocol had been contemplated in a State that lack the ability to pay these significant
reflected an expectation by the Congress does not elect the PACE option, there premiums.
that all POs would participate in both would have been no reason to assign As the above citations illustrate, some
Medicare and Medicaid. This view is such a significant role to an SAA. We provisions of the law are conflicting and
reinforced by paragraph (f)(2)(B) of these believe that a State which has not thus ambiguous. We therefore
sections, which permits us to modify or chosen PACE as an optional service interpreted them to give effect to many
waive provisions of the PACE Protocol would be ill-prepared or unable to of the provisions and policy objectives
‘‘so long as such modification or waiver perform this role. that they advance. Furthermore, in
is not inconsistent with and would not As mentioned earlier, most of the text keeping with the congressional intent
impair the essential elements, of section 1894 of the Act is identical to that the Protocol guide our
objectives, and requirements’’ of text in section 1934 of the Act. Portions implementation of the PACE program,
sections 1894 and 1934 of the Act, but of both text reflect the concept of we determined that POs must be
which forbids modifying or waiving, entities acting as POs under both approved under both Medicare and
among others, the following provisions: programs. The scope of Medicare PACE Medicaid.
• Capitated, integrated financing that program benefits includes ‘‘all items Based on this interpretation, if a State
allows the organization to pool and services covered under this title (for should choose not to amend its State
payments received from public and individuals enrolled under this section Medicaid plan to adopt PACE as an
private programs and individuals; and [section 1894]) and all items and optional Medicaid service, we would
• The assumption by the organization services covered under title XIX.’’ not accept PACE applications from
of full financial risk. Similarly, section 1934 of the Act, entities in that State. Also, if a State has
We concluded that both of these defines the Medicaid benefit package as elected the optional benefit but declines
provisions preclude the possibility of a ‘‘all items and services covered under to recommend a particular entity as a
Medicare-only or Medicaid-only PACE title XVIII (for individuals enrolled PO, we would not accept an application
program. For example, if a program under section 1894) and all items and from that entity.
We stated in the 2002 interim final the State is willing to enter into a PACE to enter into a program agreement with
rule that to implement section 903 of program agreement with the entity. We them.
BIPA, we amended the PACE regulation will not accept applications from With regard to applications, we
by adding § 460.26 and § 460.28 to entities that have not obtained these continue to believe the States are in the
establish a process for a PO to request assurances. best position to work with potential
waiver of regulatory requirements. This To enable a SAA to make these organizations to develop programs that
process allows for variations while assurances, an entity would have meet our requirements and are
achieving the intent of the regulatory established to the satisfaction of the integrated into the States’ overall long-
provision and responding to the needs State that it is committed to the PACE term care delivery system.
of POs to develop and expand within model of care, that there is sufficient Comment: One commenter asked us
their States’ long-term care delivery funding for program development and to clarify the regulatory provision
system. facilities, that there is adequate demand related to the hiring requirements of
Waivers will be discussed in detail for PACE services as shown by non-operational programs before
under § 460.26 and § 460.28. demographic analysis. submission of their program
Comment: Another commenter Entities that are interested in application. The commenter stated that
recommended that social support developing a PACE program agreement it is unreasonable to expect the
services and participant care be more should contact their SAA to determine applicant would have hired core staff
clearly defined so beneficiaries and whether the State has submitted or before application submission.
caregivers may make informed decisions plans to submit a SPA to elect PACE as Response: Although hiring
about the type and level of care to be an optional benefit under its State requirements for non-operational PACE
provided. Medicaid plan and if the State has programs do not appear in our
Response: In response to the comment established additional requirements for regulations at § 460.12, we addressed
regarding a more defined regulation POs. Section 1905(a)(26) of the Act these requirements in the preamble of
where social services and participant provides authority for States to elect the 1999 interim final rule (64 FR
care is concerned, we disagree with this PACE as an optional Medicaid benefit. 66238). We stated, ‘‘To enable a State to
commenter, as required services are The State plan electing the optional make such assurances, an entity would
participant specific. After the IDT PACE program must be approved before have established to the satisfaction of
determines a participant requires a we can approve an application for a PO the State that it is committed to the
service and it is included in their plan in that State. We received three PACE model of care, that there is
of care, those services become required comments related to application sufficient funding for program
for that participant for that specific requirements. development and facilities, that there is
need. Therefore, it would not truly Comment: Commenters questioned adequate demand for PACE services as
represent the PACE model to constrain the requirement that POs must be shown by demographic analysis, and
the benefit by defining it in regulatory approved by their SAA. Further, they that the entity has hired core PACE staff
language. requested that we specify an absolute and has developed contracts for referral
Final rule actions: role for SAA, and revise the regulatory arrangements and other program
This final rule will finalize § 460.10, language to reflect the SAAs’ services that the site will not furnish
as published in the 2002 interim final responsibility to submit the program directly.’’
rule. application and the States’ role in the When the 1999 interim final rule was
application process. developed, there were several PACE
Section 460.12 Application Response: As we explained in the demonstration programs that needed to
Requirements 1999 interim final rule, States have transition to permanent provider status.
We established § 460.12 to set forth played a significant role in the As they were operational and had key
the application requirements for the development of the PACE staff members in place before submitting
PACE program. In order for CMS to demonstration program as well as other their PACE provider applications, this
determine whether an entity qualifies as community-based alternatives to requirement was not an issue.
a PO, an individual authorized to act for institutionalization. Most States have However, as all PACE demonstration
the entity must submit an application implemented home and community programs have transitioned to
that describes thoroughly how the entity based programs that provide permanent provider status, applications
meets all the requirements specified in comprehensive coordinated services to will now be primarily from non-
this regulation. In recognition of the 90- various groups of Medicaid recipients. operational providers. We acknowledge
day review timeframe specified in the As a result, States have gained extensive that start-up costs are extensive and
statute and described below and the experience in demographic analysis and paying salaries for top management staff
numerical limit on the number of PACE contracting with entities that are without a revenue stream is unrealistic.
program agreements, we will review and capable of delivering a specified range We do not believe that it is appropriate
take action to approve, deny, or request of services. to hold non-operational applicants to
additional information only on Although the PACE statute does not the same standard as POs that had been
complete applications; those specify the States’ role in the fully operational under the PACE
applications that address all elements of application approval process, many demonstration program. Therefore, we
the PACE program agreement. We will aspects of implementing PACE in are not requiring that core staff be hired
send a letter to each applicant Medicare and Medicaid will necessitate before application approval. However,
indicating whether or not the extensive involvement of the SAAs and at the time of an organization’s
application is complete and specifying the State Medicaid Agencies. The State Readiness Review, we do expect
when the 90-day review period ends. must elect to provide PACE services as documentation that core staff have been
We require in § 460.12(b) that an option under the Medicaid State plan chosen and accepted those specific key
applications for PO status be and PACE applications must be positions. Language related to staff
accompanied by an assurance from the accompanied by an assurance from the contracts of non-operational
SAA indicating that it considers the SAA that the State considers the entity organizations has been included on page
entity to be qualified to be a PO and that to be qualified to be a PO and is willing ix of the Provider Application, which
can be found on the PACE Web site that, as of May 1, 1997, had indicated No comments were received on
under Provider Application and specific intent to become a PO through § 460.18.
Appendices at www.cms.hhs.gov/pace/. formal activities such as entering into Final rule actions:
This signed certification guarantees us, contracts for feasibility studies. This final rule will finalize § 460.18 as
among other things, that the SAA will In § 460.16, we established a process published in the 1999 interim final rule.
verify that the PO has qualified staff for special consideration of a PACE
Section 460.20 Notice of CMS
employed or under contract before application. Similar to the process for
Determination
furnishing services. This document priority consideration, to give special
must be signed by the SAA and consideration in processing applications Sections 1894(e)(8) and 1934(e)(8) of
included as part the PACE provider from entities that meet the criteria in the the Act require us to approve or deny
application. 1999 interim final rule, we indicated we an application for PO status within 90
In the 2002 interim final rule, we would accept applications from these days after the date of the submission of
revised § 460.12 by removing and entities beginning 45 days after the the application unless additional
reserving paragraph (a)(2) to clarify that effective date of the 1999 interim final information is requested. Applications
although we may begin review of PO regulation. We further noted that during are deemed approved unless we deny
applications, we may sign a program the 45-day period that extends from 45 PO status in writing or request
agreement only with a PO located in a days after the effective date to 90 days additional information within the 90-
State with an approved SPA electing after the effective date, we would accept day timeframe. In the 1999 interim final
PACE as an optional benefit under its applications only from entities that met rule, we established procedures for
Medicaid State plan. We are finalizing the priority processing criteria or implementing these requirements at
this provision by deleting § 460.12(a)(2) entities that qualified for special § 460.20. We clarified that, for purposes
entirely. For the sake of continuity we consideration. Applications from other of the 90-day time limit described in
are redesignating § 460.12(a)(3) as entities would not be accepted during this section, the date that an application
§ 460.12(a)(2). this period. is considered to be submitted to CMS is
Final rule actions: Applications from entities that the date on which the application is
In this final rule we are redesignating believed they were entitled to special delivered to the address designated by
§ 460.12(a)(3) to § 460.12(a)(2). consideration were to include CMS.
information regarding the formal These statutory sections also provide
Section 460.14 Priority Consideration that we may request in writing
activities they were engaged in towards
Section 4803(c) of the BBA directed becoming a PO. If we agreed that special additional information as may be
us to give priority in processing consideration was appropriate for required in order to make a final
applications, during the 3-year period applications submitted after the special determination regarding the application
following enactment of the BBA on 45-day window, we would identify and, after the date we receive that
August 5, 1997, to PACE demonstration those applicants and factor in the information, the application shall be
programs and then to entities which had entity’s special status in the event that deemed approved unless, within 90
applied to operate a PACE we had a greater number of applications days of that date, we deny the request.
demonstration program as of May 1, under review than available capacity for Based on this authority, we may take
1997. PACE program agreements. up to 90 days to request additional
In the 1999 interim final rule, we We did not receive any requests for information and, once the information is
established § 460.14 to address priority special consideration. received, may take an additional 90
applications and stated that to give Comment: Six commenters requested days to complete processing of the
priority in processing applications from clarification regarding the criteria and application. It is important to note that
entities that met the criteria, we would process applied to applications under there is no corresponding requirement
accept applications only from those the BBA mandate providing priority and that the SAA or the PO respond to our
entities beginning on the effective date special consideration in processing request for additional information (RAI)
of the 1999 interim final rule and PACE applications. within a specified timeframe.
continuing for 45 days. Applications Response: We believe the 2002 If the additional information proves
from other entities would not be interim final rule provided sufficient insufficient to approve the application,
accepted during this period. Moreover, information as to the criteria and the application will be denied. We will
during the subsequent 45 days, process needed for priority and special notify each applicant of our
extending to 90 days after the effective consideration for PACE applications. determination and the basis for the
date of that regulation, we stated we More importantly, however, we note determination in writing. If the
would continue to accept applications that as the authority to provide these application is denied, we will provide
from entities that met the priority considerations expired on August 5, the basis for the denial and the process
processing criteria and we would also 2000, it is no longer necessary to retain for requesting reconsideration of the
accept applications from entities that these regulations. application.
qualify for special consideration as Final rule actions: No comments were received on
described in the following section. In this final rule we are deleting § 460.20.
We did not receive any requests for § 460.14 and § 460.16. Final rule actions:
priority consideration. This final rule will finalize § 460.20 as
Section 460.18 CMS Evaluation of
Comments related to § 460.14 also published in the 1999 interim final rule.
Applications
address § 460.16 and will be addressed
We established the information used Section 460.22 Service Area
at the end of § 460.16.
to evaluate a PO application in the 1999 Designation
Section 460.16 Special Consideration interim final rule. We approve entities Sections 1894(e)(2(B) and
Section 4803(c) of the BBA required based upon a review of the materials 1934(e)(2)(B) of the Act permit the
that we give special consideration in the submitted as part of the application, as Secretary, in consultation with the SAA,
processing of applications during the 3 well as information obtained from the to exclude from a service area
years following enactment, to any entity SAA or through onsite visits. designation an area that is already
covered under another PACE program concerned that amending the regulation instability, or the goals of the PACE
agreement. In the 1999 interim final for each waiver would: (1) Create a model are not maintained.
rule, we specified in § 460.22 that each regulatory level of specificity that might
2. Conditional Waivers
applicant must designate the service make it difficult to apply to future
area of the program. We stated that CMS requests for similar but not identical A conditional waiver, subject to
(in consultation with the SAA) may waivers; and (2) cause a significant evaluation, is a provisional waiver we
exclude from the proposed service area delay between when the need for a would approve for a specific period of
designation any area that is already waiver is identified and when it may be time to a new or experienced
covered under another PACE program implemented. organization. During the conditional
agreement. Consistent with the statute, As an alternative, we amended the period, the PO would need to submit
we believe this was required to avoid PACE regulation by adding § 460.26 and specific data, that we prescribed, that
unnecessary duplication of services and § 460.28 to establish a process for a PO would allow us to monitor and evaluate
impairing the financial and service to request waiver of regulatory the conditional waiver to determine
viability of an existing PO. requirements. whether the waiver may become
No comments were received on As noted previously, the PACE permanent. This category of waiver may
§ 460.22. Protocol and the 1999 interim final rule include the following scenarios:
Final rule actions: (a) A request for waiver without
have been proven effective as POs grow
This final rule will finalize § 460.22 as which a PO would be prevented from
and reach financial solvency. We have
published in the 1999 interim final rule. entering the program. For example, if a
learned a great deal about variations in prospective PO has been unable to hire
Section 460.24 Limit on Number of the model through the information we or contract with a social worker with a
PACE Program Agreements received in processing grandfathering Master’s degree, we may consider
requests under section 902 of BIPA and approving a conditional waiver request
This provision implements sections numerous discussions with the National
1894(e)(1)(B) and 1934(e)(1)(B) of the to allow a social worker with a
PACE Association (NPA), POs, and baccalaureate degree to operate in this
Act establishing a limit on the number States. Allowing for waivers provides a
of PACE program agreements that may capacity until a qualified social worker
unique opportunity for POs, the States, is hired. This waiver would only be in
be in effect on August 5 of each year, and CMS to experiment with new
that is, the anniversary of the enactment effect until the PO could hire or contract
approaches within the structure of the for an appropriate staff member.
of the PACE statute. Those sections state PACE model. This process allows for (b) A request for approval of an
that we shall not permit the number of variations while achieving the intent of arrangement with which a PO does not
POs with which agreements are in effect the regulatory provision and responding have any experience. We want to
under those sections or PACE to the needs of POs to develop and encourage creative approaches to
demonstration programs under section expand their States’ long term care improving the PACE model and view
9412(b) of the OBRA of 1986 to delivery system. The POs will serve as conditional waivers as a responsible
exceed— an ongoing laboratory that over time way to balance the need of a PO with
• Forty as of August 5, 1997, the date will establish best practices that may protection of participant health and
of the enactment of the PACE statute, or ultimately replace the current regulatory safety. We need to be cautious in
• As of each succeeding anniversary requirements. approving arrangements in which the
of that date, the numerical limitation for We realize that in order to foster PO does not have a proven record of
the preceding year plus 20. The annual innovation and creativity within the success. In approving a conditional
increase in the number of PACE PACE program, POs must be granted waiver request, we may limit the
program agreements is not tied to the some degree of flexibility in their number of participants exposed to the
actual number of agreements in effect as operation and service delivery. waiver or approve the waiver for a
of a previous anniversary date. However, we must balance this need for limited period of time or at a specific
Based on this statutory language, we flexibility with our responsibility to PACE center until we are assured
may enter into up to 80 PACE program ensure quality, cost effective care for all through evaluation that (1) the intent of
agreements as of August 5, 1999, and beneficiaries. the regulation is met; and (2) the
the limit on the number of PACE Based upon our experience and approach is not inconsistent with nor
program agreements increases by 20 review of grandfathering requests under impairs the essential elements,
each year thereafter. section 902 of BIPA, we established two objectives, and requirements of PACE.
No comments were received on types of waivers in the 2002 interim At that time, we may approve a general
§ 460.24. final rule, that is, general waivers and waiver so that the PO may expand the
Final rule actions: conditional waivers subject to arrangement to other PACE centers it
This final rule will finalize § 460.24 as evaluation. We discuss the waiver types manages without jeopardizing
published in the 1999 interim final rule. below: participant care.
Section 460.26 Submission and Each of the conditional waivers is
1. General Waivers
Evaluation of Waiver Requests subject to periodic monitoring. A PO
A general waiver may be granted to a approved for a conditional waiver must
Section 460.28 Notice of CMS PO that has successfully implemented a submit any prescribed data at specified
Determination on Waiver Requests specific operating arrangement, for intervals. We have learned that, in most
These sections were established in the example, an operating arrangement cases, conducting a detailed review of a
2002 interim final rule to implement approved under section 902 of BIPA. waiver request allows us to implement
section 903 of BIPA. As we explained in General waivers continue indefinitely; waiver approvals without having to
that rule, we considered amending the however, approval may be withdrawn require data submission. This
1999 interim final rule to identify each for good cause if periodic monitoring of evaluation serves a dual purpose. It
requirement that is eligible for waiver the organization’s operations and allows us to monitor the impact on
and provide separate waiver criteria for policies indicates participant care is participant care as well as enable us to
each requirement. However, we were being jeopardized, there is fiscal determine if any permanent changes to
PACE should be implemented through will inform the PO as early as possible offices rather than from the PACE center
regulations. In addition, it allows us to in the review process. The PO will then and do not primarily serve PACE
provide technical assistance to other be responsible for submitting the participants.
POs requesting a similar waiver. additional information in a timely The 2002 interim final rule removed
In the 2002 interim final rule, we enough manner to allow us to evaluate the restrictive waiver provisions at
discussed the process necessary to the additional information and make a § 460.68(c) regarding direct or indirect
obtain any waiver. To obtain either a determination on the waiver request interest in contracts, which was limited
conditional or general waiver, a PO within the allotted 90 days. If the reply to rural and Tribal organizations. In
must provide a detailed description of from the PO is not received in a timely addition, the 2002 interim final rule also
how its proposed modification differs manner, we would have to deny the removed the two waivers in § 460.102(g)
from the regulatory requirement and request. The PO may then reapply for related to employment of the PCP and
how it meets the intent of the regulatory the waiver, starting a new 90-day clock. the requirement that the IDT primarily
provision. The burden is on the PO to Consistent with sections 1894(f)(2)(B) serve PACE participants. These waivers
explain why a waiver is needed to start and 1934(f)(2)(B) of the Act, we were available if CMS and the SAA
up or expand their program. Where a PO specified in § 460.26(c) the following determined that there was ‘‘insufficient
has not completed the trial period, requirements that would not be waived: availability in the PO’s service area of
attained financial solvency, and (1) A focus on frail elderly qualifying individuals who meet the requirement,
demonstrated competence with the individuals who require the level of care or State licensing laws make it
PACE model as evidenced by successful provided in a nursing facility; inappropriate for the organization to
CMS and State onsite reviews and (2) The delivery of comprehensive, employ physicians.’’ Although we
monitoring activities, it will be integrated acute and long-term care deleted the specific waivers that were
necessary for the organization to explain services; intended to encourage development of
how the waiver is necessary to meet (3) The IDT approach to care PACE in rural or Tribal or other
those objectives. For a new organization, management and service delivery; medically underserved areas, we
it will be necessary for the organization (4) Capitated, integrated financing continue to recognize the special need
to explain why a waiver is needed for that allows the provider to pool for flexibility in these areas and remain
the organization to begin serving payments received from public and committed to allowing waivers to
participants. private programs and individuals; and promote PACE in medically
Consistent with the process (5) The assumption by the provider of underserved areas. Deletion of the
developed for initial PACE provider full financial risk (we note that specific waiver language was intended
applications, all waiver requests must assuming full financial risk does not to provide greater flexibility within the
be submitted to the SAA for initial preclude an organization from utilizing overall PACE regulatory structure. We
review. The SAA forwards the waiver reinsurance, stop-loss protection, or remain committed to working with rural
request to CMS along with any concerns other mechanism to meet its financial and Tribal communities to help them
or conditions they may have regarding obligations). address the challenges of developing
the waiver. We will not accept waiver In addition to these five provisions, successful PACE programs.
requests directly from POs. Waiver we will not grant waivers that we Organizations that seek waiver of these
requests submitted with an initial believe are inconsistent with or would or any other regulatory requirements
application process must be prepared as impair the essential elements, must follow the requirements specified
a separate document. These requests are objectives, and requirements of sections in § 460.26.
reviewed simultaneously and in 1894 and 1934 of the Act. We note that a PO requesting a waiver
conjunction with the application. Where In addition to the requirements of the prohibition on direct or indirect
an existing PO is requesting a waiver, specified in sections 1894(f)(2)(B) and interest in contracts must develop
the request must be submitted through 1934(f)(2)(B) of the Act, we believe there policies and procedures for disclosure
the State to the CMS address for BIPA are other requirements that must not be of financial interest to the governing
903 waiver requests indicated on the waived. For example, health care is body, establish recusal restrictions, and
PACE home page (http:// focused at a PACE center; the IDT is a process to record recusal actions for
www.cms.hhs.gov/PACE). We intend to composed of certain health care review by CMS and the SAA in its
process waiver requests as expeditiously professionals that manage all of the waiver request.
as possible in order to be responsive to health care provided to participants; a Comment: We received two comments
the needs of new organizations to comprehensive assessment by the IDT is expressing concern about compromising
develop their programs and to the needs conducted before admission into the the integrity of the PACE model by
of mature organizations as they expand. PACE program; and reassessment occurs providing expanded flexibility.
Section 903 of BIPA directs us to at least every 6 months or whenever One commenter offered assistance in
approve or deny a request for a there is a significant change in a evaluating PACE policy, program, and
modification or waiver no later than 90 participant’s health status. Further, we practice on a continuing basis. The
days after the date of receipt. We believe that PACE participants are second commenter was concerned that
clarified in § 460.28(b) that the date of entitled to the same patient rights’ the PACE regulations lack sufficient
receipt is the date the request is protection available in the Medicare or safeguards to preserve the model as
delivered to the address designated by Medicaid fee-for-service or managed established by the Protocol. The
CMS. We note that there is no statutory care programs. Therefore, we will not commenter indicated that maintaining
authority to stop the 90-day clock if approve waiver or significant the PACE center as the focal point for
additional information is necessary to modification of these requirements. delivery of services and retaining the
make a determination on a waiver Two waiver issues specifically central role of the IDT in managing the
request. Thus, it is in the PO’s best mentioned in section 903 of BIPA are health care and other services provided
interest to provide all pertinent requirements related to employment to PACE participants were critical to the
information relevant to their request. and the use of community-based PACE model. The commenter also
Where additional information is primary care physicians (PCP). In this emphasized the important role of the
necessary, the CMS PACE Team Leader approach, the PCPs work out of their PCP in the Protocol, stating, ‘‘the
ultimate responsibility for managing flexibility and innovation within PACE Based on our experience with the
participant medical care rests with the which will allow the program to grow. waiver process, we believe there is
PCP; therefore, if this team member is The commenter also supported value in CMS and SAA review and
not present during team meetings the conditional waivers, which would allow approval of waivers. The consultations
ability to fulfill this obligation will be CMS to monitor the performance of involved in the waiver process allows
compromised.’’ organizations utilizing community- CMS and the SAA to discuss the PO’s
Response: We share the commenter’s based PCPs as well as participant ability to implement the requested
concerns regarding the integrity of the outcomes. The commenter waiver, any concerns either agency has
PACE model, and thank the commenter recommended that we focus on regarding the waiver request, request
who offered assistance in evaluating the processes for integrating care while further information or clarification of
PACE program. We believe the utilizing community-based PCPs. the PO’s operations, and determine any
flexibility permitted by the 2002 interim Response: In general, we are not requirements or conditions that will be
final rule has sufficient safeguards to inclined to approve waiver requests included in the waiver approval. CMS
ensure the integrity of the model. We allowing POs to utilize community- and the SAA collaborate in the review
instituted contracting and oversight based PCPs without identifying a and approval of waivers. We have found
requirements we believe will ensure substantial need. However, we believe that the SAA generally has a better
quality of care for PACE participants. there are circumstances when the use of knowledge and understanding of the PO
During the development of the 2002 community-based PCPs may be and its operations and relevant State
interim final rule, we made a concerted appropriate. For example, it is laws and requirements.
effort to develop a waiver process that important for a participant to have a Comment: One commenter indicated
would allow modification of the model physician that speaks their language and that the regulatory language fails to
without excessive controls, while at the understands their culture’s mores and address entities that are not already a
same time not being too burdensome for traditions, which can improve PO, saying that prospective POs (as well
POs. We believe we achieved that participant compliance with their plans as established POs) should be eligible
balance. of care and, therefore, their health for waivers of regulatory requirements.
The PACE model has been proven The commenter requested clarification
outcomes. We have approved a limited
successful when the PACE center is the regarding whether PACE demonstration
number of waiver requests allowing
focal point for delivery of services and programs transitioning to permanent
community-based PCPs contingent on
when the IDT’s central role of managing provider status, pre-PACE programs,
their compliance with specific
the health care and other services and previously ‘‘non-operational’’
requirements. We plan to monitor and
provided to PACE participants is entities are eligible to request waivers of
review the impact of the interactions
retained. Therefore, we believe there are regulatory requirements.
between the community-based PCPs and
few circumstances when it would be Response: Any entity submitting a
the IDT and participant care before we
appropriate to waive these elements of PACE provider application may submit
alter the conditions currently applied to
the PACE model without substantial a request for waiver. The PO
justification by a PO or potential PO, for these waiver requests. demonstration programs had been
example, the entity being a rural or Comment: Commenters asked operating in some cases for years and
Tribal organization. However, according whether PACE programs which are the implementation of the 1999 interim
to sections 1894(f)(2)(B) and operating under grandfathering final rule could have disrupted
1934(f)(2)(B) of the Act, we do not have arrangements would be required to operations and care to the participants
the authority to waive the provision request a waiver in order to continue as the demonstration programs
requiring the IDT’s central role operations. They believe having to transitioned to permanent provider
managing the health care and other request waiver of operational status and were required to be in
services provided to PACE participants, arrangements grandfathered under BIPA compliance with the 1999 interim final
since it is statutorily mandated. 902 will be administratively rule. BIPA provided flexibility for those
Although we have permitted the use burdensome, and they recommend POs transitioning demonstration programs to
of community-based PCPs, we require be allowed to expand grandfathering continue their existing operational
that effective and consistent arrangements ‘‘organization wide’’ arrangements and a waiver process for
communication be maintained. provided the expansion is ‘‘* * * those organizations that did not meet
Whenever we have received a request reasonably consistent with the the grandfathering criteria but were
for waiver pertaining to use of objectives of the PACE program.’’ They unable to comply with the 1999 interim
community-based PCPs, the PO has had suggested the PO could file a notice final rule. We believe the intent of the
to provide in-depth justification and with CMS describing the expansion waiver provision in BIPA was to assist
meet our conditions for waiver. Among arrangement and how it is consistent organizations to participate in the
other conditions for waiver approval, with program objectives. Medicare and Medicaid PACE benefit
the community-based PCP must perform Response: PACE demonstration program.
all the requirements of the staff PCP program sites were granted BIPA 902 We believe that there may be
including but not limited to ‘‘grandfathering’’ of certain operational circumstances when applicants are not
participation in IDT meetings related to arrangements that did not meet the 1999 able to comply with the regulations. The
their participants’ participation in interim final rule, if the identified BIPA section 903 waiver process allows
Quality Assurance and Performance practice was in place before July 1, developing organizations to work with
Improvement (QAPI) activities and 2000. As the approved ‘‘grandfathering’’ CMS and the SAA to develop an
agree to PO oversight by the medical was effective, only to the extent it appropriate alternative rather than
director. existed on July 1, 2000, we believe it abandon their efforts to become a PACE
Comment: One commenter submitted was not intended to cover a new or program when they discover they can
comments related to the submission and expanded site. As a result, POs need to not meet the regulatory requirements.
evaluation of waiver requests. This submit BIPA 903 waiver requests of Therefore, we have allowed these
commenter supported reasonable waiver grandfathered practices for expansion entities to submit waiver requests. A
requests for community-based PCPs for sites. waiver request must be submitted as a
separate document from the provider the application. Alternatively, waiver Section 460.32 Content and Terms of
application and must contain requests can be submitted PACE Program Agreement
substantial justification for the request. independently of the application by POs In § 460.32(a), we stipulate the
Pre-PACE organizations are Medicaid that are currently operational. required content of a PACE program
pre-paid health plans that provide The timeframe for our response to a agreement.
Medicare services under Medicare fee- waiver request is the same regardless of We require that each PACE program
for-service rules and certain Medicaid the operational status of the requestor. agreement designate the service area of
services paid by Medicaid on a We have a statutory 90-day timeframe to the program, specifically identifying the
capitated basis. These organizations approve or deny waiver requests. As a area by county, zip code, street
may submit a waiver request and their result, when we request additional boundaries, census tract, block, or tribal
PACE provider application information, regarding a waiver request, jurisdictional area, to the extent that
simultaneously but as separate it is incumbent upon the organization to those identifiers are appropriate. Any
documents. respond as expeditiously as possible to changes in the designated service area
We will accept waiver requests from provide CMS and the SAA time to would require advance approval by
non-operational entities and pre-PACE review their responses. We provide a CMS and the SAA. This requirement
applicants, in an attempt to assist new written approval or denial letter to the implements the provisions of sections
organizations that would otherwise be PO or PACE applicant with the 1894(e)(2)(A)(i) and 1934(e)(2)(A)(i) of
unable to meet regulatory requirements. determination and any additional the Act and reflects Part I, section D of
All waiver requests must be submitted conditions. the Protocol.
through the SAA, who will review and
Final rule actions: Each PO must agree to meet all
forward to CMS. Regardless of the prior
In this final rule, we are amending applicable requirements under Federal,
status of the entity, a request for a
paragraph (a)(2) by adding ‘‘or PACE State, and local laws and regulations,
waiver is reviewed on a case-by-case
applicant,’’ thereby requiring CMS to including provisions of the Civil Rights
basis.
Comment: Commenters also requested notify the PO or PACE applicant in Act, the Age Discrimination Act, and
that we make information regarding writing of the decision to deny the the Americans with Disabilities Act.
approved waiver requests available to submitted waiver request. These requirements include, but are not
current and potential POs. limited to, all requirements contained in
Subpart C—PACE Program Agreement the regulations implementing those
Response: At this time, we do not
agree that making information on The purpose of subpart C is to Acts. This requirement implements in
particular PACE programs available is establish requirements for the PACE part the provisions of sections
warranted. We believe it would be more program agreement establishing the 1894(e)(2)(A)(iv) and 1934(e)(2)(A)(iv) of
beneficial for each PO to develop their entity as a provider of PACE benefits the Act.
own unique waiver request and under Medicare and the Medicaid State We require that the program
rationale. Each PO is a unique plan. agreement indicate the effective date
operational entity that has specific and term of the agreement as well as
Section 460.30 Program Agreement information related to: Organizational
circumstances and experience that Requirements
influence the appropriateness for structure of the PO; participant rights;
approving a waiver. Therefore, In accordance with sections 1894(a)(4) processes for grievances and appeals;
approving all similar requests for a and 1934(a)(4) of the Act, we eligibility; enrollment and
waiver of a specific requirement is established § 460.30 to require that each disenrollment policies; service
inappropriate. Our intention is that all PO have an agreement with CMS and description; QAPI; capitation rates;
POs comply with the PACE regulations. the SAA for the operation of a PACE names and numbers of administrative
Final rule actions: program by the organization under contacts in the organization; and
In this final rule, we are expanding Medicare and Medicaid. This three- program agreement termination
the regulatory requirements of § 460.26 party agreement must be signed by an procedures. These requirements are
to permit POs and entities applying to authorized official of the organization, based on sections 1894(b)(2) and
become POs to submit waiver requests. as well as by an authorized CMS official 1934(b)(2) of the Act and on Part X,
and an authorized State official. section A of the Protocol.
Section 460.28 Notice of CMS Each PACE program agreement
Determination on Waiver Requests We received no public comments on
§ 460.30 of the 1999 interim final rule. includes a statement of the levels of
Comment: One commenter requested performance that we require the
In the 2002 interim final rule, we organization to achieve on standard
clarification as to whether an entity
revised the regulatory language to reflect quality measures and the data and
submitting a PACE application is
that the PACE program agreement is a information on participant care that
permitted to submit a waiver request
three-party agreement that is signed by CMS and the State require the
separate from the provider application,
CMS, the SAA, and the PO. Also, we organization to collect. A detailed
as prompt CMS determination will be
added regulatory language to clarify that discussion of the levels of performance
important to the organization’s ability to
CMS may sign a program agreement and the standard quality measures are
move forward with PACE development.
only with a PO that is located in a State contained in the preamble discussions
The commenter also asked whether the
with an approved SPA electing PACE as for § 460.134 and § 460.202(b) in the
CMS timeframe for responding to
an optional benefit under its Medicaid 1999 interim final rule.
waiver requests is affected by the status
State plan. In § 460.32(b), we specify that a PACE
of the request, or whether the applicant
is an operational or a prospective PO. We received no comments on this program agreement may provide
Response: Waiver requests may section of the 2002 interim final rule. additional requirements for individuals
accompany an application, but must be Final rule actions: to qualify as PACE program eligible
prepared and submitted as a separate This final rule will finalize § 460.30 as individuals. This provision implements
document. Requests will be reviewed published in the 1999 and 2002 interim sections 1894(e)(2)(A)(ii) and
simultaneously and in conjunction with final rules. 1934(e)(2)(A)(ii) of the Act. However,
the eligibility criteria in § 460.150(b)(1)– depending on whether a new PACE are annually updated, published, and
(3) cannot be modified. In addition, a center is also being opened. The posted on the CMS Web site. Current
PACE program agreement may contain abbreviated PACE expansion Medicare payment rates can be found at
additional terms and conditions as the application and additional information http://www.cms.hhs.gov/healthplans/
parties agree to, if the terms and regarding the procedures for expanding rates/default.asp.
conditions are consistent with sections a service area on the PACE home page, Final rule actions:
1894 and 1934 of the Act and with these in the PACE Fact Sheet, which is This final rule will amend § 460.32 to
regulations. This provision implements located at http://www.cms.hhs.gov/ indicate that the program agreement
sections 1894(e)(2)(A)(v) and PACE/Downloads/PACEFactSheet.pdf. must include the ‘‘Medicare payment
1934(e)(2)(A)(v) of the Act. Comment: Two commenters asked methodology’’ which replaces the
We received five comments on the when we would provide the ‘‘Medicare capitation rate.’’
1999 interim final rule related to the requirements on standard quality
Section 460.34 Duration of PACE
program agreement, which are listed measures, the requirements for
below. participant care data and information Program Agreement
Comment: One commenter requested and asked whether the requirements are In § 460.34, we specify that each
that we clarify whether the program the same for all PACE programs. A program agreement will be effective for
agreement content is meant as a number of commenters inquired when a contract year, but may be extended for
substitute for all provisions or only the data would be collected and what additional contract years in the absence
some of the provisions of the State the specific measures would be. of a notice by a party to terminate, in
Medicaid contract requirements in 42 Response: The program agreement accordance with the requirements of
CFR part 434. The commenter also identifies the data elements for sections 1894(e)(2)(A)(iii) and
asked whether additional terms and monitoring that must be submitted 1934(e)(2)(A)(iii) of the Act.
conditions could be included in the quarterly by all POs. A further Comment: It was recommended that
PACE program agreement to meet discussion on standard quality we extend the program agreement’s
specific State law requirements. measures, Outcome-Based Continuous designated 1-year contract period to a
Response: The PACE program Quality Improvement (OBCQI), and longer period of time with an automatic
agreement is a three-way contract COCOA–B is in section III subpart H of extender.
between the PO, the SAA and CMS, and this final rule. Response: As noted above, the statute
contains the PACE requirements from Comment: Commenters asked when specifies a 1-year contracting period. We
the Federal statute and regulations. If CMS would provide the Medicare provided for a flexible initial contract
the SAA has requirements beyond those capitation rates. year that could be as long as 23 months
in the three-way PACE program Response: Section 1894(d) of the Act to allow us to adjust the length of the
agreement, those requirements should directs the Secretary to make initial or start-up contract year so that
be addressed in a separate contract prospective monthly payments of a subsequent years are on a standard
between the State and the PO. The capitation amount for each PACE calendar year cycle.
PACE three-way program agreement can program eligible individual enrolled PACE program agreements are
be an attachment to the State-PO under the agreement under this section considered to be ‘‘evergreen’’ meaning
contract. As we stated above, each PO in the same manner and from the same they will be automatically renewed
must agree to meet all applicable sources as payments are made to the without having to be re-signed. We
requirements under Federal, State, and Medicare+Choice (formerly M+C, now believe the term of the program
local laws and regulations. MA) organizations and to specify the agreement is appropriate and consistent
States may implement additional or capitation amount in the PACE program with overall Medicare policy, as well as
more stringent requirements if they are agreement. Therefore, in the 1999 in compliance with the requirements of
consistent with sections 1894 and 1934 interim final rule, we required that the the Act.
of the Act and with Federal laws and Medicare capitation rates be included in Final rule actions:
regulations. However, if there is a the program agreement. The Balanced This final rule will finalize § 460.34 as
conflict between the State and Federal Budget Act of 1997(BBA) mandated that published in the 1999 interim final rule.
requirements, the Federal requirements a risk adjustment payment methodology
incorporating information on Subpart D—Sanctions, Enforcement
would generally take precedence. Actions and Termination
Comment: We were asked to describe beneficiaries’ health status be
the mechanism for revising a signed implemented in the M+C program. The In subpart D of the 1999 interim final
program agreement. resulting PACE payment methodology rule, we specified the violations
Response: We will provide the PO that began in 2004 includes a risk identified in sections 1857(g)(1) and
and the SAA with written notification of adjusted methodology that results in a 1903(m)(5)(A) of the Act that could
any revisions and include updated unique payment for each participant. As result in the imposition of sanctions
pages of the program agreement. The PO a result, it is not possible to include the under sections 1894(e)(6) and 1934(e)(6)
and the SAA have 30 days to send Medicare capitation rates in the program of the Act. We also specified in
written notification to us of any agreement. Therefore, we are amending accordance with paragraph (e)(5) of
disagreement with the revisions. We our regulation to remove the section 1894 and 1934 of the Act, that
have provided information on the requirement that the program agreement CMS or the SAA may terminate the
program agreement on the PACE home include the Medicare capitation amount PACE program agreement at any time
page, in the PACE Fact Sheet, which is and to require, instead, that the program for cause and that a PO may terminate
located at http://www.cms.hhs.gov/ agreement must include the Medicare an agreement after appropriate notice to
PACE/Downloads/PACEFactSheet.pdf. payment methodology. This CMS, the SAA, and participants. We
Comment: One commenter asked that requirement is included in Appendix also specified, in accordance with
we define the procedure for expanding ‘‘M’’ of the program agreement, which paragraphs (e)(5)(C) of sections 1894
a service area. can be found at http:// and 1934(e)(5)(C) of the Act, Part IX of
Response: The procedure for www.cms.hhs.gov/pace/Downloads/ the Protocol, the transition procedures
expanding a service area differs programagreement.pdf. Medicare rates that must be followed by an entity
whose PACE program agreement is in the provision of health care, utilization effect of denying or discouraging
the process of being terminated. Those review, medical social work, or enrollment.
procedures can be found in § 460.50. administrative services. Response: Under § 460.40(d), CMS
We received the following comments may impose a sanction if the PO engages
Section 460.40 Violations for Which in any practice that would deny or
on § 460.40.
CMS May Impose Sanctions discourage a participant from enrolling
Comment: A commenter stated that
In § 460.40 we specified, based on the 1999 interim final rule did not in PACE whose medical condition or
paragraph (e)(6)(B) of sections 1894 and include sanctions or enforcement history indicates a need for substantial
1934 of the Act, that we can impose, in actions that would apply if a program medical service. The exception to this
addition to any other remedies fails to comply with the data collection, sanction is if the applicant is otherwise
authorized by law, any of three types of record maintenance and reporting ineligible under § 460.150 (that is, they
sanctions if we determine that a PO has requirements in subpart L. The are under 55 years of the age, they do
committed any of nine listed violations. commenter asked what is the authority not live in the PO’s service area, they do
The following PO violations specified in to require the POs to comply with these not meet the level of care indicated in
this section are based on provisions of requirements. the State’s Medicaid plan, living in the
sections 1857(g)(1) and 1903(m)(5)(A) of Response: Under the terms of the community would jeopardize their
the Act: program agreement (§ 460.32(a)(2)) the health or safety under the criteria as
• Fails substantially to furnish to a PO is committed to meet all applicable specified in the program agreement, or
participant medically necessary items requirements under Federal, State and any additional eligibility requirements
and services that are covered PACE local laws and regulations, which would approved by CMS and included in the
services, if the failure has adversely include the requirements under subpart PACE provider agreement).
affected (or has substantial likelihood of L. The reporting requirements in Final rule actions:
adversely affecting) the participant. This final rule will finalize § 460.40 as
subpart L impact our ability to calculate
• Involuntarily disenrolls a Medicare capitation payments. Lacking
published in the 1999 interim final rule.
participant in violation of § 460.164. the necessary data to compute an Section 460.42 Suspension of
• Discriminates in enrollment or
appropriate payment, the PO might Enrollment or Payment by CMS
disenrollment among Medicare
receive an inaccurate payment or We described the two types of
beneficiaries or Medicaid recipients, or
possibly no payment at all for the sanctions that we may impose in
both, who are eligible to enroll in a
corresponding month(s). § 460.42 and § 460.46 (civil money
PACE program, on the basis of an
Moreover, failure to submit required penalties). Each of the sanctions, or
individual’s health status or need for
reports could be interpreted as a failure remedies, that are specified in these
health care services.
• Engages in any practice that would by the PO to comply substantially with sections for specific violations are based
reasonably be expected to have the conditions for a PO under this part on provisions of sections 1857(g)(2),
effect of denying or discouraging (§ 460.50(b)(1)(ii)) or to comply with the 1857(g)(4), and 1903(m)(5)(B) of the Act.
enrollment, except as permitted by terms of its PACE program agreement. With respect to suspension of
§ 460.150, by Medicare beneficiaries or Therefore, CMS and the SAA have the enrollment in PACE, we may suspend
Medicaid recipients whose medical option of terminating the PACE program enrollment of Medicare beneficiaries
condition or history indicates a need for agreement due to uncorrected after the date we notify the organization
substantial future medical services. deficiencies. of the violation. Suspending enrollment
• Imposes charges on participants We believe that § 460.40 as published of Medicaid recipients is an action taken
enrolled under Medicare or Medicaid in the 1999 interim final rule by the SAA rather than CMS. With
for premiums in excess of the premiums sufficiently addresses the availability of respect to suspension of payment, we
permitted. sanctions for violations of subpart L may suspend Medicare payment to the
• Misrepresents or falsifies requirements. PO and deny payment to the State of
information that is furnished to CMS or Comment: A commenter indicated it Federal financial participation (FFP) for
the State under this part; or, to an was not clear how CMS intended to medical assistance services furnished
individual or any other entity under this monitor performance in an identified under the PACE program agreement.
part. deficient area nor how CMS and the Comment: One commenter
• Prohibits or otherwise restricts a SAA would cooperate on investigations, recommended that a decision to
covered health care professional from agree on findings, and impose sanctions, suspend enrollment should be a
advising a participant who is a patient enforcement, and termination. collaborative agreement by CMS and the
of the professional about the Response: In a cooperative effort, SAA or the SAA should have the ability
participant’s health status, medical care, CMS and the SAA jointly perform onsite to do so on its own. Therefore, the
or treatment for the participant’s monitoring reviews on a regular basis to commenter recommended establishing
condition or disease, regardless of ensure quality of participant care as an expectation of collaboration between
whether the PACE program provides well as to verify clinical and CMS and the SAA, at a minimum.
benefits for that care or treatment, if the administrative compliance with the The commenter also recommended
professional is acting within his or her PACE regulations. Both CMS and the that we revise § 460.42(b)(2) to
lawful scope of practice. SAAs engage in a collaborative prospectively notify the State that FFP
• Operates a physician incentive plan relationship to sustain oversight of the will be discontinued 60 days from
that does not meet the requirements of PO. We stress communications to receipt of the notice.
section 1876(i)(8) of the Act. ensure that each party has the Response: In the event of any
• Employs or contracts with any information necessary to take violation or imposition of sanctions, we
individual who is excluded from appropriate actions. work closely with the SAA of the State
participation in Medicare or Medicaid Comment: A commenter also in which the PO is located. The
under section 1128 or 1128A of the Act requested we clarify the violation interaction between CMS and the SAA
(or with any entity that employs or incorporated into § 460.40(d), which is by nature a collaborative one and any
contracts with such an individual) for concerns practices that would have the action decided upon is the result of this
collaborative effort. We do not believe intent to close any PACE program. We independently take action against a PO
that adding regulatory language will believe the imposition of the maximum for violations providing there was prior
enhance the inherent collaborative financial penalty is an option that consultation.
working relationship between CMS and would only be used in cases of Response: The statute allows CMS to
the SAAs. egregious violations. We believe it is take an enforcement action but only
Moreover, should we exercise the appropriate to maintain the current after CMS has consulted with the SAA,
sanction option at § 460.42(b)(2), we regulatory requirements, which provide and determines that the PACE provider
will use existing procedures and CMS the ability to impose a broad range has failed substantially to comply with
timeframes for the disallowance of FFP of penalty amounts including the the PACE requirements. While the SAA
claims. These provisions can be found maximum sanction should the situation may take action based on its own
at 42 CFR 430.42. warrant. regulations, we believe, that in light of
Final rule actions: Comment: Six commenters indicated the collaborative relationship between
This final rule will finalize § 460.42 as that the level of penalties is too severe CMS and the SAA, the SAA would
published in the 1999 interim final rule. and recommend the penalties be consult with CMS before taking any
Section 460.46 Civil Money Penalties proportionate to the size of the PACE independent action.
program. One commenter recommended Final rule actions:
In addition to suspension of penalties be left to the discretion of the This final rule will finalize § 460.48 as
enrollment, CMS may impose civil State, while several others indicated published in the 1999 interim final rule.
money penalties as specified in that an appropriate amount would be
§ 460.46. These include penalties of Section 460.50 Termination of PACE
one-quarter of the amount required for Program Agreement
$100,000 plus $15,000 for each Medicaid managed care and M+C plans.
individual not enrolled as a result of the Response: As noted in the previous In § 460.50 we specified, in
PO’s discrimination in enrollment or response, the rule permits a range of accordance with paragraph (e)(5)(A) of
disenrollment or practice that would amounts to be imposed and provides sections 1894 and 1934 of the Act, that
deny or discourage enrollment; $25,000 CMS with the necessary flexibility to CMS or a SAA may terminate at any
plus double the excess amount above impose an appropriate amount time a PACE program agreement for
the permitted premium charged a depending upon the nature of the cause and that a PO may terminate an
participant by the PO; $100,000 for each violation. In addition, we note that agreement after appropriate notice to
misrepresentation or falsification of statute requires CMS to make the CMS, the SAA, and its participants. In
information; and $25,000 for any determination (after consultation with accordance with paragraph (e)(5)(B) of
violation specified in § 460.40. the SAA) to impose any sanctions. sections 1894 and 1934 of the Act, we
Comment: One commenter requested Comment: One commenter relayed specified that CMS or a SAA may
clarification of CMS’ authority to assess the regulation did not indicate to whom terminate a PACE program agreement
financial penalties for violations to dual the fines should be paid. They with a PO if CMS or the SAA
eligible individuals (Medicare recommended the fines be shared determines that:
beneficiaries that are also Medicaid equally between the Federal government • Either there are significant
eligible individuals) as well as and the SAA. deficiencies in the quality of care
Medicare-only beneficiaries. Response: Should CMS impose a fine, furnished to participants, or the PO has
Response: Authority to assess the PO will be informed in writing and failed to comply substantially with
monetary penalties is provided in directed where to send the penalty. The conditions under these regulations or
sections 1894(e)(6) (Medicare PACE statute and regulations at with the terms of its PACE program
provisions) and 1934(e)(6)(Medicaid § 460.46(b) specify that section 1128A of agreement; and
provisions) of the Act. If it is the Act governs disposition of civil • The PO has failed to develop and
determined that a provider has failed to money penalties. It is not the purpose of successfully initiate, within 30 days of
comply with the requirements of those this rule to further address disposition the date of the receipt of written notice,
sections of the Act and the regulations, of amounts recovered. a plan to correct the deficiencies, or has
CMS has the authority to impose Final rule actions: failed to continue implementation of
monetary penalties for violations This final rule will finalize § 460.46 as such a plan.
impacting either dual eligible or published in the 1999 interim final rule. Based on the Protocol, Part IX, section
Medicare-only participants. A.1, we also provided for termination if
Comment: Several commenters Section 460.48 Additional Actions by CMS or the SAA determines that the PO
expressed concern that the civil CMS or the State cannot ensure the health and safety of
monetary penalties for POs are the same In § 460.48 we specified, based on its participants. This determination may
or greater than those of Medicaid paragraph (e)(6)(A) of sections 1894 and result from the identification of
managed care and MA organizations. 1934 of the Act, that if CMS, after deficiencies, which CMS or the SAA
The commenters pointed out that consultation with the SAA, determines determines cannot be corrected. Based
significant size and revenue differences that a PO is not in substantial on the Protocol, Part IX, section A.2, we
between MA and POs warrant lower compliance with requirements in these also required that if the organization
penalties for POs. In addition POs have regulations, CMS or the SAA can take terminates the agreement, a minimum of
a smaller pool of potential participants one or more of the following actions: 90 days’ notice must be given to CMS
than managed care organizations, which Condition the continuation of the PACE and the SAA regarding the
must enroll all individuals regardless of program agreement upon timely organization’s intent and that
need. execution of a corrective action plan; participants must be given a minimum
Response: We believe the current withhold some or all payments under of 60 days notice.
requirement as published is appropriate the PACE program agreement until the Comment: Termination of the PACE
in that it allows for imposition of a organization corrects the deficiency; or program and transitional care during
range of penalty amount from one dollar terminate the program agreement. transition were topics of several
up to and including the amounts Comment: One commenter questioned comments and recommendations we
identified in § 460.48. It is not CMS’ whether CMS and the SAA could received. Recommendations included
adding regulatory language requiring participants to obtain reinstatement of necessary transitional care through
CMS and the SAA to agree and conventional Medicare and Medicaid appropriate referrals.
coordinate their actions related to benefits, transition their care to other If the PO initiates the termination, it
termination of a PACE program providers, and terminate marketing and must provide CMS 90 days’ notice,
agreement. Another recommendation enrollment activities. This information which should provide sufficient time to
was to require that CMS and the State can be located at http:// transition participants to alternative
consider the likelihood of www.cms.hhs.gov/pace/, Chapter 1, care. If a participant is eligible for
institutionalization of community section 3. Also, in accordance with Medicaid, the State should provide
participants in determining whether paragraphs (a)(2)(C) and (e)(5)(C) of assistance in arranging for alternative
termination should be imposed. sections 1894 and 1934 of the Act, we care.
Response: Neither CMS nor the State specified in § 460.52 that an entity For Medicare beneficiaries,
considers termination lightly, and our whose PACE program agreement is in disenrollment from PACE permits
primary concern is protecting the health the process of being terminated must reinstatement into original Medicare
and safety of the participants. All provide assistance to each participant in fee-for-service or enrollment into an MA
possible ramifications of terminating a obtaining necessary transitional care plan through a special election period.
program agreement, including the through appropriate referrals and Final rule actions:
likelihood of participants becoming making the participant’s medical This final rule will finalize § 460.52 as
institutionalized, will be considered records available to new providers. published in the 1999 interim final rule.
before taking such a severe action. Comment: We were asked what
However, we disagree with the constitutes ‘‘community’’ in Section 460.54 Termination
commenters and do not believe § 460.52(a)(1). Procedures
revisions to the regulations are Response: In the context of the In § 460.54, we specified termination
warranted. As stated in response to § 460.52(a)(1) of the 1999 interim final procedures based on paragraph (e)(7) of
previous commenters, we believe the rule, the term ‘‘community’’ refers to the sections 1894 and 1934 of the Act,
cooperative nature of the relationships general public. Notification to the which provide that:
between CMS and the SAAs will lead to community would include publishing • The provisions of section 1857(h) of
agreement on a decision to terminate a information regarding the termination in the Act apply to termination of a PACE
program agreement. We note however, one or more of the generally circulated program agreement in the same manner
the statute and regulations specify that newspapers in each community or as they apply to a termination of a
CMS or the SAA may independently county located in the PO’s service area. contract with a M+C organization under
terminate a PACE program agreement. Comment: A commenter asked when Part C of title XVIII of the Act.
Comment: A commenter suggested
the transition plan is due (upon • The provisions of section 1857 of
that the regulations include the
notification of termination, or at an the Act authorize termination of an
appointment of a temporary manager to
earlier point such as at the readiness agreement with an organization based
supervise the operation of the PACE
review or in the context of the program on the following:
program as an alternative to termination
agreement). • CMS provides the organization with
of the program agreement.
Response: To date our experience Response: A written plan for the reasonable opportunity to develop
with the POs does not indicate the transition in the event of termination is and implement a corrective action plan
necessity of including this remedy in a component of the PACE provider to correct the deficiencies that were the
regulation. We will continue to assess application and is due at the time the basis of the determination that cause
the performance of POs and we may POs application is submitted. exists for termination; and
consider this sanction in the future. We Comment: A commenter was • CMS provides the organization with
note that § 460.48(a) states that CMS or concerned that the regulation needed to reasonable notice and opportunity for
the SAA may condition continuation of provide additional participant hearing (including the right to appeal an
the PACE program agreement upon protection against loss of services in the initial decision) before terminating the
timely execution of a corrective action event of PO termination. More agreement.
plan (CAP). The appointment of a specifically, the commenter However, termination is authorized
‘‘temporary manager’’ could be included recommended that except where there is by section 1857(h)(2) of the Act without
within the provisions of a CAP. As such, an immediate threat of health and safety invoking these procedures if we
it would be unnecessary to specify of the participants, the PO should be determine that a delay in termination,
specific remedies (including a required to continue services until such would pose an imminent and serious
temporary manager) that CMS might time as a participant is receiving risk to the health of participants
include in the CAP for a particular PO. alternative services under Medicare enrolled with the organization.
Final rule actions: and/or Medicaid, or both, as Comment: A commenter asked what
This final rule will finalize § 460.50 as appropriate, in accordance with the is meant by ‘‘reasonable opportunity’’ in
published in the 1999 interim final rule. plan of care. relation to the development and
Response: In the event a PACE implementation of a CAP and
Section 460.52 Transitional Care program agreement is terminated, we ‘‘reasonable notice’’ for a hearing before
During Termination believe the regulation provides for terminating the program agreement.
Based on the Protocol, Part IX, section sufficient participant safeguards. These Response: Under normal
B, we require that the PO develop a safeguards are applicable regardless of circumstances, the PO is allowed 30
detailed written plan for phase-down in who initiates the termination; the PO, days from the time they receive the
the event of termination which includes CMS, or the SAA. Section 460.52(b) written report following a monitoring
the following: The process for informing provides that a PO must have a written review to submit a written response
participants, the community, CMS and plan for phase-down in the event of with the CAP to CMS and the SAA. If
the SAA in writing about termination termination which describes how the the PO is unable to submit a CAP within
and transition procedures; and steps organization plans to provide assistance the 30 day period, they may request an
that will be taken to help assist to each participant in obtaining extension. The determination to permit
the extension is made based on the POs are also required to inform CMS section also established requirements
particular circumstances at issue. and the State by e-mail within 24 hours related to physical environment,
If participant health and safety is in of the occurrence of a ‘‘sentinel event’’ infection control, transportation
jeopardy, the monitoring team will (or as soon as a determination is made services, dietary services, fiscal
inform the PO before their departure that the occurrence may be a sentinel soundness, and marketing.
that a quicker response is required. event).
Implementation of the CAP is We have defined a sentinel event as Section 460.60 PACE Organizational
dependent on the intensity and an unexpected occurrence that caused a Structure
complexity of the deficiencies participant death or serious physical or We established § 460.60 to specify the
identified. Initiation of the CAP should psychological injury that included structural requirements for a PO. As we
be as immediate as possible. In the permanent loss of function. We explained in the preamble to the 1999
event the deficiency relates to the health included in this definition any medical interim final rule, we believe that the
and safety of participants, equipment failures that could have requirements specified in § 460.60 are
implementation of the CAP must be caused a death and all attempted essential to the PO’s ability to ensure
immediate. On the other hand, should suicides. the health and safety of the participants.
the deficiency be related to the physical The sentinel event policy for PACE The performance of certain basic
facility itself, (for example, an electrical can be found at http:// organizational functions is a minimum
or plumbing issue) it may take time to www.cms.hhs.gov/PACE/Downloads/ condition for an environment in which
retain the appropriate experts to receive sereporting.pdf. appropriate care can occur. We based
a quote for required construction or The purpose of the sentinel event the organizational structure
repair, prepare and sign a contract to reporting policy is to provide guidance requirements on Part I of the Protocol.
perform the services, arrange for to the PO regarding their responsibility We require that the PO have a current
permits, materials, staff required and should a sentinel event occur. CMS organizational chart showing officials in
then to have the construction/repair views these events as opportunities to the PO. The chart for a corporate entity
performed. conduct analyses of the underlying root must indicate the PO’s relationship to
Comment: A commenter asked how causes, which will reduce the risk of the corporate board and to any parent,
CMS expects to become aware of any recurrence of a similar event. We also affiliate, or subsidiary corporate entities.
imminent and serious risks to note that generally when a concern or In the 1999 interim final rule, we
participants, as described in § 460.54(b). complaint other than a sentinel event is required a PO that is planning a change
Response: In addition to our usual brought to the attention of CMS or the in organizational structure to notify
monitoring procedures, there are a SAA, fact finding activities are initiated, CMS, the SAA, and its participants, in
number of mechanisms in place that which can include but are not limited writing, at least 60 days before the
could provide CMS and the SAA with to a desk review of documentation, change takes effect. Further, we required
information indicating imminent and conference calls, or an onsite review, changes in organizational structure to be
serious risk to participants. The depending upon the case-specific approved by CMS and the SAA, and
participant’s family or caregiver is circumstances. after approval, to be forwarded to the
actively involved in the plan of care and Lastly, POs can request to have PO’s consumer advisory committee
the PO is required to have a robust quarterly conference calls with CMS (described later in this preamble).
grievance and appeals process. In this and the SAA to discuss policy or Finally, in the event of a change of
manner, we could be directly notified operational issues. We believe quarterly ownership, we would apply the general
on any concerns about quality of care. calls between the PO, the SAA and CMS provisions described in 42 CFR 422.550.
In addition, there may be an are of great benefit in facilitating more The Protocol requires that a PO have
ombudsman program in the State, open communications. Quarterly calls a project director. In the 1999 interim
which could be accessed if there were foster a good working relationship that final rule, we included this requirement,
concerns about quality of care. POs are is helpful when CMS or the SAA need but changed the term to ‘‘program
also required to report quarterly data to investigate a concern or complaint director’’ and further defined the role of
elements for monitoring and financial they have received. this individual. The PO must have a
reports. CMS and the SAA routinely Final rule actions: program director who is responsible for
review the reports, which would This final rule will finalize § 460.54 as the oversight and administration of the
provide indications that there could be published in the 1999 interim final rule. entity. The program director is
issues with patient care. responsible for the effective planning,
For example, there is an unexpected Subpart E—PACE Administrative organization, administration, and
shortfall in revenues reported and a Requirements evaluation of the organization’s
sudden increase in the number of falls. The purpose of subpart E is to operations. The program director would
In this case, CMS or the SAA would establish the administrative also ensure that decisions about
follow up with the PO to inquire about requirements for entities applying for medical, social, and supportive services
the changes in their patterns, and ensure participation in the PACE benefit. In are not unduly influenced by fiscal
that participants are receiving adequate this subpart, we established managers. The program director is
care. requirements relating to organizational responsible for ensuring that
As noted above, CMS may terminate structure, the governing body, and appropriate personnel perform their
an agreement without invoking the program integrity of the entity, as well functions within the organization. The
procedures described in § 460.54(a), if as relationships between entities. In program director would inform
CMS determines that a delay in addition, we specified personnel employees and contract providers of all
termination, resulting from compliance qualifications and on-going training that organization policies and procedures. If
with these procedures before must be implemented by the PO for the PO is part of a larger health system,
termination, would pose an imminent employed and contracted staff, the program director would clearly
and serious risk to the health of requirements for contracting services, define and inform PO staff (employees
participants enrolled with the and oversight of employed and and contractors) of the policies
organization. contracted staff requirements. This applicable to the PO.
In the 1999 interim final rule, we also the PACE model would lose dedicated All commenters recommended
maintained the Protocol’s requirement management. This concern was deleting the requirement to report
for a medical director, but we further submitted in response to both the 1999 changes in staffing. Several commenters
delineated the responsibilities of this interim final rule and the amended 2002 requested that we clarify which changes
position. The PO must have a medical interim final rule. in organizational structure require
director who is responsible for the Response: We note that in the 1999 notifying CMS and the SAA because it
delivery of participant care, clinical interim final rule, we retained the appeared that any change of job title or
outcomes, and the implementation and Protocol’s requirement that the program the creation of a position or unit within
oversight of the QAPI program. Thus, director and medical director be the PO would warrant prior approval by
the medical director is responsible for employees of the PO. CMS and the SAA. It was also noted
achieving the best possible clinical However, in response to the large that various staffing changes and shifts
outcomes for all participants. Under this number of public comments received on in reporting relationships can be
requirement, we would expect the § 460.60 of the 1999 interim final rule, implemented seamlessly with no
medical director to use the we revised the regulatory requirements disruption in service to the participants.
organization’s data to demonstrate in the 2002 interim final rule to allow Approval of organizational changes
internal improvements in outcomes over POs the flexibility to contract for all was another topic that elicited
time. members of the IDT, the program comments. Some commenters suggested
The 1999 interim final rule director, and medical director as well as that the requirements regarding
established § 460.60 that required that all PACE center services. We also approval by CMS and the SAA of
the PACE program director and the expanded § 460.70 to include additional changes in organizational structure be
medical director be employees of the contract requirements. deleted because micromanagement
PO. In order to allow for contracting of In response to the comment about could impede a PO’s ability to
the PACE program director and medical losing dedicated management because proactively adjust its structure to meet
director, in the 2002 interim final rule, of contracting for the program director prevailing concerns as well as to
we amended § 460.60(b) and (c) to and medical director, we do not believe respond to the needs of enrollees. Other
require that the PO employ these staff that a personal commitment to the commenters thought that advance
members directly or have contracts for PACE model is related to employment approval by the SAA should be
these staff that meet the contracting status. We continue to believe that sufficient.
requirements specified in § 460.70. anyone, contractor or employee, PCA, or There were also a number of
Comment: We received several director can believe in the PACE recommendations of timeframes for
comments related to the possibility of philosophy and wish to provide care submitting advance notification.
PACE being operated as a for-profit through this model. Therefore, we are Suggestions ranged from not informing
entity. Commenters provided examples not amending this requirement in this CMS at all to 60 days, which would
of organizations that are unable to final rule. include time for CMS and the SAA to
participate in PACE due to the Comment: Several commenters stated review and approve the proposed
requirement that POs maintain non- that, as currently written, the regulatory organizational change. If CMS and the
profit status. requirement assigns responsibility for SAA did not respond within the 60-day
Response: We note that sections QAPI to both the governing body and period, the PO’s organizational changes
1894(a)(3)(B) and 1934(a)(3)(B) of the the medical director. They requested would be deemed approved. Some
Act allow private, for-profit entities to confirmation that the governing body’s commenters suggested we follow the
participate in PACE, subject to a responsibility is to affect a program- State Medicaid regulations of some
demonstration waiver described in wide approach to quality, ensuring States, which require notification at
section 1894(h) of the Act. Should for- alignment of unit activities with overall least 14 calendar days before the
profit entities wish to participate in objectives, whereas the responsibilities effective date of the change. Another
PACE, they should apply for a of the medical director would be more commenter suggested that we require
demonstration waiver under section narrowly focused on clinical aspects of prior notification and approval of
1894(h) of the Act. While participating care. changes in ownership and only require
in the PACE for-profit demonstration, Response: The commenters are notification of other changes in clinical
they must meet all requirements set correct. Although QAPI activities and or administrative structure.
forth in PACE regulations. We explicitly objectives affect every staff member and One commenter recommended the
stated that we would expect the PO to contractor, the governing body has regulatory language specify that the PO
retain all key administrative functions overall responsibility for the QAPI is responsible for forwarding
including marketing and enrollment, program and the medical director has information relating to changes in
quality assurance and program overall clinical responsibility. organizational structure to the consumer
improvement, and contracting for Comment: In response to our advisory committee.
institutional providers and other key solicitation for comment regarding the Several commenters agreed that
staff. extent to which changes in changes that impact the day-to-day
Comment: We received conflicting organizational structure are important to experience of the participants or alter
opinions regarding whether to allow participants, we received a number of their normal patterns of interaction with
flexibility in contracting for various suggestions that we revise the the PACE program should be
members of the IDT, the program requirement to notify CMS, or CMS and communicated to participants in
director, the medical director, as well as the SAA, of changes in organizational sufficient time for them to adjust to the
PACE center services. The majority of structure. Commenters were consistent changes, and that this notification
commenters advocated for flexibility in in their recommendations that should be the responsibility of the PO.
order to be responsive to the needs of notification should only be required for Response: Comments on this section
individual POs. However, some a change in ownership, governing board, address three separate requirements, the
commenters expressed concern that by or delivery system, focusing on those requirement for CMS and the SAA to be
allowing the PO to contract for the changes that significantly impact service notified in writing at least 60 days
medical director and program director, delivery. before a change in organizational
structure, the requirement that CMS and changes to the consumer advisory providers and other key staff, as well as
the SAA approve changes in committee. As changes will no longer retaining ultimate responsibility for
organizational structure, and the need to be approved by CMS and the oversight of all direct participant care.
requirement that changes in SAA we believe the requirement to Final rule actions:
organizational structure approved by forward the CMS and SAA approvals to In this final rule, we are changing the
CMS and the SAA be forwarded to the the consumer advisory committee is requirements related to changes in
consumer advisory committee. now unnecessary and should also be organizational structure by:
We established this section in the removed. • Requiring 14-days notice before
1999 interim final rule to require We reiterate that in the event of a making organizational changes;
disclosure of organizational changes change of ownership, CMS would apply • No longer requiring CMS and SAA
that affect the philosophy, mission, and the general provisions described in approval; and
operations of the PO and impact care § 422.550 (Effect of change of ownership • No longer requiring the PO to
delivery to participants. At that time, we or leasing of facilities during term of forward the CMS approval to the
believed that any change in ownership, contract.) consumer advisory committee.
relationships to another corporate board Comment: Another commenter Section 460.62 Governing Body
and to any parent, affiliate, or subsidiary questioned whether two organizations
corporate entities, the PACE governing wishing to develop PACE as a In the 1999 interim final rule, we
body, its officials, program director, and cooperative venture must establish a established the requirements and
medical director could result in a separate and distinct entity to comply responsibilities of the governing body
substantial impact on the participants with all requirements and provisions of that is legally and fiscally responsible
and their care. However, it was not our the regulations. The commenter for the administration of the PO. We left
intent to require the PO to notify CMS believed this approach would impede the specific approach to administration
and the SAA in writing every time there PACE development by restricting of the PO to the discretion of the
was a change in personnel or a change opportunities for entities to jointly governing body, reflecting our goal of
in the line of reporting of direct approach PACE development. This promoting the effective management of
participant care staff. commenter also requested clarification the organization without limiting
The 1999 interim final rule required of the regulations to clearly permit flexibility in determining how to
that POs planning to change their flexibility within the provider achieve that goal.
organizational structure must notify community, including the ability for the The governing body must create and
CMS and the SAA, in writing, at least PO to contract for the PACE center foster an environment that provides
60 days before the change takes place. services. quality care that is consistent with
This timeframe was to allow sufficient Response: We view this comment as participant needs and the program
time for CMS and the SAA to approve addressing two different issues. First, in mission. To that end, the primary
or deny the proposed change. We agree response to whether a separate and requirement is that an identifiable
with the commenters that notification of distinct entity would need to be governing body, or designated person(s)
60 days before implementing a change established if two organizations so functioning, have full legal authority
in organizational structure is developed a cooperative venture, the and responsibility for the governance
unnecessary. organizations involved would need to and operation of the organization, the
Therefore, in response to the establish a separate and distinct entity development of policies consistent with
numerous comments relating to the to be the PO that is responsible for the mission, the management and
disclosure of changes in organizational complying with all requirements and provision of all services (including the
structure, in this final rule we are provisions of the regulations. Because management of contractors), fiscal
amending this section to require any PO the PO signs a three-way program operations, and the development of
who is planning a change in agreement and is the entity responsible policies on participant health and
organizational structure to notify CMS for the management of the organization, safety. Also, the governing body will
and the SAA, in writing, 14 days before we believe that this needs to be a single establish personnel policies and
the change takes place. We believe that entity. The PO is the responsible entity contract provisions with respect to
14 days advance notice provides an for assuming full financial risk, employees or contractors with patient
adequate timeframe for CMS and the administration activities, and care responsibilities giving adequate
SAA to review the changes, and is comprehensive coordinated participant notice before leaving the PO’s network.
consistent with some States Medicaid care. We do not believe these These provisions would be intended to
notification requirements. responsibilities can be split up and still avoid disruptions in care and permit
We are also deleting the requirement maintained under a single entity. In our orderly transition of responsibilities.
that changes in organizational structure experience, this requirement has not We included a requirement that the
must be approved in advance by CMS unduly restricted organizations from governing body be responsible for the
and the SAA. We agree with the developing a PO through a cooperative QAPI program. The purpose of this
commenters that POs have the ability to agreement. requirement is to link the development,
make such business decisions based on The second issue is whether the implementation, and coordination of the
their individual circumstances. cooperative venture arrangement would ongoing QAPI program with all aspects
However, as CMS and the SAA are be precluded from using subcontractors. of the PACE program. We believe this
responsible for the health care provided As long as the arrangements designated requirement will stimulate an aggressive
to participants, requiring notification a PO, as noted above, the 2002 interim effort by the organization to identify and
will allow CMS and the SAA to monitor final rule provided flexibility to allow use the best available practices for all
whether the change is having a for contracting out all required PACE participants. As discussed in the section
substantial impact on the participants or services as well as the PACE center on the QAPI program, the PO has the
their care. services, providing that the PO retains flexibility to design its own quality
In the 1999 interim final rule, the PO all key administrative functions improvement program.
was required to forward the CMS and including marketing, enrollment, QAPI, Consistent with the Protocol, we also
SAA approval of their organizational and contracting for institutional included a requirement that the PO
must ensure community representation Response: In response to these advisory committee, and participant
on issues related to participant care. commenters, we are revising the representative; and
This may be achieved by having a regulation by changing the names and • Rearranging the order of the
community representative on the focus of the ‘‘consumer advisory requirements.
governing body. In addition, the PO committee’’ to the ‘‘participant advisory Section 460.64 Personnel
must establish a consumer advisory committee’’ and the ‘‘community Qualifications for Staff With Direct
committee to provide advice to the representative’’ to the ‘‘participant Participant Care Contact
governing body on matters of concern to representative.’’ We are also adding a
participants. As we indicated in the definition of ‘‘participant We indicated in the 1999 interim final
1999 interim final rule, consumer representative,’’ which defines the rule that although the Protocol does not
participation through advisory responsibilities of this individual. We specify personnel requirements for the
committees is a well-accepted disagree with the commenters who various staff employed by or under
community organization vehicle to indicated that the governing body needs contract with the PO, we believe that
maximize the involvement of to have a greater number of consumer certain minimum standards must be met
participants in a program designed to representatives. By changing the names in order to ensure quality of care for the
serve them. With the use of such a and objectives of the consumer frail elderly population being served. To
committee, the governing body will committee and community this end, we established § 460.64.
representative, we anticipate Our approach to personnel
have the benefit of participant input,
participants and their representatives qualifications in the 1999 interim final
including information on quality of care
becoming more involved in topics that rule followed principles described in a
issues. Participants also are likely to feel
impact their care. We believe that the March 10, 1997 Federal Register
a greater stake in the operation of the
more participants feel they are publication proposing changes to the
program. In order to ensure appropriate
stakeholders, the more involved they COPs for home health agencies (62 FR
representation, participants and
will be in their PO. 11022). This is a flexible approach,
representatives of participants must
The interactive nature of the PACE which relies on State requirements as
constitute a majority of the membership
model is such that participants are much as possible.
of this committee. One specific duty of The personnel qualifications fall into
the participant advisory committee is to encouraged to be involved and voice
their opinions. Therefore, we expect the three categories: (1) Personnel for whom
receive information from the governing there are statutory qualifications; (2)
body to be disseminated to participants. governing body to be more receptive to
participant input presented by the personnel for whom all States have
Comment: We received several licensure, certification, or registration
comments regarding community participant representative. This
collaborative relationship is expected to requirements; and (3) personnel for
representation on the governing body. whom we have specified requirements if
Commenters noted that a single achieve higher quality of care and
higher participant satisfaction. the State does not have licensure,
consumer representative did not have a certification, or registration
sufficient impact on health programs Therefore, we would not be inclined to
waive this requirement without requirements.
when the governing body is made up Category 1: This category consists of
almost entirely of provider significant justification on the part of
the PO. personnel for whom the Act contains
representatives. The commenters qualifications, which in § 460.64(b)
We do not specify how large the
requested that the regulations be pertains specifically to physicians.
participant advisory committee must be,
changed to require at least one-third of Section 1861(r) of the Act defines a
but we expect it to be representative of
the governing body to be community physician as a doctor of medicine or
the size and population of the PO’s
representatives who are Medicare or osteopathy, legally authorized to
participants.
Medicaid beneficiaries or are designated We also understand that there may be practice medicine and surgery by the
by organizations that advocate for these topics or times when the governing State in which that function or action is
persons. In addition, they recommended body would believe that it is performed, or certain other practitioners
that the governing body should include inappropriate for participants to attend for limited purposes. We adopted the
at least one PACE program participant the entire governing body meeting. definition as reflected in regulations at
and one family member of a participant. When this occurs, we would expect the 42 CFR 410.20.
They also requested that we include a meeting agenda to be arranged such that In addition, to reflect the key role of
requirement that the PO provide the participant representative could the PCP in the PACE model, we
information to CMS and the SAA to attend a portion of the meeting to required the PCP to have a minimum of
ensure compliance with community present participant issues. 1 year’s experience in working with a
representation on the governing body. We also disagree with the commenter frail or elderly population.
One commenter stated that because that requested we require POs to submit Category 2: For this category of
POs are small programs, they may find information to ensure compliance with personnel qualifications, we deferred to
it difficult to comply with the community representation on the State law. We specified that all staff
requirement of a consumer advisory governing body. Minutes and other (employee or contractor) of the PO must
committee in that it may be difficult to official documents pertaining to meet applicable State requirements.
get enough consumers or their governing body meetings must be That is, they must be legally authorized
representatives to serve on an ongoing available for review by CMS and the (currently licensed or, if applicable,
committee. They suggested instead that SAA during onsite visits and at the certified or registered) to practice in the
POs be allowed to request a waiver of request of either agency. State in which they perform the
this requirement, where they can Final rule action: function or action and must act within
demonstrate that sufficient In this final rule we are: the scope of their authority to practice.
opportunities exist for obtaining input • Changing the names and For example, to practice nursing, every
from consumers and their responsibilities of the consumer registered nurse in the State must be
representatives on matters of concern to advisory committee, community licensed and practice within their
participants. representative to the participant State’s scope of practice authority.
Category 3: This category of personnel proficiency examination conducted, quality care to PACE participants. Thus,
qualifications includes certain approved, or sponsored by the U.S. we required POs to implement a
professions for which not all States had Public Health Service, except that this training program for each PCA to ensure
licensure, certification, or registration determination of proficiency does not that they exhibit competency in basic
requirements. Our intention was that if apply with respect to persons initially skills in personal care services.
a State has licensure, certification, or licensed by a State or seeking initial Although we did not define the
registration requirements for a qualification as an occupational parameters of the training program, we
professional listed in this section, then therapist after December 31, 1977; and indicated the training program should
the State qualifications would apply. (4) have a minimum of 1 year’s include maintenance of a clean, safe,
The following requirements would only experience working with a frail or and healthy environment; appropriate
apply to those personnel in Category 3 elderly population. and safe techniques in personal hygiene
when the State they practice in does not We required that the recreation and grooming; safe transfer techniques
have licensure, certification, or therapist or activities coordinator have 2 and ambulation; reading and recording
registration requirements. years experience in a social or temperature, pulse, and respiration; and
After reviewing the personnel recreational program providing and observation, reporting, and
requirements of other Medicare and coordinating services for a frail or documentation of patient status and the
Medicaid providers that serve elderly population within the last 5 care or service furnished. In addition,
populations similar to PACE years, one of which was full-time in a the training program developed for each
participants (for example, home health patient activities program in a health PCA must include other elements
agencies, nursing facilities), in the 1999 care setting. consistent with their assigned duties for
interim final rule, we established We required that the dietitian (1) have specific participants.
personnel requirements for POs that a baccalaureate or advanced degree from Finally, we acknowledged that PCAs
were as consistent as possible with an accredited college with major studies in the home environment may furnish
those applicable to other Medicare in food and nutrition or dietetics; and not only personal care services, but also
providers. If a State does not have (2) have a minimum of 1 year’s home care services. Therefore, when the
licensure, certification, or registration experience working with a frail or participant needs home care services,
requirements applicable to the following elderly population. the PO must ensure that it has qualified
professions, then the qualifications We required that all PACE center
staff (either employees or contractors)
specified below apply. drivers (1) have a valid driver’s license
that meet the competency requirements
We required that the registered nurse to operate a van or bus in the State of
operation; and (2) be capable of and established by the PO and approved by
be a graduate of a school of professional
experienced in transporting individuals CMS for home care aides to furnish
nursing and have a minimum of 1 year’s
with special mobility needs. these services.
experience working with a frail or
elderly population. We did not define personnel We received a large number of
We required that the social worker (1) requirements for the PACE center comments regarding personnel
have a Master’s degree in social work manager or the home care coordinator. requirements.
from an accredited school of social We gave POs the flexibility to determine Comment: Numerous commenters
work; and (2) have a minimum of 1 who is best suited to fill these positions were concerned that the 1999 interim
year’s experience working with a frail or as each PACE center may have different final rule did not appropriately
elderly population. needs. Because the home care emphasize that State licensure laws,
We required that the physical coordinator is responsible for acting as certification, and registration
therapist (1) be a graduate of a physical the liaison between the IDT and the requirements take precedence over the
therapy curriculum approved by the home care providers, she or he should requirements specified in the 1999
American Physical Therapy possess good leadership and interim final rule which may lead to
Association, the Committee on Allied communication skills. In addition, the creating unnecessary and unintended
Health Education and Accreditation of home care coordinator should be able to conflicts between the PACE regulation
the American Medical Association, or identify and understand participants’ and State requirements.
the Council on Medical Education of the medical and social needs in order to Commenters believe establishment of
American Medical Association and the evaluate the home care needs of provider qualifications is traditionally a
American Physical Therapy Association participants. As a result, we indicated State function. The commenters
or other equivalent organizations that a registered nurse or social worker indicated it would be sufficient for the
approved by CMS; and (2) have a would be a good candidate to fill this regulation to specify that individuals
minimum of 1 year’s experience position. However, it was not our providing PACE services meet
working with a frail or elderly intention to deter the PO from applicable State requirements. It was
population. considering another candidate with suggested that States be permitted to
We required that the occupational appropriate qualifications because they define a combination of education and
therapist (1) be a graduate of an were neither a registered nurse nor a experience qualifications and that CMS
occupational therapy curriculum social worker. grant a waiver of these educational and
accredited jointly by the Committee on We did not impose personnel experience requirements if there are
Allied Health Education and requirements for personal care staff development procedures in place
Accreditation of the American Medical attendants (PCAs) as these individuals for those waived individuals, and where
Association and the American will primarily be providing non-skilled, the PO’s decision to hire staff without
Occupational Therapy Association; (2) personal care services (such as bathing, the required qualifications will not
be eligible for the National Registration toileting, and transferring). In the 1999 adversely impact the quality of care.
Examination of the American interim final rule, we solicited Commenters also recommended that
Occupational Therapy Association; (3) comments on whether to include services that do not require State
have 2 years of appropriate experience specific personnel requirements for licensure or certification not be subject
as an occupational therapist and have PCAs. It is important that PCAs possess to additional requirements in Federal
achieved a satisfactory grade on a certain basic skills necessary to provide regulations.
There was also concern that the (licensed, certified or registered) to program, which has to be evidenced as
requirements set forth in the 1999 practice in the State in which they completed before an individual may
interim final rule would be adopted as practice if the State has established perform participant care. We believe
minimum Federal requirements, requirements. All States have licensed, that demonstrating competency prior to
regardless of whether State licensure, certified or registered requirements for performing direct participant care is
certification, or other registration exists. physicians, registered nurses, social essential to ensure the delivery of safe
If this adoption takes place, the PO’s workers, physical therapists, care. Therefore, we are adding
burden of locating adequate numbers of occupational therapists, and dietitians. competency as paragraph (a)(4) to the
staff will be magnified. All other direct care providers, must general personnel qualification
Recommendations ranged from meet the State requirements that requirements for staff performing direct
removing personnel qualification authorize them to practice in their State. participant care.
requirements to allowing health We believe that all professions must act Section 460.71, Oversight of direct
professionals to be permitted to within the scope of their authorized participant care required the PO to
minimally meet State requirements for practice guidelines. Each profession has develop a program to ensure all staff
medical professional practice. established guidelines that define the furnishing direct participant care was
Response: In establishing personnel services that may be performed within free of communicable disease. We
qualifications, we did not intend to the scope of the minimum level of believe this is even more important with
usurp the State’s authority. Throughout knowledge and training for each a frail elderly population considering
the regulation, we have indicated that professional level. For example, the their complex medical conditions and
POs must meet all Federal, State, and scope of practice is different for licensed increased susceptibility. It is standard
local regulations and laws. We believe practical nurses, registered nurses, practice in the health care industry that
that the present qualifications clinical nurse specialist and nurse an individual must be cleared as free of
established for PACE set forth the practitioners. Regardless, each nurse is communicable disease prior to
necessary qualifications to ensure the expected to practice within his or her employment. We are therefore
health and safety of this frail elderly respective level. amending § 460.64 to require that all
population. Should State regulations be In the 1999 interim final rule, each PACE staff with direct participant
more stringent than those of this profession listed in § 460.64 (b) and (c) contact be medically cleared of
regulation, then the PO must meet the was required to have one year of communicable disease and have all
State requirements as well. experience working with the frail or immunizations up-to-date before
We believe there was considerable elderly population (except for the engaging in direct contact with
confusion and misunderstanding of the Recreational Therapist/Activity participants.
personnel qualification requirements Coordinator who was required to have For those professions where not all
published in the 1999 interim final rule. two-years experience). The PACE States have licensure laws, State
In that rule, we based personnel population is comprised of the frail certification or registration
qualifications on whether the State had elderly who need to be cared for by staff requirements, specifically Recreation
licensure, certification, or registration that has the specific training and therapist/Activity coordinator and
requirements for a profession. In States experience to understand the drivers, we believe that all States have
where there was no State licensure, complexities and differences in geriatric minimum requirements to ensure that
certification, or registration, we required patients. It is essential for staff to have services are provided safely. For
minimum educational qualifications for the knowledge of geriatric practices and example, States require a special class of
each profession. skill to work with these individuals. driver’s license to transport people for
In response to the comments and to Experienced staff will be conscious that money. In addition to the general
reduce the confusion over personnel when dealing with the frail or elderly personnel qualifications, we expect that
qualifications, we are amending the title they need to be gentler, more patient any such State qualification
of § 460.64 and the personnel and observant than with a healthy requirements be met.
qualifications to clarify that the younger person. For example, a frail Comment: A large number of
qualifications apply to all PACE staff elderly person’s skin is more likely to commenters opposed the Federally-
with direct participant contact, to tear, a bone is more likely to break, a defined qualifications for the physician
ensure the health and safety of the joint more likely to be stiff and painful, which were not included in the
participants. We are accomplishing this and medications are more likely to Protocol.
by consolidating and clarifying affect them differently with a potentially Response: As stated above, section
requirements in § 460.64(a) that were wider variety of adverse reactions. 1861(r) of the Act generally defines a
previously located in other sections of Therefore, we believe that all personnel physician and is reflected in 42 CFR
the PACE regulations and by deleting having direct participant contact must 410.20, which defines physician,
paragraph § 460.64(c). have a minimum of one year of physician services and the limitations
We are amending the title of § 460.64 experience working with a frail or on services under the Medicare
and the personnel qualifications to elderly population and are adding this program. As all physicians participating
clarify that the qualifications apply to requirement to the general requirements in the Medicare program must meet
all PACE staff with direct participant in paragraph (a)(3). § 410.20, we require that all physicians
contact and decrease the burden in In the 2002 interim final rule, we participating in the PACE program meet
hiring and contracting for adequate established requirements for the the qualifications of § 410.20, and also
numbers of staff members. We are oversight of direct participant care meet the general qualification
removing the educational requirements (§ 460.71), which included requiring the requirements as stated in § 460.64(a).
and other qualifications at § 460.64(c) PO to ensure all employees and To emphasize the key role of the PCP
that we established where no States contracted staff furnishing direct care to in the PACE model, we require the
required licensure, certification or participants demonstrated the skills PACE PCPs to have one-year’s
registration. necessary for performance of their experience working with a frail or
We believe that it is essential that all position. We also required the PO to elderly population to ensure their
professionals be legally authorized establish a competency evaluation knowledge and skill with geriatric
patients. We require they demonstrate the requirements of participant rights services through certification as nursing
their competency prior to employment they must provide for language and assistants or home health aides, are
or contract. The PO must ascertain the cultural diversity, we expect that POs required to receive redundant or
competency of prospective physicians will take these important areas into additional training unless it is deemed
through the PO’s established consideration when hiring staff. As a necessary by the PO.
competency program. We also require result, we do not believe that it is Response: We are retaining the
the PCPs be cleared of communicable necessary to repeat the requirement in requirement that POs provide ongoing
diseases to ensure that infectious this section of the regulation. training to maintain and improve the
diseases are not passed by the close Final rule actions: skills and knowledge of each staff
physical proximity necessary to treat In this final rule we are making member with respect to their specific
participants. revisions to § 460.64, including: duties in order to ensure that PACE
Comment: We received numerous • Amending the title to ‘‘Personnel participants receive the highest quality
comments related to specific staffing qualifications for staff with direct care possible. We believe POs have the
requirements. A large number of participant contact,’’ to clarify that the ultimate responsibility for all care
commenters opposed the detailed qualifications apply to all PACE staff provided to their participants and,
personnel requirements in the 1999 with direct participant contact. therefore, it is in the best interest of
interim final rule, stating that they • Amending paragraph (a) by adding PACE participants and the PO that they
unnecessarily limited flexibility in the (1) one year of experience working with provide training specific to their
development and implementation of a frail or elderly population, (2) meeting participant population. Ongoing in-
PACE programs. standardized competencies prior to service training for all staff will ensure
The commenters recommended we providing participant care, and (3) being that skills remain current and any
require all POs establish an adequate medically cleared of communicable detrimental practices are caught and
staff development process to ensure that diseases and have all immunizations rectified as early as possible.
all staff members understand the unique up-to-date before engaging in direct In this final rule, we wish to clarify
needs of the PACE population. participant contact. § 460.66(b), which requires the PO to
However, commenters wanted the States • Deleting paragraph (c). develop a training program for each
to have the option to waive these Section 460.66 Training PCA in order to establish the
requirements. They also recommended individual’s baseline competency in
we require that the PO also consider In § 460.66, we require the PO to furnishing personal care services,
factors such as languages spoken and provide ongoing training to maintain including specialized skills associated
cultural sensitivity. and improve the skills and knowledge with the specific care needs of
Response: To the extent the State has of each staff member with respect to individual participants. We intend that
licensure, certification, or registration their specific duties. The training the PO evaluate the skills of each newly
requirements, these apply and not the should result in the staff’s continued hired PCA and develop a training
requirements in § 460.64(c)(1). ability to demonstrate the skills program specific to the competencies or
These qualification requirements, as necessary for the performance of their deficiencies that they demonstrate. This
noted in the 1999 interim final rule, specific positions or job duties. The training must be performed by qualified
were to be the regulatory foundation of ability of the PO to ensure patient safety professionals. Again, the intent of this
PACE as a new Medicare benefit and and to achieve patient-specific training requirement is to identify and
State plan option. We believe that in performance measures necessitates resolve any knowledge or skill deficits
clarifying the 1999 interim final rule in competent staff. We believe there is a of each person and educate them to a
the 2002 interim final rule, permitting direct relationship between the quality level where they can demonstrate
contracting of personnel and providing of an organization’s staff and patient competency in all basic skills required
a waiver process to assist POs where well-being. The training requirement is to provide personal care services. This
they are unable to comply with intended to ensure that all staff are able clarification is intended to prevent
regulations, we have addressed and to adapt to new or changing job redundant training of skills already
resolved commenters concerns related demands. The PO is responsible for displayed by PCAs and to reduce the
to limited flexibility and personnel ensuring that individuals are educated burden on PO resources.
qualifications when no State licensure, and trained for their specific jobs. The Final rule actions:
certification, or registration laws exist. individuals would continue to be In this final rule, we are clarifying the
We believe we addressed the responsible for their own professional requirement in § 460.66(b) that POs
recommendation regarding the education and for any continuing develop a training program for PCAs
establishment of an adequate staff education needed to maintain licensure where there are competency deficits and
development process to ensure all staff or professional certification unless the that personal care attendants must
members understand the unique needs organization chooses to assume this exhibit competency before performing
of the PACE population in the 2002 responsibility. In addition, we included personal care services independent of
interim final rule, which required that a specific training requirement for PCAs supervision.
all POs develop a competency as described in § 460.66(b).
evaluation program that identify those Comment: Commenters’ opinions Section 460.68 Program Integrity
skills, knowledge and abilities that must regarding the training requirements We established § 460.68, based on
be demonstrated by direct participant varied, with recommendations that the Part I, section E of the Protocol to guard
staff. SAA should be authorized to establish against potential conflicts of interest or
• In response to the recommendation a minimum training curriculum, and other program integrity problems for
that we require that the PO also criticisms that the PO should be POs. An organization must not have any
consider factors such as languages permitted to utilize training from other staff (employees or contractors) who
spoken and cultural sensitivity, we sources available in the community. have been convicted of a criminal
believe that each PO understands the We were also asked to clarify whether offense related to their involvement in
cultural diversity of their particular PCAs, who have demonstrated Medicaid, Medicare, other health
population. To be in compliance with competency in furnishing personal care insurance or health care programs, or
any social service program under Title Comment: We received several contracting with the PO for items or
XX of the Act. We expanded this comments regarding program integrity. services.
provision from the Protocol in order to Commenters requested that we permit We acknowledge that it is quite
prevent an organization from employing the PO the discretion to determine common for a PO to be part of or have
any staff who have been excluded from whether an individual’s past a relationship with a larger entity.
participation in Medicare or Medicaid, convictions (which vary greatly in type Consistent with § 460.60(d) and Chapter
or employing staff, in any capacity, and severity) would pose a serious 1, Section VII of the PACE provider
where the employee’s contact with threat to PACE participants and application, the POs’ relationship to the
participants would pose a potential risk suggested modifications to corporate board and to any parent,
because the individual had been § 460.68(a)(3). affiliate, or subsidiary corporate entity
convicted of physical, sexual, drug, or Response: We believe our current must be described in the provider
alcohol abuse. In addition, members of policy is consistent with Medicare application under the requirements for
the PO’s governing body, and their policy related to other provider types organizational structure. In this type
family members, are prohibited from and do not agree that the threat posed arrangement it would be customary to
having a direct or indirect interest in by an individual’s past convictions contract for services with other entities
contracts with the PO. Examples of should be left to the discretion of the within the system. As these are entity-
indirect interests are holdings in the PO. PACE participants are the most frail to-entity arrangements and no
name of a spouse, dependent child, or and vulnerable members of the individual would personally benefit,
other relative who resides with the community, and it is their right to these kinds of common business
member of the governing body. These expect care that is free from the risk of practices do not give rise to the type of
requirements are intended to protect harm by their caregivers. Therefore, it is conflict of interest contemplated under
participants by preventing fraud under the responsibility of Medicare, § 460.68(b).
Medicare and Medicaid by members of Medicaid, and the PO to ensure that Since implementation of the 2002
the governing body with conflicts of every individual hired to provide care to interim final rule, we have also received
interest from inappropriately PACE participants poses the least risk numerous requests for waiver of this
influencing PO decisions. possible. We believe that facilitating section of the rule. These waivers have
We recognize that in rural, Tribal, or contact with individuals who have a been approved as general organization-
urban Indian communities there may be prior conviction for physical, sexual, wide waivers contingent upon the PO
limited availability of individuals drug or alcohol abuse increases the developing policies and procedures for:
willing to and capable of performing key potential risk to the PACE participants. (1) Full disclosure to the governing body
functions for the PO. Therefore, the Comment: One commenter of the direct or indirect conflict or
1999 interim final rule provided for recommended that conflict of interest potential conflict of interest of the
CMS and the SAA to grant a waiver of disclosure regulations apply to the member or an immediate family
the conflict of interest requirement for program director, medical director, and member related to the conflict; (2)
POs in rural or tribal areas to allow the contractor liaison. This commenter recusal of voting, discussions,
individuals who have a direct or also recommended requiring disclosure negotiations or any activity that would
indirect interest in a contract or the of conflicts of interest to the SAA. directly or indirectly affect the interest
provision of services to the PO to recuse Another commenter recommended the of the PO; and (3) inclusion of the
themselves from decisions directly or disclosure requirement also apply to the disclosure and recusal actions in official
indirectly affecting those interests, SAA. records and that are readily accessible to
rather than barring them entirely from Response: We discuss the SAA’s role CMS and the SAA.
serving on the PO’s governing body or with regard to conflict of interest in this In response to commenters’ requests,
serving as directors, officers, partners, section. However, as the program and based on our experience with
employees, or consultants of the PO. director, medical director, contractor reviewing waiver requests relating to
We also included a requirement that liaison, and the SAA are not on the conflicts of interest procedures, we are
the PO must have a process to gather governing body and have no voting amending § 460.68(b) to clarify our
information on program integrity issues responsibility, we do not think they are requirements for managing conflicts of
and respond to any request from CMS in a position to unduly influence PO interest that may involve members of
within a reasonable amount of time. decisions. Therefore, we do not believe the governing body or any immediate
As discussed previously, in the 2002 it is necessary to amend the program family members. We are requiring that
interim final rule, we established a integrity requirements to include them. POs establish policies and procedures
process for submission and approval of We note that § 460.68 does not preclude for handling such conflicts of interest,
waiver requests and deleted § 460.68(c) a PO from developing disclosure that members of the governing body
that limited waivers to direct or indirect requirements for other staff. must disclose any such conflicts, and
interest in contracts of rural and Tribal Comment: Two commenters requested that members must recuse themselves
organizations. Although we deleted we clarify whether the regulatory intent from discussing, negotiating, or voting
§ 460.68(c), we continue to recognize of § 460.68(b) is to limit contracting on any matter that involves an
the special need for flexibility in rural with related organizations or just related inappropriate conflict of interest.
and Tribal areas, and remain committed individuals, as many providers establish To illustrate, we believe the following
to allowing waivers to promote PACE in related corporations which provide is a conflict of interest of an immediate
medically underserved areas. We also services to participants and which were family member: The wife of a board
remain committed to working with rural not prohibited in the PACE member owns a supply company which
and Tribal communities to help them demonstration program. is the only one in the area that provides
address the challenges of developing Response: The intent of this institutional laundry services, so the PO
successful PACE programs. requirement was to limit an unfair has no option but to contract with this
Organizations that seek waiver of these advantage that might be gained by any company. The governing body member
or any other regulatory requirements member of the governing body, or their must make full disclosure of the
would follow the requirements specified family member, who would have a situation to the body, and recuse
in § 460.26. direct or indirect interest in an entity themselves when the contract
negotiations are in progress as well as PO’s governing body or their immediate • Name of contractor.
when voting on the contract occurs. family member(s). • Services furnished.
In response to the comments related
Section 460.70 Contracted Services • Payment rate and method.
to the SAA, we do not believe it is • Terms of the contract, including the
appropriate for CMS to impose conflict Under the scope of benefits described beginning and ending dates, as well as
of interest restrictions on the SAA as in sections 1894(b)(1) and 1934(b)(1) of methods of extension, renegotiation,
they are not on the PO’s governing body. the Act, a PO may enter into written and termination.
Our concern is that decisions made by contracts with each outside entity to • Contractor agreement to: Furnish
the governing body could be made furnish services to participants. only those services authorized by the
specifically for the financial benefit of Consequently, we require in § 460.70 PACE IDT; accept payment from the PO
certain members of the governing body that all services, except for emergency as payment in full and not to bill
or their immediate family members. services as described in § 460.100, not participants, CMS, the State Medicaid
All disclosure and recusal furnished directly by a PO must be agency or private insurers; hold
information must be recorded in the obtained through contracts, which meet harmless CMS, the State and PACE
governing body’s official records, which the requirements specified in participants if the PO cannot or will not
must be available for CMS and SAA regulations. In the 1999 interim final pay for services performed by the
review. CMS and SAA are both rule, we adopted the contracting contractor under the contract; not assign
authorized to review this information, provisions in Part VII, section A of the
or delegate duties under the contract
which can be accomplished during on- Protocol.
unless prior written approval is
site monitoring and survey activities, or We specified in § 460.70(b) that a PO
may only contract with entities that obtained from the PO; and submit
by requesting the information from the reports as required by the PO.
PO. Additionally, if a conflict exists at meet all applicable Federal and State
requirements, and provided some We did not establish a specific notice
the time a provider submits their PACE
examples of the types of requirements requirement for termination of
provider application, we expect the PO
that contractors would be expected to contracts. We believe that POs will
to disclose the conflict as part of the
meet. For example, institutional contract with individuals and entities
application.
contractors (hospital and nursing home) that understand and embrace the
Comment: One commenter asked if
must meet Medicare and Medicaid organization’s mission and commitment
the conflict of interest requirements may
participation requirements. To avoid to participants. As discussed previously,
be waived in rural, Tribal and urban
breakdowns in communication or in the we required in § 460.62 that the
Indian communities. The commenter
provision of care, we required that POs governing body establish personnel
also asked if those areas have been
designate an official liaison to policies that address adequate notice of
designated eligible for conflict of
coordinate activities between termination by contractors and
interest waivers, and if so, they
contractors and the organization. employees with direct patient care
requested that the information be shared
Effective coordination of services is responsibilities to permit an orderly
with the States.
Response: The 1999 interim final rule necessary to avoid duplicative or transition and avoid disruptions in care.
provided for a waiver of conflict of conflicting services. Designating an In the 2002 interim final rule, we
interest in rural, Tribal, and urban individual as liaison provides a conduit amended § 460.70(e) to include
Indian communities. As a result of for sharing information. The liaison additional contract requirements where
expanding waiver flexibility to all POs would inform contractors of PO the PO chooses to contract for IDT
in accordance with section 903 of BIPA, policies, changes in participants’ plans members or key administrative staff. In
that specific waiver authority, located in of care, information from team meetings, amended paragraph (e), we required that
§ 460.68(c), was deleted in the 2002 and quality improvement activities and contractors: (1) Agree to perform all the
interim final rule. We established goals. Contractor staff would inform the duties of their position; (2) participate
§ 460.26 to implement the expanded PO, through the liaison, of updates and in IDT meetings; (3) agree to be
waiver process. As previously noted, changes in a participant’s status, accountable to the PO; and (4) cooperate
POs will now be required to have personnel changes in the contractor, and with the competency evaluation
written policies and procedures in the any other information necessary for the program and direct participant care
event of a conflict of interest, and, continuity of participant care. All care requirements in § 460.71.
therefore, waiver of conflict of interest must be evaluated by the PO, with The PACE Protocol at section
will not be necessary. particular attention to care provided by IV.B.13.a. provided that the IDT may be
Comment: Two commenters contracted personnel. This requirement employed by the PO or the PACE center.
addressed conflict of interest disclosure provides a mechanism to ensure that In developing the 1999 interim final
related to the SAA. One commenter contracted personnel are adhering to rule, we did not address this issue
asked whether States have the organization policies and procedures. It because we believed that in all cases the
responsibility to ensure the disclosure also affords the organization an PO and the PACE center were the same
requirement is met. opportunity to identify any education or organization. After publication of the
Response: The SAA is not delegated training needs of contracted personnel. 1999 interim final rule, we learned that
the responsibility of ensuring that We specified in paragraph (c) that the in 1995, changes were made to the
conflicts of interests are disclosed. The PO is required to maintain a current list Protocol to permit contractual
regulation does not require full of contractors at the PACE center and arrangements for all PACE center
disclosure to CMS or the SAA, but the provide a copy to anyone upon request services, which reflected an operating
PO must be able to provide and in paragraph (d) that copies of arrangement engaged in by one of the
documentation should CMS or the SAA signed contracts for inpatient care must PACE demonstration programs, On Lok
request it. be furnished to CMS and the SAA. Senior Health Service. Through this
Final rule actions: Under the specific contract content contractual arrangement, On Lok, Inc.
In this final rule, we are providing for requirements listed in paragraph (e), we had been able to expand PACE services
disclosure and recusal in the event of a require each contract to be in writing to a different part of their service area
conflict of interest of a member of the and contain the following information: without disrupting the care that
traditionally had been provided by the participant care services, it is important insurer. Therefore, we included
other organization. to reiterate the PO’s obligation to § 460.70(e)(5)(ii) to require contractors
As described above in the 2002 monitor the care furnished by direct to accept payment from the PO as
interim final rule, we amended the 1999 participant care staff. This obligation payment in full and agree not to charge
interim final rule to allow POs to applies not only to employees of the PO, CMS, the State, the participant, or
provide PACE center services through but extends to the care provided by private insurers for services to PACE
contractual arrangements. As we contracted staff, including employees of participants.
explained in the 2002 interim final rule, organizations with which the Comment: One commenter asked
we did not view this approach as a organization contracts (for example, a which entities are considered
waiver authorized by BIPA. Rather, we home health agency, rehabilitation ‘‘organizational contractors’’ that must
established specific requirements for agency, nursing facility, transportation meet the COPs.
this approach consistent with the On service, or staffing agency). It is Response: The term ‘‘organizational
Lok, Inc. arrangement (67 FR 61499). especially important for the PO to contractors’’ was replaced with
We added a new paragraph (f) to monitor the care provided in all ‘‘institutional contractors’’ in the 2002
§ 460.70 to identify the criteria that a PO settings, including the PACE center and interim final rule. Institutional
must meet to contract out PACE center the participant’s home, as well as in providers include but are not limited to
services. We explained in the 2002 offsite locations such as physician acute care hospitals, rehabilitation
interim final rule that we are not offices and institutional providers to hospitals and distinct part rehabilitation
inclined to approve this arrangement for ensure quality care. To effectively units of acute care hospitals, psychiatric
a PO unless it is financially stable and monitor care provided outside the PACE hospitals and distinct part psychiatric
has demonstrated competence with the center, the PO must be vigilant in units of acute care hospitals, and critical
PACE model by successful CMS and following up on all unusual occurrences access hospitals, nursing facilities and
State onsite reviews and monitoring and complaints. In addition, the PO skilled nursing facilities. The PO must
efforts. must foster an atmosphere that contract only with institutional entities
We expect the PO to retain all key promotes the voicing of participant that meet all applicable Federal and
administrative functions including complaints about quality of care to State requirements. There are provider-
marketing and enrollment, QAPI, and assist the PO in monitoring the care specific COPs for institutions that
contracting for institutional providers provided by contracted staff and participate in the Medicare program.
and other key staff. We noted that, organizations. Therefore, all institutional contractors
consistent with § 460.70(e)(5)(iv), any In the 1999 interim final rule, § 460.66 must be in compliance with their
subcontracting arrangements by the required the PO to provide training to respective COPs.
PACE center would need to be approved maintain and improve the skills and Comment: One commenter requested
in writing by the PO. The PACE center knowledge of each staff member that the rationale for singling out inpatient
may employ or contract for the team and results in his or her continued ability to services contracts for submission while
provide PACE services in accordance demonstrate the skills necessary for the contracts with other entities need only
with the PACE regulation. However, the performance of the position. In be on file.
PO receives all payment from CMS and conjunction with the decision to allow Response: We agree with the
the State and remains responsible for all POs to contract for key staff, in the 2002 commenter and do not believe the
the care provided in these centers. In interim final rule, we created a new requirement is necessary. For this
addition, we emphasized that § 460.71 to identify PO oversight reason, we are revising § 460.70 to
contracting out PACE center services requirements for PACE employees and delete paragraph (d). Our experience has
does not change the participants’ contractors with direct patient care indicated that having inpatient service
relationship to the PO. All participants, responsibilities. We address these contracts on file, provides sufficient
whether assigned to the PO-operated requirements later in greater detail and accessibility. CMS and the SAA will
PACE center or assigned to a PACE respond to specific comments on this review these contracts during routine
center that contracts with the PO, are issue. We revised § 460.70(e) to require monitoring surveys.
enrolled with the PO and are afforded contractors who furnish direct Comment: One commenter requested
all benefits and protections offered by participant care to cooperate with the clarification of the role CMS expects the
the PO. requirements of § 460.71 as well. SAA to play in ensuring contracts are
On Lok, Inc. is able to monitor the We received the following questions appropriate.
care provided in the contracted PACE and requests for clarification regarding Response: We expect the SAA to
center through the sharing of electronic contracted services. ensure that the PO’s contracts meet
medical records. While we did not Comment: One commenter requested applicable State and local laws and
require electronic medical records as a we explain why a contractor must be requirements.
condition of approval, we believe it is prohibited from accepting private Comment: Commenters asked
necessary for a PO wishing to pursue insurance payments directly. whether it is acceptable for an entity to
this type of arrangement to describe Response: PACE is a capitated submit a prepared but unsigned contract
how it will monitor the care provided program at full financial risk for all with the initial application and,
and perform all the administrative services required by their participants. following a readiness review, submit the
duties required by the PACE regulation. PACE participants sign an enrollment signed contract with language
In the 2002 interim final rule, we also agreement, which states they must get specifying that the contract is not
discussed the obligation of the PO to all services (directly or indirectly) from effective until the PO’s program
monitor the care provided by contracted the PO. To ensure coordination of care agreement is signed.
entities providing PACE center services directed by the IDT, the PO needs to be Response: We have determined that it
now allowed by the amended aware of all services provided. is inappropriate for entities that are not
requirements in that final rule. Given If a contractor receives payment operational to submit signed and dated
the vulnerable frail population served directly from a private insurer, the contracts when they submit their PACE
by the PACE program and the increased contractor would have been paid twice, application. Rather, it is acceptable for
opportunity for a PO to contract out once by the PO and once by the private entities to submit contract templates
with their initial applications. As part of intent of advanced notice of termination PACE centers are afforded all benefits
the State readiness review, the SAA is to provide the participants sufficient and protections offered by the PO.
determines that all contracts are signed time to adjust to a change in providers. We are not inclined to exempt all POs
and dated. However, the contracts may We believe the current regulation makes in rural areas, as we believe a PO needs
not become effective until a program adequate provision for establishing any experience in operating a PACE center
agreement with the entity is signed. notification timeframe for termination and providing the range of services to
Comment: One commenter indicated and are retaining the language in the understand exactly what they will be
that it is unnecessary to designate one 1999 interim final rule. ultimately responsible for when they
official liaison to coordinate contracted Comment: One commenter indicated contract for services. The waiver process
services and urged us to leave the that the wording of the 2002 interim established in the 2002 interim final
coordination of contracted services to final rule may lead to unintended legal rule provides new POs the opportunity
the discretion of each PO. The implications for contractors and POs. to indicate in detail the specific barriers
commenter requested that we require Specifically, the commenter believes to meeting requirements that would be
the POs to establish a mechanism for the that terms ‘‘agree’’ and ‘‘accountable’’ resolved by contracting for services.
coordination of contracted services, but may be construed as evidence of an In response to the concern regarding
not specify the means by which to effect employment relationship between the the contracted IDT members being
this objective. PO and the contractor. The commenter unavailable for care planning, we
Response: We do not agree with the recommended deletion of the believe that as the PO has oversight
commenter that the means of accountability provision. In place of the responsibility of all care provided to
coordinating contracting services should provision, they suggested a written participants, they will ensure that care
be left up to the discretion of each PO. agreement with the contractor which planning is performed appropriately by
To ensure the health and safety of the sets forth the contractor’s duties and all IDT members.
participants, we require a contract responsibilities. Comment: We received one comment
liaison to ensure that there is a suggesting that when services are
One commenter responded to our
designated individual with the contracted, funds should be allocated to
request for comments related to the
responsibility and authority to facilitate permit contractual staff to participate in
criteria for contracting out PACE center
communication and coordinate all clinical and administrative activities
services by recommending that we
activities, to track delivery and follow- with the PACE program.
should exempt applicants in rural areas
up of services related to contractor Response: Although we agree with the
from the requirement to have
provided care, and to act as a conduit commenter that this could be a
demonstrated competence with the
for contractor issues whether raised by beneficial arrangement, we believe CMS
PACE model before they contract out for
the contractor, the PO, or a participant. should not dictate how POs allocate or
Comment: In the 1999 interim final PACE center services. This commenter
also expressed concern regarding spend their resources; thus, making this
rule, we requested comments on a regulatory requirement would be
whether to include a notification contracting for IDT members. The
commenter was concerned that inappropriate. However, staff refers to
timeframe for termination of contractor both employed and contracted staff,
or employee contracts. Three contracted IDT members might be
unavailable in person, participating in with no distinction in job duties or
commenters supported a requirement responsibilities. Contracted staff are
for prior notification to terminate a IDT meetings via telephone which
would distance them from care required to perform all the duties of a
subcontract, but each with a different PACE employee related to their position
timeframe. One commenter suggested a planning.
Response: We require POs to have including, but not limited to, being
minimum of 60 days notice, one oriented to the PACE model’s
suggested 90 days, and the last formal written contracts with all service
providers, and that these contracts philosophy, mission, policies on
suggested a timeframe that is consistent participant right, emergency plan,
with M+C (now MA) and Medicaid specifically identify the services to be
provided and the responsibilities of ethics, and the PACE benefit, and
managed care requirements. policies related to job duties; participate
Two commenters did not support a both parties. The use of the terms
questioned by the commenter does not in IDT meetings; meet competency
prior notification requirement. One requirements; and be accountable to the
commenter indicated a termination imply an employment relationship. The
PO has the ultimate responsibility for all PO. Therefore, we expect contractual
notice can be difficult and may even be staff to participate in all clinical and
contrary to the needs of the participants care and services provided to
participants including those provided administrative activities with the PACE
while the other commenter believed this program.
was a subject best left to the POs and under contract. The PO is also
Final rule actions:
individual contractors. Finally, one responsible for oversight of participant In this final rule, we are:
commenter indicated that the care. We are, therefore, retaining the • Deleting § 460.70(d),
regulations are sufficiently flexible to requirement for PACE contractors to be • Redesignating paragraph (e) as
allow the POs to structure their accountable to the PO for their paragraph (d), and
employee/contractor agreements in a performance. • Redesignating paragraph (f) as
way that maximizes benefits to the As we indicated in the 2002 interim paragraph (e).
organization and participant. final rule, we are more likely to allow
Response: We agree with the POs to contract out PACE center Section 460.71 Oversight of Direct
commenter who pointed out that the services when they have attained Participant Care
current regulations are flexible enough experience in delivering services and We intend that personnel
to allow the POs to take into account the managing the risk associated with the requirements apply to both staff and
needs of the organization and the frail elderly. We continue to believe that contractors. In this section, we intend to
participants. The 1999 interim final rule an experienced organization will be clarify the requirements for the
established the requirement in § 460.70 better equipped to adequately monitor oversight of direct participant care.
that the terms of a contract include a this arrangement and ensure that As noted previously, in the 2002
specified method of termination. The participants assigned to contracted interim final rule, we created a new
§ 460.71 to identify PO oversight PO’s ability to contract with high § 460.71, we similarly specify that
requirements for PACE employees and quality providers. oversight requirements related to direct
contractors with direct patient care Response: We believe the participant care apply to all employees
responsibilities. These requirements fall requirements pertaining to contractual and contracted staff. For purposes of
into two categories, that is, (1) staff are essential for appropriate this regulation, references to staff are
competency evaluation and (2) staff and participation in the PACE benefit. All intended to include contracted staff.
contractor requirements. staff (employees and contractors) need Their orientation to the PACE model,
• The PO must ensure that employees to understand what the PACE service specifying their direct care
and contracted staff providing care delivery model is and how it differs responsibilities, the days and hours they
directly to participants demonstrate the from other models. With regard to the provide services for the PO to PACE
skills necessary for performance of their competency evaluation requirements, participants, and their demonstration of
positions. we believe they are consistent with clinical competency must be
• The PO must provide each PACE, Medicare, and health care accomplished in the same manner as
employee and all contracted staff with industry standards. employed staff. We also assume that the
an orientation. The orientation must Comment: One commenter asked that PO is aware of the work schedule
include at a minimum the organization’s we clarify the relationship between availability of the staff, both employed
mission, philosophy, policies on § 460.71(a) and (b) because they seem to and contracted.
participant rights, emergency plan, cover similar points (staff and Comment: One commenter asked if
ethics, the PACE benefit, and policies orientation). individual provider competency is
and procedures relevant to each Response: We believe § 460.71(a) is a required and if mechanisms such as
individual’s job duties. requirement directed towards the contracting requirements established by
The PO must develop a competency education of staff of the PACE model; the PO for contract providers,
evaluation program that identifies those specifically, § 460.71(a) requires that all credentialing of staff and contractors,
skills, knowledge, and abilities that staff and contractors receive an State licensing requirements, and
must be demonstrated by direct orientation to the PACE model, what it Medicare certification requirements
participant care staff (employees and is and how it works, and demonstrate would be sufficient for ensuring
contractors). The program must be clinical competency before performing compliance with § 460.71(b).
evidenced as completed before direct participant care. Section The commenter also indicated that
performing participant care and on an 460.71(b) pertains more to the quality of requiring orientation of the employees
ongoing basis by qualified professionals. the staff, as well as ensuring that the PO of contracted provider entities (for
The PO must designate a staff person to verify that staff and contractors have example, hospitals, nursing homes,
oversee these activities for employees certification or licensure, pass a home care agencies, transportation
and work with the PACE contractor criminal background check, have been providers) will not have any impact on
liaison to ensure compliance by determined free from communicable the quality of care provided. The
contracted staff. diseases, and are up-to-date with commenter stated that the PO’s scarce
We note that the PO may satisfy this immunizations. As discussed previously resources would be better spent in
requirement for contract staff through in § 460.64, staff furnishing direct focusing on the quality of
receipt of competency evaluation participant care must be free of communication between the PO and its
documentation from certain communicable diseases and are up-to- contractors to ensure participant
independent contractors where date with immunizations. Thus, we are services are provided appropriately.
licensure requirements include a applying this provision to both Communication is viewed as more
competency evaluation component, or contractors and staff, amending important than provider knowledge
from organizations or agencies that § 460.71(b)(4) to clarify that direct about the PACE program. They
employ these individuals and contract participant care staff or contractors must requested that POs be granted the
with the PO. be determined to be free from discretion to orient contract providers to
The PO must develop a program to communicable diseases and are up-to- the program as they deem appropriate.
ensure that all staff providing direct date with immunizations before This commenter also views the
participant care services meet the performing patient care. requirement that competency evaluation
requirements listed below. The PO will Comment: A commenter requested must be completed before performing
verify that direct participant care staff or clarification regarding who is participant care as problematic. The
contractors meet the following considered a contractor. commenter pointed out that emergency
requirements: Response: A contractor is an entity situations may exist where fulfilling this
• Comply with any State or Federal with a legally binding written agreement requirement may not be possible (for
requirements for direct patient care staff to deliver items or services for the PO example, when temporary staff must be
in their respective settings; in return for payment and is not called upon to fill in during
• Comply with the requirements of considered an employee of the PO. All unanticipated absences).
§ 460.68(a) regarding persons with contractors must meet PACE Response: In response to this
criminal convictions; competency requirements except for comment, we want to clarify that
• Have verified current certifications staff in inpatient and nursing facilities individual provider competencies are
or licenses for their respective positions; that must meet provider-specific COPs. required and that contractual
• Are free of communicable diseases; Comment: One commenter asked that agreements, credentialing for physician
• Have been oriented to the PACE we clarify if references to staff include staff and contractors, State licensure,
program; and contracted staff. and Medicare certification are not in
• Agree to abide by the philosophy, Response: In § 460.71(a), we state that themselves proof of competency. The
practices, and protocols of the PO. the PO must ensure that all employees PO must follow-up to validate
Comment: One commenter indicated and contracted staff furnishing care individuals’ competency.
that the requirements pertaining to directly to participants demonstrate the We continue to believe that all direct
contracted staff are administratively skills necessary for performance of their care providers need to understand the
burdensome and may compromise the position. In most other provisions of philosophy of the PACE service delivery
model and recognize its unique features that all equipment is maintained in efficiency, knowledge, and response of
that have been proven effective in accordance with the manufacturer’s the staff and to ensure that safe care will
managing the health care needs of the recommendations to keep all equipment be provided to participants during an
frail elderly. We expect that during the (mechanical, electrical, and patient care) emergency.
orientation, the importance of free of defect. Based on the The statute and implementing
communication will be emphasized as a manufacturer’s experience with the regulations governing some Medicare
pivotal aspect of the PACE model. equipment, we believe it has the most providers (nursing facilities, hospitals,
Therefore, we are retaining the current knowledge about routine maintenance and hospices) authorize us to accept a
requirement for orienting contractual and recommended repair schedules State code in lieu of the LSC if it
providers. necessary to keep the equipment in adequately protects patients. Likewise,
Competent staff is of paramount good operating condition. under these regulations the LSC will not
importance when dealing with this frail With respect to protecting apply in a State where CMS finds that
population. Although we understand participants from fire and fire-related a fire and safety code imposed by State
that emergency staffing needs may arise, events, we incorporated by reference in law adequately protects PACE
we expect the PO to contract with our regulation at § 460.72, the Life participants and staff.
providers that have provided Safety Code (LSC). The LSC was We recognize that it could be
information and competency evaluation developed by the National Fire burdensome to require strict adherence
documentation before assigning Protection Association and adopted by to all of the requirements of the LSC.
temporary staff. the Department of Health and Human PACE centers may be established in a
Final rule actions: Services as the standard which ensures variety of building types (for example,
In this final rule, we are amending reasonably fire-safe facilities. The LSC hospitals or office buildings), which
§ 460.71(b)(4) to clarify direct specifies requirements for building must be considered in requiring
participant care staff or contractors must construction features such as walls and adherence to the LSC. We also recognize
be determined to be free from doors, exits and exit access, and fire that some PACE centers may have
communicable diseases and are up-to- protection devices such as sprinklers, alternative features that provide an
date with immunizations before smoke detectors, and fire extinguishers. equivalent level of protection to that
performing patient care in order to be In the 1999 interim final rule, we required by the specific requirements of
consistent with the general adopted the 1997 edition of the LSC, the LSC. In some buildings it may be
requirements of § 460.64(a). which was divided into occupancy impractical or impossible to provide a
chapters, including Business, specific feature due to the construction
Section 460.72 Physical Environment Education, and Health Care of the building. Therefore, we specified
As we explained in the 1999 interim Occupancies. Business occupancies that CMS may waive specific provisions
final rule, we established § 460.72 to include clinics and offices, and of the LSC which, if rigidly applied,
ensure that the PACE center and home educational occupancies cover schools would result in unreasonable hardship
are free of hazards that may cause harm and day care centers. Health care on the organization. Specific provisions
to the participants, staff, or visitors. occupancies include facilities where the may be waived only if the waiver does
Because issues of adequate space, patients are rendered incapable of self- not adversely affect the health and
infection control, fire prevention, preservation and where they remain safety of the participants and staff.
dietary services, and the safety of overnight. Unfortunately, the LSC does We established four requirements that
transportation services are important to not designate a specific category for we believe are fundamental for a PO to
ensure quality care, we added comprehensive outpatient services effectively prepare for emergency
requirements for each in the regulation. provided to nursing home eligible situations. The PO must establish,
We maintained the following individuals, so we chose to stipulate implement, and maintain documented
requirements from the PACE Protocol, that the PACE center must meet the procedures to manage medical and
with the modifications noted below: occupancy provisions of the 1997 nonmedical emergencies or disasters
• The PACE center must be designed, edition of the LSC for the type of setting that are likely to threaten the health or
constructed, equipped, and maintained in which it is located (for example, safety of participants, staff, or the public
to provide for the physical safety of hospital, office building, etc.). including, but not limited to, fire,
participants, personnel, and visitors; Each type of LSC occupancy requires equipment, water or power failures,
• The PACE center must ensure a a fire alarm system. A fire alarm system care-related emergencies, and natural
safe, sanitary, functional, accessible, must provide three functions: (1) disasters likely to affect their geographic
and comfortable environment for the Initiation—a method of initiating the location. We also stated that we do not
delivery of services, that protects the alarm, such as a pullbox; (2) expect organizations to develop
dignity and privacy of the participant; Notification—a method of notifying the emergency plans for natural disasters
and occupants, such as a loud bell, horn, that typically do not affect their
• The PACE center must include chimes, or flashing lights for those geographic area. For example,
sufficient suitable space and equipment patients who are deaf; and (3) Control— organizations in the Southeast would
to provide primary medical care and a method of controlling other fire not typically need to develop emergency
suitable space for team meetings, protection functions and features, such procedures for earthquakes.
treatment, therapeutic recreation, as air conditioning shutdown, automatic POs must train each staff member
restorative therapies, socialization, release (closing) of fire doors, etc. (employee and contractor) on the
personal care, and dining. (We believe We require a PACE center to meet the actions necessary to address different
that a PO should furnish primary care requirements for a fire alarm system in medical and nonmedical emergencies.
services in the PACE center, but this accordance with the occupancy section This requirement is designed to ensure
provision allows flexibility to avoid of the LSC that applies to the building the safety and security of both the
duplicating an entire primary care clinic in which it is located. Each occupancy participants and the staff. In addition,
if that is not necessary.) section also requires evacuation plans, the participants must be appropriately
The PO must establish, implement, fire exit drills, and fire procedures. The trained on the organization’s emergency
and maintain a written plan to ensure purpose of the drills is to test the procedures since they may need to take
steps to protect themselves during an organization to disregard State However, PACE staff will not have the
emergency. PACE participants need to requirements. ultimate authority regarding potential
be informed of what to do, where to go, Response: Current regulations require hazards. PACE staff performing the
and whom to contact if a PACE center that PACE centers meet the LSC with initial assessment should identify all
emergency occurs. the following limited exceptions: (1) potential hazards and make all
Appropriate medical practice dictates The LSC provisions do not apply in a reasonable attempts to explain them to
that the organization must have trained State in which CMS determines that a the participant and caregiver. Should
personnel, drugs, and emergency life and safety code imposed by State staff be unable to rectify the potential
equipment immediately available at law adequately protects participants; hazard before enrollment, they should
every PACE center at all times to and (2) CMS may waive specific document the hazard, their attempts to
adequately support participants until an provisions of the LSC that, if rigidly have the hazard rectified, and all other
Emergency Medical System (EMS) applied, would result in unreasonable pertinent information. Should the
responds to the PACE center. We hardship on the PACE center, but only participant and caregiver agree to a
defined the minimum emergency if the waiver does not adversely affect resolution of the hazard, that
equipment that must be on the premises the health and safety of participants and information should be included in the
and immediately available as easily staff. participant’s care plan. If the participant
portable oxygen, airways, suction, and Although there is specific waiver and caregiver do not agree to rectify the
emergency drugs. In addition, the PACE authority under § 460.26 and § 460.28, it hazard potential, the PO staff are
center must have a documented plan to does not apply to the approval of LSC expected to document the hazard, their
obtain EMS services from sources waivers. CMS staff responsible for LSC suggestions to resolve the hazardous
outside the PACE center when needed. compliance would approve LSC issue, and all other pertinent
At least annually, a PO must test, waivers. However, we note that PACE information.
evaluate, and document the centers are often licensed as adult day Comment: One commenter
effectiveness of its emergency and health centers or clinics, which are not recommended that the regulations
disaster plans to ensure and maintain among the types of Medicare providers require that accessibility requirements
appropriate responses to the situations that we typically survey for compliance be met in accordance with the
and needs that may arise from both with the LSC. As a result, in these cases, Americans with Disabilities Act and
medical and nonmedical emergencies. we will accept State licensure section 504 of the Rehabilitation Act.
Drills and emergency episodes often requirements for fire and safety as Response: Both the 1999 and 2002
reveal a weakness or flaw in the design meeting the LSC. interim final rules state repeatedly that
of the emergency plan. An annual Comment: Three commenters POs must meet all applicable Federal,
review will allow flaws or potential indicated that a PO’s responsibility State, and local laws and regulations,
problems to be identified and corrected. related to safety in the home should be which include the Americans with
In the January 10, 2003 Federal limited. Disabilities Act and section 504 of the
Register, we published a final rule, One commenter indicated the Rehabilitation Act. We note the
‘‘Fire Safety Requirements for Certain regulation only mentions POs being Americans with Disabilities Act is
Health Care Facilities’’ (68 FR 1374), responsible for safety of the physical specifically addressed in § 460.32.
which among other changes, amended environment of the PACE center and the Comment: Another commenter
§ 460.72(b) to adopt the 2000 edition of primary care clinic, while the recommended that this section of the
the LSC for Medicare and Medicaid background description states that this regulation include suggestions for
health care facilities. It is important to section’s purpose is ‘‘to ensure that the addressing the common visual deficits
note that the 2000 LSC prohibits the use PACE center and home are free of of the PACE population and provided
of roll latches on corridor doors in hazards.’’ The commenter continued by the following as examples of potential
buildings not fully protected by an stating the regulation does not address safety concerns: High gloss floors and
approved sprinkler system and requires the PO’s responsibility for ensuring that surfaces which provide high contrast in
replacement with positive latching an enrollee’s home is free of hazards. floors, steps, and walls and installing
devices in both existing sprinklered and The enrollee is living at home and not low glare but sufficient lighting.
unsprinklered buildings. It also requires in a licensed health care facility subject Response: We expect each PO to
that, effective March 13, 2006, to Federal and State oversight. However, assess their participants and to
emergency lighting must provide the local fire marshal, health implement all appropriate safety
illumination for at least a 90-minute department, Adult Protective Service, precautions. We do not believe it is
duration. and building inspectors have specific necessary to establish regulatory
Section 460.72(b) was further responsibilities to ensure a safe living requirements specific to individual
amended by the March 25, 2005 (70 FR environment. Therefore, the commenter health issues. We believe the addition of
15229) publication of the interim final recommended that we limit PO specific common deficits to the
rule, ‘‘Fire Safety Requirements for responsibilities by requiring that the regulation would be unreasonably
Certain Heath Care Facilities; initial comprehensive assessment burdensome. Therefore, we are not
Amendment,’’ which allows certain includes an assessment of the home including specific requirements
health care facilities, including PACE environment and that the participants regarding visual deficits or other
facilities, to place alcohol-based hand must be determined as able to live in a individual health deficits. We will
rub dispensers in egress corridors under community setting without jeopardizing continue to assess LSC and State
specified conditions. their health or safety. licensure developments to ensure
Comment: One commenter stated they Response: We disagree with the participants receive services in a safe
believe that identification and commenters. POs are at risk for all manner.
enforcement of physical plant standards health care services the participant Comment: Two commenters requested
for PACE centers are responsibilities of receives, and, therefore, we expect that clarification of the emergency
the State. The commenter indicated that POs will be involved in assuring the equipment requirement, which states
the provisions allowing CMS to waive health and safety of participants at all that staff be on the premises of the
the LSC effectively permits an times, including when they are at home. PACE center at all times. The
commenter indicated that it would be and develop corrective actions related to communicate with the PACE center; (3)
helpful to clarify what emergency drugs the reduction of future incidents. training transportation personnel on the
are required to be available at the PACE Comment: We received several special needs of participants and
center. comments regarding infection control. appropriate emergency response; and (4)
One of the commenters requested that One commenter did not find the as part of the IDT process,
we clarify that the requirement that the requirements overly onerous, while communicating relevant information
POs are required to establish, another commenter was concerned this about the participants’ to transportation
implement, and maintain a written plan provision preempts State’s regulatory personnel or other PACE staff in
to ensure maintenance in accordance authority regarding infection control accordance with the PO’s policies and
with manufacturer’s recommendations practices. procedures.
refers only to equipment deemed to be Another commenter requested we Comment: We received two comments
life-sustaining and biomedical clarify that the intent of this section is that addressed concerns regarding
equipment. to hold POs responsible for universal transportation. The first commenter
Response: The intent of the staffing precautions. Five commenters requested emphasized that transportation must
requirement is that we believe POs we distinguish between what can be meet the special needs of persons with
should have staff qualified to operate required in a PACE center and what can disabilities while the second commenter
emergency equipment on the premises be expected in a participant’s home. indicated that there are situations in
whenever the PACE center is open. Response: It is not our intent to usurp which routine transportation services
For purposes of this regulation, the State’s authority in this area. Should can not be safely provided to
emergency drugs are those State requirements be more stringent participants. The commenter believes
pharmaceuticals that would be used in than those of CMS, we would expect this point needs to be a consideration
an emergency that follow current States to enforce their more strict when determining if a participant can
emergency practice guidelines/protocol. requirements. We believe these be cared for appropriately in PACE.
regulations to be the minimum Response: We agree with the
We agree with the commenter asking
acceptable requirements for infection commenter, that transportation services
for clarification on the equipment
control. that meet the special needs of disabled
maintenance requirement, and we are
In response to the question on participants are crucial especially for
clarifying that in addition to written
universal precautions, the intent of frail elderly PACE participants. The
policies, the PO is responsible for
these regulations is to require the POs requirements established in the 1999
implementing the manufacturer’s
to practice universal precautions. interim final rule were intended to
recommendations for emergency and
Universal precautions are CDC ensure that safe and appropriate
biomedical equipment maintenance.
guidelines accepted as routine practice transportation practices are used with
Final rule actions:
by the health care industries at large. this frail participant population.
In this final rule, we are clarifying Moreover, POs are expected to We also agree that when the PACE
that POs must perform the observe infection control practices in all staff performs their initial assessment, it
manufacturer’s recommended settings including the participant’s is the PO’s responsibility to determine
maintenance on all equipment as residence and teach and reinforce if they can adequately address the
indicated in their written plan. infection control practices to transportation needs of the individual,
Section 460.74 Infection Control participants and their caregivers. This and that this should be a consideration
would include reinforcing the simple in determining whether or not a
Infection control is vital to the health practices such as handwashing after prospective enrollee can be cared for
and safety of participants, so we require using the restroom or blowing one’s safely in their community. However, we
in § 460.74 that the PO adhere to nose, and refrigerating foods believe that transportation
accepted policies and standard appropriately. It is in the PO’s interest considerations alone would rarely, if
procedures, including the standard to work with participants and caregivers ever, be the reason to deny enrollment.
precautions developed by and available to minimize the risk of infections. Final rule actions:
from the Centers for Disease Control and Final rule actions: This final rule will finalize § 460.76 as
Prevention (CDC). These guidelines This final rule will finalize § 460.74 as published in the 1999 interim final rule.
have been developed by the CDC in published in the 1999 interim final rule.
collaboration with industry Section 460.78 Dietary Services
representatives and have proven Section 460.76 Transportation In the 1999 interim final rule, we
effective as a means of diminishing the Services established that it is important that each
spread of blood-borne pathogens and Transportation services are a critical PACE center provide participants with
other infectious agents. The PO must component of PACE service delivery, so nourishing, palatable, well-balanced
establish, implement, and maintain a it is crucial that the PO take appropriate meals that meet the daily nutritional
documented infection control plan that steps to ensure that participants can be and special dietary needs of each
will ensure a safe and sanitary safely transported from their homes to participant. We required that each meal
environment and prevent and control the PACE center and to appointments. must meet specific requirements,
the transmission of disease and We established § 460.76 to require that including preparation by methods that
infection. At a minimum, the infection the PO’s transportation services must be conserve nutritive value, flavor, and
control plan must include the following: safe, accessible, and equipped to meet appearance; preparation in a form
(1) Procedures to identify, investigate, the needs of each participant. In designed to meet individual needs; and
control, and prevent infections in every addition, we require that the preparation and service at the proper
PACE center and in a participant’s place organization’s transportation program temperature. The PACE center must
of residence; include procedures on at least the provide substitute foods or nutritional

(2) Procedures to record any incidents following: (1) Maintaining of supplements that meet the daily
of infection; and transportation vehicles according to the nutritional and special dietary needs of
(3) Procedures to analyze the manufacturer’s recommendations; (2) any participant who refuses the food
incidents of infection, to identify trends, equipping transportation vehicles to served, cannot tolerate the food served,
or who does not eat adequate amounts. § 460.78(a)(1), § 460.78(a)(2), and meals that meet the participant’s daily
In addition, the PO must provide § 460.78(a)(3). nutritional and special dietary needs.
nutritional support (that is, tube The second suggestion was to replace Comment: One commenter indicated
feedings, total parenteral nutrition, or the phrase ‘‘provide each participant’’ that the regulation fails to mention the
peripheral parenteral nutrition) to meet with ‘‘offer each participant’’ ensuring special needs of those with swallowing
the daily nutritional needs of a participant choice with respect to meals. problems.
participant if indicated by his or her Another commenter disagreed with Response: In response to this
medical condition or diagnosis. the requested language change of ‘‘offer comment, we believe that although
It is vital to the health and safety of each participant’’ stating there is a high choking is a serious issue, particularly
participants that the food provided proportion of PACE participants with in this population, and has been known
meets acceptable safety standards. some form of dementia who may require to lead to death, this problem should be
Therefore, we require the PO to: supervision or assistance with eating. assessed by the appropriate
(1) Procure foods (including The commenter requested the language professional, as part of the participant
nutritional supplements and items to be modified to read ‘‘Except as specified assessment. This comment provides a
meet special nutrition needs) from in paragraphs (a)(2) or (a)(3) of this good example of where it would be
sources approved or considered section, the PO shall ensure, through the appropriate for an additional discipline
satisfactory by Federal, State, Tribal, or assessment and care planning process, (for example, a speech therapist) to be
local authorities that have jurisdiction that each participant receives included in the initial comprehensive
over the service area of the organization; nourishing, well-balanced meals that assessment and periodic reassessments.
(2) Store, prepare, distribute, and meet the participant’s daily nutritional Final rule actions:
and special dietary needs.’’ In this final rule, we are amending the
serve foods (including nutritional
Another commenter requested that we regulatory language of § 460.78(a) by
supplements and items to meet special
clarify that the requirement is meant to revising the first sentence to read as
nutrition needs) under sanitary
apply when PACE participants are follows: ‘‘Except as specified in
conditions; and
institutionalized or to limit the paragraphs (a)(2) or (a)(3) of this section,
(3) Dispose of garbage and refuse requirement to individuals when the the PO must ensure, through the
properly. provision of meals is specified in the assessment and care planning process,
Comment: We received several plan of care. Alternatively, they that each participant receives
comments regarding dietary services, recommended that the regulations could nourishing, palatable, well-balanced
with several proposed language specify that the PO must ‘‘assure that meals that meet the participant’s daily
changes. One commenter reiterated each participant has access to meals to nutritional and special dietary needs.’’
these are areas under State meet the daily nutritional requirement,’’
responsibility. Dietary and food service which would enable the PACE provider Section 460.80 Fiscal Soundness
sanitation practices in a variety of to document the provision of meals by Part I, section F of the Protocol
establishments, including those under family or others, as appropriate. addresses fiscal soundness and
which PACE would operate, are Response: In response to comments paragraph (e)(4)(A)(ii) of section 1894
regulated by the State. This commenter on provision of meals, we want to and section 1934 of the Act requires
recommended that the regulation clarify that meals are a required service that, during the trial period, we conduct
simply state that the PACE center will in the PACE program. Dietary services a comprehensive assessment of a PO’s
provide the enrollee a meal when are to be provided when a participant is fiscal soundness. We established
necessary. attending the PACE center, when he or § 460.80 to address requirements for
Response: In response to the comment she is institutionalized, and when he or fiscal soundness.
regarding State requirements, we want she is in the home as indicated in the As we indicated in the 1999 interim
to clarify that we believe the participant’s plan of care. The PO must final rule, each PO must have a fiscally
requirements in our regulation to be the assess each participant’s individual sound operation as demonstrated by
minimum acceptable requirements for situation when determining the most total assets being greater than total
dietary services. If State requirements appropriate method of assuring that unsubordinated liabilities, sufficient
are more stringent than those under this each participant’s daily nutritional cash flow and adequate liquidity to
regulation, we expect the State to needs are met in the most appropriate meet obligations as they become due,
enforce its more stringent requirements. manner. The POs must ensure that each and a net operating surplus or a plan for
In response to the suggestion that we participant is receiving adequate maintaining solvency.
amend the requirement as nutrition by the required modality, as Each organization must have a
recommended, we believe that as a prescribed in the participant’s plan of documented insolvency plan approved
participant protection, the PACE dietary care. We agree with this commenter and by CMS and the SAA which, in the
services requirement must be more recognize that in the geriatric event of insolvency, provides for the
specific. Again, due to the frailty of the population, for a number of medical and continuation of benefits for the duration
targeted population, a greater effort psychosocial reasons, eating is not a of the period for which capitation
must be made to ensure that the high priority for many individuals. payment has been made; the
appropriate nutrition is received by the Thus, we do not believe that language continuation of benefits to participants
most appropriate method in a safe and such as ‘‘offering’’ or ‘‘has access to’’ is who are confined in a hospital on the
sanitary manner. sufficient to ensure participants receive date of insolvency until their discharge;
Comment: One commenter provided adequate and appropriate nutrition. and protection of participants from
two technical suggestions. First, to Therefore, in this final rule we are liability for payment of any fees which
ensure that dietary needs are provided revising the first sentence of are the legal obligation of the PO.
in accordance with the participant’s § 460.78(a)(1) by adding the requirement Each organization must have adequate
treatment plan, the commenter that the ‘‘PO must ensure, through the arrangements to cover expenses if it
recommended inserting the phrase ‘‘In assessment and care planning process,’’ becomes insolvent. To this end, we
accordance with each participant’s plan that each participant receives specified requirements in this section
of care’’ at the beginning of nourishing, palatable, well-balanced that are consistent with the Protocol.
We received comments from five financial assets and not merely line-of- POs must ensure that their employees
commenters regarding fiscal soundness. credit. However, for new POs, cash in or agents do not conduct prohibited
Comment: Two commenters indicated the form of line-of-credit would be marketing activities such as
that this section of the regulation made appropriate. discrimination of any kind among
no reference to meeting applicable State Response: We assess each PO’s fiscal individuals who meet PACE eligibility
requirements, which in some situations soundness individually taking into standards; activities that could mislead
may be inconsistent with these account whether it is an established or or confuse potential participants or
requirements. newly operational organization. misrepresent the PO, CMS, or the SAA;
Response: As with any type of However, we believe that it is critical for activities that involve gifts or payments
regulatory requirement, States may the organization to meet the established to induce enrollment; contracting
establish or impose more restrictive requirements upon start-up to ensure outreach efforts to individuals or
requirements applicable to the PO that the organization can adequately organizations whose sole responsibility
regarding fiscal soundness as long as cover the costs to meet the needs of a involves direct contact with the elderly
they do not conflict with the Federal frail elderly population. As each to solicit enrollment; or unsolicited
PACE regulations. We recognize that situation is different, we do not dictate door-to-door marketing.
some States have specific fiscal the means for providing arrangements to Each PO must establish, implement,
requirements applicable to the POs, cover expenses. Organizations have and maintain a documented marketing
particularly based on State licensure flexibility to meet the requirements, and plan with measurable enrollment
programs for POs. We also acknowledge the regulation offers potential options objectives and a system for tracking its
the State’s role in relation to fiscal such as letters of credit or other effectiveness.
soundness; however, we do not believe guarantees. We received numerous comments
the regulations would need to reflect the Final rule actions:
regarding the marketing section.
States’ role in this case. Comment: Three commenters
Comment: Two commenters This final rule will finalize § 460.80 as believed that to ensure that all PACE
recommended that CMS specify that published in the 1999 interim final rule. participants are fully informed of the
POs must have requirements to cover Section 460.82 Marketing services they will receive, the PO’s
expenses of $250,000. marketing materials should specify not
Response: We appreciate that a Based on Part III, section B of the only the covered benefits and services,
minimum amount of capital is critical to Protocol, we established § 460.82 to but also the benefits and services
ensure that the organization can address marketing activities of PACE excluded from the program both before
adequately cover the costs of meeting programs. POs must conduct marketing and at enrollment, with one commenter
the needs of a frail elderly population. activities that inform the general public providing proposed regulatory language.
However, we are not inclined to impose about their programs. Response: We disagree with the
specific dollar amounts because we As we indicated in the 1999 interim commenter because of the dynamic
assess each organization’s financial final rule, all marketing material must nature of PACE, its reliance on the IDT’s
situation individually. In addition, an be approved by CMS and the SAA. determination of a specific participant’s
amount set at a particular point in time Initial marketing material is reviewed as need to determine the covered and
may not be adequate over an extended part of the application process. After an excluded services and its interaction
period due to inflationary and economic organization is under a PACE program with the participant. We do not believe
factors. agreement, any new or revised identifying excluded services
Comment: Two commenters agreed marketing materials must be submitted appropriately expresses the flexibility of
with the fiscal soundness requirements, for review by CMS and the SAA. We services provided by the PACE model.
but pointed out that the measure of will complete our review within 45 days Comment: Several commenters
fiscal soundness is different for a new after we receive the information from requested clarification of the process for
PACE program than for an established the organization or the material will be review of marketing materials, with
program. One commenter questioned deemed approved. We included the some commenters addressing the State’s
whether fiscal soundness should apply requirement for review and approval of role in the review of marketing
during the trial period because it could revised marketing materials as revisions materials. One commenter questioned
inhibit the start-up of new programs. could potentially introduce false or the intent regarding SAA approval of
The commenters recommended that POs misleading information. Although the marketing materials noting that as the
be permitted to utilize a variety of Protocol includes a 30-day review and initial program application must be
arrangements to cover expenses in case approval timeframe, we adopted a 45- submitted with SAA approval,
of insolvency. day period to be consistent with the marketing materials would have been
The other commenter indicated that process used by CMS for review of approved by the SAA before CMS
the requirements are based on a shared- changes to M+C organization (now MA) review.
risk model of an established PACE marketing materials. Another commenter suggested that
program that enrolls the certain number Printed marketing materials must CMS delegate the approval of any
of participants and spreads its risk meet participants’ special language revised or updated educational and
among all its enrollees. The commenter requirements. Marketing materials must marketing materials to the SAAs in
believes that the measures are too also provide complete and clear order to prevent unnecessary delay in
stringent for a program just starting information regarding the requirement approvals and to avoid discouraging
operations. The commenter that all services (other than emergency POs from revising their materials.
recommended that CMS consider the services), including primary care and Response: We believe the process for
measure for fiscal soundness and specialist physician services, be review is fairly noted in the regulations
differentiate the measure for new PACE furnished by or authorized by the PO but remind the public that as a partner
programs and established programs. The and that participants may be fully and in the three-way program agreement, the
commenter suggested that for an personally liable for the costs of SAA has the right to review and
established program, the minimum of 1 unauthorized or out-of-PACE program approve all educational and marketing
month of cash available be liquid agreement services. materials the PO intends to distribute.
Accordingly, all materials must go particularly the prohibited practices. Comment: One commenter asked
through the SAA for approval before the The regulation prohibits door-to-door what constitutes a principal language of
SAA forwarding the materials to CMS. solicitation but does not mention other the community, whether there is a
This review of marketing and forms of unsolicited marketing such as percentage threshold, and whether we
educational materials by CMS is to telephone calls, e-mails, or targeted intended that the reference to principal
ensure that marketing materials meet mailings. languages of the community applies to
CMS requirements. Response: The commenter is correct. the community as a whole or the target
Although a PO’s initial educational The only prohibited marketing practice population PACE intends to enroll.
and marketing materials are approved included in the 1999 interim final rule Another commenter urged CMS to
by CMS and the SAA during the was unsolicited door-to-door marketing. consider providing programs serving
application process, revised and We are not aware of marketing abuses multilingual populations with some
updated materials must be approved to by POs. We believe that any change in financial assistance to cover translation
ensure that no erroneous information is marketing policy should be presented in expenses.
disseminated. The requirement to have a proposed rule and allow for public Response: The determination of the
educational and marketing materials comment. We will continue to monitor principal languages of a PO’s service
reviewed is consistent with MA marketing practices by POs and will area is a State determination. Therefore,
requirements. propose additional safeguards as we recommend that interested parties
Comment: This commenter suggested appropriate. contact their State for specific
the regulations differentiate between Comment: A commenter information.
educational and marketing components recommended that the information In response to the request that we
of the PACE program, as the desired supplied to prospective participants consider providing financial assistance
outcomes of marketing activities are should include a review of the for translation services, we have no
fundamentally different from those of responsibility to share in the cost of mechanism to provide financial
educational activities and materials. services by way of post-eligibility
Response: We view marketing assistance for entities serving
treatment of income, which is not multilingual populations.
materials as those materials used to
expressly included in the rule. Comment: One commenter asked
promote the PACE program before an
individual enrolls in PACE. Educational Response: We agree that participants whether, like M+C organizations, the
materials, on the other hand, are those should be made aware that the share of prohibition against gifts and payments
materials provided to PACE participants cost requirements continues to apply to induce enrollment does not include
and family or their authorized after PACE enrollment; however, this items of nominal value.
representatives, that provide requirement is not a PACE eligibility Response: We have adopted the MA
information about the PACE program. requirement. We would expect that the policy regarding nominal gifts. In
The regulation addresses review of the participant be informed at the time of response to inquiries regarding nominal
marketing materials as it is essential that his or her enrollment that their gifts, we consulted § 422.80(e) of the
accurate and complete information be Medicaid eligibility requirements MA rule. For further guidance related to
disseminated to potential PACE continue to apply as required in promotional activities, we reviewed
participants. We believe that the § 460.152(a)(1). § 50.1 of the Medicare Managed Care
educational component of PACE is Comment: Since the regulations state Manual, which was originally
covered by annual notices, newsletters, that approval of an entity’s provider developed for M+C plans and is
and other materials presented to application includes approval of currently being revised for MA plans.
participants, and their families or marketing materials, one commenter Offering gifts to potential enrollees
authorized representatives, after they asked whether the application process that attend a marketing presentation is
have enrolled in PACE. We believe the would permit use of the marketing permitted as long as these gifts are of a
differentiation between marketing and materials in attracting enrollees. nominal amount and are provided
educational materials is an operational Response: A prospective PO is not whether or not the individual enrolls in
issue and not appropriate for regulation. permitted to market PACE services until the PACE program. The gift cannot be a
Comment: A commenter indicated they have an approved application. cash gift or be readily converted into
that marketing plans should be a Prospective applicants are informed in cash regardless of the amount.
submission requirement in support of writing when their application has been Final rule actions:
program oversight and monitoring. approved. In this way, marketing The final rule will finalize § 460.82 as
Response: We agree with the activities may begin before the effective published in the 1999 interim final rule.
commenter, and the regulation reflects date of the program agreement.
Comment: One commenter indicated Subpart F—PACE Services
this requirement. The PO is required to
establish, implement, and maintain a that the marketing materials must state The purpose of subpart F is to
documented marketing plan with that enrollees may be fully liable for establish the service requirements for
measurable enrollment objectives and a unauthorized or out-of-plan services, POs. In this subpart we specify the
system for tracking effectiveness. and asked what would be the financial limitations and conditions relating to
Marketing plans are submitted by the responsibility of a Medicaid recipient in Medicare and Medicaid benefits. We
PO and reviewed by the SAA and CMS this situation. stipulate that participants must receive
as part of the provider application and Response: The 1999 interim final rule all services from the PO, the required
when there is a significant revision to established in § 460.82(d)(2) that all services that must be provided by the
the marketing plan. These materials are marketing materials must clearly state PO and those that may be excluded,
also reviewed during onsite monitoring that PACE participants may be fully and emergency services, and the
visits. personally liable for unauthorized or requirements for delivery of required

Comment: A commenter indicated out-of-network services. Thus, a services at the PACE center and other
that PACE marketing requirements Medicaid recipient would be financially settings. In addition, we establish the
should be the same as the Medicare and responsible for any unauthorized out-of- requirements for composition of the IDT
Medicaid managed care requirements, network services. and its responsibilities, and
requirements for participant IDT to meet the participant’s needs (for (7) Drugs and biologicals.
assessments and the plan of care. example, respite care). Based on the (8) Blood and blood derivatives.
The scope of this subpart led to a Protocol, we included the following (9) Surgical care, including the use of
large number of comments related to the required services in § 460.92 of the 1999 anesthesia.
IDT, required services and their interim final rule: (10) Use of oxygen.
delivery. Included among the comments (a) All Medicaid-covered services, as (11) Physical, occupational,
were requests for clarification, re- specified in the State’s approved respiratory therapies, and speech-
evaluation of various service related Medicaid plan. language pathology services.
policies, and proposed changes to (b) Multidisciplinary assessment and (12) Social services.
regulatory language. treatment planning. (p) Nursing facility care.
(c) Primary care, including physician (1) Semi-private room and board.
Section 460.90 PACE Benefits Under (2) Physician and skilled nursing
and nursing services.
Medicare and Medicaid (d) Social work services. services.
Under sections 1894(a)(2)(B) and (e) Restorative therapies, including (3) Custodial care.
(b)(1) and 1934(a)(2)(B) and (b)(1) of the physical therapy, occupational therapy, (4) Personal care and assistance.
Act, we established § 460.90 to specify and speech-language pathology services. (5) Drugs and biologicals.
that Medicare and Medicaid benefit (f) Personal care and supportive (6) Physical, occupational,
limitations and conditions relating to services. recreational therapies, and speech-
amount, duration, scope of services, (g) Nutritional counseling. language pathology, if necessary.
deductibles, copayments, coinsurance, (h) Recreational therapy. (7) Social services.
or other cost sharing that are generally (i) Transportation. (8) Medical supplies and appliances.
applicable under the Medicare and (j) Meals. (q) Other services determined
Medicaid programs do not apply to (k) Medical specialty services necessary by the IDT to improve and
PACE benefits. In addition, we specified including, but not limited to the maintain the participant’s overall health
that, in accordance with sections following: status.
1894(a)(1)(B)(i) and 1934(a)(1)(A) of the (1) Anesthesiology. Comment: We received several
Act, the PACE participant shall receive (2) Audiology. comments related to the list of required
Medicare and Medicaid benefits solely (3) Cardiology. services. One commenter stated that the
through the PO. (4) Dentistry. list of services is extensive and
Comment: We received one comment (5) Dermatology. considerably longer than the list for
requesting clarification that the amount, (6) Gastroenterology. nursing facilities, presenting a dilemma
duration, and scope of services are not (7) Gynecology. to States to establish the cost
subject to the limits of traditional (8) Internal medicine. effectiveness of PACE compared to
Medicare and Medicaid services but (9) Nephrology. nursing facility cost.
(10) Neurosurgery. Another commenter requested we re-
also are not required to exceed those
(11) Oncology. evaluate the required services and
amounts unless the IDT determines it to (12) Ophthalmology.
be necessary and appropriate. ensure they are in fact the minimum
(13) Oral surgery. requirements necessary to protect the
Response: The limits on amount, (14) Orthopedic surgery.
duration, and scope of services that health, safety, welfare, and rights of
(15) Otorhinolaryngology. consumers in the PACE program.
apply to either the traditional Medicare (16) Plastic surgery.
or Medicaid benefit packages do not Response: In accordance with sections
(17) Pharmacy consulting services. 1894(b)(1)(A) and 1934(b)(1)(A) of the
apply to PACE. The amount, duration or (18) Podiatry.
scope of services provided to PACE Act, the scope of benefits for PACE is all
(19) Psychiatry. items and services covered under title
participants are participant-specific; (20) Pulmonary disease.
therefore the amount, duration, or scope XVIII and all items and services covered
(21) Radiology.
of services for each participant are under title XIX without regard to an
(22) Rheumatology.
indicated in his or her plan of care (23) General surgery. individual participant’s source of
based on the IDT assessment. If an (24) Thoracic and vascular surgery. payment and without any limitation or
assessment indicates need for a (25) Urology. condition as to amount, duration, or
particular service, the PO must provide (l) Laboratory tests, x-rays and other scope and without application of
the service without regard to whether diagnostic procedures deductibles, copayments, coinsurance,
the service would otherwise be covered (m) Drugs and biologicals. or other cost sharing that would
for a Medicare beneficiary or a Medicaid (n) Prosthetics, orthotics, durable otherwise apply. In addition, the PACE
recipient not enrolled in a PO. medical equipment, corrective vision scope of benefits includes all additional
Final rule actions: devices, such as eyeglasses and lenses, items and services specified in
This final rule will finalize § 460.90 as hearing aids, dentures, and repair and regulations, based upon those required
published in the 1999 interim final rule. maintenance of these items. under the Protocol. Based on this
(o) Acute inpatient care, including the authority, we established § 460.92 in an
Section 460.92 Required Services attempt to list the items and services
following:
Based on the provisions of sections (1) Ambulance. covered under titles XVIII and XIX of
1894(b)(1)(A) and 1934(b)(1)(A) of the (2) Emergency room care and the Act and the Protocol, to clarify that
Act, we require in § 460.92 that each treatment room services. the scope of benefits under title XIX is
PACE benefit package include for all (3) Semi-private room and board. the services specified in the State’s
participants, regardless of payment (4) General medical and nursing approved Medicaid plan, and to clarify
source, all Medicare services and all services. that the scope of benefits under PACE
Medicaid covered services as specified (5) Medical surgical/intensive care/ includes any other item or service
in the State plan, a variety of services coronary care unit. determined necessary by the IDT to
specified in the Protocol, and other (6) Laboratory tests, x-rays, and other improve and maintain the participant’s
services determined necessary by the diagnostic procedures. overall health status.
We have examined our approach to addition of this discipline to the IDT at as more options become available, these
setting forth required PACE services and this time. options should not be excluded for
have determined that it is not possible Comment: One commenter asked that PACE participants. Therefore, we
to provide a complete list of all we clarify the description of the benefit should relax the regulatory requirement
inpatient, outpatient, physician package as ‘‘all State plan services’’ by adding ‘‘other assistive devices’’ and
specialty, care planning, and social because this characterization includes ‘‘magnification devices’’ to § 460.92(n).
support services that must be furnished services not applicable to and not Response: We do not believe there
to participants if ordered by the IDT. As expected to be accessed by the PACE needs to be a change in the regulatory
the scope of benefits under PACE is so population, as well as being mutually language as the PO is required to
broad, we are revising this section to exclusive services. provide anything the IDT determines
summarize Medicare and Medicaid Response: In accordance with section necessary to assist the participant to
covered items and services and to 1934(b) of the Act, PACE is required to remain living safely in the community.
highlight the services that are unique to provide all items and services covered When determined necessary by the IDT,
the PACE model, instead of the current under title XIX. The services that are POs must provide participants with
listing of services required. Under this actually provided are those determined assistive devices that may not be
final rule, the required services under by the IDT to be required for a particular provided under traditional Medicare.
PACE are all Medicare-covered items PACE participant. For example, In order to clarify the services
and services (including outpatient neonatal intensive care unit services provided by the PACE program and to
prescription drug coverage), all will probably not be needed by a PACE emphasize what makes a program
Medicaid-covered items and services participant; however, these services are uniquely PACE, in this final rule we are
identified in the State Medicaid plan, required services under Medicaid and revising § 460.92 by removing the
and other services determined necessary must be furnished by the PO if the IDT enumerated list of required services and
by the IDT to improve and maintain the were to determine they are necessary for replacing the list with a requirement
participants’ overall health status. a particular PACE participant. that the PACE program must provide all
In response to the commenter’s Comment: We were also asked to
Medicare services, all Medicaid-covered
concern that the PACE benefit package clarify our expectations regarding
services specified in the State’s
is broader than the services furnished in mental health services, other than
approved Medicaid plan, and other
nursing facilities, which complicates psychiatric services, for alcohol and
services determined necessary by the
cost comparison, we note that currently substance abuse.
Response: We expect participants to IDT to improve and maintain the
most States establish capitation rates participant’s overall health status.
based on a blend of the cost of nursing be assessed, diagnosed, and treated for
all types of health issues or conditions, Final rule actions:
home and community-based care for the
including mental health issues or In this final rule, we are revising
frail elderly.
Comment: We received several substance abuse. § 460.92 by replacing the current list of
comments related to the respiratory Comment: Two commenters objected required services with the following:
therapy and the respiratory therapist to POs being responsible for providing (a) All Medicare-covered items and
(RT). Several commenters recommended three meals per day, recommending we services;
that the IDT be expanded to include RTs either omit meals from the benefit (b) All Medicaid-covered items and
and that respiratory therapy be added to package or, alternatively, clarify that services, specified in the State’s
the list of required services provided not POs are required to provide meals on a approved Medicaid plan;
just in an acute care setting but also in limited basis. (c) Other services determined
nursing facilities and in community Response: The intent of this rule is to necessary by the IDT to improve and
settings. We were also asked to clarify ensure all PACE participants’ maintain the participant’s overall health
our expectations for coverage of nutritional needs are met. PACE is status.
respiratory therapy in these additional responsible for a participant’s health Section 460.94 Required Services for
settings. and safety including his or her Medicare Participants
Response: The IDT is responsible for nutritional needs 24 hours a day/7 days
determining whether additional a week. That responsibility includes In accordance with paragraph
disciplines are required to assess providing nourishing, palatable, well- (b)(1)(A)(i) of sections 1894 and 1934 of
specific health concerns. If a participant balanced meals that meet the daily the Act, we specified in the 1999
requires the services of specialists, nutritional requirements and the special interim final rule that the PACE benefit
whether or not the specialist is on the dietary needs of each participant. The package for Medicare participants must
IDT, then the services become required IDT must assess the participant’s needs include, in addition to the services
for that participant. Unlike traditional as well as his or her access to adequate required by § 460.92, the scope of
Medicare and Medicaid, the site of nutrition. The participant’s nutritional hospital insurance benefits described in
service is not an issue in PACE. The requirements and dietary needs should 42 CFR part 409 and the scope of
participant may receive services be included in the participant’s plan of supplemental medical insurance
wherever the IDT determines care, whether it is providing tube benefits described in 42 CFR part 410.
appropriate. Therefore, respiratory feedings, arranging for Meals on Wheels, We also specified the following
therapy services may or may not be sending meals home with the requirements of title XVIII of the Act
furnished in an inpatient setting, based participant after his or her visit to the (and regulations relating to such
on the particular participant’s needs. PACE center or documenting that requirements) that are waived and do
We believe the regulation as revised will appropriate meals are provided by the not apply to services under the PACE
provide the flexibility needed for family/caregiver. program:
providing Recreational Therapy (RT) in Comment: One commenter • The provisions of subpart F of part
a PO if needed. Upon review, we believe recommended that durable medical 409 of 42 CFR that limit coverage of
the RT is a valuable adjunct position but equipment (DME) requirements should institutional services;
not an essential position for every IDT. not be unnecessarily restrictive as • The provisions of subparts G and H
Therefore, we are not requiring the technology is continually changing and of 42 CFR part 409 and parts 412
through 414 that relate to rules for • For services in inpatient facilities, cover a procedure deemed experimental
payment for benefits; private room and private duty nursing and CMS may choose to cover such a
• The provisions of subparts D and E services, unless medically necessary procedure under Medicare. Thus, the
of 42 CFR part 409 that limit coverage and non-medical items for personal regulation should clarify that such a
of extended care services or home convenience such as telephone, radio or procedure is not prohibited but at the
health services; television rental, unless specifically discretion of the PACE program.
• The provisions of subpart D of 42 authorized by the IDT as part of a Response: In response to the
CFR part 409 that impose a 3-day prior participant’s plan of care. comments relating to services that are
hospitalization requirement for coverage • Cosmetic surgery does not include generally excluded services under the
of extended care services; and surgery required for improved PACE program, the list of services
• The provisions of 42 CFR 411.15(g) functioning of a malformed part of the excluded from coverage under PACE is
and (k) that may prevent payment for body resulting from an accidental injury based on the Protocol. Therefore, the
PACE program services to individuals or for reconstruction following Medicare and Medicaid capitation rates
enrolled in the PACE program. mastectomy. are not based on these excluded
Comment: We were asked to clarify • Experimental medical, surgical, or services. As with all items and services
whether the reference in § 460.94(b)(5) other health procedures. provided by PACE, it is the IDT and
• Services furnished outside the each participant’s plan of care that
to ‘‘payment for PACE program services
United States, except as may be establish whether or not a service is
to PACE participants’’ means payment
permitted in accordance with 42 CFR covered as a required PACE service.
‘‘on behalf of’’ participants. If not, 424.122 and 424.124 or as may be
commenters asked whether the To further clarify, should the IDT
permitted under the State’s approved determine that an experimental surgery
regulatory language was meant to permit Medicaid Plan. While the Protocol did
PACE centers to implement direct or procedures would be appropriate for
not recognize any exceptions, the a participant and complications arise,
payment/cash benefits to enable required inclusion of Medicare and
consumers to hire personal care the PO would remain at full risk and
Medicaid covered services results in would not be able to disenroll the
attendants directly. The commenters certain limited exceptions being
stated that this would be a positive participant for changes in health status
possible. For example, a State that resulting from the experimental surgery
innovation in the PACE model. borders another country might include or procedure.
Response: Section 411.15 specifies some Medicaid coverage across the Final rule actions:
items and services excluded from border, and Medicare covers some In this final rule, we are making a
traditional Medicare. Section 411.15(g) emergency hospital, ambulance, and technical correction by revising
pertains to requirements related to physician services outside the United § 460.96(e)(1) by replacing the word
custodial care, and § 411.15(k) pertains States. (As defined in 42 CFR 400.200, ‘‘through’’ with the word ‘‘and’’ so that
to requirements related to services that the United States includes the paragraph (e) reads ‘‘Services furnished
are not reasonable and necessary. Commonwealth of Puerto Rico, the outside of the United States, except as
Section 460.94 waives Medicare Virgin Islands, Guam, American Samoa, follows: (1) In accordance with
exclusion of these services for POs. and the Northern Mariana Islands.) § 424.122 and § 424.124 of this chapter.’’
Therefore, it allows payment for PACE In the 1999 interim final rule, there
services that are provided to PACE was a technical inconsistency between Section 460.98 Service Delivery
participants, including custodial the § 460.96(e) preamble language and We require in § 460.98 that the PO
services and services that would be regulatory language regarding services must establish and implement a written
considered not reasonable and furnished outside the United States. In plan for providing care to each
necessary under traditional Medicare the preamble, we referenced § 424.122 individual participant that meets that
when furnished by a PO to a participant. and § 424.124; in the regulatory individual’s needs across all care
This section in no way implies that the language, we referenced § 424.122 settings on a 24-hour basis, each day of
PO can implement direct payment or through § 424.124. To rectify this the year. The PO must furnish
cash benefits to be paid to PACE technical inconsistency, we are revising comprehensive medical, health, and
participants. We are amending the regulatory language in § 460.96(e)(1) social services that integrate acute and
§ 460.94(b)(5) to waive those specified to conform the regulatory language to long-term care. At a minimum, these
sections that may prevent payments for the preamble language. The regulatory services must be furnished in the PACE
PACE program services ‘‘that are language in § 460.96 will now read: (e) center, the participant’s home, and
provided to’’ PACE participants to Services furnished outside of the United inpatient facilities. The PO must not
clarify this issue. States, except as follows: (1) In discriminate against any participant
Final rule actions: accordance with § 424.122 and based on race, ethnicity, national origin,
In this final rule, we are amending § 424.124 of this chapter. religion, sex, age, mental or physical
§ 460.94(b)(5) to clarify that payment is Comment: Two commenters requested disability, or source of payment.
for PACE program services ‘‘that are clarification regarding excluded The requirements in this section
provided to’’ PACE participants. services. One commenter questioned implement provisions in Part IV, section
whether the PACE center is prohibited B of the Protocol and ensure the
Section 460.96 Excluded Services
from covering services such as a private availability of and access to services as
In this section, we provide a list of room, experimental medical, surgical, or a PO grows. The following requirements
excluded services based on Part IV, other health procedures. The are based on the Protocol:
section A.6 of the Protocol. The services commenter questioned why under a • At least the following services must
that are excluded from coverage under capitated payment, a PO would be be furnished at every PACE center:
the PACE program are as follows: prohibited from covering procedures primary care (including physician and
• Any service that is not authorized they deemed beneficial if they have the nursing services); social services;
by the IDT, even if it is listed as a resources to do so. restorative therapies (including physical
required service, unless it is an The second commenter stated that he and occupational therapy); personal
emergency service. believed that some Medicaid programs care and supportive services; nutritional
counseling; recreational therapy; and Another commenter suggested that enough support staff to ensure all
meals. satellite PACE centers that furnish a participants receive the services and
• The PO must operate at least one core set of services (but not full range attention they require. We believe the
PACE center either in or contiguous to of services) and are within a reasonable flexibility the commenter requested was
its designated service area, with distance of a full-service PACE center provided in the 2002 interim final rule,
sufficient capacity for routine should be allowed. which permits POs to contract for IDT
attendance by its participants. Response: We disagree with these staff and as well as for PACE center
• The PO must ensure accessible and commenters. We believe that omitting services.
adequate services to meet the needs of the requirement that each PACE center Comment: Another commenter added
all its participants. When necessary, the provide the full range of services would that flexibility would increase access to
organization must increase the number fragment the care the PACE program PACE services in rural areas and in the
of PACE centers, staff, and other PACE was established to coordinate. development of specialized POs, that is,
services. In addition, we believe that the PO programs designed and staffed for
• The frequency of a participant’s has the flexibility to provide services in treatment of the mentally ill or
attendance at the PACE center is settings other than the PACE center. Alzheimer’s patients.
determined by the IDT based on the However, every participant must have a Response: We believe that every
needs and desires of each participant. PACE center home that is capable of PACE center must provide for every
Finally, if the PO operates more than furnishing all PACE required services. participant that meets the eligibility
one PACE center, each PACE center For POs that are sufficiently large to requirements and wishes to enroll in
must offer the full range of services and require multiple PACE centers, each PACE. We are aware that some POs have
have sufficient staff to meet the needs of center would need to have a sufficient specialized staff and accommodations
participants. number of IDTs to provide the full range specifically for Alzheimer’s/Dementia
Comment: We received numerous of services to meet the needs of all patients. As the regulation reads
comments relating to the minimum participants assigned to that PACE currently, a PO choosing to limit
range of services required to be center. enrollment to a targeted population
furnished at the PACE center. One We believe the success of the PACE would be viewed as discriminatory. We
commenter recommended we delete the delivery model is due to the are not inclined to permit POs to limit
requirement that each PACE center offer combination of the IDT assessment and enrollment to certain target populations
the full range of services, if the care planning and the PACE center. at this time. Should we consider such a
organization operates more than one Independent of each other, neither change, we would include it in future
PACE center in a defined service area, would produce the remarkable rulemaking and permit the public to
as long as all required services are participant care successes they do comment.
readily available to all participants. together. The PACE center provides a Comment: Two commenters requested
Two commenters believe the focal point of service where the primary care we broaden the list of categories under
point of PACE service delivery is the clinic is located, where services are which the PO cannot discriminate to
IDT rather than the PACE center and provided, and socialization occurs with include sexual orientation.
requested that we explicitly recognize staff that is consistent and familiar. The Response: In response to this request,
the provision of services at alternative IDT not only works from the PACE we are amending the language of
sites. One commenter indicated that this center, they provide the majority of § 460.98(b)(3) to include sexual
approach would avoid potentially services to participants at the PACE orientation.
adverse situations in which all center, where most participants come on Comment: We also received a request
alternative delivery sites are subject to a regular basis to receive the majority of for an explanation of the procedures a
PACE center regulatory requirements their care. We also believe the PO needs to follow in order to establish
and survey criteria, in addition to any attendance at the center is an important additional PACE centers.
State certification or licensure aspect of the PACE model, which helps Response: We have provided a
requirements applicable to such to differentiate it from home health care number of scenarios to explain our
facilities. One of the commenters or institutional care. Therefore, we will policy regarding expansions on our
proposed that services be allowed in continue to require that the full range of CMS PACE home page at http://
alternative locations provided they meet PACE services be offered at the PACE www.cms.hhs.gov/pace/. A separate
applicable State licensure and center and will encourage development application for the sole purpose of
certification requirements. of PACE centers in rural and Tribal expansion is also provided on the CMS
One commenter emphasized that areas, wherever possible. PACE homepage. This expansion
there is a critical distinction that should We allow alternative care settings application is abbreviated to take into
be made between a participant being (ACS) where a limited number of account only processes or practices that
assigned to a team ‘‘operating from’’ a services may be provided. Should would be different due to the expansion.
PACE center and PACE center participants choose to attend an ACS to Final rule actions:
attendance. As published in the rule, receive certain services, they would In this final rule, we are amending
§ 460.98(e) states that ‘‘the frequency of attend the PACE center for the services § 460.98, paragraph (b)(3), to add sexual
a participant’s attendance at a PACE not offered at the ACS. We do not orientation.
center is determined by the IDT, based believe that an ACS should replace the
on the needs and preferences of each Section 460.100 Emergency Care
PACE center. We believe that every
participant.’’ participant must be assigned to and We note that as sections 1894 and
Commenters indicated the regulation have the option to receive PACE 1934 of the Act do not contain specific
should afford flexibility to enable services at a PACE center. requirements regarding emergency care,
programs to offer services either on or Comment: Another commenter in the 1999 interim final rule we relied
off site in order to best meet the needs endorsed flexibility in staffing for POs on the Protocol and regulations
and preferences of participants and that operate more than one PACE center. governing emergency care under
maximize efficient use of organizational Response: Each PACE center must Medicare and Medicaid managed care to
resources. have at least one complete IDT and develop the requirements for emergency
care under PACE. We expanded on and area that are not emergency services but Response: The PO is obligated to pay
clarified the provisions in Part IV, cannot be delayed until the participant for all emergency care if the prudent
section A of the Protocol to ensure returns would need prior authorization. layperson standard as specified in
access to necessary services and to The fact that these services may be § 460.100(c) is met and the participant
adopt a beneficiary-centered approach. urgently needed means that the PO believes he or she is in a critical health
Section 460.100 requires a PO to would be expected to authorize a emergency or, in other words, if the
establish and maintain a written plan participant to obtain them from a non- participant fears for his or her life or
for handling emergency health care contract provider outside of the service well-being.
needs. The organization must ensure area, but it does not exempt them from Comment: One commenter
that the participants and their caregiver the requirement for prior authorization. recommended that the requirement that
know when and how to access This approach differs from that applied POs explain policies regarding
emergency services and ensure that to MA organizations, where prior emergency care be modified to include
CMS, the State, and PACE participants authorization for urgently needed a clarification that no prior approval is
are held harmless for emergency services is not required. We believe that required for emergency services.
services. the differences in the population served
As we explained in the 1999 interim Response: We agree with this
by POs warrant the different treatment commenter and are modifying
final rule, emergency care is appropriate of urgent, though not emergency, care
when services are needed immediately paragraph (d) in this final rule to require
needs. Due to the relative frailty, more the PO to explain that no prior
because of an injury or sudden illness limited mobility, and more complex
and the time required to reach the PO authorization is required for emergency
health status of PACE participants, we care.
or a network provider would cause the believe the need to maintain the
risk of permanent damage to the Comment: One commenter requested
coordination of care by the IDT justifies
participant’s health. Thus, emergency a definition of the term ‘‘caregiver’’ in
contact with and authorization by the
care services include inpatient and our requirement at § 460.100(d) that the
PO before receipt of non-emergency care
outpatient services, furnished by a PO must explain policies regarding
outside the PACE network.
qualified emergency services provider emergency care.
The emergency services plan must
(other than the PO or one of its contract Response: We believe that the nature
also provide for the availability of
providers) either in or out of the PO’s of PACE and the living arrangements
appropriate on-call providers. We
service area, that are needed to evaluate experienced by PACE participants
expanded this requirement from the
or stabilize an emergency medical covers a wide range of diverse
Protocol to provide a safety net for
condition. circumstances making a definition of
An emergency medical condition unanticipated health incidents, so
participants do not encounter difficulty ‘‘caregiver’’ inappropriate. A PACE
means a condition manifesting itself by participant could be living alone, with
acute symptoms of sufficient severity in obtaining care when they are away
from the PACE center, when they are family members, in a residential facility
(including severe pain) such that a or be in another type of living
prudent layperson, with an average away from the PO’s service area and
require services that cannot be delayed arrangement. They could have a
knowledge of health and medicine, caregiver or many different caregivers.
could reasonably expect the absence of until they return, or when they require
post-stabilization care services The caregiver could be a family
immediate medical attention to result member, attendant, friend, neighbor,
in: Serious jeopardy to the health of the following emergency services. An on-
call provider must be available 24 hours member of a church or other
participant; serious impairment to organization, or anyone who attending
bodily functions; or serious dysfunction per day to address any participant
questions about accessing emergency to participant’s needs and which
of any bodily organ or part. constitutes a caregiving relationship.
Emergency services that fall within services and respond to requests for
authorization of urgently needed out-of- Therefore, for purposes of PACE, we
this description do not require prior consider a caregiver anyone who attends
authorization by the PO. We believe that network services or post-stabilization
care services following emergency to the participant’s needs and we use
relying on the prudent layperson the terms ‘‘family member’’ and
standard in establishing a participant’s services.
‘‘caregiver’’ interchangeably.
need for emergency services is more We believe that POs must be
clear than the definition of emergency responsive to all participant care needs, Comment: One commenter asked that
care in the Protocol. We adopted the including the need for urgently needed we clarify if on-call providers can be
prudent layperson standard from the or post-stabilization services. In order to accessed via an answering service,
Consumer’s Bill of Rights and ensure that unforeseen circumstances beeper, or other device and if the on-call
Responsibilities (CBRR) (discussed in do not result in delays in needed care, provider must be a member of the IDT.
the section on participant rights). The we clarified that the PO must cover Response: There is no prohibition on
same standard is used in the M+C (now urgently needed out-of-network or post- providers using an answering service,
MA) definition of emergency medical stabilization care services if it does not beeper or other device, but we expect
condition. This standard encompasses a respond to a request for approval within that on-call providers respond to all
slightly broader range of circumstances 1 hour after being contacted or cannot participant calls as soon as possible and
than does the Protocol language, by be contacted for approval. at a minimum within the 1 hour allotted
including some situations that could fit Comment: We received several for response to calls for prior
under the Protocol description of urgent comments regarding emergency care. authorization. There is no requirement
care or urgently needed services. We One commenter requested clarification that the on-call provider must be an IDT
think this clarification is helpful about when the PO would not be member.
because the Protocol wording does not responsible for the cost of emergency Comment: Three commenters
clearly distinguish between emergency services, and asked whether the PO requested we define urgently needed
and urgent care. would always be obliged to provide for care, and distinguish between
Services a participant may need while emergency care if the prudent layperson emergency, urgently needed care, and
temporarily absent from the PO’s service test is met. post-stabilization services.
Response: In response to these participant does not believe his or her As we explained in the 1999 interim
requests, we are establishing the life is in jeopardy, so he or she must call final rule, we believe that a well-
following definitions in this final rule: the PO. The PO physician advises the functioning IDT is critical to the success
As defined in the 1999 interim final participant not to go to the ER, take a of the PACE program, as the team is
rule, an Emergency Medical Condition is certain over-the-counter medication, instrumental in controlling the delivery,
a condition manifesting itself by acute and see the physician when the quality, and continuity of care. Members
symptoms of sufficient severity participant returns tomorrow. of the IDT should be knowledgeable
(including severe pain) such that a While post-stabilization care services about the overall needs of the
prudent layperson, who possess an are the follow-up care required after an participants, not just the needs that
average knowledge of health and emergency condition that has stabilized, relate to their individual disciplines. In
medicine, could reasonably expect the also while the participant is outside the order to meet all of the health,
absence of immediate medical attention PO service area. For example, the psychosocial, and functional needs of
to result in placing the health of the participant is hospitalized due to the participant, team members must
individual in serious jeopardy, serious bacterial pneumonia. It was treated and view the participant in a holistic
impairment to bodily functions, or resolved enough for discharge but some manner and focus on a comprehensive
serious dysfunction of any bodily organ residual symptoms remain. The treating care approach.
or part. physician knows the participant will Based on the Protocol, in paragraph
As also defined in the 1999 interim not be returning home for 2 weeks, (b) we require that the IDT be composed
final rule, Emergency care is appropriate which he believes is too long a period of at least the following members:
when services are needed immediately of time before having a follow-up x-ray a. Primary care physician (PCP)—We
because of injury or sudden illness and ordered by her physician. Therefore, the considered expanding this to include
the time required to reach the PO or one treating physician must contact the PO nurse practitioners but decided to retain
of its contact providers, would cause for approval to order a follow-up x-ray. the requirement in the Protocol. While
risk of permanent damage to the The x-ray is not emergency care but is it would be acceptable for a PO to
participants health. Emergency services necessary and customary to ensure the include a nurse practitioner on the IDT,
include inpatient and outpatient improving condition of the lungs. we believe that this should be in
services that are furnished by a qualified Comment: One commenter requested addition to rather than instead of the
emergency services provider, other than that we lengthen the time the PO may PCP, at this time. This approach is
the PO or one of its contract providers, take to respond to a request for approval consistent with other Medicare
either in or out of the PO’s service area of non-emergent care services from 1 regulations. We believe such a change
and are needed to evaluate or stabilize hour to 24 hours. should be included in a proposed rule
an emergency medical condition. In Response: We believe that the PO’s in order to allow for public comment on
addition, in accordance with responses to urgent and post- this issue. In the meantime, we are
§ 460.112(d), we are clarifying in this stabilization care services requests need continuing to assess the appropriateness
final rule that we are amending to be completed as expeditiously as of allowing nurse practitioners to
paragraph (d) of this section to require possible in order to prevent any assume the role of the PCP consistent
POs to explain to PACE participants that misunderstanding between the PO, the with State licensure for nurse
emergency care services that are participant, and the non-network practitioners.
provided for medical conditions that fall physician. We seek to avoid a situation b. Registered nurse (RN)—The
within this description must be covered that might result in failure to provide Protocol requires the inclusion of a
by the PO and do not require prior essential care or result in providing non- ‘‘nurse.’’ In paragraph (b)(2), we
approval. covered services because of the length of specified that this team member be an
Urgent care means the care provided the PO’s response time. Therefore, we RN. The nurse represented on the IDT
to a PACE participant who is out of the are retaining the 1-hour response time must exhibit leadership and
PACE services area, and who believes for urgent care and post-stabilization management skills that are more
their illness or injury is too severe to care requests. consistent with the training received by
postpone treatment until they return to Final rule actions: RNs, as opposed to licensed practical
the service area, but their life or In this final rule, we are: nurses. In addition, we believe that an
functioning is not in severe jeopardy. • Adding language to paragraph (d) to RN would be better able to determine
We note that participants are expected require the PO to explain to the and respond to the health care needs of
to seek prior approval from the PO in participant that no prior authorization is the frail population, particularly for
order to be covered for urgent care. required for emergency care; and home care services.
Post-stabilization care means services • Revising § 460.100 to include c. Social worker;
provided subsequent to an emergency definitions for urgent and post- d. Physical therapist (PT);
that a treating physician views as stabilization care. e. Occupational therapist (OT);
medically necessary after an emergency f. Recreational therapist or Activity
Section 460.102 Interdisciplinary
medical condition has been stabilized. Coordinator;
Team g. Dietitian;
They are not emergency services, which
POs are obligated to cover. Rather, they This section is based on provisions in h. PACE center manager—We
are non-emergency services that the PO Part IV, section B of the Protocol. In the changed the Protocol terminology from
should approve before they are provided 1999 interim final rule, we included a ‘‘PACE Center Supervisor’’ to ‘‘PACE
outside of the service area. requirement that the PO must establish Center Manager.’’ The PACE center
Prior approval of these services is an IDT at each PACE center to manager is responsible for overall
intended to ensure efficient and timely comprehensively assess and meet the operation of the PACE center and
coordination of appropriate post individual needs of each participant. In ensuring service delivery. The
emergency care by the IDT. § 460.102(a)(1), we require that the PO individual who holds this position
To further clarify, an example of assign each participant to an IDT based should be a good facilitator and should
urgent care might be a severe cough at the PACE center the participant possess good communication skills. In
without other symptoms. The attends. many POs, the PACE center manager
leads IDT meetings. We are permitting condition of each participant and to In response to public comment on the
the PO and the IDT the flexibility to remain alert to pertinent input from 1999 interim final rule, and to
decide who should lead the team and other team members. We believe this implement section 903 of BIPA, we
facilitate the discussions. should be the responsibility of each made the following changes in § 460.102
i. Home care coordinator—Since member of the team rather than just the in the 2002 interim final rule.
PACE services may be furnished in the physician, as it is critical to timely We amended paragraph (d)(2)(iii) to
home, the coordination of in-home intervention to address potential clarify that IDT members must
services with PACE center and primary problems. To reflect this position, we document changes in a participant’s
care services is critical to effective require in paragraph (d) that each condition in the participant’s medical
service delivery. This coordination is member of the team must regularly record consistent with the
especially important if the PO has inform the IDT of the medical, documentation policies established by
contractors providing the home care functional, and psychosocial condition the medical director of the PO. This
services. The PO must designate a home of each participant and remain alert to ensures that only designated team
care coordinator to supervise and pertinent input from other team members have access to patient records.
coordinate home care services, whether members, participants, and caregivers. Also, in consideration of the
these services are furnished by a PACE This communication can take place expanded contracting opportunities in
employee or through a contractor. We through formal measures such as team the 2002 interim final rule, we removed
changed the Protocol’s term ‘‘home care meetings and written documentation in paragraph (f) that required members of
liaison’’ to ‘‘home care coordinator,’’ participants’ medical records, but the PACE IDT to be employed by the
because ‘‘home care liaison’’ has should not be limited to formal PO. Finally, we removed paragraph (g)
another meaning in Medicare, and we mechanisms. Informal communication that allowed CMS and the SAA to waive
wanted to avoid confusion. between team members (for example, the employment requirement for the
j. Personal care attendants (PCAs) or CARDEX systems, informal updates PCP and the requirement that the IDT
their representatives—We changed the during shift changes) should be serve primarily PACE participants.
Protocol term ‘‘health care worker/aide’’ encouraged as well. It is critical that Since the PO may contract for PCPs in
to ‘‘personal care attendant,’’ as we personal care attendants be involved in accordance with the requirements
believe this term more accurately the communication process. As they specified in § 460.70 (described in the
describes this position. We believe that often have the first contact with the section I.B.3.b. of this preamble) and
‘‘health care worker’’ is too general and participant, it is important that they other waivers are governed by § 460.26
could apply to other members of the regularly share information, for (described in section I.B.f. of this
team. example, on the participant’s mood,
k. Drivers or their representatives— preamble), these specific waiver
activities, and daily habits. In the 1999 provisions are no longer necessary. We
This requirement remains unchanged interim final rule, we required that each
from the Protocol. amended paragraph (d)(3) by removing
team member must document all the cross reference to paragraph (g).
Due to the age of most PACE changes in the participant’s condition in
participants, a geriatrician could be a Comment: There were numerous
the participant’s medical record.
valuable member of the IDT. As one recommendations on variations of IDT
In paragraph (d)(3), we require that
option, the PCP could be a geriatrician. members of the IDT must serve composition, the roles of the IDT
However, physicians who specialize in primarily PACE participants, unless a members, services the IDT members
geriatrics are relatively rare, and waiver is granted. After considering this provide and the locations where the IDT
availability might be a serious problem. issue, we concluded that in order to members may provide services. One
We have not required the involvement effectively serve a frail elderly commenter recommended we grant
of a geriatrician but in the 1999 interim population, such as is served by the greater flexibility by specifying in the
final rule, we invited comments about PACE program, it is important to regulation the teams ‘‘operate from’’ the
whether such a requirement would be support and retain measures that PACE center, regardless of where the
desirable and, if so, whether the promote quality and continuity of care. services are furnished. This commenter
geriatrician should be employed by the If team members serve primarily PACE also recommended we omit the
PO and should primarily serve PACE participants, they are able to develop a requirement relating to physical
participants. rapport with participants and are better location of the IDT. Commenters also
Consistent with the Protocol, we able to plan for and provide their care. recommended that we provide greater
require in paragraph (c) that primary We recognize that team members may flexibility in composition of the IDT
medical care for all participants be have other clients, but this must not including when POs operate multiple
furnished by the PCP(s). The PCP must interfere with the provision of services PACE centers.
serve as the gatekeeper to the for PACE participants. One commenter recommended we
participant’s use of medical specialists In paragraph (g), we included omit the positions of dietitian, PACE
and inpatient care, and he or she must conditions for waiver of the center manager, home care coordinator,
be an integral member of the IDT. employment requirement for IDT PCA, and driver from mandatory
Ultimate responsibility for management members. CMS and the SAA were membership on the IDT and add a
of medical situations must rest with the authorized to grant a waiver of this requirement that the core team
PCP. requirement if they determined that— coordinate and supervise services
The IDT is responsible for the initial • There are not enough individuals provided by other staff.
assessment, periodic reassessments, the available in the PO’s service area who Response: There are other delivery
plan of care, and coordinating 24-hour meet the PACE requirement or State models with an interdisciplinary team
care delivery. A critical element of the licensing laws make it inappropriate for approach but none revolve around a
success of the IDT is the degree to organizations to employ physicians; and PACE center. We believe the cohesive
which team members share information • The proposed alternative does not interaction between the IDT and the
and communicate with one another. The adversely affect the availability of care PACE center is one of the elements that
Protocol requires the physician to keep or the quality of care that is provided to makes PACE not only different but also
the IDT informed of the medical participants. successful.
The 2002 interim final rule expanded the PO may contract for PCPs in and team leadership under a
the flexibility available to POs by accordance with the requirements collaborative agreement with an actively
permitting contracting of individual IDT specified in § 460.70 and other waivers involved and fully accessible physician.
members or contracting for the entire are governed by § 460.26, we Another commenter requested we
PACE center and services. One of the determined that this provision was no permit more flexibility in the delivery of
essential elements of the IDT is the longer needed. primary care through the
consistency with which services are The commenter’s proposed language acknowledgement of the role of NPs and
provided to participants. Each PACE would have permitted contracting of PAs and modify both regulatory sections
center is required to have at least one services for most IDT positions, but by adding the phrase ‘‘or a nurse
IDT or more if necessary to ensure that dictated when and where services could practitioner/physician assistant working
each participant is assigned to an IDT at be provided. We continue to believe that in collaboration with a PCP, as
the PACE center the participant attends. the amendments made in the 2002 rule reasonable, appropriate, and allowable
As a result, we are not inclined to provide the flexibility requested in under State law and regulation.’’
delink the physical location of the IDT comments we received on the 1999 Response: In accordance with the
service to the PACE center. interim final rule. Therefore, we are PACE Protocol, the regulation requires
After reviewing the recommendations retaining the changes implemented in participation of a physician. Physician
made by commenters for members of the the 2002 interim final rule. is defined in the Medicare program to
IDT, we continue to believe that the Comment: One commenter mean a doctor of medicine or
required membership of the IDT recommended the IDT include the osteopathy as recognized in section
specified in paragraph (b) has been an participant’s personal representative. 1101(a)(7) of the Act. As a result, there
essential element in the PACE program’s Response: The intent of § 460.102 was must a PCP on the IDT. The regulation
proven success in managing the to establish the staff responsibilities for does not prevent the participation on
complex health conditions of the frail the disciplines that constitute the IDT the IDT of NPs or PAs acting in
elderly. Nutritional status has an team of care providers. Although the collaboration with the physician and
immense impact on health especially on participant (or his or her representative) within their scope of practice. However,
the frail and the elderly; thus, we is not specifically identified as a NPs and PAs may participate on the IDT
believe a dietitian is an essential member of the IDT under § 460.102, in addition to the PCP, but may not
member of the IDT. The home care § 460.106(e) requires the team to replace the PCP.
coordinator is another position that has develop, review, and reevaluate the plan We acknowledge the dedicated
a vital impact on the health and safety of care in collaboration with the service and quality care provided by
of participants while they are living at participant or caregiver, or both to NPs and PAs to PACE participants, but
home in the community. The PCAs ensure there is agreement with the plan we do not believe that addition of a
often have the first and closest of care and the participant’s concerns specific role description for NPs or PAs
interaction of the day with the are addressed. Although the participant in the regulatory language in § 460.102
participants and the driver has contact or his or her representative contributes would provide any additional flexibility
with the participants both in the early to the decision-making process, we do to the POs in establishing their IDTs.
morning and in their home not believe that it is appropriate to
environment. Input from these IDT Comment: We received three
include the participant or their
members or their representatives can be comments related to the requirement for
representative as an IDT member.
instrumental in the detection of the first an RN on the IDT. One commenter
The following are comments and
signs of impending illness or supported the regulation requiring an
recommendations related to specific IDT
environmental issues. Therefore, we are RN as opposed to a nurse on the IDT.
members.
retaining the required membership Comment: In response to our request Another commenter supported
composition of the IDT as published in for comments related to requiring that flexibility depending on the
the 1999 interim final rule in the PO employ a geriatrician on the IDT, composition of the team. Another
§ 460.102(b). a number of commenters indicated that commenter requested the roles of the NP
Comment: We received one comment it is desirable but not feasible to require and the clinical nurse specialist (CNS)
regarding the 2002 interim final rule POs to employ a geriatrician at each be consistent with established CMS
modifications to the IDT. This PACE center. rules and regulations.
commenter requested we retain Response: We agree with these Response: We believe the term
paragraph (f), which was deleted from commenters and are not requiring a ‘‘registered nurse’’ is a more clear and
the 2002 interim final rule. The geriatrician on each IDT. definitive title than ‘‘nurse’’ and have
commenter also suggested that Comment: One commenter requested therefore specified that the IDT must
paragraph (g) be replaced with language we delete the requirement that PCPs include a registered nurse. We believe
the commenter proposed related to must serve primarily PACE participants. that the IDT membership should
contracted PCPs. Response: We are retaining the include an RN, but that does not imply
Response: The changes to the 2002 ‘‘primarily serve’’ requirement for all that the PO cannot utilize licensed
interim final rule were made in IDT members because this requirement practical nurses, NPs, or CNSs in other
response to numerous comments was established to ensure the direct care positions acting in
requesting flexibility to contract for all participants receive the unique benefits collaboration with the physician and
members of the IDT. As we stated in the offered by the PACE program model. within their scope of practice. This
preamble to the 2002 interim final rule, Comment: A very large number of approach is consistent with established
we removed paragraph (f)(requiring comments were related to physician CMS rules and regulations.
members of the IDT to be employed by adjunct positions, specifically nurse Comment: Several commenters
the PO) and paragraph (g)(allowing practitioners (NPs) and physician requested that the requirements for the
waiver of specified requirements) in assistants (PAs). One commenter social worker be consistent with those
consideration of the expanded recommended that we include NPs and contained in the nursing home
contracting opportunities that were PAs in IDT requirements because the regulations with the additional
added in the 2002 interim final rule. As role of the NP to include primary care requirement that each PO employ or
contract with at least one Master’s level meetings. However, we believe these possible in order to capture all of the
social worker (MSW). staff are often in a position to provide information necessary for the IDT to
One commenter recommended an important details about the participants’ develop a plan of care that will
alternative to a Master’s degree in social physical and emotional condition and adequately address all of the
work. They recommended that social changes in their home environment. participant’s functional, psychosocial,
workers hold a Baccalaureate degree in Information from these IDT members and health care needs.
social work or in a human services field can be relayed through a representative, The assessment process begins before
and 1 year of supervised social work such as the PACE center manager, home enrollment, as set forth in § 460.152,
experience in a health setting working care coordinator, transportation when the PO evaluates whether a
directly with individuals. coordinator, RN, social worker, a potential participant can be cared for
Response: We agree with the supervisor, designated colleague, or appropriately in the program. Often,
commenter and note that a other IDT member. Therefore, we POs present a proposed plan of care to
Baccalaureate degree in social work included representatives of PCAs and the potential participant as part of the
does not include the training in social drivers in § 460.102(b). enrollment process. The initial
counseling that is required for a Comment: We received several comprehensive assessment must be
Master’s in social worker. Therefore, to requests to modify the rule to include completed promptly following
clarify the position and responsibilities the following positions on the IDT: enrollment, but individual team
of the social worker on the IDT, we are qualified occupational therapy members’ in-person assessment of the
amending § 460.102(b)(3) to require a assistants (OTAs), Licensed Practical participant should be scheduled at
MSW be part of the IDT, rather than a Nurses (LPNs), certified occupational appropriate intervals based on the
‘‘social worker.’’ In the 1999 interim therapy assistants (COTAs), and participant’s level of health. Because the
final rule, § 460.64(c)(2) listed the Baccalaureate-level social workers initial assessments are thorough, this
personnel qualification for a social (BSWs). will ensure that the participant is not
worker, which included having a Response: We believe LPNs, OTAs overwhelmed with several team
Master’s degree in social work from an COTAs, and BSWs, provide dedicated members conducting assessments at one
accredited school of social work. In this quality care to PACE participants and time. However, the initial
final rule, we have removed are essential to the operation of POs. comprehensive assessment must be
§ 460.64(c)(2). We are requiring a MSW However, as we noted above, our completed quickly so that the plan of
on each IDT to establish the social work current regulations provide ample care can be completed and implemented
plan of care and to provide counseling opportunity for the POs to involve without delay. This often is
services. The MSW may participate on personnel with these educational accomplished by the effective date of
several teams, perform assessments, qualifications in providing the best enrollment and should never be delayed
reassessments, care planning, and possible PACE services, without more than a few days beyond that date.
counseling consistent with their necessarily including them as part of the With the team concept, the goal is to
education and training. For consistency IDT. We do not think revising our obtain input from each discipline, as
we are also reviewing § 460.104(a)(2)(iii) regulation is necessary. well as from the participant, through
and § 460.104(c)(1)(iii), to refer to a Comment: One commenter comprehensive assessment that
Master’s-level social worker to perform recommended that we include an RT on identifies the services necessary to
assessments and reassessments. the IDT, stating the statute provides address the participant’s needs and care
Therefore, in § 460.64, we are deleting flexibility for the PO to include preferences.
the specific educational and experience additional services. Section 460.104(a) requires that as
qualifications for social workers as all Response: Composition of the IDT part of the initial comprehensive
States require licensure, certification, or was based on the Protocol, which did assessment, each of the following
registration of social workers as well as not include respiratory therapy. members of the IDT must individually
qualifications for MSWs. The PO may However, our regulations do not prevent evaluate the participant in person and
contract with other MSWs to augment the inclusion of these professionals. The develop a discipline-specific assessment
their staffing levels to ensure all extent to which POs routinely include of the participant’s health and social
participants receive the counseling respiratory therapists on their IDT will status:
services provided by MSWs. The PO be based on their participants’ medical • Primary care physician;
may employ or contract with conditions. The IDT is required to • Registered nurse;
Baccalaureate social workers to provide involve any discipline necessary to treat • Social worker;
services within their scope of practice. the participant’s individual needs, • Physical therapist or occupational
Comment: A commenter requested which includes assessment, therapist, or both;
that we clarify the terms ‘‘Personal care collaboration during the development of • Recreational therapist or activity
attendant or his or her representative’’ the plan of care, and providing coordinator;
and ‘‘Driver or his or her representative’’ treatment. • Dietitian; and
in relation to composition of the IDT. Final rule actions: • Home care coordinator.
Response: We expect the driver and In this final rule we are changing the We believe the specified IDT members
PCA to be members of the team but term ‘‘social worker’’ to ‘‘Master’s-level represent the core disciplines needed to
understand that a representative may social worker’’ consistent with our determine the specific treatment and
attend morning meetings. Most POs changes to § 460.64. psychosocial development needs of the
conduct morning IDT meetings during participants. At the recommendation of
the time when PCAs are actively Section 460.104 Participant individual team members, other
engaged in morning caring at the PACE Assessment professional disciplines (for example,
center or participants’ residences and The information obtained through the speech-language pathologists, dentists,
drivers are engaged in the transporting participant assessment is the basis for or audiologists) may participate in the
participants to the PACE center. the plan of care developed by the IDT. initial comprehensive assessment if the
Therefore, neither the PCA nor the As such, it is important that the participant’s needs warrant their
driver are available to attend these IDT assessment be as comprehensive as inclusion.
In the 1999 interim final rule, we The Protocol requires that the IDT to conduct an in-person
stated that we were in the preliminary discipline-specific plans be reassessment on at least an annual basis:
stages of developing a standardized core consolidated into a single plan of care • Physical therapist and/or
assessment instrument, the COCOA–B, for the participant. The development of occupational therapist;
to be used by POs for outcome-based the plan of care must occur through • Dietitian; and
continuous quality improvement. Until discussion and consensus of the entire • Home care coordinator.
such time as this instrument was IDT. We established this requirement in It is important for the IDT to monitor
completed, we specified in § 460.104(b) by stating that the and respond to any changes in a
§ 460.104(a)(4) that the participant’s discussion must take place during team participant’s condition or family
assessment must include, at a meetings, in order to facilitate group situation or any concerns raised by the
minimum, the following information: discussion of the plan of care and participant or his or her designated
• Physical and cognitive function and ensure that all members of the team are representative. The Protocol requires
ability; actively involved in the decision- that the participant be reassessed by the
• Medication use; making process, and that the plan of team or by selected members of the team
• Participant and caregiver care must be completed promptly. to develop a new plan of care when the
preferences for treatment; In developing the plan of care, the health status or psychosocial situation
• Socialization and availability of PACE IDT is also required by of a participant changes. We believe that
family support; § 460.104(b) to inform female all members of the IDT that are required
• Current health status and treatment participants that they are entitled to to perform the initial comprehensive
needs; choose a women’s health specialist from assessment should reassess the
• Nutritional status; the network of PACE providers. We
• Home environment, including participant because if fewer members
have included this requirement to participate in this reassessment, a
home access and egress; ensure compliance with the Consumer’s
• Participant behavior; critical component of a participant’s
Bill of Rights and Responsibilities care might be overlooked.
• Psychosocial status; (CBRR), as explained in detail in the
• Medical and dental status; and In addition, paragraph (c)(3) requires
preamble of the 1999 interim final rule.
• Participant language. Reassessments are necessary to
that if a participant’s health or
We believed that this information psychosocial status has changed or if a
provide information to adjust participant (or his or her designated
would provide a basic framework from
participants’ plans of care. Periodic representative) believes that a particular
which a comprehensive plan of care
reassessments ensure the continued service needs to be initiated, continued,
could be developed, would be
accuracy and effectiveness of the or eliminated, the appropriate IDT
appropriate for every participant, and
participant’s plan of care. Consistent members must reassess the participant.
would ensure that the plan of care
with the Protocol, we require in The purpose of this reassessment is to
focused on the participant’s medical,
paragraph (c) that the following evaluate whether it is necessary to
psychosocial, and functional needs.
members of the IDT conduct an in- increase, continue, reduce, or terminate
However, this list represented the
person reassessment on at least a semi- particular services and whether a
minimum information to be included in
annual basis: different course of treatment is needed.
the comprehensive assessment, and the • Primary care physician;
PO was encouraged to include other • Registered nurse; A complete reassessment should ensure
assessment items as necessary. • Social worker; that the participant is receiving a
Although a core assessment • Recreational therapist or activity continuing program of care that meets
instrument has been developed, since coordinator; and his or her current needs. Requiring a
the publication of the 1999 interim final • Other team members actively reassessment based on the concerns of
rule, our experience with the PACE involved in the development or the participant emphasizes the active
program has led us to having some implementation of the participant’s plan role the participant plays in the
misgivings about its long term of care, for example, home care assessment process and development of
application. Given the need for coordinator, physical therapist, his or her plan of care. The participant’s
flexibility for POs, we are concerned occupational therapist, or dietitian. adherence to the plan is critical to the
that specifically mandated measures The primary care physician, successful delivery of services.
may compromise the discretion of POs registered nurse, social worker, and Therefore, permitting the participant (or
to use other assessment tools that may recreational therapist/activity designated representative) to trigger a
be more appropriate for their settings. coordinator are required to perform reassessment gives participants the
Therefore, we are not inclined to assessments at least semiannually as opportunity to express any
replace the information requirements they are the most critical in terms of dissatisfaction with the manner in
contained in § 460.104(a)(4) with a defining outcomes of care. Other team which care or services are furnished.
specific standardized core assessment members actively involved in the We believe the requirements in
instrument. In time, we expect that POs participant’s plan of care must also § 460.104(c)(3) are appropriate, but in
will become more familiar with using reassess semiannually, as they have an this final rule, we wish to clarify that
the quality assessment and performance impact on the care the participant is not all changes in health or
indicators that are contained in receiving. However, if the participant is psychosocial status require
§ 460.134 (physiological well being, not receiving certain services (such as reassessment by the entire IDT. We are
functional status, cognitive ability, home care, physical therapy, allowing the PO the flexibility to
social/behavioral functioning, and occupational therapy, dietitian determine the appropriate staff to
quality of life) as a framework for services), these members of the team reassess changes that are not significant.
participant assessments. At this time, would not be required to conduct a We continue to believe that significant
we are finalizing the information listed semi-annual assessment for that changes in health or psychosocial status
in § 460.104(a)(4) as the required participant. require the in-person reassessment by
information POs must obtain as part of Consistent with the Protocol, we the IDT members identified in
a comprehensive assessment. require the following members of the § 460.104(a)(2).
Section 460.104(c)(3) also requires the (2) describe both the standard and have conducted assessments before
PO to have explicit procedures for expedited appeals processes, including enrollment.
timely resolution of requests from the right to and conditions for obtaining Response: The assessment process
participants (or their authorized an expedited appeal of a denial of begins before enrollment when the PO
representatives) to initiate, continue, or services; and (3) describe the right to evaluates a potential participant to
terminate a particular service. Unless an and conditions for continuation of determine if they can be cared for
extension is granted, the IDT must contested services through the period of appropriately in the community by the
notify the participant (or designated the appeal. PACE program. We do not dictate the
representative) of its decision to If the IDT fails to provide the disciplines that must perform this
approve or deny the request as participant with timely notice of the assessment; we leave that to the
expeditiously as the participant’s resolution of the request for discretion of the PO. The remainder of
condition requires, but no later than 72 reassessment or does not furnish the the initial comprehensive assessment
hours after the IDT receives the request. services required by the revised plan of can be performed before the enrollment
We considered establishing both a care, this failure constitutes an adverse agreement is signed or the PO can
standard process and an expedited decision, and the participant’s request decide to wait until after the enrollment
process for responding to participant must be automatically processed as an agreement is signed. The only
requests; however, because of the frailty appeal by the PO in accordance with requirement is that the assessment be
of this population, we concluded that § 460.122. completed as soon as possible after
every request is urgent and requires a Team members who reassess a enrollment so the plan of care can be
quick response. We want to ensure that participant must reevaluate the plan of implemented after the effective date of
a participant’s health is not adversely care. Any changes in the plan of care enrollment with as little delay as
affected due to a delay in reassessing the must be discussed and approved by the possible.
participant’s condition. The goal of the IDT and the participant (or designated As specified in § 460.104(a)(2), the
program is to maximize the participant’s representative). The plan of care reflects initial comprehensive assessment must
functioning, and a quick response is the team’s and participant’s goals for the be performed by the following
meant to ensure that all factors are participant’s care. Obtaining the disciplines:
evaluated, all necessary services are participant’s approval of the proposed • Primary care physician.
being furnished, and participant health plan of care is important to the • Registered nurse.
is not compromised. A timely successful delivery of services and the • Social worker.
notification also allows participants participant’s adherence to the plan. • Physical therapist.
adequate time to consider appeal rights, In addition, we also require that any • Occupational therapist.
if necessary, without compromising
services included in the revised plan of • Recreational therapist or activity
their health.
care as a result of a reassessment must coordinator.
The IDT may extend the 72-hour
timeframe by no more than 5 additional be furnished to the participant as • Dietitian.
days if the participant or designated expeditiously as the participant’s health • Home care coordinator, and any
representative requests the extension, or condition requires. It is critical that care other professional discipline the IDT
if the team documents its need for not be delayed and that the participant recommends be included in the
additional information and how the receive comprehensive care that comprehensive assessment process.
delay is in the interest of the maintains his or her functional status. We believe these requirements reflect
participant. An extension may be Because we recognize that some changes the current intake, assessment, and
warranted because not all of the in the participant’s plan of care (for enrollment practices of POs. In the
appropriate members of the IDT may example, installing a wheelchair ramp discussion regarding 460.102, we
always be able to meet with the at the participant’s home) may require clarified that a MSW is a required
participant, conduct a discipline- more time to accomplish, we chose not discipline on the IDT. In order to be
specific reassessment, discuss the to specify a timeframe for delivering consistent with 460.102, we are
results of the reassessment with the services. However, we solicited amending 460.104(a)(2)(iii) and
entire IDT, and develop a response to comments on the necessity of requiring 460.104(c)(1)(iii) to clarify that a MSW
the request within 72 hours. The PO a specific timeframe. Whenever a performs assessments and
retains the flexibility to determine the participant assessment or reassessment reassessments.
most appropriate manner in which to occurs, the information must be Comment: One commenter supported
provide notification to the participant documented in the participant’s medical the assessment and reassessment
(or designated representative). record. requirements but proposed a
If, based on the reassessment, the IDT Comment: Two commenters requested modification to § 460.104(a)(2)(i) and
decides to deny the participant’s confirmation that the requirements for § 460.104(c)(1)(i) by adding ‘‘or a nurse
request, the denial must be explained to the initial comprehensive assessment in practitioner/physician assistant working
the participant (or designated § 460.104(a) were not intended to in collaboration with a PACE PCP, as
representative) orally and in writing. govern the practice of assessment before reasonable, appropriate, and allowable
The PO must provide the specific enrollment or to prescribe which IDT under State law and regulation.’’
reasons for the denial in understandable members must conduct assessments Response: We believe that the
language. before enrollment for purposes of physician should perform the initial
If the participant (or designated determining whether the individual’s comprehensive assessment and
representative) is dissatisfied with the needs can safely be met through the semiannual reassessments, because
outcome of the reassessment, the PACE program. One commenter these assessments are the foundation of
participant may appeal the decision in requested clarification that the the participant’s plan of care. The NP
accordance with. § 460.122. regulation requires that a complete role is an adjunct position, supportive of
Specifically, the PO must: (1) Inform the assessment by the full team take place the physician when conducted within
participant or designated representative after enrollment. This commenter also the NP’s scope of practice and as
of his or her right to appeal the decision; asked which members of the team must allowable under State law. Therefore,
we are not modifying the regulatory specialist and, when possible, be representative. Several commenters
language. provided a choice of GYN specialists. suggested the reassessments initiated by
Comment: One commenter requested Accordingly, we are retaining the the PO based on changes in health
the requirements in § 460.104(a)(2)(iv) requirement to provide participants a status be differentiated from those
and § 460.104(c)(2)(i) which state, choice to use a woman’s health requested by the participant.
‘‘Physical therapist or occupational specialist, consistent with the CBRR Many commenters suggested that the
therapist or both,’’ be changed to protections we adopted in the 1999 requirement that a formal reassessment
designate these disciplines into separate interim final rule. be conducted based on a change in
sections. The commenter pointed out Comment: The majority of participant health status be limited to a
that these disciplines are not commenters on this section disagreed ‘‘significant change.’’ These commenters
interchangeable and both OTs and PTs with the regulatory language related to also suggested including a definition
should be required to participate in the how to accomplish, when to perform, more consistent with the definition
initial comprehensive assessment and and who must conduct the periodic contained in nursing home regulations
annual re-assessment. reassessments required by § 460.104(c). where ‘‘a ‘‘significant change’’ means ‘‘a
Response: After reviewing the Recommendations ranged from deleting major decline or improvement in the
comments, we agree that PTs and OTs various requirements to requests to participant’s status that will not
both needed to participate in the initial provide POs the flexibility over the normally resolve itself without further
assessment and annual reassessments. timing and scope of reassessments. intervention by staff or by implementing
Therefore, we are revising Commenters also provided proposed standard disease related clinical
§ 460.104(a)(2)(iv) and § 460.104(c)(2)(i) language changes, including some that interventions, that has an impact on
to require a PT and an OT to perform are consistent with the Protocol. more than one area of the participant’s
initial comprehensive assessments and Several commenters requested health status, and requires an IDT
the annual reassessments. clarification of whether all team review or revision of the care plan or
Comment: Two commenters requested members must perform reassessments or both.’’ Another commenter
clarification on the delivery of whether only relevant team members recommended that we provide POs the
gynecological (GYN) services. One may perform reassessments. same discretion as the nursing home
commenter asked whether the PO could Response: In response to the regulations afford nursing homes, to
limit GYN services to providers in their numerous comments related to the determine whether and to what extent a
network and, if so, whether there was an reassessment requirements, we want to reassessment or a change in the plan of
assumption that the PO must have more confirm that we believe that the care, or both, are necessary. Other
than one GYN specialist under contract. disciplines designated in the 1999 commenters recommended that if a non-
The other commenter requested interim final rule at § 460.104(c) are the significant change occurs, the
clarification of which health minimum disciplines required to reassessment may be conducted by the
professionals would meet our definition perform reassessments. We also expect discipline impacted.
of ‘‘qualified specialist for women’s that, should the results of the One commenter recommended that
health services.’’ They questioned reassessments raise further issues this requirement be eliminated,
whether PCPs would be acceptable due related to other disciplines, particularly when there is agreement
to the time commitment required by the reassessments by additional disciplines between the IDT and the participant or
geriatric and cognitive deficits of many must be conducted and included in the his or her designated representative.
participants. The commenter questioned development of the comprehensive plan One commenter suggested that we
whether adequate GYN services would of care. require the PO to have a defined process
be available to PACE participants with In contrast, the initial comprehensive for responding to participant requests,
contracted specialists and assessment must be conducted by those which includes assigning appropriate
recommended the elimination of the disciplines listed in § 460.104(a)(2), and team members to the reassessment.
regulatory requirement. any other professional disciplines Response: Due to the fragility of the
Response: We first want to clarify that recommended by the IDT. The results of PACE population, we do not believe it
the PO must provide access to all the discipline specific assessments must would be prudent to restrict the
specialties within its network and be consolidated into a single requirement at § 460.104(c)(3) by
participants are required to receive all comprehensive plan of care. limiting reassessments to significant
services through the PO. The CBRR Again as specified in our regulation, changes in participant health status. The
guarantees participants the choice of periodic reassessments must be philosophy of PACE requires the staff to
providers as well as the right of female conducted as follows; be cognizant of any and all changes in
participants to choose a qualified • At least semi-annually, and more participant health status so that they can
specialist in woman’s health. Therefore, frequently if the participant’s condition take a proactive approach to the care of
we expect that when possible the PO dictates, by the PCP, RN, MSW, this frail and vulnerable population and
will contract with more than one recreational therapist or activity prevent development of a major
provider of gynecological services. coordinator, and other appropriate problem. We believe the suggested
In response to whether the PCP is a members of the IDT that are actively changes would compromise the
qualified specialist for women’s health engaged in the development or integrity of the PACE philosophy.
services, a PCP is qualified to perform implementation of the participant’s plan Moreover, individuals that do not
primary care including basic GYN of care. participate in the PACE program and
services, but the PCP is not a ‘‘qualified • At least annually the PT, OT, reside in a NF will generally be less
specialist for women’s health services.’’ dietitian, and home care coordinator independent and mobile. In addition, as
Although female participants may must conduct in-person reassessments. they reside in a more restricted
choose their PCP for basic GYN services, Comment: Numerous commenters environment under constant observation
if a participant requests a GYN remarked on the provision requiring by staff, residents of NFs need less
specialist or the participant requires reassessment based on change in formally defined IDT reassessment
more complex GYN services, the participant status or at the request of the requirements. These individuals do not
participant must be provided a GYN participant or his or her designated require evaluation of home health or
transportation issues and generally that services be furnished to the are team goals for the participant’s care.
receive more limited PT and OT participant as expeditiously as the Involving the participant in the plan of
services than community dwelling participant’s health condition requires; care is important to the successful
PACE participants. For these reasons, others indicated that the timeframe delivery of services and the participant’s
we believe that the requests for should be left to the discretion of the adherence to the plan.
consistency with NF requirements is PO. Those commenters stated that In paragraph (c), we require the team
inappropriate. specifying a timeframe for service to implement, coordinate, and monitor
PACE is based on the collaborative delivery merely adds a layer of the plan of care by providing services
relationship between the participant regulation and oversight that in all directly and by supervising the delivery
and the PO. We believe it is in the best likelihood will not be necessary. Of the of services furnished by contract
interest of both the participant and the comments supporting a specific providers. The participant’s health and
PO to conduct a reassessment when timeframe, some commenters urged us psychosocial status, as well as the
there is a request for a specific service to set a maximum timeframe of no more effectiveness of the plan of care, must be
regardless of whether or not the than 5 days for initiating service monitored continuously throughout the
participant and the PO agree. The delivery following an approved change provision of services, informal
reassessment might uncover other issues in the plan of care plan and permit the observation, input from participants and
not previously detected. timeframe to be waived in specific caregivers, and communications among
In response to comments, we are situations. Other commenters members of the IDT and other providers.
revising § 460.104(c)(3) by renaming recommended that any individualized In paragraph (d), we require that, on
paragraph (c)(3) as paragraph (d) timeframes be specified in the at least a semiannual basis, the IDT
Unscheduled reassessments. We are participant’s plan of care. must reevaluate the participant’s plan of
separating the requirements for Response: In response to the varied care, including the defined outcomes,
reassessments based on a change in and different comments received in and make changes as necessary.
participant status in paragraph (d)(1) response to our solicitation for comment Semiannual review of the
from those performed at the request of on timeframes for delivering services, participant’s plan of care ensures that
the participant or designated we believe further consideration of this the needs of the participant are being
representative in paragraph (d)(2). We issue is needed before adopting a met. It allows the team to determine
are amending the requirements to specific timeframe. Accordingly, we are whether the participant’s level of health
require the IDT members listed in retaining the requirement as published has changed enough to warrant a change
paragraph (a)(2) to perform in-person in the 1999 interim final rule which in the level of services or even the
reassessments for change in participant requires the PO to implement changes setting in which care is provided.
status while permitting the IDT the in a participant’s plan of care In paragraph (e), we require that
flexibility to determine the appropriate expeditiously as the participant’s health participant plans of care be developed,
IDT members when the assessment is condition requires. reviewed, and reevaluated in
performed at the request of a participant Final rule actions: collaboration with the participants or
or his or her representative. In this final rule, we are: caregivers. The purpose of participant/
Comment: There was strong • Amending § 460.104(a)(2)(iv) and caregiver involvement is to assure that
disagreement by one commenter § 460.104(c)(2)(i) to require that both the they approve of the care plan and that
regarding the PO’s responsibility to PT and OT perform the initial participant concerns are addressed. We
inform participants about the appeal comprehensive assessment and annual give POs the flexibility to determine
process if they are dissatisfied with a reassessments. how often care plans should be
determination. The commenter stated • Amending § 460.104(a)(2)(iii) and reviewed with the participant.
the PO should provide appeal 460.104(c)(1)(iii) changing social worker In paragraph (f), we require that the
information with all written denials, to Master’s-level social worker. participant’s plan of care and any
reductions, and terminations of services • Redesignating paragraph (c)(3) as changes in the plan must be
or changes in the plan of care. paragraph (d) titled ‘‘Unscheduled documented in the participant’s medical
Response: The requirement for reassessments’’ to permit the IDT the record.
written notification of the PO’s appeal discretion to determine the disciplines Comment: We received several
process is discussed in § 460.122 under necessary to perform reassessments that comments related to participant
Subpart G, Participant rights. This are requested by a participant or his or involvement in their plan of care. One
section states, among other things, that her representative. commenter stated that the participant
participants are provided with written should always be included in the
materials on the appeal process upon Section 460.106 Plan of Care
development of the plan of care to the
enrollment and annually thereafter and Based on Part IV, section B of the extent possible and desired, but that use
whenever there is a denial of a request Protocol, we developed requirements for of the term ‘‘or’’ in ‘‘participant or
for services. Denial of services includes the participant’s plan of care. In caregiver’’ suggests that the team may
denial, continuation, or termination of a § 460.106(a), we require that the IDT elect not to involve the participant in
requested service. The provisions for promptly develop a comprehensive plan the development of his or her plan of
reassessment at the request of a of care that specifies all care needed to care.
participant was intended to serve as the meet the participant’s medical, physical, Another commenter suggested we
first stage of the appeals process. emotional, and social needs, as include a provision to provide for a
Comment: In the 1999 interim final identified in the initial comprehensive more negotiated plan of care process
rule, we solicited comments on whether assessment. As required by paragraph incorporating discussion with the
to impose a timeframe under which POs (b), the plan of care must identify participant as part of the process.
must initiate changes in services after a measurable outcomes to be achieved Two respondents suggested that the
revision to a participant’s plan of care. and must be developed in collaboration participant and/or his or her
Comments varied and included the with the participant and his or her representative be given the opportunity
following, while some commenters caregiver. The specified outcomes need to review the plan of care at the time of
agreed with the existing requirement not be discipline-specific. Instead, these the official review (semiannually), when
the plan requires significant revision incorporate the requirements in the recreational services intended to
and upon a request of the participant. Protocol which includes a patient bill of enhance participants’ quality of life.
Response: It is our expectation that rights. To reiterate the philosophy set forth
the IDT will include the participant in In addition, we made every effort to in the Protocol, the PO furnishes
the plan of care development when assure that the rights and protections comprehensive services designed to: (1)
possible and include the participant’s established in the PACE program Enhance the quality of life and
representative when it is not agreement are in substantial compliance autonomy for frail, older adults; (2)
appropriate to include the participant or with the Presidential Advisory maximize dignity and respect of older
at the instruction of the participant. Commission’s (The Commission) adults; (3) enable frail, older adults to
We believe that the current Consumer Bill of Rights and live in their homes and in the
requirements in § 460.106 provide Responsibilities (CBRR), which community as long as medically and
sufficiently for the inclusion of the appeared as an addendum to The socially feasible; and (4) preserve and
participant, or the participant’s Commission’s Final Report to the support the older adult’s family unit.
representative, in the plan of care President, entitled ‘‘Quality First: Better The bill of rights for PACE participants
development. Health Care for All Americans’’ (March must complement and maintain this
Comment: One commenter requested 1998). The President issued an philosophy. In the 1999 interim final
we provide some samples of what CMS Executive Memorandum to the rule, we relied on the Protocol and
considers measurable outcomes that Secretary of the Department of Health incorporated the basic rights that it
could be included in the plan of care. and Human Services dated February 20, identifies. However, we were also
Response: Some examples of 1998, which required that, by December guided by the M+C regulations in effect
measurable outcome measures that 31, 1999, Medicare and Medicaid health at that time and by the CBRR.
would be specific to an individual plan care programs be brought into The statute also directs us to consider
of care include the following: substantial compliance with the CBRR. State law. We interpreted this to mean
• Participant will receive yearly flu The PACE program is included within that a PO’s participant bill of rights may
shot. that framework. include additional rights and
• Participant will gain and maintain 1 As we explained in the 1999 interim protections as required by State or local
pound each 2 week period until weight final rule, in considering how to apply laws and regulations or ethical
achieves 100 pounds. these patient protections, the statute considerations of particular concern, but
• Participant will be instructed in requires that we take into account the only if these additions or modifications
blood sugar testing. Within 1 week, the differences between the populations provide stronger rights and protections
participant will able to explain and served and benefits provided under than those established in the 1999
demonstrate the use of the glucometer PACE, MA, and Medicaid managed care. interim final rule. Consistent with the
and recording of the results. We believe that the PACE program is Protocol and the CBRR, we included a
Final rule actions: unique in its approach to meeting the provision allowing participants to
This final rule will finalize § 460.106 needs of the frail elderly. Unlike most choose to be represented by family
as published in the 1999 interim final managed care organizations which are members, caregivers, or other
rule. responsible for meeting health care representatives. We intend that a
Subpart G—Participant Rights needs alone, the PACE program is an participant may designate a
integrated partnership between the representative to exercise any or all of
The purpose of subpart G is to individual, the community, and the PO, the rights to which the participant is
establish requirements for patient rights which is dedicated to providing all- entitled.
and protections that POs must include inclusive care to meet all medical and In addition, we require, as did the
in their program agreements and social needs to enable the participant to Protocol, the PO to provide
provide to PACE participants. remain in the community. encouragement and assistance to
In accordance with sections We believe it is important to establish participants in understanding and
1894(b)(2)(B) and 1934(b)(2)(B) of the participant rights that reflect the exercising their rights and in
Act, the PACE program agreement differences in the PACE delivery recommending changes in PACE
requires the PO to have in effect, approach from that of other managed policies and services.
‘‘written safeguards of the rights of care systems. For example, since PACE In the discussion on consultations
enrolled participants (including a participants receive services most days with the State Administration on Aging
patient bill of rights and procedures for of the week, either at the PACE center in section I.B.2.c. of this final rule, we
grievances and appeals) in accordance or through home visits, POs are able to referred to the State Long Term Care
with regulations and with other monitor changes in a participant’s Ombudsman Programs. These State
requirements of this title and Federal medical condition and social service programs promote and monitor the
and State law that are designed for the needs on a daily basis. When PACE quality of care in nursing homes,
protection of patients.’’ In addition, participants are referred to contracted including identifying and resolving
sections 1894(f)(3) and 1934(f)(3) of the specialists, in most cases, the PO makes complaints, making regular visits to
Act allow CMS the discretion to apply the appointment, provides nursing homes, and generally,
the requirements of Part C of title XVIII transportation, and often provides an improving the quality of care and
and sections 1903(m) of the Act and aide or other staff member to quality of life of nursing home residents.
1932 of the Act relating to the protection accompany the participant. While The role of the ombudsman is to engage
of beneficiaries and program integrity as managed care organizations may in a variety of activities designed to
would apply to M+C (now MA) provide this level of care management to encompass both active advocacy and
organizations under Part C and to some enrollees, POs do so routinely for representation of residents’ interests. In
Medicaid managed care organizations their entire participant census. Also, the 1999 interim final rule, we
under prepaid capitation agreements while managed care organizations specifically requested public comment
under section 1903(m) of the Act. furnish a selected array of medical on whether the ombudsman program
Moreover, sections 1894(f)(2) and services, they do not furnish all- could play a role in consumer assistance
1934(f)(2) of the Act require us to inclusive care, including social and to potential PACE participants, as well
as to those who have disenrolled and PACE. In addition, the organization treatment, the staff should be instructed
need assistance in organizing their care. must protect participants’ rights and to provide temporary screens or
With regard to PACE participants, we provide for the exercise of those rights. curtains.
were also interested in receiving public Comment: Numerous commenters We adopted from the Protocol the
input as to whether an ombudsman supported the requirement for a written right to be free from harm, including
could provide one-on-one consumer participant bill of rights, and rights physical or mental abuse, neglect,
assistance to PACE participants and published in the 1999 interim final rule. corporal punishment, involuntary
their caregivers to exercise their rights Response: We appreciate the seclusion, excessive medication, and
and work effectively with the IDT. commenters’ support of the participant any physical or chemical restraints
We received a very large number of bill of rights, as we believe in the imposed for purposes of discipline or
comments related to participant rights. importance of participant rights and the convenience and not required to treat
Comment: We received 10 comments protection they provide participants. the participant’s medical symptoms.
responding to our request for input Final rule actions: The use of restraints must be based on
regarding whether to require the use of This final rule will finalize § 460.110 the assessed needs of the patient, be
the State Ombudsman Programs as as published in the 1999 interim final monitored and reassessed appropriately,
advocates for PACE participants, rule. and be ordered for a defined and limited
prospective participants, and period of time. The least restrictive and
Section 460.112 Specific Rights to
disenrolled PACE participants, and to most effective method available must be
Which a Participant Is Entitled
monitor the quality of care provided to utilized and it must conform to the
PACE participants. The comments Section 460.112(a) Respect and patient’s plan of care. Restraints may
related to this request varied. Some Nondiscrimination only be used as a last resort and must
commenters recommended that the Right #1— be removed or ended at the earliest
State Ombudsman Program be extended possible time. We do not believe that
to cover PACE participants as a natural Each participant has the right to restraints of any kind should ever be
and appropriate expansion of the considerate, respectful care from all used as a preferred approach to care and
ombudsman program. However, the PACE employees and contractors at all we expect PACE organizations to ensure
majority of commenters recommended times and under all circumstances. Each that their programs are ‘‘restraint free’’
leaving the option to State discretion participant has the right not to be to the greatest extent possible. Specific
rather than mandating it in regulation. discriminated against in the delivery of requirements regarding the use of
The primary concern was the limited required PACE services based on race, restraint are established in § 460.114.
resources available to State’s ethnicity, national origin, religion, sex, We adopted the rights established in
ombudsman programs. Commenters age, mental or physical disability, or the Protocol to encourage and assist the
recommended that should the source of payment. participant to exercise his or her rights,
ombudsman role be expanded to The individual’s right to respect and including the Medicare and Medicaid
include PACE, CMS should provide the nondiscrimination is embedded in the appeals processes as well as civil and
appropriate funding. Other commenters basic philosophy of the PACE program. legal rights. Participants are encouraged
indicated concerns related to funding In keeping with the PACE model, we and assisted in recommending changes
for training and funding for pilot recognize the participant’s right to to PO policies and services. We also
programs to test the efficacy of the receive comprehensive care in a safe maintained the right to have reasonable
ombudsman program in relation to and clean environment and in an access to a telephone. However, we
PACE. accessible manner. The Protocol states altered the right established in the
Response: We agree with the majority that a PACE participant must receive Protocol not to be required to perform
of commenters who recommended that treatment and rehabilitative services. services for the organization unless the
CMS not mandate the use of the State We expanded this requirement to state services are included for therapeutic
Ombudsman Program for PACE. We that the participant has a right to receive purposes in the plan of care. As we
acknowledge the limited resources comprehensive health care. explained in the 1999 interim final rule,
available to the ombudsman program The Protocol stipulates that the we do not believe that a therapeutic
and agree that utilization of these participant has the right to have dignity, program should be tied to performing
resources is best left to the States’ privacy, and humane care. We require services for the PO.
discretion. Additionally, our experience the PO to treat the participant with The CBRR specifies that organizations
with the program to date indicates that dignity and respect, to afford the should not discriminate on the basis of
the PACE grievance and appeal participant privacy and confidentiality race, ethnicity, national origin, religion,
processes are working effectively to in all aspects of care, and to provide sex, age, mental or physical disability,
resolve participant concerns. We, humane care. The PO must assure that or source of payment. POs are required
therefore, are not revising our a participant’s dignity and privacy are to comply with all Federal, State, and
regulations at subpart G to mandate the respected not only in its own facilities local laws, including discrimination
use of the State Ombudsman Program but also in affiliated or contract statutes with regard to marketing,
for PACE. providers. Staff should be instructed enrollment, and provision of services.
that any discussions with participants However, we recognize that, with regard
Section 460.110 Bill of Rights regarding treatment, the participant care to health status considerations, POs are
In § 460.110, we require a PO to have plan, and medical conditions should be required as part of the intake process to
a written participant bill of rights that held in private and kept confidential. assess whether a potential participant is
is designed to protect and promote the While recognizing the participant’s right appropriate for PACE, that is, meets the
rights of each participant. The to privacy and confidentiality, we do State’s nursing facility eligibility
organization is required to inform not advocate physical barriers because standard and can be safely cared for in
participants upon enrollment, in participants should be in the view of the the community. Meeting required
writing, of their rights and staff at all times to ensure safety. certification standards within the PACE
responsibilities, and all rules and However, in situations where there is context is not deemed a violation of
regulations governing participation in participant body exposure during antidiscrimination laws. However, in
order to ensure that the qualification in the home in a manner that respects that certain information should be
decision is free from other, illegal forms the participant’s privacy. provided routinely with the remaining
of discrimination, we require POs to The requirement to be free from harm information available upon request.
retain information on individuals who relates primarily to the behavior of and Information that is provided to
are assessed but, for whatever reason, treatment by the PACE staff and potential enrollees is addressed in more
are not enrolled. contractors to the participant. However, detail in the sections on marketing
Comment: One commenter requested if PACE staff or contractors identify that (§ 460.82) and enrollment (§ 460.154).
that we broaden the list of demographic the participant is being abused or With regard to participant rights, we
categories under which the PO cannot harmed by a family member or other linked the right to information
discriminate against a PACE participant caregiver, they are obligated to report disclosure to the information that is
to specifically include sexual this abuse to the appropriate authorities, included in the enrollment agreement.
orientation. and if acceptable to the participant, may The PO must explain the enrollment
Response: We agree with the assist the participant in acquiring new agreement in a manner that the
commenter that the list of demographic living accommodations, or otherwise participant is capable of understanding
categories under which the PO cannot resolving the abusive situation. in order to ensure that all participants
discriminate against a PACE participant Comment: Another commenter asked fully comprehend their rights and
should be broadened to specifically if the right to reasonable access to a responsibilities from the beginning of
include sexual orientation. As discussed telephone means the PO is financially their relationship with the PO.
in § 460.98(b)(3), we do not believe responsible for a participant’s personal Among the items in the enrollment
anyone should be denied enrollment in telephone bills. agreement are an acknowledgment that
PACE because of discrimination of any Response: This requirement was not the participant understands that the PO
kind. Therefore, in this final rule we are intended to make the PO financially is the participant’s sole service provider;
amending the antidiscrimination responsible for the participant’s a description of PACE services available
requirement in § 460.112(a) to include personal telephone bill. Should the IDT and how services are obtained from the
sexual orientation. determine a telephone is necessary for PO; the procedures for obtaining
Comment: Several commenters asked the health and safety of a participant emergency and urgently needed out-of-
to what extent the PO is responsible for and includes it in the participant’s plan network services; information on the
meeting the following assurances for an of care, then a telephone would become grievance and appeals processes;
enrollee at home: a required service and the PO would be conditions for disenrollment;
• Receiving health care in a safe and description of participant premiums, if
financially responsible. In this situation,
clean environment and in an accessible any, and procedures for payment of
we recommend the PO investigate
manner; and premiums.
• To be afforded privacy; to be free special telephone plans available in its
The enrollment agreement also
from harm, including physical or mental area that provide only emergency
indicates that the PACE organization
abuse, neglect, punishment, involuntary service for those individuals with
has a program agreement with CMS and
seclusion, excessive medication, and medical conditions that require the
the SAA that is subject to renewal on a
any physical or chemical restraints person to have telephone access. In
periodic basis. In order to provide
imposed for purposes of discipline or addition, participants should have
participants with information on the
convenience and not required to treat reasonable access to a telephone at the
status of their organization’s program
the participant’s medical symptoms. PACE center that can be used for local
agreement, in paragraph (b)(3), PACE
Response: In accordance with section calls.
participants have the right to examine
1894(f)(2)(B)(v) of the Act, we may not Section 460.112(b) Information the results of the most recent review of
grant a waiver of the requirement that Disclosure the PO conducted by CMS and the SAA
the PO is at full financial risk and is and any corrective action plan in effect.
responsible for the health and safety of Right #2—
Comment: Several commenters
the enrolled participants. In accordance Each PACE participant has the right to requested that we eliminate the
with § 460.180(b), the monthly receive accurate, easily understood requirement for disclosure of all PACE
capitation amount is payment in full information and to receive assistance in services available, including all services
regardless of a change in health status, making informed health care decisions. delivered by providers under contract.
and a PO must not seek additional As we explained in the 1999 interim Response: The 2002 interim final rule
payment except for the limited final rule, in order for consumers to provides flexibility by allowing POs to
exceptions specified in § 460.180(b)(7). make rational decisions, they need contract for all IDT members and all
We expect that locations which furnish accurate, reliable information that will required PACE services. Therefore, we
medical care to maintain a standard of allow them to comprehensively assess believe it is even more important for
cleanliness and safety (for example, no differences in their health care options, POs to disclose to participants which
bodily fluids on the floors, no broken including information critical to their services are furnished by PACE staff and
plumbing, no exposed wires or broken initial decision to enroll in PACE and which are provided under contract with
windows). This requirement was whether to remain in PACE. The CBRR another individual or entity. Knowing
specifically aimed at the facilities provides for comprehensive information who will be furnishing services is an
providing PACE services. However, to be provided to consumers in three essential component of the participant’s
should the IDT determine and include basic categories: health plan right to make informed choices.
in the participant’s plan of care that information; health professional Therefore, we are not adopting the
assistance is required in the home, then information; and health care facilities. commenter’s suggestion to eliminate
home care would become a required Topics addressed include benefits, cost- this requirement.
service, subject to the safety and sharing, dispute resolution, consumer We have learned that there is
cleanliness requirements of § 460.112. satisfaction and plan performance confusion over the meaning of
With regard to privacy, consistent with information, network characteristics, § 460.112(b)(1)(iii). That provision
standards of practice, we expect that PO care management information, corporate requires POs to notify participants when
staff and contractors to furnish services organization, etc. The CBRR indicates there is a change in services. Our
intention was that participants be development and implementation of the thousands of enrollees and numerous
provided information regarding a PO’s plan of care, and to make health care providers. This is not always the case
contracted providers at the time a decisions, including the right to refuse with the PACE model. Potential
participant’s needs change and a referral treatment and to be informed of the participants must weigh the limited
to a contracted provider may be consequences of such decisions. network of POs with the benefits of a
necessary. This allows the participant to It is in this context that the comprehensive, all-inclusive delivery
make an informed choice and to be able determination with regard to the need system when choosing to enroll. As we
to choose from the list of the for specialty care is made by the IDT discuss in more detail in the enrollment
organization’s contracted providers, if and the participant. If there is section, potential participants must be
multiple contractors are available, and disagreement, then the participant has advised that the PO is the participant’s
be provided the information to make an the right to engage the dispute sole source provider and that although
informed choice. To clarify this point, resolution process. The IDT is expected the organization guarantees access to
we are revising § 460.112(b)(1)(iii) to to give ample consideration to a services, it does not guarantee access to
require disclosure of all PO services and participant’s request to see a specialist a specific provider.
services delivered by contracted and to objectively determine whether Comment: We received numerous and
providers at the time a participant’s such visits are necessary to meet the varied comments on this provision. One
needs necessitate the disclosure and needs described in the plan of care. commenter pointed out that there is no
delivery of such information in order to We believe that access to qualified requirement in the regulation that POs
allow the participant to make an specialists for women’s health services must have more than one PCP or
informed choice. is extremely important. Therefore, we specialist. Two commenters stated the
identified such a request as one of the bill of rights should clearly require
Section 460.112(c) Choice of Providers participant preferences that must be disclosure when a PO has only one PCP.
Right #3— considered in developing the plan of One commenter requests that CMS
care. qualify § 460.112(c)(1) as follows: ‘‘[T]o
Each participant has the right to a In addition, the CBRR asserts that choose his or her primary care
choice of health care providers within consumers with complex or serious physician and specialists from within
the PO’s network which must be medical conditions who require the PACE network, as accessible and
sufficient to ensure access to frequent specialty care should have feasible * * *’’
appropriate high-quality health care. direct access to a qualified specialist of Other commenters recommended that
Specifically, each participant has the their choice within a plan’s network of POs be required to contract with several
right: providers. Authorizations, when of the more frequently required
(1) To choose his or her primary care required, should be for an adequate specialists to provide choice to
physician (PCP) and specialists within number of direct access visits under an participants.
the PACE network. approved treatment plan. We believe Response: We expect POs to have
(2) To request that a qualified that central to the PACE model is the contractual arrangements with PCPs and
specialist for women’s health services organization’s interest in ensuring that specialists to meet the needs of their
provide routine or preventive women’s participants obtain the care they need, participants. CMS and the SAA
health services. including specialty care, in the easiest determine compliance with the
(3) To disenroll from the program at and most efficient manner possible. A requirement as part of the application
any time. participant who needs a course of process and through ongoing monitoring
The right to access specialists must be therapy with a specialist will have that to ensure that all participants have
seen in the context of the PACE model. need reflected in his or her plan of care access to specialist services to meet
Active involvement by participants in and would receive that care for the their needs.
their care planning in conjunction with duration and number of visits specified We note that there are many
an IDT approach to care management in the plan. In light of the requirements geographic areas that have a limited
and service delivery are fundamental elsewhere in this rule concerning the number of specialists available and
aspects of the PACE model of care. In development and management of the providing a choice of specialists may
fact, although sections 1894(f)(2)(B) and plan of care, we believe it would be not be possible. In addition, many PACE
1934(f)(2)(B) of the Act provide for redundant to include an explicit programs begin operations with a few
waiver of certain provisions of the requirement that would mirror this participants and gradually gain
Protocol, the use of an IDT approach CBRR provision, and have, therefore, participant census over time. In these
may not be waived. not included such a requirement. cases, it would be unnecessary for the
As we explained in the 1999 interim In addition, CBRR provides the right PO to employ or contract with more
final rule, development of a to transitional care for patients who are than one PCP or specialist in order to
participant’s plan of care begins with a undergoing an extensive course of ensure appropriate access to specialist
comprehensive assessment. Participant treatment for a chronic or disabling services. For this reason, we are not
preferences for care are identified condition. adopting the change in this final rule.
components of the assessment. With regard to having a participant’s We believe that POs will have an
Moreover, the team is required to choice of PCP and specialists, the PO is adequate number of primary care
develop, review, and reevaluate the plan required to maintain sufficient staff and providers and commonly-needed
of care in collaboration with the contractors to meet participant needs. specialists to care for their participant
participant in order to ensure there is Given the initial participant census of population. The POs are financially
agreement with the plan of care and that POs, it is likely that choice will be responsible for all their participants’
participant’s concerns are addressed. limited. POs may start out with one of health care needs. Delays in the
These provisions complement the each type of specialist and perhaps only provision of primary care services or
participant’s rights to participate in one PCP. Although the CBRR includes referrals for specialist services may have
treatment decisions, to be fully the right to choose among physicians in significant impact on the PO’s overall
informed of his or her functional status the provider’s network, it was aimed at financial viability. Likewise, early
by the IDT, to participate in the managed care organizations with identification of emerging health care
problems has helped POs manage the Response: As discussed in § 460.104, accordance with § 460.100(e),
risk associated with programs for the in developing the plan of care, female participants must be informed that they
frail elderly. Failure to furnish timely participants must be informed that they are required to wait 1 hour after
primary care services may lead to more are entitled to choose a specialist in requesting prior authorization for urgent
expensive care including the need for women’s health services from the PO’s care before pursuing this care. POs need
institutionalization. network of providers. to understand their responsibility to
In order to ensure that participants Although we believe that a PCP respond to these requests within one
and potential enrollees are aware of the trained in women’s health care is hour or the PO relinquishes its
PO’s network, § 460.112(b) requires that capable of providing adequate care, we opportunity for prior authorization for
POs disclose all PO services and included this right to be consistent with the services and will be responsible for
services furnished by contractors before the CBRR and Medicare managed care payment of the services obtained by the
enrollment, at enrollment, and when a regulations. To further clarify the participant. Section 460.100, as
change in a participant’s needs importance of access to a woman’s discussed above, further describes the
necessitates the disclosure in order to health care specialist, we included these concepts of urgent, emergency, and post
allow the participant to make an requests as one of the participant stabilization care.
informed choice. The lists will provide preferences that must be considered in
information about the number of PCPs Section 460.112(e) Participation in
developing the plan of care under
and providers within each specialty and Treatment Decisions
§ 460.104(b). We recommend that POs
allow participants or prospective contract with a sufficient number of Right #5—
enrollees to make an informed decision woman’s health care specialists to Each participant has the right to fully
about enrollment or continued respond to participant requests.
enrollment in the PO. participate in all decisions related to his
Finally, we believe changing the Section 460.112(d) Access to Emergency or her care. A participant who is unable
regulatory language as the commenter Services to fully participate in treatment
suggested could be read as allowing a decisions has the right to designate a
Right #4— representative. Specifically, each
participant to choose from outside the
PO’s network if a PCP or specialist Each participant has the right to participant has the right:
within the PO’s network was not access emergency health care services (1) To have all treatment options
considered ‘‘accessible and feasible.’’ when and where the need arises without explained in a culturally competent
We are unsure what the commenter prior authorization by the PACE IDT. manner, and to make health care
meant, but we do not agree that We establish a participant’s right to decisions, including the right to refuse
participants should have access to non- emergency services without prior treatment, and be informed of the
network providers. Before enrollment, authorization, and define emergency consequences of the decisions.
when participants sign the enrollment care, emergency medical condition, (2) To have the PO explain advance
agreement, they are informed that the urgently needed services and post- directives and to establish them, if the
PACE program is their sole health care stabilization care services in § 460.100 participant so desires, in accordance
provider. In addition, each PACE as these terms relate to obtaining with § 489.100 and § 489.102 of this
program has a network that is sufficient emergency care. chapter.
to ensure access to appropriate high Comment: One commenter requested (3) To be fully informed of his or her
quality care. As a result, we do not that we define prior authorization to health and functional status by the IDT.
believe it would be necessary to allow mean any requirement or request (4) To participate in the development
access to non-network providers. This imposed on the participant to call or and implementation of the plan of care.
requirement is intended to ensure all- notify the PO before or during the (5) To request a reassessment by the
inclusive and coordinated care. emergency. IDT.
Therefore, we are not amending the Response: We do not believe the term (6) To be given reasonable advance
regulatory language. ‘‘prior authorization’’ needs to be notice, in writing, of any transfer to
Comment: Commenters also requested defined as it is a well understood another treatment setting and the
clarification as to a participant’s right to concept as used in the health care arena. justification for the transfer (due to
request services from a qualified In addition, while we generally agree medical reasons or for the participant’s
specialist whether or not the IDT has with the commenter’s definition, we do welfare or that of other participants).
determined that specialist care is not believe it is needed in this context. The PO must document the justification
medically necessary. In emergency situations, as described in in the participant’s medical record.
Response: It is a participant’s right to § 460.100, prior authorization under any Active involvement by participants
request a service they believe is possible interpretation could delay a and their designated representatives in
necessary, which includes a request to participant from receiving life saving care planning is fundamental to the
see a specialist. If the IDT disagrees that critical care. Therefore, we are not PACE model of care. As a result, we
specialist services are necessary, the revising the regulation as requested. included the rights from the Protocol
participants may request a reassessment We note, however, that prior related to participant involvement in the
under § 460.104(d) and access the authorization is appropriate for urgent development and implementation of the
appeals process to ensure appropriate care outside of the service area and for plan of care. We included the
consideration is given to their request post stabilization care services. The PO participant’s right to be fully informed
for coverage of specialist services. needs to educate its participants in the by the IDT of his or her health and
Comment: One commenter difference between emergency care functional status. In support of this
recommended that we eliminate the (where prior authorization is not right, the participant must have, upon
requirement concerning women’s health required), and urgent care (where prior written request, access to all records
services and instead, allow an authorization is appropriate). pertaining to herself or himself.
appropriately trained PACE PCP to Participants need to understand when to Moreover, the team must provide care
serve as a qualified specialist for request prior authorization and when to information in a manner that is
women’s health services. request urgent care. In addition, in responsive to the culturally diverse
populations whom they serve. The PO options with the participant or caregiver Section 460.112(f) Confidentiality of
may need to develop strategies for (see § 460.40(g)). Health Information
enhancing cultural competence in its Comment: In response to our request
Right #6—
staff such as increased use of for comment relating to specifying a
interpreters, incorporating in-house timeframe for notification to Each participant has the right to
training programs, recruiting culturally participants of transfers to other communicate with health care providers
diverse staff or contractors, or treatment settings, we received several in confidence and to have the
establishing relationships with comments which provided general confidentiality of his or her individually
organizations that provide technical consensus that the regulation should not identifiable health care and other
assistance regarding cultural aspects of impose a timeframe on notification for information protected, including
health care. transfers. Most commenters supported information contained in an automated
The Protocol states that a participant permitting the PO the flexibility to data bank (see § 460.200). Each
has the right to refuse treatment and be distinguish between the different types participant also has the right to review
of situations and to determine whether and copy his or her own medical
informed of the consequences of such
a written notification and/or verbal records and request amendments to
refusal and that PACE participants may
advanced notice would be most those records.
establish advance directives and make Consistent with the CBRR and MA
health care decisions. We restructured appropriate based on emergency and
non-emergency situations. and Medicaid managed care
these two requirements in order to place organization requirements, participants
greater emphasis on the participant’s One commenter suggested that the
term ‘‘reasonable’’ is sufficient, with the have the right to communicate with any
right to make health care decisions and member of the IDT and contract
to clarify that to refuse treatment is a understanding that the timeframe must
be justified by the documentation in the providers in confidence and to have the
type of health care decision. We confidentiality of their individually
maintained the participant’s right to medical record.
Another commenter stated the PACE identifiable health care information
make advance directives, we clarified protected.
program is designed around its
that within this right, the PO is required In addition, the section on
collaborative nature, but the ‘‘right to be
to fully explain advance directives to maintenance of records and reporting of
given reasonable advanced notice in
participants (in accordance with data specifically addresses
writing of transfer to another treatment
§ 489.100 and § 489.102 of this chapter). confidentiality and the safeguarding of
setting with justification’’ sounded like
We maintained the requirement that a unilateral decision by the PO. The health, financial, and other information
POs provide reasonable advance notice, commenter believes that transfer (see § 460.200). It requires POs to
in writing, of any transfer to another decisions should also be collaborative establish written policies and
treatment setting. In the 1999 interim and agreed upon by the participant. implement procedures to safeguard the
final rule, we solicited comment on the Several other commenters supported privacy of participant information and
necessity of specifying a timeframe for advanced written notice for a planned ensure appropriate use and release of
participant notification. Given the transfer, while some identified participant information. POs are also
frailty of the PACE population, while situations when immediate transfers required to comply with the HHS
some participants may require would preclude the appropriateness of privacy standards as required by the
additional time to prepare for a an advanced written notice (for Health Insurance Portability &
transition to another setting, others may example, a heart attack). Accountability Act (HIPAA) of 1996,
be able to transfer without delay. Another commenter recommended Pub. L. 104–191, and its implementing
In addition to these specific rights, that CMS incorporate the requirement of regulations codified at 45 CFR parts 16
there are other processes embodied in timely notice, by both written notice and 164.
the PACE model that promote and verbal explanation, of at least 30 Comment: We were asked to clarify
participant involvement in care days. This notification timeframe would that a participant’s right to
planning and implementation. For permit participants to file a grievance or communicate with health care providers
example, the comprehensive assessment appeal, as appropriate. in confidence and to have the
that serves as the basis for the plan of Response: We agree with the majority confidentiality of his or her individually
care includes participant and caregiver of the commenters who pointed out the identifiable health care information
preferences for care. This input from difference between planned and protected does not preclude IDT
participant and caregivers is used by the emergent transfers, and the need for PO members and other care providers from
IDT to monitor the effectiveness of the flexibility in determining an appropriate sharing such information with each
plan of care. Finally, the team is timeframe to notify the participant other.
specifically required to develop, review, based on the individual situation. We Response: Members of the IDT and
and reevaluate the plan of care in also note that while generally a transfer other care providers are permitted to
collaboration with the participant or may be collaborative depending on the discuss a participant’s confidential
caregiver, to ensure that there is participant’s need for the transfer, the individually identifiable health care
agreement with the plan of care and that PO may need to make the decision and information for treatment, payment, and
participant concerns are addressed. should be afforded the flexibility to do health care operations, provided that
In support of effective involvement in so without undue time restrictions. We such use or disclosure is consistent with
care planning and communication also expect full documentation for the other applicable requirements of the
between participants and providers, we transfer to be reflected in the HIPAA Privacy Rule (45 CFR parts 160
note that the statute provides a specific participant’s medical record. Therefore, and 164). Confidentiality requirements
sanction if we determine that the PO we are maintaining the current are intended to protect the participant’s
imposes a physician incentive plan that language, requiring ‘‘reasonable health information from being disclosed
does not meet statutory requirements advanced notice’’ for transfers to any to individuals who are not involved
(see § 460.40(h)) or prohibits or treatment setting. We urge POs to with the participant’s health care needs.
otherwise restricts a health care provide as much advance notice as This requirement does not prevent
practitioner from discussing treatment possible for non-emergent transfers. members of the IDT, contracted
providers, and caregivers from the earliest possible time. As noted speaking participants, and that
discussing a participant’s health above, the use of restraints must be interpreter services and other
information, which may be essential in based on the assessed needs of the accommodations (such as TTY
ensuring appropriate care. patient, and be continually assessed, connections) are made available to the
monitored, and reevaluated. hearing-impaired.
Section 460.112(g) Complaints and We do not believe that restraints of We also incorporated the requirement
Appeals any kind should ever be used as a that participant rights be posted in a
Right #7— preferred approach to care, and we prominent place in the PACE center in
expect POs to ensure that their programs English and any other principal
Each participant has the right to a fair
are ‘‘restraint free’’ to the greatest extent language of the community. This allows
and efficient process for resolving
possible. Specific requirements participants, PACE center staff, and
differences with the PO, including a
regarding the use of restraints are other concerned persons to review the
rigorous system for internal review by
established in § 460.114. participant rights at any time. For those
the organization and an independent We have re-examined our seclusion
system of external review. Specifically, participants who speak or read in only
and restraint policy for all CMS-covered a ‘‘non-predominant’’ language, the
each participant has the right: providers and have begun amending our
(1) To be encouraged and assisted to participants should have their rights
restraint and seclusion policies. We call explained to them in a manner they
voice complaints to PACE staff and your attention to the discussion of the
outside representatives of his or her understand.
use of seclusion and restraints in the Comment: We received three
choice, free of any restraint, CMS interim final rule concerning the
interference, coercion, discrimination, comments related to multilingual issues.
conditions of participation for hospitals One commenter recommended that we
or reprisal by the PACE staff. (CMS–3018–IFC, published July 2, 1999,
(2) To appeal any treatment decision specify that written information should
64 FR 36070). In that regulation, we
of the PO, its employees, or contractors be in a language easy to understand by
established explicit standards for the
through the process described in the participant and should be given out
use of seclusion and restraints both in
§ 460.122. at enrollment. Commenters also
medical/surgical care and for behavior
We received no comment on this recommended that the participant bill of
management (see § 482.13(e) and (f)).
section. We note that comments rights be displayed in English and other
While the standards are not identical to
regarding grievance and appeals principal languages in the PO’s service
those we included in § 460.114, they
procedures are addressed in § 460.120 area. One commenter recommended that
share the common principle that
through § 460.124. we consider providing programs serving
patients have the right to be free from
Final rule actions: multilingual populations with financial
restraints of any form that are not
In this final rule, we are revising assistance to cover translation expenses.
medically or psychiatrically necessary
§ 460.112 by: Response: Our intent is that all
or are used as means of coercion,
• Expanding paragraph (a) to include discipline, convenience, or retaliation
marketing materials including the
sexual orientation; and enrollment agreement be provided in a
by staff. In the preamble to the interim
• Revising paragraph (b)(1)(iii) to final rule for the hospital conditions of
language the participant is able to
require the disclosure of all PO services understand. The regulation requires
participation, we indicated our intent to
and services delivered by contracted participant rights to be provided in
examine the applicability of the hospital
providers at the time a participant’s writing, in English, and in other
restraint and seclusion standards to
needs necessitate the disclosure and principal languages of the community,
other providers. In our 1999 PACE
delivery of such information in order to and to be explained in a manner the
interim final rule, we asked for
allow the participant to make an participant and his or her representative
comments about how best to extend the
informed choice. understands. In addition, § 460.116(c)
protections established for hospital
requires that the PO display the
Section 460.114 Restraints patients to participants in the PACE
participant rights in a prominent place
program.
We revised the wording used in the We received no public comments on in the PACE center. The State
Protocol regarding the use of restraints § 460.114. establishes the criteria POs use for
in order to emphasize that the use of Final rule actions: determining a principal language of the
restraints must be limited to those This final rule will finalize § 460.114 community. We do not provide
situations with adequate, appropriate as published in the 1999 interim final financial compensation for translation
clinical justification. The PO must limit rule. expenses, as we believe this is a cost of
use of restraints to the least restrictive doing business for all entities in
and most effective method available. If Section 460.116 Explanation of Rights geographic areas where there are
the use of a restraint is needed to ensure Section 460.116 requires the PO to multilingual populations.
the participant’s physical safety or the have written policies and implement Final rule actions:
safety of others, the use must be in procedures to ensure that the staff, the This final rule will finalize § 460.116
accordance with certain conditions. participant, and his or her as published in the 1999 interim final
First, restraints may only be used for a representative understand the rule.
defined and limited period of time participant’s rights. The regulations also
Section 460.118 Violation of Rights
based on the assessed needs of the require that, at the time of enrollment,
patient; second, such use must be staff review participant rights with the Section 460.118 requires the PO to
imposed using safe and appropriate participant and his or her have and implement documented,
restraining techniques; third, such use representative, if any, in a manner established procedures to respond to
may only be imposed when other less which he or she understands. The PO is and rectify a violation of a participant
restrictive measures have been found to expected to assure that information is right. This requirement is intended to
be ineffective to protect the participant provided to the physically and mentally ensure that the PO will address all
or others from harm; and finally, such disabled, that translator services are violations of participant rights and not
restraints must be removed or ended at available as needed for non-English allow problems to continue.
We received no public comments on rights, so they may exercise these rights QAPI requirements. We expect that once
§ 460.118. from the beginning of their relationship an organization has a quality
Final rule actions: with the PO. improvement system in place,
This final rule will finalize § 460.118 The grievance process, at a minimum, participant grievances will be analyzed
as published in the 1999 interim final must include procedures for: and evaluated as grievances may be the
rule. (1) Filing a participant’s grievance; first clue that a problem exists. By
(2) Documenting the participant’s analyzing the number and types of
Section 460.120 Grievance Process grievance; grievances, a PO will be able to develop
In accordance with sections (3) Responding to and resolving the activities to monitor and improve the
1894(b)(2)(B) and (f)(3) and participant’s grievance in a timely grievance resolution process, as well as
1934(b)(2)(B) and (f)(3) of the Act, we manner; and identify and make improvements or
have established requirements at (4) Maintaining confidentiality of the modifications in the care.
§ 460.120 through § 460.124 requiring participant’s grievance. Comment: One commenter was
PACE organizations to establish The PO’s internal procedures should concerned that the definition of
procedures for grievances and appeals. assure that every grievance is handled grievance found in § 460.120 could lead
We have adapted these requirements in a uniform manner and that there is to confusion as to whether minor
from Part II, section B of the Protocol. communication among different problems that present in day-to-day
Rather than follow the Protocol’s individuals who are responsible for staff-participant contact during the
interchangeable use of the terms reviewing or resolving grievances. In provision of services would be
‘‘complaint,’’ ‘‘grievance,’’ and addition, the PO must maintain interpreted as grievances and reported
‘‘appeal,’’ we have distinguished appropriate documentation, so the as such.
between grievances and appeals. Our information can be utilized in the Response: The commenter has
intent was to delineate between (1) a organization’s QAPI program. Requiring interpreted the requirement correctly. A
participant’s grievance regarding that grievances be responded to and grievance could identify a minor
dissatisfaction with service delivery or resolved in a timely manner provides a problem where someone is dissatisfied
the quality of a service furnished and (2) protection to the participants. This with the service provided. We would
a participant’s action with respect to action is intended to ensure that the PO expect grievances to occur in day-to-day
noncoverage of or nonpayment for a addresses all participant concerns and interactions and we expect to see a
service. We believe that such a does not allow the problem in service number of grievances simply because
distinction is needed to clearly establish delivery to be unresolved. Finally, at all people have different opinions and
both a process to address a participant’s times, an organization must have expectations. Therefore, we are more
dissatisfaction with service delivery or procedures governing confidentiality to concerned when grievances over such
quality of care furnished and a process protect against unauthorized or things as food or the choice of music are
to address the PACE organization’s inadvertent disclosure of information. not recorded. We expect these
refusal to furnish or pay for a particular Participant confidentiality is also grievances to be tracked, evaluated, and
service. The grievance process and the intended to prevent reprisal against the included in the QAPI process. For
appeals process are similar, since both participant. example, if there is a pattern of
are based on the Protocol, with some It is critical that the PO continue to complaints about cold food, the issue
minor differences due to the nature of provide care to the participant during should be addressed and if every time
the complaint. the grievance process because once a particular dish is served many
A grievance is defined as a complaint, enrolled, in accordance with participants complain, then a change in
either written or oral, expressing § 460.154(p), participants must receive the menu should be considered.
dissatisfaction with service delivery or care solely through the PO. Continuing Comment: Two commenters
the quality of care furnished. care also encourages participants to expressed concern with the requirement
The PO must have a formal written continue to voice concerns about service to ‘‘continue to furnish all required
process to evaluate and resolve delivery without fear of reprisal. services.’’ One commenter requested the
grievances, whether medical or non- The PO must discuss and provide to regulatory language be revised to define
medical in nature, by PACE the participant in writing the steps, ‘‘required services,’’ and the other
participants, their family members, or including timeframes for response, that commenter requested modifying the
representatives. Having a formal written will be taken to resolve the participant’s requirements regarding the PO’s
process to evaluate and resolve grievance both at the time of the responsibility to continue to provide
grievances is essential since all participant’s enrollment and when a services during the grievance process.
personnel (employees and contractors) grievance is filed. This requirement Both commenters recommended that we
who have contact with participants assures the participant that there will be clarify that the PO must continue to
should be aware of and understand the resolution of the issue. In addition, the furnish to participants all services
basic procedures for receiving and organization acknowledges the required by their current treatment plan.
documenting grievances in order to participant’s concern, tries to address If a change in health status necessitates
initiate the appropriate process for the problem, and makes any necessary a change in treatment plan, the PO must
resolving participant concerns. adjustments in service delivery. We furnish to the participant all services
We retained the requirement from the recognize there will be occasions when required by the revised treatment plan.
Protocol that all participants must be a grievance may not be resolved to the Response: It appears that commenters
informed of the grievance process in satisfaction of the participant, but may have confused grievances which
writing. This information must be believe the PO should nonetheless set related to quality of services with
provided to participants upon forth its best efforts. The PO must appeals that relate to coverage of
enrollment into the PACE program and maintain, aggregate, and analyze services. ‘‘Required services’’ are those
at least annually thereafter. We believe information on grievance proceedings. services indicated in the participant’s
it is critical that participants are fully This requirement is an integral part of plan of care. This requirement is a
and promptly informed of this process fostering an environment of continuous participant protection intended to avoid
and periodically reminded of their improvement, and complements the potential reprisal. We continue to
believe that it is appropriate for the PO Section 460.122 PO’s Appeals Process the appeal process because, in
to continue to provide all required An appeal is defined as ‘‘a accordance with § 460.154(p),
services in the plan of care during the participant’s action taken with respect participants must receive care solely
grievance process. Thus, we do not to a noncoverage of, or nonpayment for through the PO. In addition, we
believe the clarification requested is a service.’’ The PO must have a formal incorporated the Medicaid continuation
necessary. written appeals process, with specified of benefits provision for all Medicaid
Comment: One commenter indicated timeframes for response. We included participants. Under the Medicaid
the requirement did not specify a continuation of benefits provision in
the requirement from the Protocol that
timeframes for the resolution of a § 460.122(e)(1), the PO may not
all participants must be informed of the
grievance. The regulations require that terminate or reduce disputed services
appeals process in writing. This
the PO only has to provide written while an appeal is pending if the
information must be provided to
notice that includes the timeframes for Medicaid participant requests that they
participants upon enrollment into the
response. The commenter recommended be continued, with the understanding
PACE program, at least annually
that all grievances be resolved within 30 that the participant may be liable for the
thereafter, and whenever the IDT denies
days. cost of those services if the appeal is not
a request for services or payment. The
Response: Grievances cover a wide resolved in his or her favor. It is critical
appeals process, at a minimum, must
range of issues which may be resolved that all other care continue in order to
include written procedures for: maintain the participant’s functional
in minutes or may take much longer to (1) Timely preparation and processing
resolve. Therefore, while we require the status. The goal of the program is to
of written denials of coverage or furnish comprehensive care to the
PO to have a written process to evaluate payment in accordance with
and resolve medical and non-medical participant and this cannot be
§ 460.104(c)(3); accomplished if there is a breakdown in
grievances, we have not established a (2) Filing a participant’s appeal;
specific timeframe for resolution of the provision of services.
(3) Documenting the participant’s The PO must have an expedited
grievances. The PO must acknowledge appeal;
receipt of the grievance in writing and appeals process for situations in which
(4) Appointing an appropriately the participant believes that if the
provide to the participant information credentialed and impartial third party
as to the expected timeframe for service is not furnished, his or her life,
who was not involved in the original health, or ability to regain maximum
response based on the specific situation. decision and who does not have a stake
We expect that POs will make every function would be seriously
in the outcome of the appeal to review jeopardized. This process provides for
effort to resolve grievances as the participant’s appeal;
expeditiously as possible accounting for prompt consideration of requests for
(5) Responding to and resolving the services if the participant’s health might
the complexity of the particular participant’s appeals as expeditiously as be adversely affected if he or she had to
grievance filed. Accordingly, we have the participant’s health condition wait for the standard appeals process to
not revised the regulation to set forth requires, but no later than 30 calendar resolve the issue. As noted above, the
timeframes for resolutions. days after the PO receives an appeal; goal of the PACE program is to
Comment: One commenter asked and maximize the participant’s functioning,
whether we intended that service (6) Maintaining confidentiality of and the expedited appeals process
delivery encompass administrative participant appeals. ensures that all factors are evaluated so
complaints, such as failure to replace a The appeals process is similar to the that all necessary services are being
lost handbook on a timely basis, failure grievance process. However, we furnished and participant health is not
to return phone calls related to requests included the requirement that an compromised.
for information, or breaches of objective third party be appointed to We included a provision at
confidentiality. review all appeals. In this way, § 460.122(f)(2) pertaining to the
Response: We expect POs to information is reviewed by an expedited appeals process requirement
acknowledge grievances in writing, to individual or group that has no financial that the PO must respond to the appeal
record, and to resolve any issue about stake in the decision. This helps to as expeditiously as the participant’s
which a participant expresses prevent bias in the decision. In addition, health condition requires, but no later
dissatisfaction (medical or non- we specified that the PO must respond than 72 hours after it receives the
medical), including administrative to participant appeals within 30 appeal. The 72-hour timeframe may be
complaints. These grievances should be calendar days of receipt of an appeal extended by up to 14 calendar days if
reviewed, analyzed, and included in the and established a shorter timeframe for the participant requests the extension or
PO’s QAPI plan. expedited appeals. We did not include if the PO justifies to the SAA the need
Comment: One commenter a provision for a 14-day extension of for additional information and how the
recommended that PO actions on this 30-day timeframe (as allowed under delay is in the interest of the
grievances be subject to monitoring at the MA regulations at § 422.590(a)) in participant. The timeframes for
any time. recognition of the frailty of the PACE responding to requests for expedited
Response: In accordance with population. We solicited comments on appeals are consistent with the
§ 460.200, the PO must allow CMS and both the appropriateness of the 30-day requirements for MA expedited appeals
the SAA access to its data and records. timeframe and on the necessity of in § 422.590(d). The PO must take
In addition, POs report data for requiring a specific timeframe. appropriate action to furnish the
monitoring that includes grievance In § 460.122(d)(2), we adopted the disputed service as expeditiously as the
information. Thus, CMS and the SAA Protocol requirement that the PO must health condition of the participant
have access to and routinely review give the parties involved in the appeal requires if, on appeal, a determination is
grievance information. a reasonable opportunity to present made in favor of the participant. There
Final rule actions: evidence related to the dispute in may be situations in which the PO has
This final rule will finalize § 460.120 person as well as in writing. made an incorrect or inaccurate
as published in the 1999 interim final It is critical that the PO continue to assessment of the participant’s needs or
rule. furnish care to the participant during condition and has denied a service. In
these situations, it is critical that requests an item or service, the reason party reviewer’s salary or fee, an
ongoing care not be delayed until the for the denial, the right to submit individual’s reputation, or other factors.
appeal is resolved, and that the additional evidence, and information Comment: Two commenters disagreed
participant continue to receive about the appeal process. with the regulation requirement in
comprehensive care that maintains her Response: Section 460.104(c)(3) § 460.122(h) that CMS and the SAA be
or his functional status. requires an in-person reassessment informed of every adverse
We maintained the Protocol when the participant or his or her determination and recommended that
requirement that all determinations that representative believes a participant this requirement be deleted.
are wholly or partially adverse to the needs to initiate, eliminate, or continue Response: We view the reporting of
participant must be forwarded to CMS a particular service. In addition, in adverse determinations to CMS and the
and the SAA. We require that the PO accordance with § 460.122(b), the PO is SAA as a participant protection. Routine
notify CMS, the SAA, and the required to have processes for timely reporting will enable us to track trends
participant of its actions at the time the resolution of participant requests and in coverage of services to participants
decision is made. appeals and to provide written and to monitor the extent to which
We solicited comment regarding the information on the appeals process to appeals are addressed in the PO’s
appropriateness of a 30-day timeframe participants on enrollment, annually quality improvement activities. It also
without extension, within which the thereafter, and any time the IDT denies alerts us to the potential for a request for
PACE provider must respond to a a request for services. We believe that an external appeal.
participants’ appeal, and on the the current regulation provides adequate Comment: Several comments were
necessity of requiring a specific notification requirements for the submitted regarding services furnished
timeframe for implementing the change appeals process and additional changes during appeals. While one commenter
in the participant’s plan of care at this time are not necessary. recommended that we delete the
resulting from resolution of the appeal. Comment: We received comments requirement, other commenters
Comment: Several commenters requesting that we clarify what is meant indicated we should extend the
supported the timeframes as published. by ‘‘appropriately credentialed’’ and protection to Medicare participants. One
One commenter supported the emphasis ‘‘impartial third party,’’ as provided in commenter pointed out that MA
on participant rights, believed appeals § 460.122(c)(4). It was recommended providers must continue to provide
would be rare and thus supported the that the regulatory requirement be disputed services during an appeal. One
30-day timeframe with a shorter period modified to specify that the commenter recommended that we
for expedited appeals. appointment be of an impartial third require POs to continue to furnish to the
Several commenters suggested party credentialed in a field that is participant all other services required by
timeframes for the various components appropriate for the service at issue. his or her current treatment plan. The
of the appeal process. Three Commenters questioned whether a PO’s commenter believes that in the event a
commenters supported the 30-day employees or contractors could serve in change in health status necessitates a
timeframe in which the PO must this capacity. change in the treatment plan, the PO
respond to the participant’s appeal. Two Response: An appropriately must furnish to the participant all
commenters requested the regulation credentialed and impartial third party is services required by the revised
specify a timeframe in which the PO an individual who was not involved in treatment plan. Another commenter
must inform the participant of the the original action and who does not indicated that without the continuity of
determination on the appeal, while have a stake in the outcome of the Medicare and Medicaid services, PACE
another commenter suggested that the appeal. For example, this individual participants would be subject to
regulation specify that services should may be an outside physician or discrimination based on payment
be provided no later than 10 days after practitioner in a related field who will source.
a favorable determination or review the documentation related to the Response: We adopted the
immediately in the case of the expedited appeal. requirement that POs continue to
appeal. One commenter requested that To the extent that POs allow furnish disputed services during the
we clarify the PO’s right to implement employees and contractors to review the appeal process to Medicaid-eligible
its determination in connection with its IDT denials, it is in the context of a participants in order to be consistent
internal appeal process. review committee. An employee or with the Medicaid State fair hearing
Response: We are retaining the contractor may participate on these (SFH) regulation at § 431.230. We did
timeframes as required in the 1999 review committees so long as they have not adopt a similar requirement in the
interim final rule. The timeframes are no connection to the original denial 1999 interim final rule for Medicare-
consistent with MA requirements in decision and their expertise is in the eligible participants because there is no
§ 422.568 through § 422.570. As PACE appropriate field. For example, it would corresponding requirement for
utilizes the same timeframes as the MA not be appropriate for a social worker to continuation of services during appeal
requirements, we believe it is important review an appeal related to a physical in the Medicare Independent Review
to maintain this consistency. therapy denial, or a gynecologist to Entity (IRE) review process. For this
Comment: One commenter stated that review a denial of services regarding reason, we believe it is appropriate to
informing the participant of the external coronary surgery. retain the 1999 interim final
appeal process when the PO’s internal We recommend that the PO ensure requirement at this time. We note, it is
appeal process determination is not that the credentialed and impartial third critical however, that the PO continue to
wholly in the participant’s favor was party reviewer make his or her furnish the non-disputed services to the
sufficient. Other commenters requested determinations in a similar manner to participant during the appeal process,
the regulation provide more detail in the determinations made under section because section 1894(a)(1)(B)(1) of the
denial notice provided to the participant 1862(a)(1)(A) of the Act. The Act requires that participants receive
when a request for services is denied. determination is based on the services solely through the PO and as
The commenter recommended that the participant’s medical need and not on explained in § 460.98, the required
notice include a description of the other reasons such as the cost of the services for a participant are those
process used when a participant disputed care, who is paying the third services identified in their plan of care.
Comment: Commenters suggested that in the 1999 interim final rule does not into consideration the differences
the appeals section apply to reductions reflect CMS’s intent to allow dually between the population served and
and terminations of services in addition eligible participants to access only one benefits provided under this section and
to denials of services. appeal route, either Medicare or under Medicare and Medicaid managed
Response: We agree with the Medicaid. The language does not clearly care programs. Because of this
commenters and have revised the state that participants must choose one requirement, we did not intend that the
introductory text of § 460.122 route of appeal and that the route PACE external appeals process involve
accordingly. chosen is final. the Medicare fee-for-service Part A
Comment: Commenters suggested that Commenters indicated that the intermediary or Part B carrier appeals
the expedited appeals process described bifurcated external appeal process was processes. Rather, we followed the
in § 460.122(f) be revised. Currently, confusing, administratively Medicare managed care process using
§ 460.122(f) requires that POs have an burdensome, and ambiguous and that a the IRE contractor for the PACE external
expedited appeals process for situations single appeals system should be appeals process.
in which the participant believes that developed. These commenters also The external appeals process provides
his or her life, health, or ability to regain stated that the regulation should specify participants with an appropriate
maximum function would be seriously a timeframe for the completion of the external review depending on their
jeopardized absent provision of the entire appeal process suggesting a 90- Medicare and Medicaid status. Medicare
service in dispute. The commenters day timeframe which is consistent with beneficiaries have access to the
suggested that an expedited appeal Medicaid requirements. Medicare external appeals route through
process apply where a participant We also received comments the IRE that contracts with CMS to
believes that his or her life, health, or recommending a single system of resolve MA appeals, while Medicaid
ability to regain or maintain maximum grievance, appeals, and hearings, or eligible individuals have access to the
function could be seriously jeopardized adapting the essentials elements of the SFH process. PACE participants who are
absent provision of the service in Medicaid managed care regulations that dually eligible for both Medicare and
question. were published in the Federal Register Medicaid have the choice of either
Response: We agree with the on September 29, 1998 (63 FR 52022) to process, the Medicare IRE or the
commenters and have revised the PACE program since most PACE Medicaid SFH process. Allowing dually
§ 460.122(f) accordingly. participants are Medicaid eligible. eligible participants to choose to pursue
Final rule actions: One commenter requested an appeal through either the Medicare’s
In this final rule, we are: clarification on the relationship between IRE or Medicaid’s SFH processes
• Amending the regulatory language the PO’s appeal process and the external eliminates the possibility of conflicting
of the introductory paragraph of Medicare/Medicaid processes. Another determinations. Therefore, all PACE
§ 460.122 to clarify that for purposes of commenter requested that we define participants have one route by which to
this section, a denial of services could ‘‘appropriate external entity for exercise their external appeal rights.
include a denial, reduction, or Medicare and Medicaid,’’ and respond It is the PO’s responsibility to assist
termination of services. to the following questions: First, how the participants in understanding which
• Revising § 460.122(f)(1) to require will the PO and participant know which external route is appropriate for them
that a PACE organization must have an appeal route is appropriate, and second, based on the participant’s Medicare and
expedited appeals process for situations how to handle disparate decisions when Medicaid status. For dually eligible
in which the participant believes that a participant chooses both appeals participants, the PO must explain the
his or her life, health, or ability to regain routes. external processes of each option and
or maintain maximum function could be One commenter pointed out that the assist them in initiating their choices.
seriously jeopardized, absent provision reference in the regulations to the This is primarily a matter of personal
of the service in dispute. Medicare appeals process was preference as both external appeals
confusing. The commenter questioned processes are equally valid options.
Section 460.124 Additional Appeal whether we intended that denials of Information on the Medicare IRE
Rights Under Medicare or Medicaid Part A services be referred to the Part A process is available online at http://
As we explained in the 1999 interim fiscal intermediary and denials of Part B www.medicareappeal.com and
final rule, the PO must inform services be referred to the Part B carrier. information on the SFH process can be
participants in writing of their Lastly, other commenters indicated obtained from the SAA. Should the
additional appeal rights under Medicaid the reporting requirements were participant need help with the Medicare
or Medicare, assist participants in burdensome as all adverse IRE process, then in accordance with
choosing which appeal process to determinations are to be forwarded to § 460.124, the PO will provide that
pursue if both are applicable, and then both CMS and the State without any assistance. Although Medicare does not
forward the appeal to the appropriate guidelines or criteria to assess whether have an external appeals process to
external entity. Participants who are such determinations were appropriately permit challenges of disenrollment
dually eligible for Medicare and made. determinations, all participants may use
Medicaid may utilize either the Response: Review of the comments their State’s external appeals processes.
Medicare or the Medicaid managed care indicated that many of the commenters As we noted in the discussion on
appeal process. In those cases where misunderstood the PACE appeals § 460.164 (Involuntary disenrollment),
participants are covered only under one process and in response to the the State must provide a process for
program (Medicare or Medicaid), only comments, we believe a reiteration of Medicare-only participants for an
the applicable appeals process would the process would address the concerns involuntary disenrollment appeal.
apply. raised. As noted previously, sections Comment: Commenters asked what
Comment: We received several 1894(f)(3)(A) and 1934(f)(3)(A) of the would happen if the PO directs the
comments related to the additional Act, require that in applying certain participant to the wrong entity and
appeal rights under Medicare and additional beneficiary protections, we would the appeal rights of the
Medicaid. Several commenters should apply Medicare and Medicaid participant be lost if the correct filing is
indicated that the preamble description managed care requirements while taking not made in the required time. In
addition, one commenter stated that made. In addition, we note that since Since the publication of the 1999
implementation of the 1999 interim the 1999 interim final rule was interim final rule, the health care
final rule regarding appeals would be implemented, no IRE appeals and only industry has moved beyond the
problematic for them due to a class- a few SFH appeals have been filed. We problem-oriented, ‘‘after-the-fact’’
action litigation settlement agreement will continue to monitor appeals under corrective approach of quality assurance
which applies a time limit on initiating PACE and will propose changes in the to a proactive approach that focuses on
appeals through the State Medicaid appeals process if warranted. We have continuously addressing QAPI.
appeals process. worked extensively with POs to educate Consequently, many health care QAPI
Response: CMS staff has worked them on the Medicare IRE process so programs are patient-driven rather than
closely with the POs, the SAAs, and the that they are able to fully explain the process-driven. Given that changes in
IRE staff responsible for PACE in order system to participants. health care delivery systems are rapid
to ensure that appeals are directed to the Final rule action: and continuous, many providers
appropriate entity. However, if an This final rule will finalize § 460.124 requested flexibility to design QAPI
appeal should be misrouted, corrections as published in the 1999 interim final programs that meet the needs of their
can be accommodated. rule. health care settings, rather than try to
As noted previously, dual eligible comply with a ‘‘one-size-fits-all’’
Subpart H: Quality Assessment and
participants are allowed to choose to program. We agree that a QAPI program
Performance Improvement
use either the Medicare or Medicaid should blend flexibility with
external appeal processes and POs play Sections 1894(e)(3) and 1934(e)(3) of appropriate accountability and in the
a significant role in assisting the Act require that, under a PACE past few years, we have been striving to
participants in choosing the appropriate program agreement, the PO, CMS, and balance both in a patient-centered
external review entity and filing the the SAA shall jointly cooperate in the approach. With an effective QAPI
appropriate documentation. Where State development and implementation of program, we believe that providers will
law establishes a timeframe for health status and quality of life outcome be able to determine how its
initiating an SFH, the PO must be measures with respect to PACE performance has affected patient
sensitive to those time constraints in participants. In 1999, we were experiences and outcomes. We expect a
order to ensure that the participant’s considering putting into place a PACE provider to focus on performance
rights to access the SFH is not negated participant assessment tool, and outcomes and to prioritize areas needing
by a failure to meet the State outcome measures that would be improvement.
timeframes. clinically meaningful to PACE While we recognize the utility of the
Comment: Another commenter participants and empirically valid for OBCQI core outcome and
recommended that Medicare purposes of quality monitoring and comprehensive assessment data
participants be provided the same right improvement. Thus, CMS took a set(COCOA–B) system as a useful
as Medicare beneficiaries enrolled in an leadership role in developing outcome assessment tool for PACE participants,
M+C plan and be allowed to go directly measures to be integrated into clinical we have misgivings about its long-term
to an Administrative Law Judge (ALJ) and administrative practices at PACE application. Given the need for
hearing upon completing the internal sites. flexibility for PACE sites, we are also
appeals process, and not have to go In the 1999 interim final rule, we concerned that specifically mandated
through carrier or fiscal intermediary adopted quality QAPI requirements that measures may compromise the
review. Another commenter indicated are consistent with the provisions from discretion of POs to use other
that the participant should not have to part V of the Protocol. As noted below assessment tools that may be more
exhaust the internal PACE appeal and as discussed in that rule (64 FR appropriate for their settings. We
process before initiating the external 66259), we added further requirements decided not to impose the OBCQI
appeal process. to prepare POs to participate in the requirements for POs. Therefore, POs
Response: According to § 422.600, OBCQI system that was under should not expect to see the publication
beneficiaries are not permitted to development pursuant to a CMS of specific outcome measures as was
circumvent the appeals process with contract with the Center for Health implied in the 1999 interim final rule.
their MA organization. Under § 422.600, Services and Policy Research (CHSPR) We are not foreclosing the possibility of
beneficiaries may only be heard before at the University of Colorado. requiring specific outcome measures in
an ALJ after reconsideration with their At the time the 1999 interim final rule the future, but at this time we believe
MA organization. was published, CHSPR was developing PACE organizations and their
Comment: One commenter expressed a core data set that was to provide the participants will benefit from a wide
concern that the regulation places the foundation for a standardized OBCQI degree of flexibility in the QAPI
responsibility entirely with the PO to system for PACE programs. In approach we have chosen to present.
advise dually-eligible participants of the developing the data set for PACE,
appropriate route of appeal without CHSPR examined existing CMS data Section 460.130 General Rule
supplying guidance as to which route instruments such as the Minimum Data We require the PO to develop,
would best benefit the participant in Set (MDS) (a part of the nursing home implement, maintain, and evaluate an
different situations. This commenter assessment instrument), the Outcome effective data-driven QAPI program. It is
believes it is essential that guidelines be Assessment Information Set (OASIS), important that the QAPI program take
established to decrease the possibility of (required under the home health agency into consideration the wide range of
litigation against the State or the PO and conditions of participation), DataPACE services furnished by PACE.
to prevent participants from accessing a (developed by On Lok, Inc., and used by Additionally, the program should use
second appeal route by saying they were the PACE demonstration programs), and data to identify and improve areas of
wrongfully advised in selecting a the Functional Independence Measure poor performance. The PO must take
particular route of appeal. (FIM) (an assessment data set used in actions that result in improvements in
Response: We believe that both rehabilitation hospitals), for data items its performance in all types of care.
processes are valid options and we do that could be pertinent for PACE quality Comment: One commenter requested
not agree that a wrong choice can be improvement purposes. that we clarify whether the requirement
to take action to improve the plan by either the Federal or State the PO to survey the participants and
performance in ‘‘all types of care’’ government. family, but we are not specifying the
means that the organization does not Response: The program agreement survey tool they must use. The PO will
have flexibility to identify its critical contains a description of the QAPI plan be expected to demonstrate its
processes and to prioritize and select and CMS and the SAA review plan satisfaction measurement system and
areas of concentration in which to apply during monitoring visits. how it is used as part of the overall
resources for improvement efforts. Final rule actions: internal QAPI system.
Response: The requirement in This final rule will finalize § 460.132 (3) Outcome measures derived from
§ 460.130(c) states that a PO must take as published in the 1999 interim final participant assessment data. These
actions that result in improvements in rule. measures can be used to determine if
its performance in all types of care. Our Section 460.134 Minimum individual and organization-level
expectation is that POs will operate a Requirements for Quality Assessment measurable outcomes are achieved
continuous QAPI program that does not and Performance Improvement Program compared to a specified previous time
limit activity to only selected kinds of period. These measures should
The requirements contained in encompass the various areas needed to
services or types of patients. We expect § 460.134 are consistent with the
POs to exercise as much flexibility as is monitor care for PACE participants,
Protocol, but provide more explicit including physiologic, functional,
necessary in order to fully meet information about the types of outcomes
obligations to its participants’ care. As cognitive, mental health, social/
that must be used to monitor quality. behavioral, and quality of life outcomes.
we do not require the use of a common We provided the following guidance
quality assessment tool or a set of For example, POs should focus their
regarding QAPI in the 1999 interim final quality improvement activities on
specific outcome measures beyond the rule. The PO’s QAPI program must
data elements for monitoring included outcomes such as stabilization in ability
include, but need not be limited to, the to bathe, from a baseline period to each
in the program agreement, POs have the use of objective measures to
flexibility to develop the program that follow-up period; improvement in
demonstrate improved performance dyspnea from admission into PACE to a
best meets their needs. The desired with regard to the following:
outcome of the QAPI requirement is that follow-up period; improvement in
(1) Service utilization. PACE transportation services over a specific
data-driven quality assessment serves as demonstration programs collected
the engine that drives and prioritizes time period; and improvement in
utilization data such as hospitalizations caregiver stress from participant
continuous improvements for all the and emergency room visits. This
PO’s services. admission into PACE to a follow-up
information can be used to evaluate time period.
Final rule actions: fiscal well-being, as well as evaluate (4) Effectiveness and safety of staff-
This final rule will finalize § 460.130 quality of care. It can also be used to provided and contracted services,
as published in the 1999 interim final target reviews of PACE centers whose including the competency of clinical
rule. utilization data suggest, for example, staff, promptness of service delivery,
Section 460.132 QAPI Plan that participants may be receiving fewer and achievement of treatment goals and
services than necessary to achieve measurable outcomes. For participants
The PO must have a written QAPI expected outcomes. The purpose of to experience the outcomes that the
plan. Consistent with the Protocol, we including utilization data in the PO’s PACE benefit is intended to achieve,
require POs to have their QAPI plan QAPI program is to help the PO ensure staff must demonstrate skills and
annually reviewed by the PACE that participants receive the appropriate competencies necessary to facilitate
governing body and, if necessary, level of care through their PACE center. those desired outcomes. The PO is
revised. Further, in this section we Additionally, using information expected to include data-based,
establish that a written plan must, at a regarding utilization of and reasons for criterion-referenced performance
minimum, specify how the PO proposes emergency care and hospital and measures of staff skills, to utilize these
to (1) identify areas in which to improve nursing home admissions, the PO can data to ensure that staff maintain skills,
or maintain the delivery of services and identify areas for improvement. and to provide training as new
patient care; (2) develop and implement (2) Caregiver and participant techniques and technologies are
plans of action to improve or maintain satisfaction. Caregiver and participant introduced and as new staff are hired.
quality of care; and (3) document and satisfaction with services is an Each PO will be expected to
disseminate the results of the QAPI important element of a QAPI program. demonstrate that it has a system of
activities to the PACE staff and A PO must survey, on an ongoing basis, appropriate complexity for keeping
contractors. participants and their caregivers to track of the skills and competencies of
We received a number of comments determine satisfaction with the services the staff and for effectively identifying
and questions regarding the QAPI plan. furnished and the outcomes achieved. and addressing staff training needs.
Comment: Several commenters Given the large number of PACE These data should be an integral part of
requested information regarding CMS’ participants who are cognitively the PO’s internal QAPI program that
intention regarding prior approval and impaired and the critical role caregivers provides continuous feedback on staff
monitoring of the QAPI plan. play in keeping PACE participants in performance.
Response: POs are required to present the community, it is important to survey (5) Non-clinical areas. The types of
their QAPI plan to their governing body caregivers about their satisfaction with outcomes in this area include outcomes
for annual approval. CMS and the SAA the program. We expect the PO to use related to participants grievances,
must approve the QAPI plan prior to its this information to identify transportation services, and meals. For
inclusion in the program agreement and opportunities to improve services and example, if a PO finds a high rate of
review the plan during monitoring caregiver and participant satisfaction. grievances not resolved, the PO might
visits. We do not intend, at this point, to target its activities to improve the
Comment: One commenter indicated prescribe the specific tools for grievance process.
that the regulations do not establish an measuring participant and family We expect POs to use the most
oversight responsibility for review of the satisfaction. It is the responsibility of current clinical practice guidelines and
professional standards in the organization to identify and collect could divert resources from providing
development of outcome measures information that will support its use. services to PACE enrollees.
applicable to the care of PACE Comment: One commenter asked Another commenter expressed
participants. Continuous improvement when it will be known how the quality concern that POs will be unduly
is only possible through the data, referred to in the 1999 interim subjected to data reporting and quality
identification and use of current final rule, will be collected by CMS and assessment requirements exceeding
information, techniques, and practices. what the specific quality measures will those imposed on other Medicare
While we are not imposing any specific be. The commenter also questioned how provider types. The commenter
standards of practice, this requirement POs can be expected to comply with the indicated it would be better to condense
establishes the expectation that the PO PACE regulation prior to the data collection responsibilities of
will utilize the current clinical and implementation of the OBCQI program the PACE provider and establish a core
professional standards as a routine part minimum requirements for QAPI set of minimum data and reporting
of its daily operations. program. requirements.
In addition, we included a Response: In 2001, we established Response: We are concerned that
requirement that the PO must meet requirements for submission of Data specifically mandated measures such as
minimum levels of performance on Elements for Monitoring, which is the OBCQI may compromise the
standardized quality measures that will included in the PACE program discretion of POs to use other
be established by CMS and the SAA and agreement under Appendix L. The assessment tools that may be more
which are specified in the PACE program agreement can be located at appropriate for their settings. At this
program agreement. For example, we http://www.cms.hhs.gov/PACE. As time, CMS does not have any plans to
require all POs to achieve at least 80 discussed in more detail in Subpart L of establish a minimum data set for PACE.
percent flu immunization rate for their this final rule, POs are required to As stated in previous responses, we are
PACE participants. If a PO fails submit the Data Elements for not requiring POs to comply with the
substantially to meet these specified Monitoring quarterly via the Health Plan OBCQI system in this final rule.
requirements, the continuation of the Management System (HPMS). POs are However, we believe some structure for
PACE program agreement may be expected to collect, analyze, and track quality-related data collection and
conditional on the execution of a CAP, data from the five outcomes measures reporting is necessary. We expect POs to
or alternatively, some or all further required in § 460.134, the Data Elements exercise flexibility in determining the
payments for PACE program services for Monitoring, and any other outcome most appropriate methods and
may be withheld until the deficiencies measure where an identified improved instruments for their participant
have been corrected. We are not performance will benefit their caseloads. Those POs that have
establishing minimum performance participants. experience with data sets should be able
standards in this regulation. Rather, we Comment: A commenter questioned to manage the data needs of their QAPI
will establish minimum performance whether levels of performance will vary program.
standards in the program agreement by program based on such factors as the We recognize that in some States, POs
based on analysis of available data sets program’s age, its enrollees’ are already subject to OASIS reporting
that are applicable to PACE participants. characteristics, its specific service requirements because they are licensed
We also added a requirement that the model, and unique characteristics of the as home health agencies and must
PO take actions to ensure the accuracy service area. comply with OASIS requirements. It
and completeness of all data used for Response: As in other types of health was not our intent to subject POs to
outcome monitoring. A data-driven care facilities, the participant more reporting requirements than other
QAPI program must be based on population in PACE sites varies. These providers. However, as more States
accurate data. The regulations require differences should not affect the QAPI develop specific licensure requirements
that POs set up mechanisms to check for process but may determine what for PACE, this reporting burden will be
the accuracy, timely collection, and performance indicators (that is, adverse greatly reduced. We also recognize that
completeness of all data. patient events, satisfaction, wound some POs have experience in utilizing
Comment: One commenter described healing, etc.) a PO uses to identify areas the draft performance measures
the efforts of the Performance Measure requiring continuous quality assessment developed by the NPA Performance
Workgroup lead by the NPA in 1999, and performance improvement. Measure Workgroup. Although we are
which reviewed draft performance Comment: One commenter supported not requiring that POs use the OBCQI
measures previously developed as a part CMS’s plan, as explained in the 1999 nor submit the COCOA–B data at this
of the NPA accreditation project. The interim final rule (64 FR 66259), not to time, for POs still searching for
final core set of 15 measures were impose standardized data collection guidelines to develop or improve their
accepted by the POs and States as requirements by implementing OBCQI, assessment tools or quality
measures valuable to track. This pending the outcome of work by enhancement, the COCOA–B is
commenter recommended that CMS CHSPR. The commenter also supports available at http://www.cms.hhs.gov/
adopt these 15 measures or allow the CMS continuing to work with States to QualityInitiativesGenInfo.
States to negotiate quality measures collect data to be used in the The commenters may have
with POs and CMS as part of the PACE development and implementation of misunderstood the preamble discussion
program agreement. outcome measures that would allow of QAPI in the 1999 interim final rule.
Response: We believe that the comparison between varied types of We stated that the CHSPR was
decision to use outcome measures in programs serving individuals with like examining existing CMS data
addition to the five noted in § 460.134 needs as well as with cross-site instruments such as MDS, OASIS,
is one that that a PO is in the best comparison. Other commenters DataPACE and FIM for data items,
position to make. If a PO believes that indicated that the application of which may be pertinent for PACE. We
tracking a specific outcome measure numerous other data collection did not intend to imply that POs would
will benefit its participants and improve instruments such as those noted in the have to comply with these other CMS
the level of service or the delivery of Preamble of the interim final rule, that data sets. However, States have differing
service, we would expect the is, the MDS, OASIS, DataPACE, etc., requirements for PACE licensure and
with licensure and if the State requires experience from its performance Response: We thank the commenters
a PO to be licensed as several provider improvement program to change care for their support although we are not
types the PO would be responsible for behaviors and to ensure that these requiring POs to comply with a specific
the reporting requirements of each of behaviors are sustained. OBCQI system at this time.
the licensed provider types. We require the PO to set priorities for Comment: A commenter pointed out
Comment: One commenter requested performance improvement, considering that the QAPI coordinator has a similar
information about CMS’s plan for the prevalence and severity of identified function similar to the medical director
working with States to establish problems and giving priority to with regard to quality. The commenter
outcome measures and minimum levels improvement activities that affect asked if one person could hold both
of performance. clinical outcomes. However, any positions.
Response: At this time, we have no identified problems that directly or Response: The medical director has
specific plans to establish additional potentially threaten the health and responsibility for patient outcomes and
outcome measures or minimum levels of safety of participants must be corrected for the organization’s QAPI program. It
performance beyond the data elements immediately. Prioritizing areas of is the PO’s choice to determine that the
for monitoring which were established improvement is essential to ensure medical director will serve as the QAPI
in 2001 and are included in the program consistency in the quality of care coordinator. The coordinator’s function
agreement as Appendix L. State furnished over time. Conditions that is to coordinate and oversee the
licensure requirements are based on the may threaten the health and safety of implementation of quality assessment
State’s designation of PACE as a participants must be immediately and and performance improvement
particular provider type. The State directly addressed when they are activities. We envisioned the QAPI
designation determines the State and identified. coordinator as an individual other than
Federal requirements, which may Similar to the Protocol, we require the the medical director. The QAPI
include outcome measures or minimum PO to designate an individual to coordinator would be responsible for
levels of performance. coordinate and oversee implementation day-to-day quality issues, collecting
We believe that State licensure of QAPI activities. The purpose of this data, analyzing data, detecting trends,
requirements together with QAPI requirement is to ensure that the PO coordinating IDT involvement in QAPI
program requirements and our reporting designates responsibility for a QAPI activities, and compiling comments
requirements related to the data plan and the various activities resulting related to participant/caregiver
elements for monitoring are sufficient to from this plan. Also, this individual is satisfaction and concerns.
ensure quality care for PACE responsible for ensuring that all team Final rule actions:
participants without being excessively members, PACE staff, and contract This final rule will finalize § 460.136
burdensome for the POS. In 2001, we providers are aware of the various as published in the 1999 interim final
established the Data Elements for quality QAPI activities. rule.
Monitoring. POs are required to submit We require that the PO ensure that all
team members, PACE staff, and contract Section 460.138 Committees With
quarterly data on each of the following Community Input
9 elements: providers are involved in the
1. Routine Immunization development and implementation of the Consistent with the Protocol, we
2. Grievance and Appeals QAPI activities and are aware of the require that the PO develop a
3. Enrollments results of these activities. The process of committee(s) with community input to
4. Disenrollments service delivery in PACE requires the (1) evaluate data collected pertaining to
5. Prospective Enrollees team to identify participant problems, quality outcome measures, (2) address
6. Readmissions determine appropriate treatment the implementation of and results from
7. Emergency (unscheduled) Care objectives, select interventions and the QAPI plan, and (3) provide input
8. Unusual Incidents for Participants evaluate outcomes of care on an related to ethical decision-making
and the PACE site (to include staff if individual participant basis. The IDT is including end-of-life issues and
participant was involved) in a unique position to provide PACE implementation of the Patient Self-
9. Deaths management with structured feedback Determination Act. Through this
Final rule actions: on the performance of the PACE committee, the PO will be able to
This final rule will finalize § 460.134 program and suggest ways in which receive guidance regarding its QAPI
as published in the 1999 interim final performance can be improved. Thus, we program and the ethical issues faced by
rule. expect the PO to make full use of the POs.
IDT and other staff in contributing to its Comment: One commenter disagreed
Section 460.136 Internal QAPI with the requirement, stating that it
internal quality improvement program.
Activities Finally, consistent with the Protocol, does not seem reasonable or necessary,
In § 460.136, we require that the PO we require the PO to encourage PACE for a small PO to be required to involve
must use a set of outcome measures to participants and caregivers to be community members in one or more
identify areas of good or problematic involved in QAPI activities, including committees to evaluate data from the
performance and must take actions providing information about their quality outcomes measures and to
targeted at reinforcing or improving care satisfaction with services. One of the address implementation of the
based on these outcome measures. best sources of information about the organization’s QAPI plan. The
The PO also must incorporate any strengths and weaknesses of a program commenter indicated that it should be
actions that result in performance is from the users of the program. In this sufficient for the SAA and CMS to
improvement into its standards of case, it is important for PACE programs evaluate the QAPI data and plan
practice for the delivery of care. A to get feedback from both PACE implementation on behalf of the
method of periodically tracking participants and caregivers to help enrollees and community.
performance to assure that any identify areas that need improvement. Response: The requirement for a PO
improvements are sustained over time Comment: Many commenters to establish committee(s) with
must also be incorporated in the expressed support for the use of an community input was adopted from the
program. The PO must use its own OBCQI system. Protocol. Section 1894(f) of the Act
requires that the Secretary ‘‘* * * impairment) that are part of the individuals have a health status
incorporate the requirements applied to information collected by POs on comparable to that of participants in the
PACE demonstration waiver programs potential PACE program eligible PACE demonstration programs must
under the PACE protocol.’’ The use of individuals. This provision was take into account variances among sites
community input is contained in that intended to ensure that POs continue to and differences across patients within a
protocol. Our intention is to provide a serve patients who are as frail as those site. Therefore, we concluded that we
participant protection through served under the PACE demonstration could not develop a tool that would
community involvement in the program and will prevent POs from more adequately determine health status
oversight of participant satisfaction and selecting enrollees who need less care comparable to individuals in the PACE
QAPI activities. and whose care is less costly. demonstration programs than the
Final rule actions: As we explained in the 1999 interim current criteria used by States to
This final rule will finalize § 460.138 final rule, we examined data extracted determine if an individual needs a NF
as published in the 1999 interim final from the PACE Fact Book (Second level of care.
rule. Edition, 1996, prepared by On Lok, Inc., In determining how best to implement
1333 Bush Street, San Francisco, this requirement, we also considered
Section 460.140 Additional Quality California, 94109) which provides a other safeguards against selective
Assessment Activities portrait of participants in the eleven enrollment. Sections 1894(c)(3) and
We require that POs participate in fully-capitated demonstration programs 1934(c)(3) of the Act include a
periodic, external quality improvement as of December 31, 1995. Activities of requirement that participants be
reporting requirements as may be daily living (ADLs) are personal care recertified annually as requiring a NF
specified by the CMS or the SAA. tasks (bathing, dressing, toileting, level of care. Under the demonstration
Examples of participation in an activity transferring, and eating) that a person program, there was a one-time
include the reporting of data items for must be able to perform to be certification of a participant’s meeting
outcome measurement purposes, considered independent. A person is the NF level of care. Thus, under the
participation in the survey process, and considered to have an ADL dependency demonstration program, POs could
participation in a CMS-directed national and a score of ‘‘1’’ is assigned, for each continue to serve individuals who had
quality improvement project. of those 5 tasks for which some or full a short-term need for a NF level of care
Comment: One commenter asked assistance is needed to perform the task. but whose condition had shown
when CMS would provide the ‘‘external A similar scale measured dependencies significant improvement. The law’s
quality assessment and reporting in eight instrumental activities of daily annual recertification requirement
requirements.’’ living (IADLs), which include meal ensures that participants will continue
Response: The only quality preparation, shopping, housework, to need a NF level of care.
assessment reporting that we currently laundry, heavy chores, money Additionally, we included a
require is the Data Elements for management, taking medications, and requirement that POs must notify CMS
Monitoring. transportation. The 2710 participants in and the SAA of enrollment denials.
Final rule actions: these 11 sites at the end of 1995 had an CMS and the SAA can analyze this
This final rule will finalize § 460.140 average of 2.8 ADL dependencies information to detect selective
as published in the 1999 interim final (varying by site from 2.3 to 3.8) and an enrollment.
rule. average of 7.5 IADL dependencies After weighing both the need to
(varying from 6.9 to 7.9 by site). maintain State and organization
Subpart I: Participant Enrollment and flexibility to develop programs suitable
Additionally, these participants had an
Disenrollment to the communities in which the POs
average of 7.9 medical conditions
The purpose of subpart I is to (varying from 4.9 to 11.0 by site) and an operate and the implementation of other
establish the requirements for average number of 4.5 errors or safeguards against selective enrollment,
enrollment and disenrollment of a PACE unanswered questions (varying from 2.0 we believe having a health status
participant. We received a large number to 6.4) on the Short Portable Mental comparable to the PACE demonstration
of comments related to enrollment and Status Questionnaire used to evaluate programs is inherently equivalent to
disenrollment in PACE. mental functioning. needing a NF level of care. We are
The PACE Fact Book acknowledges satisfied that applying the NF level of
Section 460.150 Eligibility To Enroll in care requirement in conjunction with
the difficulty of maintaining a valid and
a PACE Program the other safeguards discussed will
consistent data set in a multisite project
In accordance with sections 1894(a)(5) with sites scattered across the country. minimize selective enrollment while
and (c)(1) and 1934(a)(5) and (c)(1) of However, there are many reasons why preserving program flexibility; however,
the Act, we established § 460.150, to the data would be expected to show we invited comments with regard to
specify the requirements for eligibility differences across sites. Although the other ways to implement this provision.
to enroll in a PACE program. targeted population for all PACE Additionally, the statute requires that
Sections 1894(c)(2) and 1934(c)(2) of demonstration programs consisted of an individual meet any other eligibility
the Act provide that a PACE program individuals who met the NF level of conditions imposed under the PACE
eligible individual must have a health care, the specific criteria used to program agreement. We are aware that
status comparable to the health status of determine if an individual needs this under the demonstration program, some
individuals who participated in the level of care varies by State. Actual PACE sites instituted some other
PACE demonstration programs. Further, implementation of the PACE program eligibility conditions. For example,
sections 1894(c)(2) and 1934(c)(2) of the also differs in other ways across sites to some set their minimum age limits
Act specify that this determination will reflect the particular community in higher than 55. However, we do not
be based upon information on health which the site is located. Furthermore, believe the intent of section
status related indicators (such as marketing efforts vary, as do the 1894(a)(5)(D) of the Act was to allow for
medical diagnoses and measures of maturity of the site and particular modification of the requirements of
activities of daily living, instrumental staffing arrangements. We are convinced section 1894(a)(5)(A–C) of the Act,
activities of daily living, and cognitive that any means of determining whether including the age criteria of 55 or older.
Thus, POs may not turn away any PACE applicants, regardless of Medicaid eligible. The statute does not specify the
otherwise eligible individual who is at status. premium that may be charged to non-
least age 55. Comment: Four commenters Medicare and non-Medicaid
In the 1999 interim final rule, we concurred with our interpretation of participants. However, in response to
cautioned organizations that these site- health status comparable to individuals inquiring POs, we have indicated they
specific eligibility requirements are not enrolled in the PACE demonstration could charge the non-Medicare and non-
intended to allow programs to programs. One commenter asked about Medicaid participants the combined
discriminate against individuals with the meaning of the NF certification Medicare and Medicaid capitation rates
problems such as cognitive deficits, requirement and if States have the as their premium.
disruptive behavior, or substance abuse. ability to set criteria that would limit Comment: A commenter asked if an
Any site-specific eligibility criteria must enrollment to persons who are more individual who met all enrollment
be specified in the program agreement. costly or more difficult to care for than criteria, except the ability to live safely
We will not approve criteria that would persons who meet the State’s minimum in a community setting could be denied
serve as a way to selectively enroll threshold level for NF level of care. enrollment. The commenter asked
individuals whose care is anticipated to Response: Section 460.150(b) requires whether this would be the only
be less costly or who are thought have that an individual must meet 3 basic condition under which a willing
easier care needs. eligibility requirements in order to individual could be denied enrollment.
The eligibility requirement specified enroll in PACE. These are: (1) Be 55 Response: Consistent with the
in § 460.150(c) incorporated the years old or older, (2) be determined by Protocol, the only permitted reason for
Protocol provision that at the point of the SAA to need the level of care a denial of enrollment is when a
enrollment, an individual’s condition required under the State Medicaid plan participant’s health or safety would be
must be such that his or her health or for coverage of NF services (that is, the jeopardized by living in a community
safety would not be jeopardized by individual’s health status is comparable setting. The criteria used to determine if
living in a community setting. We to the health status of individuals who an individual’s health or safety would
recognize that enrollment in the PACE participated in the PACE demonstration be jeopardized by living in a community
program is not appropriate for everyone programs), and (3) reside in the PO’s setting are often developed by the SAA
who meets the basic eligibility criteria. service area. and must be included in the PACE
Determining whether or not an If a State establishes that its minimum program agreement in accordance with
individual’s health or safety would be threshold to qualify for a NF level of sections 1894(c) and 1934(c) of the Act.
jeopardized by living in the community care would permit the enrollment of less PACE staff must assess the potential
involves assessing the individual’s care frail individuals than those who participant to establish that the
support network as well as the participated in PACE demonstration participant can be cared for
individual’s health condition. As programs (on a nationwide or State appropriately in a community setting
specified in § 460.152(a)(4), this basis), we will approve the use of a and that he or she meets all
assessment is done by the PO based more stringent or higher level of care requirements for PACE eligibility
upon criteria developed by the SAA and requirement in order to ensure that the specified in this part. The SAA is
specified in the program agreement. PACE permanent providers continue to responsible for oversight of this process
We indicated in the statutory serve a population that is comparable to and has ultimate responsibility for the
provisions in sections 1894(i) and those served under the PACE determination. If a PO denies
1934(j) of the Act that PACE program demonstration programs. enrollment because based on their
eligibility is not contingent upon an Comment: Several commenters assessment, that is, they do not believe
individual’s eligibility for Medicare or requested clarification on the the individual can be safely maintained
Medicaid. requirement that individuals with in the community, the PO must notify
Comment: Two commenters disagreed neither Medicare nor Medicaid may CMS and the SAA.
with the regulatory requirement enroll in PACE. Commenters asked if Comment: When determining whether
permitting enrollment of individuals 55 this requirement was intended to an individual can be maintained safely
years of age or older. One commenter mandate that States provide PACE as a in the community, one commenter
requested allowing the age limitation be private pay benefit or whether this asked if we intended to include all
established at the State’s discretion. The would be an option. Commenters noted possible community settings or merely
other commenter requested more that establishing PACE as a private pay the one in which the individual resides
restrictive age targeting criteria which benefit may subject POs to State at the time of application.
would be consistent with pre-PACE and insurance laws. Response: The intent of the
PACE demonstration programs. This Another concern was that the requirement is that POs consider the
commenter would limit eligibility to regulation addressed all combinations individual’s residence at the time of
those age 65 years old and older. for premiums except for individuals application. However, if the individual
Response: The age requirement is with neither Medicare nor Medicaid. cannot be maintained safely in their
consistent with sections 1894(a)(5)(A) One commenter requested clarification current residence but the PO believes
and 1934(a)(5)(A) of the Act, which of premium amounts for non-Medicare they could live safely in another
defines a PACE program eligible and non-Medicaid participants. community setting, the option of
individual as ‘‘55 years of age or older.’’ Response: Based on sections 1894(i) moving should be presented to the
Comments: There were numerous and 1934(j) of the Act, we believe the individual before enrollment is denied.
requests for clarification of the State Congress intended to permit individuals Comment: Several commenters
responsibility related to PACE eligibility with Medicare Part A, Medicare Part B, recommended regulatory revisions that:
determinations. Commenters asked who Medicaid, any combination of the (1) Provide the SAA flexibility to ensure
determines NF level of care for PACE above, or none of the above mentioned that selective enrollment is avoided; (2)
applicants who are not Medicaid- benefits to participate in PACE. permit denial of enrollment to those
eligible. Therefore, § 460.150(d) indicates that a with End-Stage Renal Disease (ESRD)
Response: The SAA is responsible for potential participant is not required to (alternatively, CMS should reconsider a
determining the NF level of care for all be Medicare enrolled or Medicaid proposed change in financing for
enrollees with ESRD); and (3) In January 2005, we implemented a financial burden from the substantial
specifically exclude conditions risk-adjusted capitation model loss of revenues related to the
prohibited elsewhere in the regulation exclusively for ESRD. The ESRD CMS– prohibition from collecting the
from being approved as an additional HCC model accounts for the additional Medicare capitation amount from these
program specific eligibility requirement. costs of providing ESRD patients with participants.
Commenters noted that specific mention the costly and highly specialized care Response: With implementation of the
of important protections against needed. This model is exclusively for Part D benefit, all States will have to
discriminatory exclusion would be ESRD patients and has three categories develop Medicaid rates that vary
beneficial. Lastly, commenters of ESRD acuity: those that are on depending on whether the participant is
requested that we provide an example of dialysis, those that have had kidney or dually eligible (Medicare and Medicaid
an optional eligibility criterion. kidney and pancreas transplant(s), and eligible) or is a Medicaid-only
Response: The regulations include those that have had kidney grafts. individual. The costs utilized as the
several provisions intended to prevent We agree with the commenter’s basis for the calculation of the Medicaid
selective enrollment. First, participants suggestion that any condition that is rate will vary for these two comparable
must have a health status comparable to specifically excluded in statute or populations due to service utilization
the health status of individuals who regulation not be included in a program and will result in a higher rate for the
participated in the PACE demonstration agreement as an additional program Medicaid-only population. Therefore,
program. This is incorporated into the specific eligibility condition. As all the Medicaid capitation payment is
requirement that eligible individuals additional program specific eligibility adjusted to account for the difference in
must meet the State’s NF level of care conditions must be approved by CMS costs between the dually-eligible
requirements. If a State establishes that and the SAA, we do not believe that individual and the Medicaid-only
its minimum threshold to qualify for a additional regulatory language is individual. We recognize that an
NF level of care would permit the needed. organization may receive more for a
enrollment of less frail individuals than Although we have not yet approved dually-eligible participant, due to the
those who participated in the PACE any site-specific eligibility receipt of both Medicare and Medicaid
demonstration program (on a requirements, we anticipate that the capitation payments rather than only
nationwide or State basis), the State may most likely proposal would be to the Medicaid capitation for a Medicaid-
request the use of a more stringent or develop a disease or condition-specific only participant. However, we believe
higher level of care requirements in program, such as programs for the Medicaid capitation payments are
order to ensure that the POs continue to participants with Alzheimer’s disease. adequately adjusted to account for the
serve a population that is comparable to Site-specific requirements may not difference in costs, and we are not
that served under the PACE modify the three basic eligibility inclined to grant a waiver of the
demonstration. Other safeguards requirements and may not serve as a requirement to enroll the Medicaid-only
include a requirement that participants way to selectively enroll participants. population.
be recertified annually as requiring a NF We will consider other proposals on a Final rule actions:
level of care as well as a requirement case-by-case basis. This final rule will finalize § 460.150
that POs must notify both CMS and the Comment: Several commenters asked as published in the 1999 interim final
SAA of enrollment denials. which IDT members are required to rule.
It is the SAA’s responsibility to assess the participant to determine the
establish the criteria used by the PO in participant’s ability to live safely in the Section 460.152 Enrollment Process
assessing an individual’s ability to live community. Another commenter We established § 460.152 to specify
safely in the community. These criteria requested that the PO’s ability to safely the PO’s responsibility during the intake
are included in the program agreement. transport a participant be considered in process and actions required in the
The PO’s assessment is used by the SAA the determination of whether a event a potential PACE participant is
in their final enrollment/denial participant could live safely in the denied enrollment because his or her
determination. Although we believe that community. health and safety would be jeopardized
the States will be open to PO Response: We did not specify by living in a community setting.
assessments regarding a participant’s particular IDT members that must assess Although we recognize that the intake
ability to live safely in the community, the participant’s ability to live safely in process must be flexible to meet the
the decision to permit a denial of the community because we believe that needs of POs and potential PACE
enrollment is ultimately delegated to the the PO is in the best position to assign enrollees, in the 1999 interim final rule,
State. If the PO determines that the this responsibility. It is our expectation we specified certain steps that must, at
individual must be denied enrollment, that individuals’ health condition and a minimum, be included in the process.
the PO must inform CMS and the SAA. their social support system will be These are not intended to be sequential
In addition, the PO is required to inform considered in their assessment. In steps and may in fact occur
the individual in writing of the reason addition, as transportation is a major concurrently. Potential participants
for the denial. activity, whether to the PACE center, or need reliable, accurate information on
We understand individuals with to off-site providers, we expect this the PACE delivery system in order to
ESRD are among the most frail and assessment to include the PO’s ability to make a rational decision whether to
complex persons to care for and in the transport individuals safely. enroll. There is both a legal and an
past POs have had reservations about Comment: One commenter requested ethical obligation to inform potential
enrolling this population due to that for POs located in areas where there participants about how the PO controls
additional cost of their care. However, are a disproportionate number of and affects the delivery of health care
we believe that PACE is a care delivery Medicaid-only elderly, they be and other services, albeit in full
model well-suited to meeting the needs permitted a waiver or modification of partnership with the participant.
of this population. Thus, we do not the mandate to enroll all individuals The following discussion describes
believe that it is appropriate for POs to meeting the eligibility requirements. the information that is made available to
deny enrollment to individuals solely The commenter indicated that a PO in the potential participant routinely and
based on ESRD status. this situation will have a serious upon request. One-on-one assistance is
provided throughout the intake process. of the reason for the denial; as Response: We wish to clarify the
In all situations, the information is appropriate, refer the individual to difference between ‘‘withdrawal,’’
provided in a culturally competent alternative services; and retain ‘‘screen-out,’’ and ‘‘denial of
manner, including providing supporting documentation of the reason enrollment.’’
information in a language understood by for the determination. When a prospective enrollee begins
the participant. We received the following comments the intake process, the PO must
The most basic disclosure is that all related to the PACE enrollment process. determine whether or not the
health care services must be received Comment: Commenters asked if the prospective enrollee meets the three
through the PO. Once that disclosure is State review was limited to certifying a basic eligibility criteria:
made and understood by the potential potential participant’s eligibility for NF (1) Age 55 or older,
participant, other key disclosures level of care. Commenters also asked if (2) Lives in the service area of the PO,
related to what is included within and the State was prohibited from reviewing and,
what is excluded from the PACE other eligibility criteria such as the (3) Requires the State’s NF level of
program, what costs would be borne by ability for the potential participant to be care.
the participant, how to access maintained safely in the home. • If the potential enrollee does not
emergency services, and how the Response: In addition to certifying NF meet any of these three basic eligibility
grievance and appeals processes work. level of care, States are responsible for criteria, we consider the result to be a
Additional information that should be establishing the criteria used for the PO ‘‘screen-out’’ by the PO.
disclosed upon request includes the assessment to determine if an • If the prospective enrollee meets the
process that the PO uses to decide that individual’s health and safety would be three basic eligibility criteria but
drugs, devices, and procedures are jeopardized by living in a community decides not to enroll in the PACE
experimental and whether the PO uses setting. States are also responsible for program, we consider the enrollee’s
a drug formulary. oversight of the PO’s intake process. action to be a ‘‘withdrawal.’’
The uniqueness of the PACE model Comment: A commenter asked if • If the potential enrollee meets the
depends upon the partnership formed Federal financial participation (FFP) is three basic eligibility criteria, they are
between the participant and the IDT. available to States for administrative then assessed to ensure they can safely
Therefore, a potential participant should costs related to the State performing live in the community and be provided
also be made aware of how the team preadmission screening for NF level of a preliminary explanation of services
works, who is on it, and what choices care determinations for participants, that would be provided. If the enrollee
exist for participant selection of a particularly if they are not Medicaid then chooses not to enroll, it is still
primary care physician. The participant eligible. considered a ‘‘withdrawal.’’ Neither
must also know how the organization Response: FFP is provided to States screen-outs nor withdrawals are
provides access to services not provided for all administrative costs for required to be reported to CMS or the
directly by the IDT. These services may administering the PACE program. SAA by our regulations.
include contractors who furnish Because the State NF level of care • A ‘‘denial of enrollment’’ may occur
specialty services, health care facilities determination is a statutory eligibility when the person is determined to be
such as hospitals and nursing homes, requirement for the PACE program, the unable to live in the community without
and providers of home health care. Also, State may claim FFP for this jeopardizing his or her health and
participants may request information administrative function regardless of safety. The PO must report this denial
regarding whether there are financial whether the participant is ultimately of enrollment to CMS and the SAA and
incentives to PO staff and contractors determined eligible for Medicaid or provide the individual with a written
that may impact care. Finally, upon Medicare. explanation of the denial of enrollment.
request, the following information must Comment: Commenters requested we Consistent with the Protocol, the only
be disclosed: Information regarding identify which members of the IDT must permitted reason for a denial of
board certification and other conduct assessments prior to enrollment is that living in a community
credentialing requirements; clinical enrollment. setting would jeopardize an individual’s
protocols; medical practice guidelines, Response: We have not specified health and safety.
consumer satisfaction survey results; or which IDT members must conduct Comment: Commenters asked about
the results of the organization’s most assessments prior to enrollment. We the purpose of notifying CMS and the
recent Federal or State review. believe the PO is best able to identify State of each denial of enrollment, and
With regard to specific intake tasks, staff qualified to perform the assessment how this notification was to occur. We
we did not include the Protocol to determine whether the participant were also asked if the intent of reporting
requirement for a complete assessment can live safely in the community and a denial of enrollment is to
by the IDT prior to the denial of provide a preliminary explanation of the communicate the presence of an ‘‘at
enrollment based on health and safety services that an individual would risk’’ individual living in the
issues. We believe that such a receive from the program. An initial community, for which the State already
determination can generally be made comprehensive assessment as described has established reporting requirements
without a complete IDT assessment. In in § 460.104 must be completed by all and protocols for addressing such
establishing enrollment requirements, members of the IDT promptly following situations. Commenters also asked if
our intent was to clarify, not change, the enrollment. potential participants could appeal
enrollment process as described in the Comment: We received several denials of enrollment.
Protocol. comments related to denials of Response: The purpose for notifying
If a prospective participant is denied enrollment that we believe indicate CMS and the SAA of each enrollment
enrollment because his or her health or some confusion regarding the denial is to prevent selective enrollment
safety would be jeopardized by living in differences between ‘‘withdrawal’’ by a by the PO. We believe this reporting is
the community, we require the PO to participant, ‘‘screen-out’’ by the PO another participant protection
inform CMS and the SAA as well as when the prospective enrollee does not preventing the practice of enrolling
make the documentation available for meet eligibility requirements, and those individuals with less expensive
review; notify the individual in writing ‘‘denial of enrollment’’. care needs or implementing
discriminatory practices. The CMS include a review of post-eligibility a Member Handbook. Although some
requirement is fulfilled through the treatment of income, which was not POs may use a cover sheet to obtain the
quarterly HPMS reporting. The SAA is expressly included in the 1999 interim participant’s signature and a
responsible for the oversight of the final rule. ‘‘handbook’’ to provide the required
denial process and may specify Response: Although not specified in information, the cover sheet alone does
additional reporting requirements. this section of the regulation, we require not constitute the enrollment agreement
Denials of enrollment are may be that information regarding post- and must be accompanied by the
appealed by potential participants eligibility treatment of income is additional minimum information
through the State fair hearing process, included in the enrollment agreement specified when provided to the
and this process is applicable for all (see § 460.154(g). participant.
enrollment denials, regardless of the However, we agree with the In the 1999 interim final rule, we
participant’s Medicare and Medicaid commenter and as an additional emphasized that an individual who
status. participant protection, we are adding a accepts PACE as his or her sole source
Comment: Two commenters requirement to § 460.152(a) that POs of services could not then make an
recommended that we modify review post-eligibility treatment of election of hospice care under section
requirements to explicitly permit income with prospective enrollees. 1812(d) of the Act and 42 CFR 418.24
qualified M+C (now MA) enrollees to Comment: Commenters asked if the or section 1905(o)(2) of the Act.
disenroll from MA at any point in the State could delegate review of denials of However, hospice-type services are
year for the purpose of enrolling in enrollment and review of proposed available from the PO as the PACE
PACE. involuntary disenrollments to local model of care is designed to furnish a
Response: Medicare has an departments of social services. continuum of services which meet
operational process called the Special Response: The PO must provide health care needs. We included a
Election Period (SEP) which allows written notification to individuals requirement that the enrollment
Medicare managed care enrollees to denied enrollment. We note that a agreement include notification that
disenroll from MA plans at any time in denial occurs when an individual meets Medicaid recipients and individuals
order to enroll in PACE. The SEP for the basic eligibility criteria of age, living dually-eligible for Medicare and
PACE is in the Medicare Managed in the service area and requiring NF Medicaid enrolled in PACE are not
Manual, section 30.4.4., and can be level of care but is determined to be liable for any premiums, but they may
located on the CMS Web site at http:// unable to live safely in the community. be held liable for any applicable
www.cms.hhs.gov/manuals/downloads/ The SAA is ultimately responsible for
mc86c02.pdf. Moreover, after spenddown liability under 42 CFR
oversight of this process and for prior 435.121 and 435.831 and any amounts
disenrolling from PACE, under the SEP, review of involuntary disenrollments.
individuals are allowed two months to due under the post-eligibility treatment
While the SAA can delegate these of income process under § 460.184.
enroll in an MA plan or revert to the activities, the SAA must maintain
original Medicare program. As SEPs are We also included a requirement for
adequate and appropriate oversight and
an operational practice of the MA the enrollment agreement to include
review of any delegated activities/
program, we do not believe it is information on the consequences of
responsibilities.
appropriate to include SEP provisions subsequent enrollment in other optional
Final rule actions:
in PACE regulations. In this final rule, we are adding a Medicare or Medicaid programs
Comment: One commenter requirement that POs review post- following disenrollment from PACE.
recommended that the regulation be eligibility treatment of income with This provision was intended to ensure
revised to require POs to explain to prospective enrollees. that participants are informed in
potential enrollees which services or advance of conditions that might apply
benefits are excluded and how the Section 460.154 Enrollment if they are disenrolled from PACE and
PACE service delivery model differs Agreement elect, for example, to enroll in another
from the other service alternatives. While the program agreement managed care plan.
Response: The intake process is an contains the specific enrollment and We added a requirement that any
extensive and interactive activity disenrollment procedures to be followed changes to the information contained in
between the PO, the participant and by the PO, in § 460.154, we specify the enrollment agreement must be
their family or caregiver. During these general requirements, which must be provided to the participant in writing
encounters the PO staff explains PACE, met by all POs. Although the statute is and fully discussed with the participant
what it encompasses and the differences silent as to any general enrollment and his or her representative or
between PACE and other service requirements, it requires that the caregiver. We believe it is essential that
delivery alternatives including what regulations should incorporate, to the all participants are made aware of any
services generally are not covered. The extent possible, the requirements changes in this information in order to
PACE benefit includes all Medicare applied to the PACE demonstration protect and exercise their rights.
services, all Medicaid services, and programs under the Protocol. Thus, we Comment: We received four
services the IDT determines is necessary adopted the Protocol enrollment and comments related to the enrollment
for a particular participant. Therefore, disenrollment provisions with the agreement. One commenter expressed
we believe regulatory language requiring exceptions noted below. concern that in § 460.154(h) our
POs to provide information on excluded We removed the reference to the requirement that the enrollment
services would be inappropriate because Member Handbook because we found agreement contain a notice that a
PACE services are participant-specific the distinction between the Member Medicare participant may not disenroll
and excluded services for one Handbook and the enrollment from a PACE program at a Social
participant may become required agreement to be confusing. We define Security office seems likely to create
services for another participant. the minimum information that must be confusion and could be more
Comment: One commenter included in the enrollment agreement to appropriately handled by proper
recommended that the information incorporate those materials that would education of Social Security
supplied to prospective participants generally be expected to be included in Administration staff.
Response: Social Security emergency information to be posted in date of the capitation payment, they
Administration staff are unable to make his or her home which includes the need flexibility in establishing the
an eligibility determination for PACE phone number of the PO, and when effective date for Medicaid enrollment,
enrollment. The PO and SAA make the applicable, stickers for the PACE and should be permitted to adjust that
required determinations that a participant’s Medicare or Medicaid first month’s capitation payment.
prospective PACE enrollee meets the cards (or both) that indicate the Response: Our regulation at § 460.158
State’s NF eligibility criteria and can be individual is a PACE participant and requires that a participant’s enrollment
safely cared for in the community. include the phone number of the PO. in the program is effective on the first
Because most Medicare beneficiaries In addition, the PO must submit day of the month following the date the
are familiar with the Social Security participant information to CMS and the PO receives the signed enrollment
office in their community as the place SAA in accordance with established agreement. This is applicable for all
where they signed up for their Social procedures. participants regardless of Medicare or
Security and Medicare benefits, it is We also included a requirement that, Medicaid eligibility. Therefore, the
reasonable to assume that Medicare in the event there are changes in the effective date for Medicare and
beneficiaries would think that the Social enrollment agreement information at Medicaid payment will be the same,
Security office is the logical place to any time during the participant’s even if the participant is eligible for
enroll or disenroll from PACE. We enrollment, the PO must provide to the both programs.
included this requirement in our participant an updated copy of the
information and explain the changes to In an instance where there is a lag
regulations to ensure that all PACE
the participant and their representative time between the signing of the
participants understand that, unlike
in a manner they understand. enrollment agreement and its effective
other Medicare benefits, they cannot
Comment: One commenter requested date, the PO may choose to provide
enroll in or disenroll from PACE at a
clarification of the ‘‘established services to the newly signed enrollee.
Social Security office.
procedures’’ POs are required to use for However, any services provided are not
We are clarifying this requirement by
submitting enrollment information to considered ‘‘PACE’’ services until the
revising the regulatory language to state
CMS and the SAA. effective date of enrollment. Therefore,
that enrollees may not enroll or
Response: The ‘‘established services would only be covered to the
disenroll at a Social Security office.
Comment: Two commenters requested procedures’’ refers to CMS and SAA extent an individual’s existing health
we modify § 460.154(k) to require POs procedure for enrollment and payment. plan (for example, Medicare fee-for-
to include in the enrollment agreement CMS and the SAA notify the PO how to service or Medicaid) provided the
all services that are covered and not submit information regarding coverage. Should the PO choose to
covered through the PACE providers. enrollment. provide services outside the individuals
Response: We disagree with the Final rule actions: existing benefits package prior to the
commenters; PACE services are This final rule will finalize § 460.156 effective date of enrollment in PACE,
participant-specific as determined by as published in the 1999 interim final the PO would be liable for the cost of
the IDT and specified in the rule. providing these services.
participant’s plan of care. Therefore, Section 460.158 Effective Date of A State may choose to pay the PO for
identifying covered and non-covered Enrollment services for a participant prior to the
services could be misleading and effective date of enrollment whether on
potentially confusing for participants Consistent with the Protocol, this a fee-for-service or pro-rated capitated
and their family or representative. section established that a participant’s basis. However, the participant’s
Comment: One commenter requested enrollment in the PACE program is effective date of enrollment as a PACE
we modify § 460.154(t) to specify that effective the first day of the calendar participant is not established until the
the enrollment agreement contain the month following the date the PO first of the following month.
signature of the applicant or his or her receives the signed enrollment
Comment: A commenter asked what
designated representative, and the date. agreement.
Comment: Three commenters the PO’s responsibilities are for covering
Response: We agree with this nursing home care in the event that a
commenter, and are amending indicated that unless we require that
PACE enrollment be effective on the participant’s condition necessitates such
§ 460.154(t) to include ‘‘or his or her placement before the effective date of
designated representative’’ to sign the same date for both Medicare and
Medicaid, there is the potential that a enrollment.
enrollment agreement. Response: Section 460.150(c) requires
Final rule actions: participant could be enrolled in
Medicare a month earlier than they are that at the time of enrollment into
In this final rule we are revising:
• § 460.150(h) by clarifying that enrolled in Medicaid. The commenters PACE, an individual must be able to live
individuals may not enroll or disenroll indicated that as written, this in a community setting without
at a Social Security office. requirement is problematic for States jeopardizing his or her safety. If a
• § 460.154(t) to read ‘‘The signature that set the enrollment date for PACE on participant’s condition or situation
of the applicant or his or her designated a day other than the first day of the changes prior to the effective date of
representative and the date.’’ month following the date of the signed enrollment such that they can no longer
enrollment agreement. Commenters be maintained safely in the community,
Section 460.156 Other Enrollment indicated that potential PACE the PO, with SAA concurrence, may
Procedures participants may very likely be in deny the enrollment. Since the
We established this section to specify situations where they need to enroll enrollment was never implemented,
the documentation that must be before the beginning of the next month. there is no need to involuntarily
provided to a PACE participant who The commenters explained that since disenroll the enrollee. However, once
signs an enrollment agreement. capitation payment is tied to pull down the enrollment status has become
Specifically, a PACE participant must be dates for the Medicaid Management effective, a participant may not be
given a copy of the enrollment Information System and the effective disenrolled due to health status.
agreement, a PACE membership card, date of enrollment impacts the effective Final rule actions:
This final rule will finalize § 460.158 organization and that the deemed program. The continued eligibility
as published in the 1999 interim final eligibility continues until the next provisions at § 460.160(b)(2) avoid this
rule. annual recertification. While it is the unnecessary and disruptive cycling in
SAA’s responsibility to determine the and out of eligibility by allowing
Section 460.160 Continuation of
need for NF level of care, the PO has a participants to remain in the program
Enrollment
detailed knowledge of the day-to-day even though they do not currently meet
In this section, we specify that a care and service requirements of the the NF level of care requirement if a
PACE participant’s enrollment participants and would, therefore, be determination is made that, in the
continues until death regardless of better able to predict a participant’s absence of PACE services, they would
changes in health status unless the reaction to the loss of PACE services. reasonably be expected to meet the
PACE participant voluntarily disenrolls We invited comments on whether this requirement within the next 6 months.
in accordance with § 460.162 or is responsibility should be shared or In the 1999 interim final rule, we
involuntarily disenrolled in accordance carried out solely by either the SAA or solicited comments on whether the
with § 460.164. the PO. determination of continued eligibility
We incorporated the statutory Comment: Eight commenters should be a responsibility that should
requirement contained in sections supported differing requirements related be shared or carried out solely by either
1894(c)(3) and 1934(c)(3) of the Act for to continuation of enrollment. The the State administering agency or the
an annual recertification of need for NF commenters generally agreed with PACE organization. In considering the
level of care. We believe that the law annual recertification of NF eligibility. comments received, and in light of the
contemplated that reevaluations would Half of the commenters supported fact that it is the State’s responsibility to
be conducted by the SAA for all deeming the annual recertification a determine the need for nursing facility
participants, whether Medicaid eligible State responsibility after working with level of care, we have concluded that all
or not. the PO to make the determination. The States should develop appropriate
The statute provides that the annual remaining commenters viewed deeming criteria and implement a process
recertification may be waived for those a PO responsibility subject to State whereby continued eligibility
individuals for whom the SAA review or a joint State/PO activity. determinations can be made. However,
determines there is no reasonable One commenter did not support we recognize that the PO has knowledge
expectation of improvement or annual recertification, stating that of the care and service requirements of
significant change in condition. As a disenrolling a participant from the the individual participants and should
waiver may not be granted until the first program penalizes the participant and be consulted in making the
annual recertification is due, a IDT team for reaching their goals. determination of continued eligibility
participant for whom this requirement Five commenters responded to our based on these criteria. For this reason,
is waived would have been receiving request for input regarding whether we are revising § 460.160(b)(3)(i) to
services under the PACE program for at deemed eligibility should continue until specify that the SAA must establish
least a year. We believe it is unlikely, the next annual recertification. They criteria, in consultation with the PO,
especially in view of the average age unanimously agreed that the period of make a determination of deemed
and frailty of PACE participants, that a deemed eligibility should continue for continued eligibility based on a review
person who has not shown significant 12 months until the next annual of the participant’s medical record and
improvement in the past year would recertification is due. plan of care.
show enough improvement in the future Response: With the publication of the With regard to the comments on
to no longer need a NF level of care. The 1999 interim final rule and the annual recertification, we understand
law permits a waiver ‘‘during a period transition of PACE programs from the argument presented by the
in accordance with regulations’’ in those demonstration programs to permanent commenter that disenrolling a
cases where the SAA determines there provider status, the provisions regarding participant who does not meet the NF
is no reasonable expectation of continued enrollment in the program level of care at the time of recertification
improvement. Therefore, we provided changed. Under the demonstration penalizes the participant and the IDT for
in the 1999 interim final rule that such program, the NF level of care reaching their goals. However, the
a waiver should be for the life of the determination was a one-time annual recertification required at
participant. However, the reasons for certification prior to enrollment and § 460.160(b) is a statutory requirement
the waiver must be explicitly PACE participants were not recertified (sections 1894(c)(2)–(4) and 1934(c)(2)–
documented in the medical record. We as needing a NF level of care. While (4) of the Act). The recertification
indicated that we did not provide a sections 1894(c)(3) and 1934(c)(3) of the process is an important safeguard to
mechanism for reinitiating the Act, implemented a new annual ensure that PACE programs continue to
recertification process once a waiver certification requirement, the law serve individuals who have a health
was granted, and we invited comments balanced this requirement with an status comparable to those who
on this issue. important beneficiary protection in the participated in the demonstration
Finally, sections 1894(c)(4) and continued eligibility provisions of program. We believe the provisions
1934(c)(4) of the Act allow for the section 1894(c)(4) and 1934(c)(4) of the allowing the waiver of this requirement
continuation, or deemed eligibility, of Act. The continued eligibility on a case-by-case basis as well as the
participants who are determined, provisions take into account that a use of the deemed continued eligibility
through the annual recertification participant’s condition may have provisions provide important flexibility
process, to no longer meet the NF level improved such that he or she no longer and safeguards for States in
of care requirement but who, in the meets the NF level of care solely due to administering the program and would
absence of continued coverage under the services being received from the not result in penalizing the participant
PACE, would reasonably be expected to PACE program. Thus, being disenrolled or the PO.
again meet the NF level of care within from the program could result in a Regarding whose responsibility it is to
the next 6 months. We indicated that decline in which the person quickly determine or deem a participant’s
the determination is made by the SAA, needs a NF level of care once again and continued eligibility, we believe that
which may solicit input from the PACE would be eligible to re-enroll in the establishing whether a participant meets
the State’s criteria for NF level of care We also incorporated the following participant on the grounds that the
is a State responsibility. We believe this reasons for involuntary disenrollment individual has engaged in noncompliant
activity includes pre-enrollment or post- from the Protocol: behavior if such behavior is related to a
enrollment eligibility. We also (a) The participant moves out of the mental or physical condition of the
acknowledge that due to the gravity of PO’s program service area or is out of individual unless the individual’s
continued eligibility determinations, the the service area for more than 30 days behavior is jeopardizing his or her
SAAs should solicit input and unless the PO agrees to a longer absence health or safety or that of others. The
assistance from the PO in making these due to extenuating circumstances; term ‘‘noncompliant behavior’’ includes
determinations, but the SAA retains the (b) The PO is unable to offer health repeated noncompliance with medical
ultimate responsibility. care services due to loss of State advice and repeated failure to keep
Comment: Several commenters agreed licensure or contracts with outside appointments.
that a mechanism for reinitiating the providers. While we believe this definition
recertification process once a waiver We added as a reason for involuntary provides a necessary safeguard, we are
had been granted was not necessary disenrollment that the PO agreement not suggesting that a participant should
because waivers would only be granted with CMS and the SAA is not renewed be disenrolled at the first sign of
in cases where the possibility of or is terminated. We also incorporated, difficulty. We caution organizations to
improvement is extremely remote. at § 460.164(a)(4), as a reason for use this authority only as a last resort
involuntary disenrollment the statutory when all reasonable remedies (which
Response: We agree with the
provision regarding the annual must be documented in the medical
commenters and therefore have not
recertification of NF level of care. In all record) have been exhausted.
developed a mechanism for reinitiating
of these situations the disenrollment is
the recertification process once a waiver Based on sections 1894(c)(5)(B)(iii)
not a subjective determination made by
has been granted. and 1934(c)(5)(B)(iii) of the Act, we
the PO but is necessary due to the
Final rule actions: specified that proposed involuntary
application of objective criteria.
In this final rule we are revising disenrollments are subject to a timely
We did not incorporate the following
paragraph (b)(3)(i) to clarify that the review and final determination by the
reasons for disenrollment from the
SAA must establish criteria for use in SAA prior to the effective date of the
Protocol: the participant refuses to
making deemed eligibility proposed disenrollment. This provision
provide accurate financial information,
determinations. protects the participant from being
provides false information, or illegally
inappropriately disenrolled and
Section 460.162 Voluntary transfers assets. As these situations
provides for the continuation of services
Disenrollment would affect the determination of
until a final determination is made. We
Medicaid eligibility, we believe they
In accordance with sections invited comments on whether the
would actually prevent enrollment in
1894(c)(5)(A) and 1934(c)(5)(A) of the regulations should specify a timeframe
the first place. However, if the
Act, this section specifies that a PACE in which the review must be conducted
individual is already enrolled when
participant may voluntarily disenroll and, if so, what an appropriate
these situations occur or are discovered,
from the program without cause at any timeframe would be.
they may affect the participant’s
time. We received no public comments payment responsibility and thus lead to We received a large number of
on § 460.162. either voluntary disenrollment or comments regarding involuntary
Final rule actions: involuntary disenrollment based on disenrollment.
This final rule will finalize § 460.162 failure to pay premiums. Comment: Several commenters
as published in the 1999 interim final In order to incorporate the statutory requested that we expand the reasons
rule. provision regarding disruptive or for involuntary disenrollment to include
threatening behavior, we felt the need to the failure to pay any allowable fees and
Section 460.164 Involuntary share of costs including amounts
Disenrollment balance two concerns: (1) To protect
participants who are exhibiting difficult required as part of a participant’s
In accordance with sections behaviors from being disenrolled by the spenddown liability and post-eligibility
1894(c)(5)(B) and 1934(c)(5)(B) of the PO, and (2) to provide a safeguard for treatment of income amounts.
Act, we established this section to the PO, by permitting them to disenroll Response: Sections 1894(c)(5)(B) and
specify the conditions under which a a competent but noncompliant 1934(c)(5)(B) of the Act explicitly state
PACE participant can be involuntarily participant whose behavior disrupts the that the PO may involuntarily disenroll
disenrolled from a PACE program. The organization’s ability to furnish a participant for only one payment-
Protocol, in Part III, section D.1, adequate services to that individual for related issue, which is nonpayment of
describes various circumstances under reasons beyond the organization’s premiums.
which a participant may be control. Therefore, after consulting with However, CMS has the authority to
involuntarily disenrolled. SAAs, we defined a person who engages provide BIPA 903 waivers in instances
The statutory language at sections in disruptive or threatening behavior as: where the POs are unable to comply
1894(c)(5)(B) and 1934(c)(5)(B) of the a. A person whose behavior is with regulatory requirements (see
Act provides that a participant may only jeopardizing his or her health or safety § 460.26). We have approved several
be involuntarily disenrolled for or that of others; or BIPA 902 grandfathering requests and
nonpayment of premiums on a timely b. A person with decision-making BIPA 903 waiver requests regarding this
basis or for engaging in disruptive or capacity who consistently refuses to issue. However, to retain flexibility in
threatening behavior. In our regulations comply with his or her individual plan application of these waivers, we are not
at § 460.164(a)(1), we adopted the of care or the terms of the enrollment expanding the reasons for involuntary
requirement that a participant may be agreement. disenrollment for non-payment of

involuntarily disenrolled if they fail to However, in accordance with premiums in this final regulation.
pay or to make satisfactory paragraphs (c)(5)(B)(ii) of sections 1894 Comment: Three commenters
arrangements to pay any premium due and 1934 of the Act, a PO may not requested that we eliminate the
the PO after a 30-day grace period. involuntarily disenroll a PACE requirement for State review of an
involuntary disenrollment due to failure required by § 460.164(d) and (e), all Response: Documentation provided to
to pay a premium. pertinent documentation must be the SAA by the PO should include all
Response: We believe the submitted to the SAA for review before relevant information supporting their
commenters’ concern about the SAA the PO may implement an involuntary reason for initiating an involuntary
review of a proposed involuntary disenrollment. disenrollment. Our regulations do not
disenrollment due to failure to pay Comment: One commenter agreed that preclude the SAA from requesting
premiums may be that the process the breakdown in the physician/IDT and additional documentation if it feels that
would cause further delay and present participant relationship is not a reason the organization has not provided
a financial hardship for the POs. The for involuntary disenrollment. adequately documented grounds for
intent of this requirement is oversight Response: We appreciate the disenrollment.
by the SAA to ensure that the commenters support. We believe that a Comment: One commenter expressed
disenrollment documentation reflects breakdown in the IDT/participant support for CMS’ attempt to distinguish
adequate grounds for involuntary relationship is an unacceptable reason between behavior that jeopardizes
disenrollment. The review was for involuntary disenrollment and health and safety and noncompliant
established as a check in the process to would undermine the participant’s right behavior. They requested further
ensure an important participant to participate in treatment decisions. clarification as to whether a PO may
protection. We are confident the SAAs Our expectation in this situation is that disenroll a participant for noncompliant
have established procedures that ensure the PO would work with the participant behavior if the behavior is not related to
the State review is completed prior to and the IDT to establish a mutually a mental or physical condition of the
the effective date of the proposed acceptable resolution. Should the participant. The commenter questioned
disenrollment. participant remain dissatisfied after the whether noncompliant behavior would
Comment: One commenter requested PO attempts to reestablish an acceptable be considered disruptive behavior if the
that we include the disruptive or working relationship, it would be the participant is competent and the
threatening behavior of family members, participant’s right to voluntarily noncompliance was addressed in the
where they are involved in health care participant’s care plan.
disenroll. We view this breakdown as an
or decisions at the participant’s request, Response: We note that § 460.164(b)
incident the PO would review as a part
as a reason for involuntary does not distinguish between disruptive
of its QAPI plan.
disenrollment. behavior and noncompliant behavior,
Response: It is not our intention to Comment: Commenters supported a
but rather defines noncompliant
jeopardize the safety of those providing variety of timeframes for SAA review of behavior as disruptive behavior,
care. However we expect POs to make involuntary disenrollments. consistent with the statute. The PO may
every effort to resolve such situations Recommended timeframes included no involuntarily disenroll a participant for
before considering disenrollment. required timeframe, in a timely manner, noncompliance with their plan of care
Sections 1894(c)(5) and 1934(c)(5)of the 72 hours, up to 30 days (depending on provided the noncompliance is not
Act specify the reasons a PACE Program the cause of the disenrollment, related to a mental or physical
eligible individual may be disenrolled, especially where the participant’s health condition.
including ‘‘for engaging in disruptive or and safety may be in jeopardy or the Comment: Two commenters requested
threatening behavior, as defined in such participant has not paid their that we eliminate noncompliance as a
regulations (developed in close premiums). Commenters suggested that reason for involuntary disenrollment.
consultation with State administering the involuntary disenrollment be Other commenters were concerned that
agencies).’’ deemed approved if the SAA does not we unduly expanded the definition of
In consultation with SAAs, we have respond within a reasonable timeframe. disruptive or threatening behavior to
defined disruptive or threatening Response: Our experience to date has include a competent participant who
behavior in our regulations at been that States have developed consistently refuses to comply with his
§ 460.164(b) as including consistent adequate procedures and are in a or her individual plan of care or terms
refusal by a competent participant to position to know when a particular of the PACE enrollment agreement.
comply with the plan of care. If PO staff situation warrants an expedited review. Another commenter indicated that
or contractors cannot furnish necessary While we understand the concerns this type of disenrollment violates the
care because of the threatening behavior behind the suggestion that involuntary participant’s right to refuse treatment.
of someone other than the participant, disenrollments should be deemed Therefore, they requested that
then we expect the PO to establish approved if the SAA has not responded noncompliance be eliminated as a
alternative arrangements that would not within an appropriate timeframe, we are reason to disenroll a participant.
disrupt the PO’s ability to provide not including this provision in this final Response: We disagree with the
adequate services and to include those rule. We view the State review as an commenters’ suggestion that we delete
arrangements in the participant’s plan of important beneficiary protection and are noncompliance as a reason to
care. Such arrangements might include concerned that a specific timeframe involuntarily disenroll. We do not
providing services at the PACE center, might unduly constrain or limit the believe that a disenrollment based upon
arranging for alternative living State’s ability to provide an adequate noncompliance by a competent
arrangements, or obtaining the review. Therefore, we are retaining participant violates their right to refuse
participant’s agreement to control the § 460.164(e) and will require SAA treatment.
actions of the caregiver or family review in a timely manner for The competent participant actively
member during the time PO staff are on involuntary disenrollments. participates in establishing their plan of
the premises. Should the participant Comment: One commenter suggested care, and it is at this juncture that the
refuse to cooperate with the plan of care we give the State the authority to participant should raise any objections
and all efforts fail, as a last resort the PO consider all relevant evidence in their to the components of their plan of care
may submit a proposal to involuntarily review of proposed involuntary and refuse treatment. At the time the
disenroll a competent participant for disenrollment, not to limit review to the participant refuses the proposed
refusal to comply with their plan of sufficiency of reasons shown in the treatment, the IDT should present and
care, as provided in § 460.164(b). As records. discuss other treatment options. If the
participant has issues with the located at 42 CFR 431.200 through Medicare and Medicaid programs for
treatment after the establishment of the 431.250. which the individual is eligible.
plan of care, there should be discussion Comment: One commenter indicated We received no comments on this
with his or her IDT. Because of the that there is no need for SAA review of section.
cooperative nature of establishing the proposed disenrollments due to Final rule actions:
plan of care, once the participant has nonpayment of premiums. This final rule will finalize § 460.168
agreed with the plan of care they are Response: As a participant protection, as published in the 1999 interim final
committed to following it. If the we believe the SAA should review all rule.
participant later refuses to comply with involuntary disenrollments, including
the agreed upon plan of care and the Section 460.170 Reinstatement in
involuntary disenrollment related to
IDT and the participant are unable to PACE
nonpayment or failure to make
agree to an alternative treatment, the PO satisfactory arrangements to pay Section 460.170 provides that a
can involuntarily disenroll that premiums. previously disenrolled participant may
participant. We believe that the Final rule actions: be reinstated in the PACE program.
noncompliant behavior will disrupt the In this final rule, we are finalizing However, we did not adopt the Protocol
provision of care to the participant and § 460.164 as published in the 1999 provision limiting a participant to a one-
jeopardize their health or safety. interim final rule. time-only reinstatement following a
Additionally, potential participants voluntary disenrollment. We believe
are informed of the terms of the Section 460.166 Effective Date of that frail elderly individuals may
enrollment agreement during the Disenrollment experience living arrangement changes
enrollment process and signing of the We require that the PO must use the that take them in and out of a PO’s
enrollment agreement indicates the most expedient process allowed for by service area and result in unavoidable
person’s willingness to comply with Medicare and Medicaid procedures to disenrollments. However, we included
those terms. We believe we must ensure that the disenrollment date is the Protocol provision that a PACE
provide this safeguard to allow POs to coordinated between Medicare and participant may be reinstated in the
disenroll competent but willfully Medicaid for participants who are PACE program with no break in
noncompliant participants if their dually eligible for both programs and coverage if the reason for the
behavior disrupts the organization’s that reasonable advance notice is given disenrollment was failure to pay
ability to furnish adequate services and to the participant. In addition, until premiums and the PACE participant
safeguard the participant’s health and such time the enrollment is terminated, pays the premium before the effective
safety. PACE participants must continue to use date of the disenrollment.
Comment: One commenter questioned PO services and remain liable for any Comment: One commenter
the requirement that the State review premiums, and the PO must continue to recommended that the State be granted
involuntary disenrollments initiated by furnish all needed services. the flexibility to set criteria for multiple
the PO without respect to the enrollee Comment: One commenter re-enrollments of participants after
payer status and asked if the SAA recommended that an involuntary involuntary disenrollment. Two other
review was considered to be a final disenrollment should not be effective commenters indicated that it would be
determination that can be appealed. until Medicare and/or Medicaid appropriate to restrict the number of
Response: As specified in eligibility has actually been established times an individual may be reinstated.
§ 460.164(e), the SAA must review all and alternative providers are available One commenter suggested a one-time
proposed involuntary disenrollments, to provide the services in the reinstatement or, alternatively, that the
regardless of payer status, in order to participant’s care plan. PO be granted the discretion to
determine that the PO has adequately Response: We believe the determine whether to reinstate a
documented acceptable grounds for disenrollment date must be the same for participant multiple times based upon
disenrollment. This was one of the Medicare and Medicaid participants. the unique circumstances of the
issues specifically discussed with the We intend that no disenrollment would previous disenrollment. The commenter
State workgroup in developing the 1999 become effective until the participant is recommended that the PO identify the
interim final rule. At that time, the appropriately reinstated into other circumstances for reinstatement and
States correctly predicted that this Medicare and Medicaid programs and establish policies and procedures prior
provision would not lead to a major alternative services are arranged. to implementation of the PACE
increase in workload. If the State Final rule actions: program.
supports the PO’s decision to In this final rule, we are finalizing Response: We believe the decision to
involuntarily disenroll the PACE § 460.166 as published in the 1999 allow participants the ability to be
participant, the participant may pursue interim final rule. reinstated repeatedly is appropriate in
an external appeal. States must provide some cases, especially for participants
an alternative to the Medicaid State Fair Section 460.168 Reinstatement in who voluntarily disenroll. Therefore, we
Hearing process for Medicare-only Other Medicare and Medicaid Programs are not inclined to limit the number of
participants because Medicare’s We established this section to allowable reinstatements. However, if a
independent review entity does not hear prescribe the PO’s responsibility to participant has been involuntarily
involuntary disenrollment appeals. facilitate a participant’s reinstatement in disenrolled, and wishes to re-enroll in
The SAA review of involuntary other Medicare and Medicaid programs the PO, the issue that caused the
disenrollments is a final determination, after disenrollment. We require that the involuntary disenrollment must be
which would allow a Medicaid-eligible PO make appropriate referrals and resolved, before the participant can be
participant to pursue a Medicaid Fair ensure that medical records are made reinstated.
Hearing. POs should contact their SAA available to new providers in a timely Final rule actions:
for details on their State’s Fair Hearing manner. In addition, we require that the This final rule will finalize § 460.170
process. Medicaid regulations regarding PO work with the SAA and CMS to as published in the 1999 interim final
the State Fair Hearing process are reinstate the participant in other rule.
Section 460.172 Documentation of Section 460.180 Medicare Payment to Under the PACE demonstration
Disenrollment PACE Organizations program, the Medicare capitation rate
for each PO was calculated using CMS’
We established § 460.172 to specify Section 1894(d)(1) of the Act requires standard Adjusted Average Per Capita
that a PO must have procedures to that POs be paid monthly payments of Cost (AAPCC) methodology (also
document the reasons for all voluntary a capitation amount for each eligible referred to as the demographic rate
and involuntary disenrollments, make enrolled PACE program individual, in methodology) developed in accordance
the documentation available for review the same manner and from the same with the 1982 Tax Equity and Fiscal
by CMS and the SAA, and use the sources as payments that are made to a Responsibility Act to pay risk-based
information on voluntary M+C (now MA) organization under health maintenance organizations for
disenrollments in the PO’s internal section 1853 of the Act. In accordance Medicare enrollees. However, instead of
QAPI plan. with section 1894(d)(2) of the Act, PACE using the usual adjustments for age, sex,
Comment: One commenter capitation amounts are based upon welfare status, institutional status,
recommended that the information on payment rates established for the employment status, and disability, there
all disenrollments be used in quality purposes of payment under section 1853 was one frailty adjuster of 2.39 for all
assurance. of the Act and shall be adjusted to take PACE participants except those
Response: It is our intent to use only into account the comparative frailty of diagnosed with ESRD. Therefore, in
the voluntary disenrollment information PACE enrollees and other factors the accordance with 1894(d)(2) of the Act,
in QAPI as these disenrollments are Secretary determines appropriate. as of January 1, 1998, the Medicare
more likely to be impacted by Payments of a capitated amount are to capitation rate paid to PACE
participant impressions of the quality of be adjusted in the manner described in demonstration programs was calculated
their care and their satisfaction. section 1853(a)(2) or section using the M+C (now MA) AAPCC rates
Involuntary disenrollment is not usually 1876(a)(1)(E) of the Act; that is, with an additional frailty adjuster of
initiated because a participant is retroactively adjusted to take into 2.39 to account for the higher costs
unhappy with their care but rather the account any difference between the related to caring for this frail
participant has not met their actual number of participants and the population.
responsibilities to the PO. Therefore, we estimated number of participants to be Subsequently, the BBA mandated
only require that voluntary enrolled in determining the amount of M+C (now MA) plans to implement a
disenrollment information be used in the advance payment. risk adjusted methodology starting
QAPI. Consistent with the basic January 1, 2000. However, PACE
methodology applied to M+C (now MA) payment continued to be based on the
Final rule actions:
plans at the time of publication of the frailty adjusted demographic rate
This final rule will finalize § 460.172 methodology until refinements to the
as published in the 1999 interim final 1999 interim final rule, Medicare paid
monthly payments based on an interim risk adjustment methodology specific to
rule. PACE were completed. Implementation
per capita rate per participant. Under
Subpart J: Payment that methodology, separate rates were of the risk adjustment payment
established for Part A and Part B. The methodology with PACE specific
The 1999 interim final rule described adjustments began January 1, 2004.
Medicare payment as follows. Sections PO received payments based on each
Changes to PACE payment
1894(d) and 1934(d) of the Act requires participant’s entitlement to Medicare
methodology are proposed in the annual
that payment to a PO be based on a Part A and Part B. Therefore, if the
Advance Notice of Methodological
capitation amount. The Medicare participant was entitled to Part A
Changes for Medicare Advantage
capitation amount is based upon the benefits, but was not enrolled under
Payment Rates (Advance Notice), along
M+C (now MA) payment rates Part B, the PO received only the
with changes to MA methodology. After
established under section 1853 of the monthly capitation rate established for
publication of the Advance Notice, the
Act. The Medicaid capitation amount is Part A. For Medicare Part A-only
public is given a two-week period to
negotiated between the State and the participants who are also eligible for
provide comments. The final changes
PO. Medicaid, the State is obligated to pay are described in the Announcement of
Medicare Part B premiums under Medicare Advantage Payment Rates
The following basic principles section 1902(a)(10) of the Act.
distinguish the PACE financing model. (Announcement). The Announcement is
Therefore, POs needed to verify at the published the first Monday in April,
• Obligation for payments is shared time of enrollment whether the
by Medicare, Medicaid, and individuals and the Advance Notice is published 45
participant was dually eligible for days before that. Any changes that have
who do not participate in Medicare and Medicare and Medicaid and whether the
Medicaid. been made to PACE payment
participant has Medicare Part A and methodology since the publication of
• Medicare, Medicaid, and private Part B. As required in 1999 and still the 1999 proposed rule were dealt with
payments for acute, long-term care, and currently required, payment for a through that process.
other services are pooled. participant begins upon the effective Many of the changes to the PACE
• The capitation rates paid by date of enrollment (see § 460.158). payment methodology since 1999 are
Medicare and Medicaid are designed to Under section 1894(d)(2) of the Act, based on the January 1, 2004
result in cost savings relative to the capitation amount should be implementation of the CMS-
expenditures that would otherwise be adjusted to take into account the Hierarchical Conditions Category (CMS–
paid for a comparable NF-eligible comparative frailty of PACE participants HCC) based MA risk adjustment
population not enrolled under the PACE and other factors the Secretary payment methodology with refinements
program. determines to be appropriate. As for PACE. These changes are reflected

• The PO accepts the capitation explained below, a frailty factor and an throughout § 460.180. The risk
payment amounts described in this adjustment factor for PACE participants adjustment payment methodology,
section as payment in full from who have ESRD were applied to the history and authority are initially
Medicare and Medicaid. appropriate demographic payment rate. described in the Advance Notice and
Announcement for calendar year 2004, changes in payments and effects related On January 1, 2004, PACE began the
with the refinements described in to risk adjustment. However, due to the phase-out of the demographic payment
subsequent Advance Notices and additional refinements that were made methodology adjusted by the 2.39 frailty
Announcements. Advanced Notices and to the PACE payment, the adjuster and phase-in of the new MA
Announcements can be found on the implementation of the risk adjustment risk-adjusted payment methodology. To
CMS Web site at http:// phase-in was delayed for PACE. The ease the transition, the rates will blend
www.cms.hhs.gov. phase-in schedule for PACE will lag the a gradual decreasing amount of the
The purpose of risk adjustment is to phase-in of MA risk adjustment by one demographic payment methodology
use health status indicators to improve year. The additional refinements to the adjusted by the 2.39 frailty adjuster and
the accuracy of payments and establish risk adjustment model for PACE, a gradual increasing amount of the new
incentives for plans to enroll and treat mentioned above, surrounded the frailty
MA risk-adjusted payment
less healthy Medicare beneficiaries. The adjuster. A deferral was needed so that
methodology. The blended phase-in
risk adjustment model was phased-in CMS could study the applicability and
for all MA plans. The gradual phase-in impact of risk adjustment on capitated rates for PACE are provided in the
provided a safeguard against abrupt payments for the frail elderly. following table.
Percent frailty Percent risk

adjusted de- adjusted rate
Calendar year mographic rate (CMS–HCC
(AAPCC times times frailty
2.39) score)
2004 ......................................................................................................................................................................... 90 10
2005 ......................................................................................................................................................................... 70 30
2006 ......................................................................................................................................................................... 50 50
2007 ......................................................................................................................................................................... 25 75
2008 ......................................................................................................................................................................... 0 100
The demographic payment the variations in expenditures for frail adjustment and factors were initially
methodology referenced above, which is community populations. We determined described in the CY 2004 Advance
the payment methodology that is being that it was appropriate to augment risk Notice and Announcement of MA
phased out, was used at the time of the adjustment with a frailty adjustor for Payment Rates. The CY 2004 Advance
interim final rule in 1999. Under that functionally impaired community Notice and Announcement of MA
methodology, the Medicare capitation residents in PACE. The purpose of the Payment Rates can be found on the CMS
rate paid to PACE demonstration PACE frailty adjustment is to predict the Web site at: http://www.cms.hhs.gov/
programs was calculated using the MA Medicare expenditures of community MedicareAdvtgSpecRatesStats/
AAPCC rates with an additional frailty populations with functional Downloads. We continue to refine our
adjuster of 2.39 to account for the higher impairments that are unexplained by risk adjusted payment methodology to
costs related to caring for this frail risk adjustment. Therefore, we ensure that capitated payments to POs
population. developed a payment approach that are accurate and take into account the
As discussed above, section 1894(d) adjusts the risk adjustment payment to comparative frailty of PACE enrollees.
of the Act mandated that the Medicare an organization according to the frailty Any changes to our current PACE
capitated payments to POs be based on of the organization’s enrollees. To payment methodology will be described
MA rates and be adjusted to account for clarify, the PACE frailty adjustment in subsequent Advance Notices and
the comparative frailty of PACE currently is made in addition to the risk Announcements.
enrollees. The CMS–HCC payment adjustments made under the MA Comment: We received numerous
approach described herein is a further payment methodology. comments, recommendations and
refinement to the risk adjustment The PACE frailty adjustment is based concerns related to the Medicare
payment methodology to ensure that on activities of daily living (ADLs), a payment methodology provided in the
capitated payments to POs that serve proxy for functional impairment, and 1999 interim final rule. Overall, the
frail community-based populations are applies only to community-based and commenters disapproved with changing
accurate. short-term institutionalized participants the established payment methodology,
The CMS–HCC payment model (that is, the frailty adjustment for long- discontinuing the 2.39 frailty
described above is the basis of the new term institutionalized participants is adjustment, and speculation regarding
PACE payment. The individual zero). how the Principal Inpatient-Diagnostic
participant risk score for MA and PACE The prospective frailty adjustment Cost Group (PIP–DCG) methodology risk
is calculated using the appropriate was designed to adjust for the average adjustment payment methodology
CMS–HCC model (community, long- difference between the predicted and would work, including the rate amounts
term institutionalized, ESRD or new actual expenditures for each group. The and how an MA payment methodology
enrollee) based on the participant’s prior year’s functional impairment data would be appropriate for calculating the
status. Risk adjustment explains the are used to predict the next year’s PACE capitation payments. They also
future Medicare expenditures of payment adjustment. Functional data requested we continue to explore
individuals based on diagnoses and are submitted to CMS, where they are methods to capture the frailty status of
demographics. The risk score is calculated to establish the PO’s frailty PACE participants. Several commenters
computed for each participant for a score, which is then applied to each also inquired how ESRD payment
given year and applied prospectively. participant’s risk adjusted payment. The would be calculated.
The risk score generally follows the frailty adjustment approach is applied Response: The PIP–DCG risk
beneficiary for one calendar year. But in conjunction with the CMS–HCC risk adjustment methodology has been
risk adjustment does not explain all of adjustment model. The frailty replaced by the CMS–HCC risk
adjustment model, that provides New ESRD Risk Adjustment Model amount to the methodology used to
numerous adjustments related to Simultaneous with the calculate the risk adjusted capitation
participant demographics, implementation of the CMS–HCC model payment amount is consistent with the
characteristics, and diagnosis. CMS for risk adjustment, we have statutory intent that the program
provided extensive technical assistance implemented a new approach to agreement should specify how the PO
and training to the NPA and POs prior improve payments on behalf of will be paid. Because of the change in
to the phase-in of risk adjustment for enrollees with ESRD. The approach is the MA payment methodology enacted
PACE. We also provided guidance and the same for both PACE and MA plans. by the Congress, it is no longer feasible
training on the ESRD payment Section 605 of BIPA required CMS to to include the amount of payment. We
methodology. adjust the approach to computing ESRD will therefore include the payment
methodology in the program agreement
We believe that the comments payment rates to reflect the method
as a way to give effect to the intent of
presented have been answered to the used in the ESRD social HMO (S/HMO)
the PACE statute.
satisfaction of the commenters. Further demonstration program then in place. Under the demographic rate
information and specific MA risk We interpreted this to mean that ESRD methodology, the capitation amount per
adjustment rate updates and MA payments to MA organizations should person was the same for all participants
documentation pertinent to risk employ the same basic approach used (except participants with ESRD) and
adjustment methodology can be found under the ESRD demonstration was multiplied by the number of
on the CMS Web site at http:// referenced in section 605. To implement participants. Under the new risk
www.cms.hhs.gov. Annual rate updates the BIPA provision for 2002, CMS adjusted methodology each participant
are also published in the Advanced increased the base rates by three percent receives a individualized diagnosis-
Notice of Methodological Changes for and began adjusting payments with age related payment. There is no way for
Calendar Year (CY)—Medicare and sex factors, while continuing to CMS, the SAA, or the PO to predict
Advantage (MA) Payment Rates and are review other options. what diseases or number of diseases
also located on the CMS Web site. Effective January 2005, MA enrollees future participants will have. Therefore,
with ESRD were incorporated into we have replace the capitation amount
End-Stage Renal Disease (ESRD) diagnosis-based risk adjustment using a with the methodology for calculating
Adjustment Under the PACE different version of the CMS–HCC the capitation amount in the PACE
Demonstration Program model. (A list of coefficients for each program agreement in Appendix M.
disease group can be found at http:// Comment: Commenters suggested that
Under the PACE demonstration www.cms.hhs.gov.) The new ESRD
program, POs were paid in two ways for the actual fee-for-service cost factors be
payment model aligned us further with utilized in developing the new MA
Medicare ESRD participants. Each the method used in the ESRD S/HMO
month for each ESRD participant, the capitation rates and that the regulation
demonstration program by allowing us should include language which allows
PACE program was paid the AAPCC to capture co-morbidity information in
Part A and Part B ESRD rate. The rate alternatives to the MA methodology.
addition to demographic information Commenters also requested that CMS
was not adjusted by the 2.39 frailty and basic disease markers for ESRD
factor. Instead, PACE programs received continue to explore methodology
beneficiaries. ESRD status is recognized options and test the validity of various
additional payment each month for the in the payment year. The data for 100 methods of capturing the true frailty
actual cost of services in excess of the percent of ESRD beneficiaries were used status of PACE participants.
AAPCC ESRD payment rate. As section to develop the model. The CMS–HCC Response: Section 1894(d) of the Act
1894(d) of the Act does not authorize model for ESRD is described in the directs that PACE payment be based on
payment of actual cost, we conducted Advance Notice and Announcement for MA payment rates, adjusted for frailty of
an analysis of 1994 Medicare claims Calendar Year 2005, which is available PACE enrollees and other factors as
data for ESRD patients. The analysis on the CMS Web site. Any updates will appropriate. The differences in the cost
shows that Medicare expenditures for be described in future Advance Notices of caring for the community based frail
ESRD patients who are 75 or older are and Announcements. population led to the implementation of
significantly higher than expenditures In this final rule, we are revising a frailty adjustor being added to the risk
for all ESRD patients. This finding was § 460.180(b)(4) to reflect the new ESRD adjustment methodology of the CMS–
fairly constant over time. The group of risk adjustment model. HCC model.
ESRD patients who are 75 or older tend We are also revising § 460.180(b)(1) to Comment: In the 1999 interim final
to be very frail and in most cases would require that the PACE program rule, we also solicited comment related
be considered NF-eligible. This group of agreement contain the ‘‘methodology’’ to the data collection that would be
elderly ESRD patients were used as a for establishing the monthly capitation required to develop a specific risk
proxy for ESRD patients who are NF- rather than the ‘‘amount’’ of the adjustment methodology for PACE.
eligible. ESRD patients who are 75 or monthly capitation. Section 1894(d)(2) Numerous commenters presented
older have 46 percent higher Part A of the Act, requires that capitation their concerns that CMS sets Medicare
expenditures relative to all ESRD amount be specified in the program payments to PACE providers based on
patients, while their Part B expenditures agreement. As such, under the new risk the rate CMS pays to a MA organization.
are 36 percent higher. We applied this adjustment methodology, specifying the The commenters questioned whether
information to calculate adjusters for capitation amount in the program the MA payment methodology is an
ESRD patients enrolled in PACE. Thus, agreement is operationally impractical. appropriate foundation for calculating
the Part A ESRD adjuster was 1.46 and We believe that continuing to include capitation payments for PACE providers
the Part B ESRD adjuster was 1.36. the capitation amount would require considering the inherent problems with
These ESRD adjustment factors were CMS, the SAA, and the PO to establish applying the PIP–DCG methodology to
established at the time the 1999 interim and sign new program agreements each PACE and the decision to delay
final rule was published as an interim time a new individual enrolled in the implementation of risk adjustment for
measure pending development of a risk PACE program. We believe that the PACE. They also believe that a risk-
adjustment methodology. change from including the capitation adjustment methodology that relies on
inpatient diagnosis as a determinant for the new risk adjusted payment payment amount is negotiated between
payment is an inappropriate payment methodology will occur over a 5-year the PO and the SAA and can be
methodology for innovative programs period. Implementation of the MA risk renegotiated on an annual basis.
such as PACE that diligently strive to adjustment payment methodology for As the statutory requirements do not
minimize inpatient days through PACE programs was delayed until 2004 differ from the Protocol requirements
aggressive preventative and primary to provide CMS with sufficient time to regarding Medicaid payments under the
care and serve a frail elderly population evaluate differences in cost of care for PACE demonstration program, the
with multiple chronic and complex the frail elderly community dwelling regulations mirror the Protocol
health conditions. population. requirements. We received three
Response: The Congress, through In response to the commenters, the comments pertaining to Medicaid
BIPA, required the implementation of a risk adjustment methodology for PACE, payment.
payment model for M+C organizations includes a frailty adjustment based on Comment: One commenter stated that
using not only diagnoses from inpatient the functional status of the PO’s considering the relationship between
hospital stays, but also from ambulatory participant population. PACE payments and M+C (now MA)
settings, beginning in 2004. In addition, After the development of the MA risk methodologies, there should be ample
as described previously, CMS applies a adjustment model and of PACE specific safeguards to assure that PACE entities
frailty adjuster to an individual modifications to the MA payment can reasonably be expected to provide
participant’s risk-adjusted payment to methodology, CMS had discussions high quality services at these (Medicaid)
account for the frailty of PACE with NPA regarding implementation of payment levels. The commenter was
participants. the new PACE payment methodology. also concerned that Medicaid payments
Comment: The commenters also Comment: A commenter asked if the are set at the state, not national level,
indicated that risk adjustment for PACE Medicare capitation rate would be based and suggested we should examine the
must account for PACE participants’ on the location of the program or the variation in state payments in relation to
functional status and cognitive residence of the participant if the outcomes.
impairment as well as other factors that program spanned more than one county. Response: We believe this commenter
may systematically impact Medicare Response: The Medicare capitation was indicating their opinion that the
utilization and costs in the fee-for- rate is based on the county in which the Medicaid payment amount in
service environment and the need to participant resides. conjunction with the Medicare payment
base payment methodology (and related Final rule actions: was ample to provide the highest
reporting requirements) for PACE In this final rule, we are amending quality care.
programs on Medicare expenses § 460.180 to: Medicaid costs vary depending on the
incurred by comparable individuals • Reflect statutory changes in the State plan and home and community-
outside PACE, not utilization of capitation payment methodology used based services offered in the State. The
Medicare covered expenses by PACE to determine payment amounts for MA Medicaid capitation payment must be
participants themselves. plans, and thus payment amounts for less than the amount that would
Because the 1999 interim final POs; and otherwise have been paid under the
regulation was not specific in regard to • Require that the PACE program State plan if the participant were not
the manner in which MA rates will be agreement contain the payment enrolled in a PACE program. As costs
established in the future or the manner methodology for establishing the and benefits vary by State, we do not
in which CMS will adjust MA rates for monthly capitation rate, rather than believe it would be appropriate to set
frailty and other factors determined by specifying a payment amount, in Medicaid rates at a national level.
CMS to be appropriate, they requested accordance with the changes to the MA Comment: A commenter indicated
that any process that CMS employs to capitation payment methodology. that to date POs have operated with a
modify the current rate-setting fixed rate that does not change based on
Section 460.182 Medicaid Payment the participant’s health status and
methodology for PACE, include
consistent and timely communication Section 1934(d) of the Act requires a suggested testing alternative
with POs. State to make prospective monthly approaches. The commenter offered to
They also recommended that CMS capitated payments for each PACE assist CMS with testing an alternative
consult with NPA regarding the program participant eligible for medical approach involving a rate change (at
reasonableness and impact of proposed assistance under the State plan. The specified intervals) if there is significant
changes well in advance of a final capitation payment amount must be change in a participant’s health status.
determination regarding a particular specified in the PACE program The commenter also requested that
rate-setting approach and its agreement and be less, taking into waivers be considered to facilitate
implementation. account the frailty of PACE participants, testing this payment approach.
Response: In response to our than the amount that would otherwise Response: We appreciate the
solicitation for comment we received have been paid under the State plan if commenter’s offer, however, the statute
numerous comments on the data the individuals were not enrolled in a does not address risk adjustment for
collection required to develop a PACE- PACE program. Medicaid rates in PACE. As explained
specific risk adjustment methodology. A national Medicaid rate-setting above, CMS does not want to impose a
The 1999 interim final rule discussed a methodology for PACE has not been rate setting methodology on States.
MA payment methodology that no established. Rather, each State that States have flexibility to implement a
longer applies to PACE payment since elects PACE as a Medicaid State plan risk adjusted payment methodology that
that MA payment methodology is in the option must develop a payment amount would recognize differences in health
process of being phased out as required based on the cost of comparable services status among participants should they
by BIPA. for the State’s nursing-facility-eligible choose to do so consistent with the

Implementation of a new risk adjusted population. Generally, the amounts are requirements of 1934(d)(2) of the Act.
payment methodology based on the based on a blend of the cost of nursing Comment: The third commenter asked
CMS–HCC model began in 2004. The home and community-based care for the if the requirement at § 460.182(b)
transition to 100 percent payment using frail elderly. The monthly capitation precludes the establishment of multiple
rate cells, with different payment levels the PACE participant. The income that using institutional rules, including use
that may change based on an annual remains after these deductions are of the special income level group
reassessment, that address the frailty applied is the amount a participant is described at section
level and health status of the liable to pay toward the cost of the 1902(a)(10)(A)(ii)(IV) of the Act.
participant. PACE services. Therefore, an argument We received no public comments on
Response: States are afforded the could be made that sections 1934(b) and § 460.184.
flexibility to establish various payment (i) of the Act are in conflict since under Final rule actions:
levels reflective of frailty levels as long section 1934(i) of the Act, PACE This final rule will finalize § 460.184
as payment is prospective and does not participants may incur limited liability as published in the 1999 interim final
change before the annual renegotiation for part of the cost of their services. rule.
of the Medicaid capitation rate due to a However, we have concluded that the Section 460.186 PACE Premiums
change in health status. Section type of Medicaid participant liability
460.182(b)(4) permits capitation rates to permitted by section 1934(i) of the Act Neither section 1894 nor section 1934
be renegotiated on an annual basis. It is not cost sharing prohibited by section of the Act addresses the premiums a PO
would be the responsibility of the State 1934(b)(1)(A)(I) of the Act. can charge a PACE participant. As a
Medicaid Agency to ensure that Section 1902(a)(17) of the Act permits result, we have adopted most of the
payments for participants are accurately an individual (or family) who has more PACE premium requirements in this
made for the appropriate payment level. income than allowed for Medicaid section from Part VI, section D of the
Comment: A commenter asked if the eligibility to reduce excess income by Protocol. It is important to note that the
requirement at § 460.182(c) precludes incurring expenses for medical or term ‘‘premiums’’ as used in this
risk sharing on losses and profits on the remedial care to establish Medicaid regulation does not include spenddown
Medicaid services. eligibility. However, this spenddown liability under 42 CFR 435.121 and
Response: Under sections 1894 and process is used in establishing Medicaid 435.831, or post-eligibility treatment of
1934(f)(2)(B)(v) of the Act, the PO must eligibility rather than being the type of income under § 460.184. This use of the
be at full financial risk. The State may cost sharing prohibited by section word premiums is narrower than the
not share risk with the PO. 1934(b)(1)(A)(I) of the Act. way the word is used in the Protocol,
Accordingly, § 460.182(c) states that We interpret section 1934(b)(1)(A)(i) where a participant’s ‘‘share of cost’’
the PO must accept the capitation of the Act, to refer to deductibles, responsibility under Medicaid is
payment as payment in full for copayments, coinsurance or other cost referred to as a type of premium. In
Medicaid participants and may not bill, sharing beyond participant liabilities addition, POs may continue to collect
charge, collect, or receive any other related to Medicaid eligibility. Any any liability due them under Medicaid
forms of payment from the SAA. other reading of the law would make spenddown and post-eligibility
Therefore, the PO cannot share the risk section 1934(i) of the Act merely processes, but that liability is not a
with the State under stop-loss surplusage and not meaningful. premium.
provisions. Therefore, to give significance to these We specify that a participant’s
POs are permitted to purchase stop- sections of the Act, we provided in monthly premium responsibility
loss insurance from entities in the form § 460.184, which implements section depends upon his or her eligibility
of reinsurance, which is discussed in 1934(i) of the Act, references to 42 CFR under Medicare and Medicaid.
§ 460.80(c)(2). States can offer stop-loss 435.726 and 435.735. Sections 435.726 The Protocol says that the premium
or reinsurance as a product to be and 435.735 lay out the post-eligibility for Medicare-only participants is equal
purchased by the PO. Stop-loss treatment of income requirements that to the Medicaid capitation amount.
provisions should be established based may be applied to PACE participants in Nearly all Medicare participants have
on the total costs for a participant and the same manner as applied to both Part A and Part B, and the
may not be based on a particular aspect individuals receiving home and capitation amount that Medicare pays is
of the benefit package. community-based services. the sum of the Part A and Part B
Final rule actions: capitation rates. However, section
Conforming Amendments
This final rule finalizes § 460.182 as 1894(a)(1) of the Act permits an
published in the 1999 interim final rule. The BBA made conforming individual who is entitled to Medicare
amendments to sections 1924(a)(5) and benefits under Part A or enrolled under
Section 460.184 Post-Eligibility 1903(f)(4)(C) of the Act pertaining to Part B to enroll in the PACE program.
Treatment of Income eligibility for medical assistance. For those rare persons who are eligible
Section 1934(b)(1)(A)(i) of the Act Section 1924(a)(5) of the Act, was under only one part, the Medicare
states that a PO shall provide, to eligible revised to indicate that special capitation amount will be only the
individuals, all covered items and treatment of income and resources for portion for that part. Such a participant
services without application of institutionalized spouses in determining is required to make up the difference,
deductibles, copayments, coinsurance, eligibility for medical assistance is that is, pay an additional premium
or other cost sharing that would applied to individuals receiving services amount equal to the missing piece of the
otherwise apply under Medicare or under a PACE program under sections Medicare capitation amount. We specify
Medicaid. Section 1934(i) of the Act 1934 or 1894 of the Act. Further, section the premiums for Medicare-only
permits States to use post-eligibility 710 of the Omnibus Appropriation Bill participants as follows—
treatment of income in the same manner (Pub. L. 105–277) enacted October 21, • For a participant who is entitled to
as it is applied for individuals receiving 1998, permits PACE program eligible Medicare Part A and enrolled under
services under a waiver under section individuals enrolled in a PACE program Medicare Part B, but is not eligible for
1915(c) of the Act. under section 1934 of the Act to be Medicaid, the premium equals the
The post-eligibility treatment of eligible for Medicaid under the optional Medicaid capitation amount.
income provision reduces the amount of categorically needy eligibility group at • For a participant who is entitled to
Medicaid payments to a PO by the section 1902(a)(10)(A)(ii)(IV) of the Act. Medicare Part A, but is not enrolled
amount remaining after specified Under this authority, States can under Part B and is not eligible for
deductions are made from the income of determine eligibility for PACE enrollees Medicaid, the premium equals the
Medicaid capitation amount plus the a higher premium amount for these No public comments were received on
Medicare Part B capitation rate. participants. CMS specifies the § 460.192.
• For a participant who is enrolled premium amount that may be charged to Final rule actions:
only under Medicare Part B and is not these PACE participants so that This final rule will finalize § 460.192
eligible for Medicaid, the premium premiums correlate with (Medicaid) as published in the 1999 interim final
equals the Medicaid capitation amount costs and are equal for participants with rule.
plus the Medicare Part A capitation rate. the same eligibility. CMS and States go Section 460.194 Corrective Action
We specify that no premium may be through an extensive process to
charged to a participant who is dually calculate Medicaid rates that take into We require the PO to take action to
eligible for both Medicare and Medicaid account the frailty of PACE participants. correct deficiencies identified during
or one who is only eligible for Medicaid. Therefore, the Medicaid capitation rate, the reviews. CMS or the SAA will
We received four comments regarding should be an acceptable amount for a monitor the effectiveness of corrective
PACE premiums. premium. actions. Failure to correct deficiencies
Comment: Commenters requested Final rule actions: can result in sanctions or terminations
clarification on the premiums for those This final rule will finalize § 460.186 in accordance with subpart D.
with neither Medicare nor Medicaid. as published in the 1999 interim final Comment: One commenter inquired
One commenter recommended that POs rule. how it would be determined whether
not be permitted to establish private pay the CMS or the State would monitor a
premiums for Medicare covered services Subpart K: Federal/State Monitoring CAP.
in excess of the Medicare capitation Section 460.190 Monitoring During Response: CMS works in partnership
amount. Two commenters suggested Trial Period with the SAA to monitor POs.
that private pay premiums for non- Sections 1894(e)(4)(A) and Information received by either agency in
Medicaid eligible participants be no less 1934(e)(4)(A) of the Act provide for response to the CAP is shared with the
than the Medicaid capitation rate. annual close oversight during the trial other agency. As indicated in § 460.194,
Response: We believe it was period, which is a PO’s first 3 contract either CMS or the SAA will monitor the
congressional intent to permit years. We established § 460.190 to CAP. The determination of which
individuals with Medicare Part A, Part address the requirements for monitoring agency will monitor the CAP will vary
B, Medicaid, any combination of the during the trial period. During the trial depending on the issues addressed by
above or none of the above to participate period, CMS in cooperation with the the CAP. Since CMS and the SAA have
in PACE based on sections 1894(i) and SAA conducts comprehensive annual their own regulations, each agency is
1934(j) of the Act. Therefore, POs must reviews of a PO. monitoring for deficiencies in relation to
enroll any individual who meets the In accordance with the statute and as their regulations as well as any general
enrollment criteria even if they specified in § 460.190 the review deficiency they identify that needs
participate in neither Medicare nor includes an on-site visit to the PO, a correction. CMS and the SAA discuss
Medicaid. comprehensive assessment of the the monitoring review findings and the
However, as we noted previously, the organization’s fiscal soundness, a actions that need to be taken, to assure
statute does not address the amount a comprehensive assessment of the the PO has corrected or is in the process
private pay PACE enrollee can be organization’s capacity to furnish all of correcting the deficiencies, prior to
charged in premiums. Therefore, we PACE services to all enrolled releasing the official CAP report to the
will leave the premium amount to the participants, a detailed analysis of the PO. During those discussions, they will
discretion of the POs, based on their organization’s substantial compliance decide who will be the lead for
individual population and service with all significant requirements of monitoring the progress of the CAP. One
needs. sections 1894 and 1934 of the Act and of the factors involved in that decision
Comment: One commenter these regulations, and any other is the number of follow-up visits that
recommended that, through the waiver elements that CMS or the SAA find will be required and the proximity of
process, POs be allowed to explore necessary. the SAA and CMS offices. Often times,
alternate methods of establishing No public comments were received on quarterly calls between CMS, the SAA,
premiums for non-Medicaid § 460.190. and the PO can include specific CAP
participants, who have Medicare so long Final rule actions: items on the agenda. Follow-up visits
as the premiums are set to be actuarially This final rule will finalize § 460.190 can be conducted by the SAA, CMS, or
equivalent to, those established for the as published in the 1999 interim final the results can be reviewed at the next
Medicaid populations. rule. monitoring visit.
Response: In accordance with BIPA Final rule actions:
903, the 2002 interim final rule provides Section 460.192 Ongoing Monitoring
This final rule will finalize § 460.194
a waiver process that can be accessed by After Trial Period
as published in the 1999 interim final
a PO, that is unable to meet a regulatory In accordance with paragraph (e)(4)(B) rule.
requirement or, if they are an of sections 1894 and 1934 of the Act, we
experienced PO, waivers to explore specified that at the conclusion of the Section 460.196 Disclosure of Review
alternative practices (see § 460.26 and trial period, CMS, in cooperation with Results
§ 460.28 regarding waiver process). the SAA, would continue to conduct In accordance with paragraph (e)(4)(C)
Additional information regarding the reviews of a PACE program, as of sections 1894 and 1934 of the Act, we
waiver process is on the PACE Web site, appropriate. These reviews must take specified requirements for disclosing
www.cms.hhs.gov/PACE. into account the performance level of the results of monitoring reviews. CMS
As explained above, CMS requires the PO with respect to the quality of and the SAA promptly report the results
that the premium for Medicare-only care provided and compliance of the of reviews under § 460.190 and
participants enrolled in both Medicare organization in meeting the PACE § 460.192 to the PO, along with any
Part A and Part B be equal to the program requirements. Such reviews recommendations for changes to the
Medicaid capitation amount. The PO include an on-site visit at least every organization’s program. The results are
does not have the discretion to establish two years. made available to the public upon
request. In addition, we require that the them from loss, destruction, HPMS User’s Guide and HPMS
PO post a notice of the availability of unauthorized use or inappropriate Connectivity for States. These materials
the results of the most recent review and alteration. can also can be found on the PACE Web
any CAPs or responses related to the We established several requirements site at http://www.cms.hhs.gov/PACE/
most recent review. The PO must also intended to safeguard the privacy of any 09_AdditionalResources.asp.
make the results available for information that identifies a particular The Data Elements for Monitoring
examination in a place readily participant. The PO must establish include information on the number of
accessible to participants. written policies and implement grievances and appeals; reasons for
Comment: One commenter stated that procedures to ensure that information disenrollment; and vaccination rates for
access to the information by the public from, or copies of, records are released flu and pneumonia.
would be greatly expanded by requiring only to authorized individuals and that Appendix M of the PACE program
the SAA to post the results of PACE original medical records are released agreement indicates that Medicare
monitoring reviews on the agency’s Web only in accordance with Federal or State payment is also reliant on information
sites. laws, court orders, or subpoenas. In reported to CMS. As discussed in the
Response: We believe the decision addition, a participant’s written consent payment section, the risk score for
regarding whether the State posts the must be obtained before the release of PACE participants is based on the CMS–
results of PACE monitoring reviews is a identifiable information to persons not HCC, which is based on the diagnostic
State determination. We encourage otherwise authorized to receive it. The information submitted by the PO. The
access to information for the public but written consent may limit the degree of PO’s frailty score is based on the
do not believe it is necessary to dictate information and the persons to whom responses received from community-
specific methods in regulations. information may be released. dwelling participants on the Modified
Comment: Another commenter Participants are guaranteed timely HOS (Health Outcomes Survey), which
questioned if the definition for access to review and copy their own identifies participant difficulty in
‘‘promptly’’ means within 45 days. medical records and may request performing ADLs.
Response: CMS and the SAA expect amendments to their records. Finally, To the extent the SAA establishes
to complete the analysis of monitoring the PO must abide by all Federal and additional reporting requirements, the
review findings and provide them to the State laws regarding confidentiality and requirements would be identified in a
PO within 30 days after completion of disclosure of participant mental health separate contract between the SAA and
the review and, if this timeframe is not and medical records and other health the PO.
possible, then as close to 30 days as information. Final rule actions:
possible. Due to the in-depth review The Protocol did not specify a This final rule will finalize § 460.200
performed by the CMS and SAA minimum record retention timeframe. In as published in the 1999 interim final
monitoring review teams, it is not order to enable adequate oversight and rule.
always possible to complete an to be consistent with the requirements
established for M+C plans, we require Section 460.202 Participant Health
extensive report quickly. Therefore, we Outcomes Data
have decided to retain the term POs to retain records for the longest of
promptly and not provide a specific the following periods: the period In the 1999 interim final rule, we
timeframe. specified by State law; six years from modified the requirement in Part VII,
Final rule actions: the date of the last entry made in the section B of the Protocol for data
This final rule will finalize § 460.196 record; or for medical records of collection and reporting. We require
as published in the 1999 interim final disenrolled participants, six years after POs to maintain a health information
rule. the date of disenrollment. If any system that collects, analyzes,
litigation, claim, financial management integrates, and reports data necessary to
Subpart L: Data Collection, Record measure their performance and to
review, or audit is started before the
Maintenance, and Reporting develop their QAPI. As discussed above,
expiration of the retention period, we
The purpose of subpart L is to are requiring that those records be POs are expected to collect data for
establish the requirements for data retained until completion of the monitoring and report it at quarterly
collection, record maintenance, and litigation, or until claims or audit intervals via HPMS. HPMS information
reporting. This subpart describes in findings involving the records have may be used by CMS, SAAs, and POs.
detail the manner in which POs must been resolved and final action taken. Each PO must collect, evaluate, and
collect, maintain and report data We note that for purposes of Medicare report the data as part of managing its
including participant health outcomes, Part D, POs are required to retain Part QAPI. These data will assist the PO in
organization financial information, and D related records for a period of 10 years its efforts to identify opportunities to
medical records. in accordance with 42 CFR 423.505(d). improve participant care and outcomes,
Comment: One commenter asked and to evaluate the results of its
Section 460.200 Maintenance of
when data collection, maintenance, and performance improvement activities.
Records and Reporting of Data Additionally, we have a requirement
reporting requirements would be issued
In accordance with sections by CMS and the SAA. that the PO must furnish data and
1894(e)(3)(A) and 1934(e)(3)(A) of the Response: In the fall of 2001 the PACE information in the manner and at the
Act, we require POs to collect data, demonstration programs were instructed time intervals specified by CMS and the
maintain records, and submit reports. to submit Data Elements for Monitoring SAA, pertaining to its participant care
We describe data and records to include on a quarterly basis via the HPMS. This activities. The items to be collected are
participant health outcome data, reporting requirement remains in effect specified in the PACE program
financial books and records, medical for POs. agreement and will be subject to the
records, and personnel records. We Prior to signing the program confidentiality requirements specified
require the documents to be accessible agreement, which contains these in § 460.200.
to CMS and the SAA upon request and reporting requirements, POs are Finally, we require that each PO
be stored in a manner consistent with provided with instructions on the conduct an annual satisfaction survey of
the PO’s written policies that protect HPMS: The HPMS Connectivity Guide, its participants and caregivers. The
findings should be used by the PO to additional OASIS information. The Section 460.208 Financial Statements
identify opportunities for improvement. encounter and functional status CMS, in cooperation with the SAA,
Comment: Four commenters reporting are necessary for PACE has the responsibility of assessing fiscal
commented on health outcomes data, payment under risk adjustment soundness as described in § 460.80. The
and although they were supportive of methodology. financial information required to assess
requirements for participant health Final rule actions: the fiscal soundness of a PO is
outcomes data, they maintain that This final rule will finalize § 460.202 information from basic financial
flexibility is important in developing as published in the 1999 interim final statements, balance sheets, statement of
State or site specific systems. rule. revenues and expenses, and sources and
Commenters asked that CMS focus on
Section 460.204 Financial uses of funds statement. An
the specific data elements that will be
Recordkeeping and Reporting organization that has completed its trial
required but leave the decision about
Requirements period is required to submit financial
which tool to use to the States or
providers. statements annually. An organization
In § 460.204, we require that a PO that is in the trial period is required to
One commenter indicated that it is
must provide CMS and the SAA with submit quarterly financial statements in
important for States to know, up front,
the participant health outcome data accurate financial reports that are addition to the annual certified financial
reporting requirements to assist them in prepared using an accrual basis of statements. An organization may use the
making PACE a State plan option. accounting and verifiable by auditors. ‘‘Annual Statement’’ (also known as the
Response: Although the reporting In addition, we require that the PO ‘‘orange blank’’), which was developed
requirements discussed above were not maintain an accrual accounting by the National Association of Insurance
available when we published the 1999 recordkeeping system that accurately Commissioners for reporting by HMOs.
interim final rule, we established the documents all financial transactions, For information contact NAIC 2301
requirement shortly after publication. provides an audit trail to source McGee Street, Suite 800 Kansas City,
We also provided training to the POs. documents, and generates financial MO 64108 (816–842–3600).
States should now be aware of the statements. We require that, not later than 180
reporting requirements for PACE. Further, except as stipulated under days after the end of the organization’s
Comment: One commenter indicated Medicare principles of reimbursement fiscal year, the PO submit the annual
that if encounter data were going to be set forth in 42 CFR part 413, a PO must financial statement that includes
used for uses other than risk adjustment, follow standardized definitions and appropriate footnotes. This financial
then a broader range of data accounting, statistical, and reporting statement must be certified by an
requirements would be needed. This practices that are widely accepted in the independent certified public
commenter was interested in CMS health care industry. accountant. At a minimum, the certified
developing consistency in reporting We also require that a PO must permit financial statement must include a
requirements in order to minimize the CMS and the SAA to audit or inspect certification statement, a balance sheet,
reporting burden for POs. any books and records of original entry a statement of revenues and expenses,
Response: Currently, encounter data that pertain to any aspect of services and a source and use of funds statement.
is only being used to determine performed, reconciliation of Throughout the trial period, we
reimbursement under the risk participants’ benefit liabilities or require that not later than 45 days after
adjustment payment methodology. As determination of Medicare and the end of each quarter of the
discussed in the QAPI section, we are Medicaid amounts payable. organization’s fiscal year, a PO must
no longer pursuing development of a submit a quarterly financial statement.
We note the statute does not provide
standardized assessment tool for PACE. Quarterly financial statements are not
for risk-sharing arrangements between
Comment: Several commenters required to be certified by an
CMS and POs. It places the organization
stressed the importance of streamlining independent certified public
at full financial risk for all services, thus
all Federal and State reporting accountant.
our emphasis is on the need for accurate
requirements. Two commenter opposed At the conclusion of the trial period,
accounting records.
CMS’ application of a broad range of CMS or the SAA may require a PO to
reporting requirements to POs which Comment: One commenter submit monthly or quarterly financial
were developed for, and are more recommended that CMS require POs statements, or both, if CMS or the SAA
appropriate to, managed care entities that are a subdivision of a larger parent determines that an organization’s
and more limited provider types, such organization, to maintain a balance performance requires more frequent
as, home health agencies or nursing sheet, statement of income and monitoring and oversight due to
homes. One commenter discouraged expenses, and documentation of the concerns about fiscal soundness. These
whole scale application of these types of sources and uses of its funds that is additional reports do not have to be
requirements and encouraged the separate and distinct from the parent certified by a certified public
development of OBCQI requirements organization’s financial record keeping. accountant.
unique to PACE providers. Response: We agree. We believe it is Sections 1894(e)(3) and (4) and
Response: At the time we published important for us to receive the financial 1934(e)(3) and (4) of the Act require
the 1999 interim final rule, several information for the PO in order to CMS and the SAA to work in
PACE demonstration programs were determine the PO’s solvency. However, consultation to determine what data,
licensed under State law as home health where the PO’s financial solvency is cost and financial reports the PO must
agencies. In these cases, the POs were based on a guarantee by the PO’s parent submit so these agencies can monitor
subject to the additional reporting organization, we request this the cost and effectiveness of a PO and
requirements based upon their information as well. perform necessary reviews.

licensure. We understand many States Final rule actions: We consulted with representatives
are now developing licensure programs This final rule will finalize § 460.204 from various State organizations that
for PACE. When this occurs, the POs as published in the 1999 interim final serviced PACE demonstration programs.
would no longer be required to submit rule. We have determined that data collection
and financial reporting requirements progress in achieving care goals; and (4) + Interdisciplinary assessments,
vary among the State organizations. The provides the team members with data reassessments, plans of care, and
data collection and financial reports we for evaluating and documenting the treatment and progress notes that are
require for purposes of assessing fiscal quality and appropriateness of care signed and dated;
soundness can also assist the SAA in delivered. Because care for the PACE + Laboratory, radiological and other
their monitoring and oversight population will be provided by a variety test reports (This change from the
requirements. Of course, States have the of sources (for example, PACE center Protocol clarifies that all tests should be
authority to request any data and reports employees, contracted personnel, included in the participant medical
that they consider to be necessary in hospital staff, nursing home staff, etc.), record.);
implementing the PACE program. We it is critical that all information on the + Medication records;
solicited comments on consistency in participant be documented in the + Hospital discharge summaries, if
reporting requirements in the 1999 medical record to ensure quality and applicable;
interim final rule. continuity of care. As a result, in the + Reports of contact with informal
Comment: Two commenters asked 1999 interim final rule, we retained support (for example, representatives/
whether financial statements and with few modifications the minimum care givers, legal guardian, or next of
reports should be routed to CMS via the elements specified in the Protocol to be kin);
SAA or if they should go to CMS and included in the participant’s medical + Enrollment Agreement signed by
the SAA simultaneously. record. the participant;
Response: Financial reports should go To facilitate continuity of care, we + Physician orders;
to CMS and the SAA simultaneously. require in § 460.210 that the PO + Disenrollment justification, if
Comment: Commenters asked maintain a single comprehensive applicable;
whether there is any flexibility in CMS medical record for each participant at + Advance directives, if applicable
requirements at § 460.208 for the PACE center they attend. Participant (For example, when a participant has
submission of financial reporting medical records should be complete, executed an advance directive, that fact
documents to CMS and the State, if the accurately documented, easily should be prominently displayed. If the
State establishes a different reporting retrievable, systematically organized, PO cannot implement an advance
cycle. and available to all staff. We recognize directive as a matter of conscience that
Response: The financial statements that a PO may have more than one fact also should be prominently
are due to CMS within the required PACE center, however, participant displayed and explained to prospective
timeframes of 45 days from the end of medical records must be located at the enrollees.);
the quarter (during the trial period) and PACE center where the participant + A signed release permitting
180 days after the fiscal year end. There receives services so that staff has access disclosure of personal information; and
is no flexibility in CMS’ timeframes, but to pertinent information. This + Accident and incident reports.
States may have discretion regarding requirement also should prevent time (Accident and incident reports were
their timeframes for reporting lost in obtaining records and facilitate included because we believed they may
requirements if they are different than timely review and documentation of the be an indicator of changes in the
the Federal requirements. medical record. participant’s functional status, problems
Comment: Several commenters asked At a minimum, the participant or changes in the participant’s home
if CMS has standard reporting formats medical record must include: environment, or physical problems with
and if States have flexibility to develop • Appropriate identifying the PACE center or its staff.)
their own financial reporting information; We also require the PO to provide for
documents. • Documentation of all services the prompt transfer of copies of
Response: CMS does not have a furnished, including: appropriate medical record information
standard format for financial reporting + A summary of emergency care and between treatment facilities to ensure
for POs. As specified in § 460.204, other inpatient or long-term care continuity of care whenever a
financial reports are required to be services. (We included this last phrase participant is temporarily or
prepared using an accrual basis of to ensure that any services furnished to permanently transferred to another
accounting and must be verifiable by the participant outside the scope of the facility. Examples of appropriate
qualified auditors. PACE center’s direct care is documented medical record information include, but
There is flexibility for States to in the medical record. It is critical to the are not limited to, the reason for the
develop their own financial reporting continuity of care that the IDT be transfer, the name and phone number of
formats if they choose to do so. informed of all outside services the attending physician, participants’
Final rule actions: furnished to the participant. Once the demographics, active diagnosis and
This final rule will finalize § 460.208 participant returns to the PACE center, treatment plan including current
as published in the 1999 interim final the course of treatment can be medications and ADL status, special
rule. reevaluated and adjusted based on any dietary considerations, etc. It is essential
changes in the participant’s status.); that the medical history and plan of care
Section 460.210 Medical Records + Services furnished by employees of follow the participant. This requirement
The participant’s medical record the PACE center; and is intended to ensure communication
presents a total picture of the care + Services furnished by contractors between providers. We solicited
provided. The medical record is a useful and their reports (This item is intended comments on whether a specific
tool in diagnosing, treating and caring to ensure that anyone who furnishes timeframe for the transfer of participant
for the participant. The medical record: services to the participant, employees of medical record information should be
(1) Facilitates communication among the PO or contractors, shares the required.
the various health care professionals information with the IDT for We included a requirement for
providing services to the participant; (2) documentation in the medical record. authentication of the medical record to
provides a focal point for coordinating Again, this requirement is intended to ensure that the appropriate individuals
the actions of the IDT; (3) provides an facilitate communication between have reviewed and completed the
accurate picture of the participant’s providers.); participant’s medical records. All
entries must be legible, clear, complete, medical records in order to assist other are also amending this section by
and appropriately authenticated and providers and facilities in coordinating adding the definition of ‘‘PACE
dated. PACE participant care. program’’.
Authentication must include Therefore, we believe that POs will
signatures or a secured computer entry Subpart B—PACE Organization
provide for the prompt transfer of
by a unique identifier of the primary Application and Waiver Process
appropriate medical record information
author who has reviewed and approved between treatment facilities to ensure Section 460.10 Purpose—No Change
the entry. continuity of care whenever a Section 460.12 Application
Comment: Three commenters participant is temporarily or Requirements
indicated that it is inappropriate for permanently transferred to another
accident and incident reports to be kept facility and a timeframe for doing so is The October 2002 interim final with
in the medical record. They suggest that not necessary. Accordingly, we are not comment removed and reserved
changes in a participant’s health status § 460.12(a)(2). In this final rule, we are
imposing a timeframe for transferring
resulting from an accident and other redesignating § 460.12(a)(3) as
medical records in this final rule.
incident not be noted in the medical Comment: Two commenters § 460.12(a)(2). We are also removing the
record. Rather the commenter believed questioned whether the PO must cross reference to § 460.14 in newly
that accident or incident reports should maintain a hardcopy of all electronically redesignated paragraph (a)(2)(i) of
be maintained in a secure, confidential maintained medical records. The § 460.12, and the cross reference to
location that is available to CMS and the commenters requested clarification of § 460.16 in newly redesignated
SAA for review. the requirement for electronic record paragraph (a)(2)(ii) of § 460.12, since
Response: Our intent at the time of integrity and back-up. § 460.14 and § 460.16 are being removed
drafting the 1999 interim final rule was Response: CMS does not require the in this rule.
that POs would record changes in health hardcopy backup of electronic medical Section 460.14 Priority Consideration
status resulting from accidents or records. We are not mandating a specific
incidents in the medical record and all In this final rule, we are deleting
system for electronic medical record § 460.14 which no longer applies since
records would be consolidated into one backup but the PO needs to develop and
medical record. However, we agree with August 5, 2000 timeframe has passed
maintain a backup system for their and all PACE demonstration programs
the commenters that specific accident or electronic medical records to ensure
incident reports should be maintained have transitioned to permanent
that they can reproduce their medical providers. We are reserving this section.
in a secure confidential location and records should there be a systems
should be available to CMS and the dysfunction or physical destruction Section 460.16 Special Consideration
SAA for review. We believe the purpose such as a fire. The electronic medical
of including such items in the medical In this final rule, we are deleting
records should be periodically and § 460.16 which no longer applies since
record is served by noting the change in systematically backed-up, secure, and
medical condition. We do not think that the August 5, 2000 timeframe has
located off site in case of a physical passed and all PACE demonstration
the origin of the change is required in disaster. The PO must be able to provide
the medical record but agree that programs have transitioned to
a copy of participants medical records permanent providers. We are reserving
accident and incident reports should be upon request by CMS or the SAA.
available to CMS and the SAA for this section.
Final rule actions:
purposes of program review. Changes in This final rule will amend § 460.210 Section 460.18 CMS Evaluation of
participant health status and related by deleting paragraph (b)(13) ‘‘Accident Application—No Change
participant assessments and and incident reports’’ from the required Section 460.20 Notice of CMS
modifications to care plans are required contents of the medical record. Determination—No Change
to be included in the medical record.
We will, however, no longer require that IV. Provisions of Final Rule Section 460.22 Service Area
accident and incident reports be filed in Determination—No Change
Part 460 Authority Citation
participant medical records. Section 460.24 Limit on Number of
Therefore, we are amending § 460.210 We are adding sections 1894(f) and
1934(f) of the Social Security Act to the PACE Program Agreements—No Change
by deleting paragraph (b)(13) from the
required content of medical record. authority citation for part 460 because Section 460.26 Submission and
Comment: Two commenters they specifically require the Secretary to Evaluation of Waiver Requests
responded to our request for comments promulgate regulations for these In this final rule, we are amending
regarding whether to impose specific sections. § 460.26 by redesignating paragraph (a)
timeframes for the transfer of participant Subpart A—Basis, Scope, and as paragraph (a)(1) and adding
medical record information between the Definitions paragraph (a)(2) permitting non-
PO and another treatment facility or operational entities submitting a PACE
provider. One commenter did not Section 460.2 Basis—No Change provider application to submit a waiver
recommend the imposition of a Section 460.4 Scope and Purpose—No request at the same time. The waiver
timeframe for transfer of records, while Change request must be submitted as a separate
the other commenter recommended document and follow all other
implementing a timeframe requirement Section 460.6 Definitions
requirements as stated in this section.
only when providing the participant We are amending this section to We are also amending paragraphs (b)
with a copy of their medical record redefine the term ‘‘PACE center’’ as ‘‘a and (b)(1) by adding ‘‘or PACE
when requested. facility which includes a primary care applicant.’’
Response: We believe that a clinic, areas for therapeutic recreation,

comprehensive treatment history equips restorative therapies, socialization, Section 460.28 Notice of CMS
providers to deliver appropriate care. personal care, and dining which serves Determination on Waiver Requests
We also believe that POs are cognizant as the focal point for coordination and We are amending (a)(2) by adding ‘‘or
of the importance of prompt transfer of provision of most PACE services.’’ We PACE applicant,’’ thereby requiring
CMS to notify the PO or PACE applicant to be the ‘‘Participant Advisory to date before performing direct
in writing of the decision to deny the Committee’’ to more adequately reflect participant care.
submitted wavier request. the intent of the PO having an advisory
Section 460.72 Physical Environment
committee that is comprised of
Subpart C—PACE Program Agreement We are amending this requirement to
participants and participant
Section 460.30 Program Agreement representatives who are focused on their clarify that POs must perform the
Requirement—No Change issues. The Participant Advisory manufacturers’ recommended
Committee provides the Participant maintenance.
Section 460.32 Content and Terms of
PACE Program Agreement Representative with issues as recorded Section 460.74 Infection Control—No
in minutes of their meeting to present at Change
We are amending paragraph (a)(12) to the PO governing body meeting required
require the PACE program agreement to in the new paragraph (c)(3). Section 460.76 Transportation
include the Medicaid capitation rate Services—No Change
and the methodology used to calculate Section 460.64 Personnel
Qualifications for Staff With Direct Section 460.78 Dietary Services
the Medicare capitation rate.
Participant Contact In this section, we are clarifying that
Section 460.34 Duration of Program each participant’s dietary requirements
Agreement—No Change We are amending the title of § 460.64 are determined by assessment and
and the personnel qualifications to included in the participant’s plan of
Subpart D—Sanctions, Enforcement
clarify that the qualifications apply to care. It also clarifies that the PO must
Actions, and Termination
all PACE staff with direct participant ensure that each participant receives
Section 460.40 Violations for Which contact and decrease the burden in meals that are specific to their dietary
CMS May Impose Sanctions—No hiring and contracting for adequate needs. If the PO needs to provide meals,
Change numbers of staff members. We are which are included in the participant’s
Section 460.42 Suspension of removing the educational requirements plan of care, the meals must be
Enrollment or Payment by CMS—No and other qualifications at § 460.64(c) nourishing, palatable, well-balanced,
Change that we established for professions and meet the participant’s daily
where no States require licensure, nutritional and special dietary needs.
Section 460.46 Civil Money certification, or registration. All PACE
Penalties—No Change staff with direct participant contact Section 460.80 Fiscal Soundness—No
Section 460.48 Additional Actions by must meet the general personnel Change
CMS or the State—No Change qualifications. Section 460.82 Marketing Materials—
Section 460.50 Termination of PACE The amended requirements also No Change
Program Agreement—No Change clarify that physicians must meet the
Subpart F—PACE Services
requirements for Federally-defined
Section 460.52 Transitional Care qualifications for a physician in Section 460.90 PACE Benefits Under
During Termination—No Change addition to the general personnel Medicare and Medicaid—No Change
Section 460.54 Termination requirements. Section 460.92 Required Services
Procedures—No Change Section 460.66 Training We are amending the list of required
Subpart E—PACE Administrative We are clarifying the training services to clarify that the PACE benefit
Requirements requirement for personal care attendants package include all Medicare-covered
Section 460.60 PACE Organizational by requiring that their competency must items and services, Medicaid-covered
Structure be exhibited before performing personal items and services specified in the
care services independently. State’s approved Medicaid plan, and
In this final rule, we are amending other services determined necessary by
§ 460.60(d)(3) by changing ‘‘60’’ to ‘‘14’’ Section 460.68 Program Integrity the IDT to improve and maintain the
days. Together with the following participant’s overall health status.
deletions of paragraphs (d)(4) and (d)(5) We are amending the conflict of
of this section, we are reducing interest prohibitions. We provided a Section 460.94 Required Services for
administrative burden for POs. mechanism for disclosure and recusal in Medicare Participants
We are deleting paragraph (d)(4) that the event that a PO experiences any We are amending the requirement to
states ‘‘changes in organizational direct or indirect conflict of interest by clarify that payment for PACE program
structure must be approved in advance a member of the governing body or an services is for services that are provided
by CMS and the SAA.’’ immediate family member. to the PACE participants.
We are also deleting paragraph (d)(5) Section 460.70 Contracted Services
that states, ‘‘changes in organizational Section 460.96 Excluded Services
structure approved by CMS and the We are reducing operational burden We are correcting a technical error
SAA must be forwarded to the by amending this regulation to remove published in § 460.96(e)(1) by replacing
consumer advisory committee, the requirement that POs submit each the word ‘‘through’’ with the word
described in § 460.62(c) for signed contract for inpatient care. ‘‘and’’ so that paragraph (e) reads
dissemination to participants as Section 460.71 Oversight of Direct ‘‘Services furnished outside of the
appropriate.’’ Participant Care United States, except as follows: (1) In
accordance with § 424.122 and
Section 460.62 Governing Body We are amending this requirement to § 424.124 of this chapter.’’
In this final rule, we are clarifying the be consistent with the general personnel
requirements for community qualifications by clarifying that all Section 460.98 Service Delivery
involvement on issues relating to direct participant care staff and We are expanding participant rights
participants. We are revising the name contractors be free of communicable by amending this requirement to
of the ‘‘Consumer Advisory Committee’’ diseases and have all immunizations up include sexual orientation in the list of
categories under which PO must not Section 460.106 Plan of Care—No Section 460.154 Enrollment
discriminate. Change Agreement
Section 460.100 Emergency Care Subpart G—Participant Rights We are clarifying the requirement that
Section 460.110 Bill of Rights—No a participant may not enroll or disenroll
We are defining urgent care and post-
Change at a Social Security office.
stabilization care outside of the service
area. We are also expanding participant
Section 460.112 Specific Rights to protection by amending this
We are also expanding participant Which a Participant Is Entitled requirement allowing the participant or
protection by amending this
We are amending this requirement by their designated representative to sign
requirement to clarify that the PO must
and date the reenrollment agreement.
explain to the participant or caregiver expanding the Participant’s rights to
that they can obtain emergency care include sexual orientation in the list of Section 460.156 Other Enrollment
without prior authorization. categories that a PO must not Procedure—No Change
Section 460.102 Interdisciplinary discriminate against. Section 460.158 Effective Date of
Team Also we are revising paragraph Enrollment—No Change
(b)(1)(iii) to require the disclosure of all Section 460.160 Continuation of
We are clarifying the position and PO services and services delivered by
responsibilities of the social worker on Enrollment
contracted providers at the time a
the IDT by amending it to ‘‘Master’s We are revising paragraph (b)(3)(i) to
participants needs necessitate the
level social worker (MSW).’’ This will clarify that the SAA must establish
disclosure and delivery of such
make the requirement consistent with criteria for use in making deemed
information to allow the participant to
other Medicare regulations. eligibility determinations.
make an informed choice.
Section 460.104 Participant Section 460.162 Voluntary
Assessment Section 460.114 Restraints—No
Change Disenrollment—No Change
We are amending this provision to Section 460.164 Involuntary
require that the in-person assessment Section 460.116 Explanation of
Disenrollment—No Change
and reassessments be performed by both Rights—No Change
Section 460.166 Effective Date of
a physical therapist and an occupational Section 460.118 Violation of Rights— Enrollment—No Change
therapist, thus clarifying one discipline No Change
cannot replace the other discipline. Section 460.168 Reinstatement in
Section 460.120 Grievance Process— Other Medicare and Medicaid
We are clarifying that a MSW No Change
performs assessments and Programs—No Change
reassessments. Section 460.122 PACE Organization’s Section 460.170 Reinstatement in
We are also redesignating paragraph Appeals Process PACE—No Change
(c)(3) as new paragraph (d) and Section 460.172 Documentation of
We are amending this requirement to
changing the heading from Disenrollment.—No Change
clarify that noncoverage of services
‘‘Reassessment based on change in
participant status or at the request of the including denials, reduction, or Subpart J—Payment
participant or designated termination of services are included as
Section 460.180 Medicare Payments to
representative’’ to ‘‘Unscheduled a basis for appeal. POs
reassessments.’’ We are identifying We are also expanding participant
separate requirements in paragraph (d) protections by changing ‘‘would’’ be We are amending this section to
for reassessments based on a change in seriously jeopardized to ‘‘could’’ be reflect the new Medicare risk
participant status or requested by a seriously jeopardized and revising adjustment payment methodology and
participant or his or her representative. ‘‘regain’’ maximum function to ‘‘regain are requiring that the PACE program
agreement contain the ‘‘methodology’’
We are decreasing the operational or maintain’’ maximum function.
for establishing the monthly capitation
burden by removing the requirement
Section 460.124 Additional Appeal rather than the ‘‘amount’’ of the
that all reassessments be performed by
Rights Under Medicare or Medicaid— monthly capitation rate.
the IDT minus the personal care
attendant, driver, and PACE center No Change Section 460.182 Medicaid Payment—
manager. We are amending this Subpart H—Quality Assessment and No Change
requirement to require the IDT members Performance Improvement—No Change Section 460.184 Post-Eligibility
listed in paragraph (a)(2) to perform in- Treatment of Income—No Change
person reassessments for change in Subpart I—Participant Enrollment and
status and permit the IDT to determine Disenrollment Section 460.186 PACE Premiums—No
which IDT members must perform Section 460.150 Eligibility To Enroll in Change
reassessments when requested by the the PACE Program—No Change Subpart K—Federal/State Monitoring
participant or their designated
representative. However, we added a Section 460.152 Enrollment Process Section 460.190 Monitoring During
requirement that if a significant change Trial Period—No Change
We are expanding participant
in the participant’s health or protection by amending the requirement Section 460.192 Ongoing Monitoring
psychosocial status occurs, the in- After Trial Period—No Change

that POs must explain and provide
person reassessment must be performed Section 460.194 Corrective Action—No
information related to post-eligibility
by the entire IDT minus the personal Change
treatment of income during the intake
care attendant, driver, and PACE center
manager. process.
Section 460.196 Disclosure of Review The burden associated with this Section 460.70(c) states that a list of
Results—No Change requirement is the time and effort for a contractors must be on file at the PACE
Subpart L—Data Collection, Record State to develop its State plan center and a copy must be provided to
Maintenance, and Reporting amendment to elect PACE as an anyone upon request.
optional Medicaid benefit. We estimate
Section 460.200 Maintenance of Section 460.72 Physical Evironnment
that 25 States will each take 10 hours to
Records and Reporting Data—No complete this requirement for a total Section 460.72(c)(1) states that the
Change annual burden of 250 hours. We PACE organization must establish,
Section 460.202 Participant Health estimate the total burden for these implement, and maintain documented
Outcomes Data—No Change requirements to be 358 hours. procedures to manage medical and
Section 460.68 Program Integrity nonmedical emergencies and disasters
Section 460.204 Financial
that are likely to threaten the health or
Recordkeeping and Reporting Section 460.68(b)(1) requires PACE safety of the participants, staff or the
Requirements—No Change organizations to develop written public.
Section 460.208 Financial policies and procedures for handling
direct or indirect conflict of interest by Section 460.72(c)(4) states that the
Statements—No Change organization must have a documented
a member of the governing board or an
Section 460.210 Medical Records immediate family member. plan to obtain emergency medical
The burden associated with this assistance from sources outside the
We are amending this section by
requirement is the time and effort for a center when needed.
removing the requirement that accident
and incident reports be contained in the PACE organization to develop written Section 460.74 Infection Control
medical record. The origin of a change policies and procedures for handling
in the status of a medical condition is direct or indirect conflict of interest by Section 460.74(b) states that the PACE
not required in the medical record, but a member of the governing board or an organization must establish, implement,
should be available for CMS and the immediate family member. We estimate and maintain a documented infection
SAA for review. that each organization will spend 1 hour control plan.
developing and writing these policies Section 460.82 Marketing
V. Collection of Information and procedures. There will be
Requirements approximately 54 organizations for a Section 460.82(a) states that a PACE
Under the Paperwork Reduction Act total annual burden of 54 hours. organization must inform the public
of 1995, we are required to provide 30- Section 460.68(b)(2) requires that in about its program and give prospective
day notice in the Federal Register and the event of a direct or indirect conflict participants the following written
solicit public comment before a of interest the PACE organization must information: An adequate description of
collection of information requirement is document the disclosure of the exact the PACE organization’s enrollment and
submitted to the Office of Management nature of the conflict. disenrollment policies and
and Budget (OMB) for review and We estimate each organization will requirements; PACE enrollment
approval. In order to fairly evaluate spend 30 minutes documenting a procedures; description of benefits and
whether an information collection conflict of interest disclosure. There services; premiums; and other
should be approved by OMB, section will be approximately 54 organizations information necessary for prospective
3506(c)(2)(A) of the Paperwork for a total burden of 27 hours. participants to make an informed
Reduction Act of 1995 requires that we Note: The following ICRs are subject to the decision about enrollment.
solicit comment on the following issues: PRA. However, we believe that the burden Section 460.82(d) states that
• The need for the information associated with these ICRs is exempt from marketing materials must inform a
collection and its usefulness in carrying the PRA in accordance with 5 CFR potential participant that he or she must
out the proper functions of our agency. 1320.3(b)(2) because the time, effort, and receive all needed health care (other
financial resources necessary to comply with
• The accuracy of our estimate of the these requirements would be incurred by
than emergency or urgently needed
information collection burden. persons in the normal course of their services) from the PACE organization or
• The quality, utility, and clarity of activities. from an entity authorized by the PACE
the information to be collected. organization. All marketing materials
• Recommendations to minimize the Section 460.52 Transitional Care must state clearly that PACE
information collection burden on the Following Termination participants may be fully and personally
affected public, including automated liable for the costs of unauthorized or
Section 460.52(b) states that an entity
collection techniques. out-of-PACE program agreement
whose PACE program agreement is
We are soliciting public comment on services.
terminated must provide assistance to
each of these issues for the following each participant in obtaining necessary Section 460.98 Service Delivery
sections of this document that contain transitional care through appropriate
information collection requirements referrals and making the individual’s Section 460.98(a) states that a PACE
(ICRs): medical records available to new organization must establish and
providers. implement a written plan to furnish care
Section 460.30 Program Agreement that meets the needs of each participant
Requirement Section 460.70 Contracted Services in all care settings 24 hours a day, every
Section 460.30(c) states that CMS may Section 460.70(a) states that the PACE day of the year.
only sign program agreements with organization must have a written Section 460.100 Emergency Care
PACE organizations that are located in contract with each outside organization,
States with approved State plan agency, or individual that furnishes Section 460.100(a) states that a PACE
amendments electing PACE as an administrative or care-related services organization must establish and
optional benefit under their Medicaid not furnished directly by the PACE maintain a written plan to handle
State plan. organization. emergency care.
Section 460.102 Interdisciplinary Section 460.112(e)(6) states that a enrollment because his or her health or
Team participant has the right to be given safety would be jeopardized by living in
In summary, section 460.102(d) states reasonable advance notice, in writing, of a community setting, the PACE
that the interdisciplinary team is any transfer to another treatment setting, organization must maintain supporting
responsible for the initial assessment, and the justification for it, due to documentation of the reason for the
periodic reassessments, plan of care, medical reasons or for the participant’s determination.
and coordination of 24 hour care welfare, or that of other participants.
Section 460.154 Enrollment
delivery. Each team member must The PACE organization must document
Agreement
regularly inform the interdisciplinary the justification in the participant’s
team of the medical, functional, and medical record. Section 460.154 states that if the
psychosocial condition of each potential participant meets the
Section 460.116 Explanation of Rights
participant; and document changes in a eligibility requirements and wants to
Section 460.116(a) states that a PACE enroll, he or she or their representative
participant’s condition in the
organization must have written policies must sign an enrollment agreement in
participant’s medical record consistent
and implement procedures to ensure accordance with the requirements in
with documentation policies established
that the participant, his or her this section.
by the medical director.
representative, if any, and staff
Section 460.104 Participant understand these rights. Section 460.156 Other Enrollment
Assessment Section 460.116(b) states that upon Procedures
In summary, section 460.104(d) states enrollment, the staff must fully explain Section 460.156(c) states that if there
that the interdisciplinary team must the rights to the participant and his or are changes in the enrollment agreement
explain why it denies a participant’s her representative, if any, in a manner information at any time during the
request for services, inform participants understood by the participant. participant’s enrollment, the PACE
of additional appeal processes available, Section 460.122 PACE Organization’s organization must give an updated copy
and document all assessment and Appeals Process of the information to the participant;
reassessment information in the and explain the changes to the
Section 460.122(d) states that a PACE participant and his or her representative
participant’s medical record.
organization must give all parties or caregiver in a manner they
Section 460.106 Plan of Care involved in the appeal appropriate understand.
Section 460.106(f) states that the team written notification and a reasonable
must document the plan of care, and opportunity to present evidence related Section 460.168 Reinstatement in
any changes made to it, in the to the dispute in person, as well as in Other Medicare and Medicaid Programs
participant’s medical record. writing.
Section 460.168(a) states that in order
Section 460.110 Bill of Rights Section 460.152 Enrollment Process to facilitate a participant’s reinstatement
Section 460.152(a)(1) requires that at in other Medicare and Medicaid
Section 460.110(a) states that a PACE programs after disenrollment, the PACE
organization must have a written a minimum, the intake process must
include the following steps: the PACE organization must make appropriate
participant bill of rights designed to referrals and ensure medical records are
protect and promote the rights of each staff must explain to the potential
participant and his or her representative made available to new providers in a
participant. timely manner.
Section 460.110(b) states that upon or caregiver: the PACE program; the
enrollment, the organization must requirement that the PACE organization Section 460.172 Documentation of
inform a participant in writing of her or is the participant’s sole service provider; Disenrollment
his rights and responsibilities, and all monthly premiums, if any; any
Medicaid spend-down obligations, and Section 460.172(a) states that a PACE
rules and regulations governing organization must have a procedure in
participation. post-eligibility treatment of income, if
any. place to document the reasons for all
Section 460.112 Specific Rights to Section 460.152(a)(2) states that the voluntary and involuntary
Which a Participant Is Entitled potential participant must sign a release disenrollments.
Section 460.112(b)(1) states that a to allow the PACE organization to Section 460.200 Maintenance of
participant has the right to be fully obtain his or her medical and financial Records and Reporting of Data
informed in writing of the services information and eligibility status for
available from the PACE organization. Medicare and Medicaid. Section 460.200(e) states that a PACE
Section 460.112(b)(2) states that a Section 460.152(b)(1) states that if a organization must safeguard the
participant has the right to have the prospective participant is denied confidentiality of any information that
enrollment agreement fully explained in enrollment because his or her health or identifies a particular participant;
a manner understood by the participant. safety would be jeopardized by living in establish and implement procedures
Section 460.112(e)(2) states that a a community setting, the PACE that govern the use and release of a
participant has the right to have the organization must notify the individual participant’s information before
PACE organization explain advance in writing of the reason for denial. releasing personal information that is
directives and to establish them, if the Section 460.152(b)(2) states that if a not required by law to be released.
participant so desires. prospective participant is denied Section 460.200(f)(1) states that a
Section 460.112(e)(3) states that a enrollment because his or her health or PACE organization must retain records
participant has the right to be fully safety would be jeopardized by living in for the longest of the following periods:
informed of his or her health and a community setting, the PACE the period of time specified in State law;
functional status by the organization must refer the individual to six years from the last entry date; or for
interdisciplinary team and to participate alternative services, as appropriate. medical records of disenrolled
in the development and implementation Section 460.152(b)(3) states that if a participants, six years after the date of
of the plan of care. prospective participant is denied disenrollment.
Section 460.204 Financial Section 460.172 Documentation of 460.104, 460.116, 460.120(b) & (e), 460.122,
Recordkeeping and Reporting Disenrollment 460.124, 460.132, 460.152, 460.156, 460.160,
Requirements 460.164, 460.190, 460.196, 460.202, 460.208,
Section 460.172(b) states a PACE 460.22, 460.32, 460.52, 460.60(d)(1) & (2),
Section 460.204(b) states that a PACE organization must make documentation 460.68, 460.80, 460.104, 460.118, 460.120,
organization must maintain an accrual available for review by CMS and the 460.122, 460.132, 460.200, 460.204; however,
accounting recordkeeping system. State administering agency. that burden is currently approved under
OMB # 0938–0790 with an expiration date of
Section 460.210 Medical Records Section 460.192 Ongoing Monitoring 2/28/2009.
After Trial Period
Section 460.210(a) states that a PACE In the 2002 IFC, § 460.12 was
organization must maintain a single, Section 460.192(a) states that at the redesignated as § 460.30(c) and the
comprehensive medical record for each conclusion of the trial period, CMS, in burden was approved at that time. It
participant, in accordance with cooperation with the State continues to be currently approved
accepted professional standards. administering agency, will continue to under OMB#0938–0790 with an
conduct reviews of a PACE expiration date of February 28, 2009.
Section 460.210(c) states that the organization, as appropriate, taking into If you comment on these information
PACE organization must promptly account the performance level of the collection and record keeping
transfer copies of medical record organization with respect to the quality requirements, please mail copies
information between treatment of care provided and the organization’s directly to the following: Centers for
facilities. compliance with all requirements of this Medicare & Medicaid Services, Office of
Section 460.210(d) states that all part. Strategic Operations and Regulatory
entries must be legible, clear, complete, Affairs, Division of Regulations
and appropriately authenticated and Section 460.194 Corrective Action
Development, Attn.: Melissa Musotto,
dated. Authentication must include Section 460.194(a) states that a PACE CMS–1201–F, Room C5–14–03, 7500
signatures or a secured computer entry organization must take action to correct Security Boulevard, Baltimore, MD
by a unique identifier of the primary deficiencies identified during reviews. 21244–1850. Office of Information and
author who has reviewed and approved Regulatory Affairs, Office of
the entry. Section 460.200 Maintenance of
Records Management and Budget, Room 10235,
Note: We believe the following New Executive Office Building,
requirements are not subject to the PRA in Section 460.200(f)(2) states that if Washington, DC 20503, Attn: Carolyn
accordance with CFR 1320.3(c)(4) since they litigation, a claim, a financial Lovett, CMS Desk Officer, CMS–1201–F,
do not require information from ten or more management review, or an audit arising carolyn_lovett@omb.eop.gov. Fax (202)
entities on an annual basis. from the operation of the PACE program 395–6974.
is started before the expiration of the
Section 460.60 PACE Organizational retention period, specified in paragraph VI. Regulatory Impact Statement
Structure (f)(1) of this section, the PACE We have examined the impact of this
organization must retain the records rule as required by Executive Order
Section 460.60(d)(3) states that a
until the completion of the litigation, or 12866 (September 1993, Regulatory
PACE organization planning a change in
resolution of the claims or audit Planning and Review), the Regulatory
organizational structure must notify
findings. Flexibility Act (RFA) (September 19,
CMS and the State administering
agency, in writing, at least 14 days Section 460.204 Financial 1980, Pub. L. 96–354), section 1102(b) of
before the change takes effect. Recordkeeping and Reporting the Social Security Act, the Unfunded
Requirements Mandates Reform Act of 1995 (Pub. L.
Section 460.82 Marketing 104–4), and Executive Order 13132.
Section 460.204(d) states that a PACE First, Executive Order 12866 directs
Section 460.82 states that once a organization must permit CMS and the agencies to assess all costs and benefits
PACE organization is under a PACE State administering agency to audit or of available regulatory alternatives and,
program agreement, any revisions to inspect any books and records of if regulation is necessary, to select
existing marketing information and any original entry that pertain to the regulatory approaches that maximize
new information is subject to CMS’ time following: any aspect of services net benefits (including potential
period for approval. CMS approves or performed; reconciliation of economic, environmental, public health
disapproves marketing information participant’s benefit liabilities; or and safety effects, distributive impacts,
within 45 days after receipt from the determination of Medicare and and equity). A regulatory impact
organization. Medicaid amounts payable. analysis (RIA) must be prepared for
Note: In accordance with 5 CFR Section 460.208 Financial Statements major rules with economically
1320.4(a)(2), we believe the following ICRs significant effects ($100 million or more
are exempt from the PRA since it is in Section 460.208(c) states that if CMS in any 1 year). This rule does not reach
response to an administrative action, or the State administering agency the economic threshold and thus is not
investigation, or audit against specific determines that an organization’s considered a major rule.
individuals or entities. performance requires more frequent Next, the RFA requires agencies to
monitoring and oversight due to analyze options for regulatory relief of
Section 460.68 Program Integrity concerns about fiscal soundness, CMS small businesses. For purposes of the
Section 460.68(c) states that a PACE or the State administering agency may RFA, small entities include small
organization must have a formal process require a PACE organization to submit businesses, nonprofit organizations, and
in place to gather information related to monthly or quarterly financial small governmental jurisdictions. Most
paragraphs (a) and (b) of this section, statements, or both. hospitals and most other providers and
and must be able to respond in writing Note: There is additional burden associated suppliers are small entities, either by
to a request for information from CMS with Sections 460.12, 460.26, 460.30(a) & (b), nonprofit status or by having revenues
within a reasonable amount of time. 460.70, 460.71, 460.72, 460.82, 460.102, of $6 million to $29 million in any 1
year. Individuals and States are not operations of a substantial number of 4. In conjunction with the PO,
included in the definition of a small small rural hospitals. developing and implementing health
entity. Although PACE organizations Next, Section 202 of the Unfunded status and quality of life outcome
(POs) are nearly always small entities, Mandates Reform Act of 1995 also measures—sections 1894(e)(3)(B) and
the industry is limited in scope with a requires that agencies assess anticipated 1934(e)(3)(B) of the Act.
growth rate of new POs averaging fewer costs and benefits before issuing any 5. The statute requires the Secretary
than six per year. Currently, there are 36 rule whose mandates require spending and State to conduct a comprehensive
POs that have program agreements. In in any 1 year of $100 million in 1995 annual review—sections 1894(e)(4)(A)
addition, the requirements contained in dollars, updated annually for inflation. and 1934(e)(4)(A) of the Act.
this rule are largely similar to the That threshold level is currently 6. Establishing the frequency of the
requirements that have been applicable approximately $120 million. Consistent monitoring reviews—sections
to the existing organizations through the with our approach in the 1999 and 2002 1894(e)(4)(B) and 1934(e)(4)(B) of the
1999 and 2002 interim final rules. Other PACE interim final rules, we are not Act.
entities that have contemplated or preparing an analysis of section 202. 7. Establishing a mechanism for
already have started developing PACE Even as we factor in the growth rate of communicating CMS Secretary’s
programs have been aware of those PACE since the two previous interim findings and State action when a PO is
requirements and would have designed final rules, the mandates of this rule do failing to comply with Federal
their potential programs to comply with not require spending $100 million or requirements—sections 1894(e)(6)(A)
them. Because the basic effect of this more in any 1 year. This rule will have and 1934(e)(6)(A) of the Act.
rule is to finalize prevailing industry no consequential effect on State, local, 8. Establishing the entity responsible
standards, its impact is not significant. or Tribal governments or on the private for the annual eligibility
While we do not have data on which sector. recertification—sections 1894(c)(3) and
to base an estimate of overall costs or Finally, Executive Order 13132 1934(c)(3) of the Act; and continuation
savings to the Medicare and Medicaid establishes certain requirements that an of eligibility requirements—sections
programs, we believe that any agency must meet when it promulgates 1894(c)(4) and 1934(c)(4) of the Act.
incremental difference would be so For this reason, we obtained State
a proposed rule (and subsequent final
small as to be negligible. PACE services input in the early stages of policy
rule) that imposes substantial direct
substitute for services that would development through conference calls
requirement costs on State and local
otherwise be covered, and payment with State Medicaid Agency
governments, preempts State law, or
rates are adjusted so that the total representatives. The 8 agencies that
otherwise has Federalism implications.
payment level is less than the projected volunteered to participate in these
Under Executive Order 13132, this
payment that would have been made if discussions represented a balanced view
regulation will not significantly affect
the participants were not enrolled in of States; some with PACE
the States beyond what is required and
PACE. Thus, the overall result should be demonstration program experience and
provided for under the BBA. It follows
a slight savings for this small some that were not involved with PACE
the intent and letter of the law and does
population. PACE services substitute for at that time, but were interested in
not usurp State authority beyond what
services that would otherwise be providing input to establish a new long
the BBA requires. This regulation
covered, and payment rates are adjusted term care optional benefit. The calls
describes the processes that must be
so that the total payment level is less were very productive in understanding
undertaken by CMS, the States, and POs
than the projected payment that would the variety of State concerns inherent in
in order to implement the PACE benefit.
have been made if the participants were implementing a new program. In
not enrolled in PACE. Thus, the overall As noted previously, sections 4801 addition, in order to formulate processes
result should be a slight savings for this and 4802 of the BBA clearly describe a to operationalize the PACE benefit, we
small population. Because this rule will cooperative relationship between the maintained ties with State
not have a significant economic impact Secretary and the States in the representatives through conference calls
on a substantial number of small development, implementation, and to obtain information on a variety of
entities, we are not preparing an administration of the PACE benefit. The topics including the applications review
analysis for the RFA. following are some examples of areas in and approval process, data collection
In addition, section 1102(b) of the Act which we engaged in partnership with needs, and enrollment/disenrollment
requires us to prepare a regulatory States to establish policy and issues, join CMS/State onsite surveys.
impact analysis if a rule may have a procedures: We are committed to continuing this
significant impact on the operations of 1. Establishing procedures for dialogue with States after publication of
a substantial number of small rural entering into, extending, and this regulation to ensure this
hospitals. This analysis must conform to terminating PACE agreements—sections cooperative atmosphere continues as the
the provisions of section 604 of the 1894(e)(1)(A) and 1934(e)(1)(A) of the PACE matures.
RFA. For purposes of section 1102(b) of Act. Since this regulation finalizes costs
the Act and relating to Medicare 2. Establishing procedures for associated with PACE and does not
payment, we define a small rural excluding service areas already covered impose any new costs on State or local
hospital as a hospital that is located under other PACE program agreements governments, the requirements of E.O.
outside of a Metropolitan Statistical in order to avoid unnecessary 13132 are not applicable.
Area and has fewer than 100 beds. In duplication of services and also to avoid In accordance with the provisions of
terms of Medicaid payment, we define impairing the financial and service Executive Order 12866, this regulation
a small rural hospital as a hospital that viability of the existing program— was reviewed by the Office of
is located outside of a Core-Based sections 1894(e)(2)(B) and 1934(e)(2)(B) Management and Budget.
Statistical Area and has fewer than 100 of the Act.

beds. We are not preparing an analysis 3. Establishing procedures for the POs List of Subjects in 42 CFR Part 460
for section 1102(b) of the Act, because to make available PACE program data— Aged, Health care, Health records,
we have determined that this rule will sections 1894(e)(3)(A)(i)(III) and Medicaid, Medicare, Reporting and
not have a significant impact on the 1934(e)(2)(A)(i)(III) of the Act. recordkeeping requirements.
■ For the reasons set forth in the ■ C. In newly redesignated paragraph § 460.32 Content and terms of PACE
preamble, the Centers for Medicare & (a)(2)(ii), removing the phrase ‘‘, as program agreement.
Medicaid Services confirms as final the provided in § 460.16.’’ (a) * * *
interim final rules amending 42 CFR (12) The Medicaid capitation rate and
Chapter IV, published on November 24, § 460.14 [Removed and Reserved] the methodology used to calculate the
1999 (64 FR 66234) and October 1, 2002 ■ 5. Section 460.14 is removed and Medicare capitation rate.
(67 FR 61496), as final with the reserved. * * * * *
following changes:
§ 460.16 [Removed and Reserved] § 460.60 [Amended]
PART 460—PROGRAM OF ALL- ■ 6. Section 460.16 is removed and ■ 10. Section 460.60 is amended as
INCLUSIVE CARE FOR THE ELDERLY reserved. follows:
(PACE) ■ 7. Section 460.26 is amended as ■ A. Paragraph (d)(3) is revised.
■ B. Paragraphs (d)(4) and (d)(5) are
■ 1. The authority citation for part 460 follows:
■ A. Redesignating paragraph (a) as
removed.
is revised to read as follows: The revisions read as follows:
paragraph (a)(1).
Authority: Secs. 1102, 1871, 1894(f), and ■ B. Adding paragraph (a)(2). § 460.60 PACE organizational structure.
1934(f) of the Social Security Act (42 U.S.C.
■ C. Revising paragraph (b) introductory * * * * *
1302, 1395, 1395eee(f), and 1396u–4(f)).
text. (d) * * *
§§ 460.72, 460.74, 460.98, and 460.102 ■ D. Revising paragraph (b)(1). (3) A PACE organization planning a
[Amended] The revisions read as follows: change in organizational structure must
■ 2. In the following paragraphs in part § 460.26 Submission and evaluation of
notify CMS and the State administering
460, remove the word ‘‘center’’ and add waiver requests. agency, in writing, at least 14 days
the phrase ‘‘PACE center’’ in its place: before the change takes effect.
(a)(1) A PACE organization must
■ § 460.72(b)(1) at the end of the first ■ 11. Section 460.62 is amended by—
submit its waiver request through the
sentence ■ A. Revising paragraph (b).
State administering agency for initial ■ B. Revising paragraph (c).
■ (b)(2)(ii) review. The State administering agency The revisions read as follows:
■ (b)(4) forwards the waiver requests to CMS
■ § 460.74(c)(1) along with any concerns or conditions § 460.62 Governing body.
■ § 460.98(d) heading regarding the waiver. * * * * *
■ (d)(3) (2) Entities submitting an application (b) Participant advisory committee. (1)
■ (e) heading and in the body of the to become a PACE organization may A PACE organization must establish a
paragraph § 460.102(a)(1) submit a waiver request. The entity participant advisory committee to
must submit its waiver request through provide advice to the governing body on
Subpart A—Basis, Scope, and the State administering agency for matters of concern to participants.
Definitions initial review. The State administering Participants and representatives of
agency forwards the waiver requests to participants must constitute a majority
■ 3. Section 460.6 is amended by CMS along with any concerns or of the membership of this committee.
revising the definition of ‘‘PACE center’’ conditions regarding the waiver. The (2) The participant advisory
and by adding a definition of ‘‘PACE waiver request is submitted as a committee must provide the liaison to
program’’ to read as follows: document separate from the application the governing body with meeting
but may be submitted in conjunction minutes that include participant issues.
§ 460.6 Definitions. (c) Participant representation on the
with and at the same time as the
* * * * * application. governing body. (1) A PACE
PACE center is a facility which (b) CMS evaluates a waiver request organization must ensure participant
includes a primary care clinic, and areas from a PACE organization or PACE representation on issues related to
for therapeutic recreation, restorative applicant on the basis of the following participant care. This shall be achieved
therapies, socialization, personal care, information: by having a participant representative
and dining, and which serves as the (1) The adequacy of the description on the governing body.
focal point for coordination and and rationale for the waiver provided by (2) The participant representative is a
provision of most PACE services. the PACE organization or PACE liaison of the participant advisory
* * * * * applicant, including any additional committee to the PACE organization
PACE program means a program of information requested by CMS. governing body.
all-inclusive care for the elderly that is (3) Duty of the participant
* * * * *
operated by an approved PACE representative. The participant
■ 8. Section 460.28 is amended by representative must present issues from
organization and that provides revising paragraph (a)(2) to read as
comprehensive healthcare services to the participant advisory committee to
follows: the governing body.
PACE enrollees in accordance with a
PACE program agreement. § 460.28 Notice of CMS determination on ■ 12. Section 460.64 is revised to read
* * * * * waiver requests. as follows:

(a) * * * § 460.64 Personnel qualifications for staff
§ 460.12 [Amended] (2) Denies the request and notifies the with direct participant contact.
■ 4. Section 460.12 is amended by— PACE organization or PACE applicant in (a) General qualification
■ A. Redesignating paragraph (a)(3) as writing of the basis of the denial. requirements. Each member of the PACE
paragraph (a)(2). * * * * * organization’s staff that has direct
■ B. In newly redesignated paragraph ■ 9. Section 460.32 is amended by participant contact, (employee or
(a)(2)(i), removing the phrase ‘‘, as revising paragraph (a)(12) to read as contractor) must meet the following
provided in § 460.14.’’ follows: conditions:
(1) Be legally authorized (for example, § 460.70 [Amended] § 460.92 Required services.
currently licensed, registered or ■ 15. Section 460.70 is amended by— The PACE benefit package for all
certified if applicable) to practice in the participants, regardless of the source of
■ A. Removing paragraph (d).
State in which he or she performs the payment, must include the following:
■ B. Redesignating paragraph (e) as
function or action; (a) All Medicare-covered items and
paragraph (d).
(2) Only act within the scope of his or services.
■ C. Redesignating paragraph (f) as
her authority to practice; (b) All Medicaid-covered items and
(3) Have 1 year of experience with a paragraph (e).
services, as specified in the State’s
frail or elderly population; ■ 16. Section 460.71 is amended by
approved Medicaid plan.
(4) Meet a standardized set of republishing paragraph (b) introductory (c) Other services determined
competencies for the specific position text and revising paragraph (b)(4) to necessary by the interdisciplinary team
description established by the PACE read as follows: to improve and maintain the
organization and approved by CMS § 460.71 Oversight of direct participant participant’s overall health status.
before working independently. care. ■ 20. Section 460.94 amended by
(5) Be medically cleared for revising paragraph (b)(5) to read as
* * * * *
communicable diseases and have all follows:
immunizations up-to-date before (b) The PACE organization must
engaging in direct participant contact. develop a program to ensure that all
§ 460.94 Required services for Medicare
staff furnishing direct participant care participants.
(b) Federally-defined qualifications
services meet the following
for physician. In addition to the * * * * *
requirements:
qualification specified in paragraph (a) (b) * * *
of this section, a physician must meet * * * * * (5) Section 411.15(g) and § 411.15(k)
the qualifications and conditions in (4) Are free of communicable diseases of this chapter that may prevent
§ 410.20 of this chapter. and are up to date with immunizations payment for PACE program services that
■ 13. Section 460.66 is amended by
before performing direct patient care. are provided to PACE participants.
adding paragraph (c) to read as follows: * * * * * ■ 21. Section 460.96 is amended by
§ 460.66 Training. § 460.72 [Amended] revising paragraph (e)(1) to read as

follows:
(c) Personal care attendants must ■ 17. Section 460.72 is amended by
exhibit competency before performing revising paragraph (a)(3) to read as § 460.96 Excluded services.
personal care services independently. follows: * * * * *
■ 14. Section 460.68 is amended by– (e) * * *
§ 460.72 Physical environment.
■ A. Revising paragraph (b). (1) In accordance with § 424.122 and
■ B. Redesignating paragraph (d) as (a) * * *
§ 424.124 of this chapter.
paragraph (c). (3) Equipment maintenance.
(i) A PACE organization must * * * * *
■ C. Revising the heading of newly
establish, implement, and maintain a ■ 22. Section 460.98 is amended by
redesignated paragraph (c).
The revisions read as follows: written plan to ensure that all revising paragraph (b)(3) to read as
equipment is maintained in accordance follows:
§ 460.68 Program integrity. with the manufacturer’s § 460.98 Service delivery.
* * * * * recommendations.
(b) Direct or indirect interest in * * * * *
(ii) A PACE organization must
contracts. The PACE organization shall perform the manufacturer’s (b) * * *
identify members of its governing body recommended maintenance on all (3) The PACE organization may not
or any immediate family member having equipment as indicated in the discriminate against any participant in
a direct or indirect interest in any organization’s written plan. the delivery of required PACE services
contract that supplies any based on race, ethnicity, national origin,
* * * * * religion, sex, age, sexual orientation,
administrative or care-related service or
■ 18. Section 460.78 is amended by mental or physical disability, or source
materials to the PACE organization.
revising paragraph (a)(1) introductory of payment.
(1) PACE organizations must develop
text to read as follows: * * * * *
policies and procedures for handling
any direct or indirect conflict of interest § 460.78 Dietary services. ■ 23. Section 460.100 is amended by:
by a member of the governing body or (a) Meal requirements. (1) Except as ■ A. Revising paragraph (d).
by the member’s immediate family. specified in paragraphs (a)(2) or (a)(3) of ■ B. Republishing the introductory text
(2) In the event of a direct or indirect this section, the PACE organization to paragraph (e).
conflict of interest by a member of the must ensure, through the assessment ■ C. Adding paragraph (e)(3) containing
PACE organization’s governing body or and care planning process, that each definitions of ‘‘Post stabilization care’’
his or her immediate family member, participant receives nourishing, and ‘‘Urgent care.’’
the board member must— palatable, well-balanced meals that meet The revisions read as follows:
(i) Fully disclose the exact nature of the participant’s daily nutritional and
the conflict to the board of directors and § 460.100 Emergency care.
special dietary needs. Each meal must
have the disclosure documented; and meet the following requirements: * * * * *
(ii) Recuse himself or herself from (d) Explanation to participant. The
* * * * *
discussing, negotiating, or voting on any organization must ensure that the

issue or contract that could result in an Subpart F—PACE Services participant or caregiver, or both,
inappropriate conflict. understand when and how to get access
(c) Disclosure and recusal ■ 19. Section 460.92 is revised to read to emergency services and that no prior
requirements. * * * as follows: authorization is needed.
(e) On-call providers. The plan must (2) Annual reassessment. On at least (A) Informing the participant or
provide for the following: an annual basis, the following members designated representative of his or her
* * * * * of the interdisciplinary team must right to appeal the decision as specified
(3) Definitions. As used in this conduct an in-person reassessment: in § 460.122.
section, the following definitions apply: (i) Physical therapist. (B) Describing both the standard and
(i) Post stabilization care means (ii) Occupational therapist. expedited appeals processes, including
services provided subsequent to an (iii) Dietitian. the right to, and conditions for,
emergency that a treating physician (iv) Home care coordinator. obtaining expedited consideration of an
(d) Unscheduled reassessments. In appeal of a denial of services as
views as medically necessary after an
addition to annual and semiannual specified in § 460.122.
emergency medical condition has been
reassessments, unscheduled (C) Describing the right to, and
stabilized. They are not emergency
reassessments may be required based on conditions for, continuation of appealed
services, which POs are obligated to
the following: services through the period of an appeal
cover. Rather, they are non-emergency
(1) A change in participant status. If
services that the PO should approve as specified in § 460.122(e).
the health or psychosocial status of a
before they are provided outside the (v) If the interdisciplinary team fails
participant changes, the members of the
service area. to provide the participant with timely
interdisciplinary team, listed in
(ii) Urgent care means the care notice of the resolution of the request or
paragraph (a)(2) of this section, must
provided to a PACE participant who is does not furnish the services required
conduct an in-person reassessment.
out of the PACE service area, and who (2) At the request of the participant or by the revised plan of care, this failure
believes their illness or injury is too designated representative. If a constitutes an adverse decision, and the
severe to postpone treatment until they participant (or his or her designated participant’s request must be
return to the service area, but their life representative) believes that the automatically processed by the PACE
or function is not in severe jeopardy. participant needs to initiate, eliminate, organization as an appeal in accordance
■ 24. In § 460.102, paragraph (b)(3) is or continue a particular service, the with § 460.122.
revised to read as follows: appropriate members of the * * * * *
§ 460.102 Interdisciplinary team. interdisciplinary team, as identified by ■ 26. Section 460.112 is amended by—
the interdisciplinary team, must ■ A. Revising the introductory text of
* * * * * conduct an in-person reassessment. paragraph (a).
(b) * * * (i) The PACE organization must have ■ B. Revising paragraph (b)(1)(iii).
(3) Master’s-level social worker. explicit procedures for timely resolution The revisions read as follows:
* * * * * of requests by a participant or his or her
designated representative to initiate, § 460.112 Specific rights to which a
§ 460.104 [Amended] participant is entitled.
eliminate, or continue a particular
■ 25. Section 460.104 is amended by— service. (a) Respect and nondiscrimination.
■ A. Revising paragraph (a)(2). (ii) Except as provided in paragraph Each participant has the right to
■ B. Revising paragraph (c)(1)(iii). (d)(2)(iii) of this section, the considerate, respectful care from all
■ C. Revising paragraph (c)(2). interdisciplinary team must notify the PACE employees and contractors at all
■ D. Redesignating paragraphs (d) and participant or designated representative times and under all circumstances. Each
(e) as paragraphs (e) and (f), of its decision to approve or deny the participant has the right not to be
respectively. request from the participant or discriminated against in the delivery of
■ E. Redesignating paragraph (c)(3) as designated representative as required PACE services based on race,
new paragraph (d) and revising it. expeditiously as the participant’s ethnicity, national origin, religion, sex,
The revisions read as follows: condition requires, but no later than 72 age, sexual orientation, mental or
§ 460.104 Participant assessment. hours after the date the interdisciplinary physical disability, or source of
team receives the request for payment. Specifically, each participant
(a) * * *
reassessment. has the right to the following:
(2) As part of the initial
(iii) The interdisciplinary team may * * * * *
comprehensive assessment, each of the
extend the 72-hour timeframe for (b) * * *
following members of the
notifying the participant or designated (1) * * *
interdisciplinary team must evaluate the
representative of its decision to approve
participant in person, at appropriate (iii) At the time a participant’s needs
or deny the request by no more than 5
intervals, and develop a discipline- necessitate the disclosure and delivery
additional days for either of the
specific assessment of the participant’s of such information in order to allow
following reasons:
health and social status: the participant to make an informed
(A) The participant or designated
(i) Primary care physician. choice.
representative requests the extension.
(ii) Registered nurse. (B) The team documents its need for * * * * *
(iii) Master’s-level social worker. additional information and how the ■ 27. Section 460.122 is amended by—
(iv) Physical therapist. delay is in the interest of the ■ A. Revising the introductory text to
(v) Occupational therapist. participant. the section.
(vi) Recreational therapist or activity (iv) The PACE organization must ■ B. Revising paragraph (f)(1).
coordinator. explain any denial of a request to the
(vii) Dietitian. The revisions read as follows:
participant or the participant’s
(viii) Home care coordinator. designated representative orally and in § 460.122 PACE organization’s appeals
* * * * * writing. The PACE organization must process.

(c) * * * provide the specific reasons for the For purposes of this section, an
(1) * * * denial in understandable language. The appeal is a participant’s action taken
(iii) Master’s-level social worker. PACE organization is responsible for the with respect to the PACE organization’s
* * * * * following: noncoverage of, or nonpayment for, a
service including denials, reductions, or (b) * * * this section, ‘‘Medicare Advantage

termination of services. (3) Continued eligibility criteria. (i) rates’’ means the Part A and Part B rates
* * * * * The State administering agency, must calculated by CMS for making payment
(f) Expedited appeals process. (1) A establish criteria to use in making the to Medicare Advantage organizations
PACE organization must have an determination of ‘‘deemed continued under section 1853(c) of the Act.
expedited appeals process for situations eligibility.’’ The State administering (3) CMS will adjust the monthly
in which the participant believes that agency, in consultation with the PACE capitation payment amount derived
his or her life, health, or ability to regain organization, makes a determination of under paragraph (b)(2) of this section
or maintain maximum function could be deemed continued eligibility based on a based on a risk adjustment that reflects
seriously jeopardized, absent provision review of the participant’s medical the individual’s health status. CMS will
of the service in dispute. record and plan of care. These criteria ensure that payments take into account
* * * * * must be applied in reviewing the the comparative frailty of PACE
participant’s medical record and plan of enrollees relative to the general
Subpart I—Participant Enrollment and care. Medicare population.
Disenrollment (ii) The criteria used to make the
determination of continued eligibility (4) For Medicare participants who
■ 28. Section 460.152 is amended by must be specified in the program require ESRD services, the monthly
adding paragraph (a)(1)(vi) to read as agreement. capitation amount is based on the
follows: Medicare Advantage ESRD risk
Subpart J—Payment adjustment model.
§ 460.152 Enrollment process. * * * * *
(a) * * * ■ 31. Section 460.180 is amended by—
(1) * * * ■ A. Revising paragraph (a). Subpart L—Data Collection, Record
(vi) Post-eligibility treatment of ■ B. Revising paragraphs (b)(1) through Maintenance, and Reporting
income. (b)(4).
The revisions read as follows: § 460.210 [Amended]
* * * * *
■ 29. Section 460.154 is amended by— § 460.180 Medicare payment to PACE ■ 32. Section 460.210 is amended by
■ A. Revising paragraph (h). organizations. removing paragraph (b)(13).
■ B. Revising paragraph (t). (a) Principle of payment. Under a (Catalog of Federal Domestic Assistance
The revisions read as follows: PACE program agreement, CMS makes a Program No. 93.778, Medical Assistance
prospective monthly payment to the Program)
§ 460.154 Enrollment agreement.
PACE organization of a capitation (Catalog of Federal Domestic Assistance
* * * * * amount for each Medicare participant in Program No. 93.773, Medicare—Hospital
(h) Notification that a Medicare a payment area based on the rate it pays Insurance; and Program No. 93.774,
participant may not enroll or disenroll to a Medicare Advantage organization. Medicare—Supplementary Medical
at a Social Security office. (b) Determination of rate. (1) The Insurance Program)
* * * * * PACE program agreement specifies the Dated: September 26, 2006.
(t) The signature of the applicant or methodology used to calculate the Mark B. McClellan,
his or her designated representative and monthly capitation amount applicable
Administrator, Centers for Medicare &
the date. to a PACE organization. Medicaid Services.
■ 30. Section 460.160 is amended by (2) Except as specified in paragraph
(b)(4) of this section, the monthly Approved: November 14, 2006.
revising paragraph (b)(3) to read as
capitation amount is based on the Part Michael O. Leavitt,
follows:
A and Part B payment rates established Secretary.
§ 460.160 Continuation of enrollment. for purposes of payment to Medicare [FR Doc. E6–20544 Filed 12–7–06; 8:45 am]
* * * * * Advantage organizations. As used in BILLING CODE 4120–01–P

Rule: Medicare: Physician Fee Schedule (CY 2007) Payment Policies and Relative Value Units Programs of All-Inclusive Care For Elderly Program Revisions

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Friday,

42 CFR Parts 460, 462, 466, 473, and 476

Act of 2000 (BIPA) 1. Demonstration Project

of residence; include procedures on at least the provide substitute foods or nutritional

visits. personally liable for unauthorized or requirements for delivery of required

requirement that a participant may be agreement. disenrollment for non-payment of

program. determines to be appropriate. As for PACE. These changes are reflected

Percent frailty Percent risk

by BIPA. for the State’s nursing-facility-eligible choose to do so consistent with the

requirements based upon their information as well. perform necessary reviews.

Response: We believe that a clinic, areas for therapeutic recreation,

psychosocial status occurs, the in- After Trial Period—No Change

Statistical Area and has fewer than 100 of the Act.

* * * * * waiver requests. as follows:

§ 460.66 Training. § 460.72 [Amended] revising paragraph (e)(1) to read as

discussing, negotiating, or voting on any organization must ensure that the

* * * * * writing. The PACE organization must process.

service including denials, reductions, or (b) * * * this section, ‘‘Medicare Advantage

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