On May 28, 2019, the Centers for Medicare & Medicaid Services (CMS) released the Medicare and Medicaid Programs’ Programs of All-Inclusive Care for the Elderly (PACE) Final Rule which finalizes the policies proposed in the August 2016 PACE proposed rule. Specifically, the final rule addresses application and waiver procedures, sanctions, enforcement actions and termination, administrative requirements, PACE services, participant rights, participant enrollment and disenrollment, payment, federal and state monitoring, data collection, record maintenance, and reporting.

The PACE program is a unique model of managed care service delivery for the frail elderly, most of whom are dually-eligible for Medicare and Medicaid benefits, and all of whom are assessed as being eligible for nursing home placement. The proposed changes aim to provide greater operational flexibility, remove redundancies and outdated information, and codify existing practice. CMS estimates that the final rule will save approximately $4 million over three years due to its monitoring provisions.

CMS Finalizes PACE Expansion Applications Based on Initial Application Process

• Current regulations only apply to initial applications, and CMS is finalizing its proposal to apply this existing process to existing PACE organizations seeking approval to expand their service area or add a new PACE center site.
• CMS also finalizes its proposal to incorporate site visit and other data into its approval decisions.

Increased Flexibility to Meet Interdisciplinary Team Member Requirements

• In the proposed rule, CMS requested comments on ways to facilitate greater flexibility to how interdisciplinary team (IDT) members can provide PACE services.
  • Commenters widely supported being able to provide PACE services in alternate settings such as adult day care centers, senior centers, or activity areas in residential communities. CMS may look at this in potential rulemaking, however, provisions regarding flexibility of settings is not being updated at this time.
• CMS finalized its definition of primary care services to include services provided by a primary care provider, which includes a community-based physician, a physician assistant, or a nurse practitioner.
  • CMS now specifies that a primary care provider, rather than a primary care physician, must be part of the IDT.
• CMS finalizes the removal of the requirement that members of the IDT must primarily serve PACE participants. Instead, IDT members may be community based.
• Additionally, PACE organizations will no longer be subject to a requirement that they hire only individuals with at least 1 year of experience with the elderly
• PACE organizations will be requirement to have a written Quality Assessment and Performance Improvement (QAPI) plan that is collaborative and interdisciplinary in nature
  • As an example, the rule offers that a PACE organization that identifies the goal of improving overall fall incident rate would develop a plan of action through soliciting recommendations from staff and contracted resources, such as pharmacists, physicians, social workers, transportation providers, and physical therapists.

Pace Organizations Not Required to Develop Compliance Oversight Requirements

• In response to comments, CMS declined to finalize its proposed requirement that each PACE organization develop compliance oversight requirements that ensure responsibility for monitoring and auditing their organization for compliance with the regulations, similar to the compliance programs found in the Medicare Advantage and Medicare Part D programs.
• However, CMS will require appropriate corrective actions in response to any identified issues of non-compliance that they may discover.
• CMS  finalizes its proposed flexibilities with the current requirement that POs be monitored for compliance with the PACE program requirements during and after a 3-year trial period.
• CMS will use technology to enhance efficiencies in monitoring by remotely reviewing PACE documents, which CMS has to date reviewed primarily through site visits.
  • This will reduce the number of onsite visits after the 3-year trial period by utilizing a risk assessment to select which POs will be audited each year. This risk assessment would rely largely on an organization’s past performance and ongoing compliance with CMS and state requirements.
  • The risk assessment will also take into account other information that could indicate a PO needs to be reviewed, such as participant complaints or access to care concerns.

Revised eligibility determinations require additional notification for denials

• CMS revises the eligibility criteria regulation to enroll in a PACE program, used to determine whether an individual’s health or safety would be jeopardized by living in a community setting, to specify that the criteria used is developed by the state administering agency (SAA).
• In addition, CMS finalizes that if a PACE organization denies enrollment to a potential PACE participant on the basis that his or her health or safety would be jeopardized by living in a community setting, the PO must notify CMS and the SAA in the “form and manner” specified by the Agency.
• CMS left the responsibility for developing the criteria, and ensuring its clarity, to the states.

Additional Flexibility in Assessment Timing and Setting

• CMS finalizes its proposal that a plan of care for a patient must be completed within 30-days from the date of enrollment.
• During administration of a reassessment, CMS finalizes that recreational therapists and activity coordinators are not required to be present at every reassessment. However, a recreational therapist and/or activity coordinator should be present if the primary care provider, registered nurse, and social worker determines they should be present at the time of a reassessment.
• CMS eliminates the requirement for team members, such as physical therapists, that must always be part of annual reassessments. CMS states that primary care providers can determine if individual patient requires allied health, or other, clinicians to be present during reassessments.
• CMS finalizes a provision allowing reassessments to be conducted using remote technology in specific circumstances. CMS cites potential circumstances as ones that maintain a participants’ health and well-being in the community setting. CMS additionally states that remote technology cannot be used to deny a service to a PACE enrollee, however, this should not be used routinely.

CMS Finalizes Technical Updates to Regulations

• CMS adds “Part D Program Requirements” into existing PACE regulations to clarify the policy that Part D program requirements apply to PACE organizations that elect to provide qualified Part D coverage unless a specific requirement has been waived.
• To update terminology in PACE regulations to be consistent with both other CMS programs and industry practice, all references to “quality assessment and “performance improvement” will be replacement with “quality improvement.”
• CMS finalizes its proposal to require PACE program agreements to contain the state’s Medicaid capitation rate or the methodology behind establishing the Medicaid capitation rates to specify how PACE organizations will be paid for each Medicaid participant.