[Federal Register Volume 84, Number 106 (Monday, June 3, 2019)]
[Rules and Regulations]
[Pages 25610-25677]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-11087]
[[Page 25609]]
Vol. 84
Monday,
No. 106
June 3, 2019
Part II
Department of Health and Human Services
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Centers for Medicare & Medicaid Services
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42 CFR Parts 423 and 460
Medicare and Medicaid Programs; Programs of All-Inclusive Care for the
Elderly (PACE); Final Rule
Federal Register / Vol. 84 , No. 106 / Monday, June 3, 2019 / Rules
and Regulations
[[Page 25610]]
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DEPARTMENT OF HEALTH AND HUMAN SERVICES
Centers for Medicare & Medicaid Services
42 CFR Parts 423 and 460
[CMS-4168-F]
RIN 0938-AR60
Medicare and Medicaid Programs; Programs of All-Inclusive Care
for the Elderly (PACE)
AGENCY: Centers for Medicare & Medicaid Services (CMS), HHS.
ACTION: Final rule.
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SUMMARY: This final rule updates the requirements for the Programs of
All-Inclusive Care for the Elderly (PACE) under the Medicare and
Medicaid programs. The rule addresses application and waiver
procedures, sanctions, enforcement actions and termination,
administrative requirements, PACE services, participant rights, quality
assessment and performance improvement, participant enrollment and
disenrollment, payment, federal and state monitoring, data collection,
record maintenance, and reporting. The changes will provide greater
operational flexibility, remove redundancies and outdated information,
and codify existing practice.
DATES: Effective Date: These regulations are effective on August 2,
2019.
FOR FURTHER INFORMATION CONTACT: Brandy Alston, 410-786-1218.
SUPPLEMENTARY INFORMATION:
Table of Contents
I. Executive Summary
A. Purpose
B. Summary of Key Economic Provisions
C. Summary of Costs and Benefits
II. Background
A. Program Description
B. Legislative and Regulatory History
C. PACE Regulatory Framework
III. Summary of the Provisions of the Proposed Rule, and Analysis of
and Responses to Public Comments
A. Global Change Regarding Quality Assessment and Performance
Improvement
B. Subpart A--Basis, Scope, and Definitions
C. Subpart B--PACE Organization Application and Waiver Process
D. Subpart C--PACE Program Agreement
E. Subpart D--Sanctions, Enforcement Actions, and Termination
F. Subpart E--PACE Administrative Requirements
G. Subpart F--PACE Services
H. Subpart G--Participant Rights
I. Subpart H--Quality Assessment and Performance Improvement
J. Subpart I--Participant Enrollment and Disenrollment
K. Subpart J--Payment
L. Subpart K--Federal/State Monitoring
M. Subpart L--Data Collection, Record Maintenance, and Reporting
IV. Provisions of the Final Rule
V. Collection of Information Requirements
VI. Regulatory Impact Statement
Regulation Text
I. Executive Summary
A. Purpose
The purpose of this final rule is to revise and update the
requirements for the Programs of All-Inclusive Care for the Elderly
(PACE) under the Medicare and Medicaid programs. The rule addresses
application and waiver procedures, sanctions, enforcement actions and
termination, administrative requirements, PACE services, participant
rights, quality assessment and performance improvement, participant
enrollment and disenrollment, payment, federal and state monitoring,
data collection, record maintenance, and reporting. The changes will
provide greater operational flexibility, remove redundancies and
outdated information, and codify existing practice.
B. Summary of Key Economic Provisions
1. Compliance Oversight Requirements
Compliance programs, as found in the Medicare Advantage (MA) and
Medicare Part D programs, have long been recognized as key to
protecting against fraud, waste, and abuse. The importance of these
programs has been highlighted by several of our oversight bodies. In
the August 16, 2016 Federal Register (81 FR 54666), we published the
proposed rule, entitled ``Medicare and Medicaid Programs; Programs of
All-Inclusive Care for the Elderly (PACE).'' In that rule, as
authorized by sections 1934(f)(3) and 1894(f)(3) of the Social Security
Act (the Act), we proposed to adopt two key elements of the Part D
compliance program in the PACE regulations. Specifically, we proposed
to require each PACE organization (PO) to develop a compliance
oversight program that will be responsible for monitoring and auditing
its organization for compliance with our regulations. Additionally, we
proposed to require POs to have measures that prevent, detect and
correct non-compliance with CMS' program requirements, as well as
measures that prevent, detect, and correct fraud, waste, and abuse. We
received comments that indicated these requirements would potentially
present a significant burden to POs and possibly take key staff away
from providing participant care. After careful consideration of these
concerns, and after re-analyzing the burden estimates, we are
finalizing this provision in part.
2. Monitoring and Oversight of PACE Organizations
As a result of our experience with oversight and monitoring of the
PACE program, we proposed flexibilities in connection with the current
requirement that POs be monitored for compliance with the PACE program
requirements during and after a 3-year trial period. We stated in the
proposed rule that we must balance the responsibilities of ensuring
that all of our beneficiaries are receiving quality care with our duty
to effectively manage our resources and ensure proper oversight over
all of the programs we manage. We proposed to use technology to enhance
efficiencies in monitoring by remotely reviewing PO documents, which we
have to date reviewed primarily through site visits. We also proposed
to reduce the number of on-site visits after the 3-year trial period by
utilizing a risk assessment to select which POs will be audited each
year. We stated in the proposed rule that this risk assessment would
rely primarily on an organization's past performance and ongoing
compliance with CMS and state requirements. However, the risk
assessment would also take into account other information that could
indicate a PO needs to be reviewed, such as participant complaints or
access to care concerns. We are finalizing the provisions related to
federal and state monitoring as proposed.
3. Additional Flexibility for Interdisciplinary Team
This final rule makes several changes intended to expand the
flexibilities of the interdisciplinary team (IDT) that comprehensively
assesses and provides for the individual needs of each PACE
participant. Key provisions in this final rule include permitting one
individual to fill two separate roles on the IDT if the individual has
the appropriate licenses and qualifications for both roles, and
permitting the primary care provider that is required for each IDT to
include nurse practitioners, physician assistants and community-based
physicians, in addition to physicians. Another flexibility we are
finalizing in this rule is removal of the requirement that members of
the IDT must serve primarily PACE participants.
C. Summary of Costs and Benefits
[[Page 25611]]
Table 1--Summary of Costs and Benefits
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Total cost to
government
Provision description Total costs to POs (without
transfer)
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Compliance Oversight This provision The creation of
Requirements. requires POs to this program
create a compliance does not have
oversight program to cost or savings
allow prompt to the
identification of non- government
compliance and report since it is the
of fraud, waste and POs who are
abuse. We estimate a creating and
one-time burden of using the
$116,026.8 in the compliance
first year for oversight
developing the program.
written materials and
training necessary
for the prompt
identification and
reporting of fraud,
waste and abuse (124
PO x 15 hours per PO
x 62.38 (hourly
rate)). This cost
when annualized over
3 years is $38,675.6.
We further estimate
an annual cost of
$154,702 per year for
POs reporting and
responding to any
suspected fraud,
waste and abuse (124
PO x 20 hours per PO
x $62.38 hourly
rate). Thus, the
total cost would be
$38,675.6 initially
and $154,702
afterwards.
Monitoring.................... This provision reduces We estimate an
the required annual savings
monitoring by CMS of of $2,638,144
POs. We estimate that to the
there will be an government. We
annual savings to POs expect 72 PO
based on our proposal audits under
of $1,523,253. We current
expect 72 PO audits regulations. We
under the current expect only 35
regulations but only audits under
35 audits as a result this final
of this final rule. rule. The
Consequently, the savings to the
savings to PO would government
be the effort saved would be the
by not having to effort saved by
produce documentation not having to
and other perform 37
administrative audits.
burdens that occur The cost per
during an audit for audit is 2 GS-
37 audits. 13 x $1,980
Consequently, we are travel + 200
estimating the hours for GS-
savings per audit for 13s x $46.46/hr
a PO to be GS-13 wage x 2
approximately $41,169 (Fringe benefit
(1 Nurse Manager at factor) + 60
$53.69/hour x 2 hours for GS-
(Factor for fringe 15s x $64.59/hr
benefits) x 150 hours GS-15 wage x 2
per person plus 1 (Fringe benefit
Executive Assistant factor) + 20
at $28.56/hour x 2 hours for 1 GS-
(Factor for fringe 13 x 46.46/hr
benefits) x 150 hours GS-13 wage x 2
per person) plus 1 (Fringe benefit
Medical Record factor) =
Technician at 20.59/ $71,301.20.
hour x 2 (Factor for Hence, the
Fringe benefits) x total savings
150 hours per person is $71,301.20 x
plus 1 Compliance 37 = 2,638,144.
Officer at 34.39/hour The audit work
x 2 (Factor for includes all of
Fringe benefits) x the pre-audit
150 hours per work, including
person). Therefore, (i) compiling
the total savings to and (ii)
POs will be $41,169 x submitting
37 = $1,523,253. audit
documentation;
(iii) 2 weeks
of audit
fieldwork; the
post-audit work
of (iv)
collecting and
(v) submitting
impact
analyses, (vi)
reviewing and
(vii)
commenting on
the draft audit
report, and
(viii)
submitting and
(ix)
implementing
corrective
action plans
for conditions
of non-
compliance.
Additional Flexibility for the This provision This provision
Inter-disciplinary Team (IDT). provides has neither
administrative cost nor
flexibility for POs savings to the
without compromising government due
care by: (i) to the fact
Permitting one that many POs
individual to fill are currently
two separate roles on exercising
the IDT if the these
individual has the flexibilities
appropriate licenses through PACE
and qualifications waivers.
for both roles; (ii)
permitting the
primary care provider
(required for each
IDT) to include nurse
practitioners,
physician assistants
and community-based
physicians, in
addition to
physicians; and (iii)
removing the
requirement that
members of the IDT
must serve primarily
PACE participants.
While this provision
provides greater
flexibility in
creating the IDT, it
does not create cost
or savings.
Participant Assessments....... The provision provides These provisions
clarity on initial will not result
assessments, removes in additional
duplicative costs or
requirements for savings to the
periodic government.
reassessments, and
provides greater
flexibility for
unscheduled
reassessments. More
specifically: The
provision clarifies
that: (i) Initial
assessments must be
done in-person and
prior to completion
of the plan of care
(within 30 days);
(ii) reassessments
must be done semi-
annually and requires
a minimum of three
IDT members; (iii)
``change in
participant status''
reassessments require
a minimum of three
(instead of eight)
IDT members; and (iv)
remote technology may
be used to conduct
certain reassessments
for participant
requests that will
likely be deemed
necessary to improve
or maintain the
participants overall
health status. The
use of remote
technologies to
conduct these
reassessments for
participant requests
under Sec.
460.104(d)(2) results
in savings from
reduced travel costs
for PO staff and PACE
participants. We are
scoring this as a
qualitative savings
since there are
challenges with
quantifying it.
Similarly, the other
provisions are
qualitative savings
to POs.
[[Page 25612]]
PACE Program Agreement-- This provision Since this is an
Include Medicaid Rate provides states and option on the
Methodology. POs the ability to part of states,
adapt to potential and some states
payment rate changes may continue to
and variations by elect to
allowing the include the
inclusion of the actual Medicaid
Medicaid payment rate rates in the
methodology in the program
PACE program agreement, and
agreement instead of because CMS
the actual rates. will continue
Although this to review and
provision may reduce approve state
the burden of POs Medicaid PACE
having to update capitation
agreements to include rates, there is
the actual Medicaid neither cost
payment rates, this nor savings to
is not a mandatory the government.
requirement and we
are not scoring this
change since some
states may elect to
continue to include
the Medicaid rates.
Enforcement Actions........... This provision allows Because the
CMS the discretion to provision
take less punitive authorizes
action, such as lesser
sanctions or CMPs, sanctions under
when authorized to the existing
terminate a PO. disciplinary
Because the provision process, the
authorizes lesser provision has
sanctions under the neither cost
existing disciplinary nor savings to
process, the the government.
provision has neither
cost nor savings to
POs.
Application Process........... This provision allows This provision
an electronic and codifies
automated PACE existing
application and practice, and
waiver process. Since therefore, has
this provision neither cost
codifies existing nor savings to
practice it results the government.
in neither costs nor
savings.
PACE Marketing................ The provision This provision
strengthens has neither
beneficiary cost nor
protections by savings to the
prohibiting POs from: government.
(i) Using agents/
brokers that are not
directly employed by
the PO to market PACE
programs, unless
appropriately
trained; (ii)
unsolicited marketing
by direct contact,
including phone calls
and emails. Since the
purpose of
prohibiting these
marketing practices
is to strengthen
existing beneficiary
protections, this
provision is not
considered a cost or
savings.
------------------------------------------------------------------------
II. Background
A. Program Description
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 according to the Medicaid standards
established by their respective states.
B. Legislative and Regulatory History
1. Demonstration Project
Section 603(c) of the Social Security Amendments of 1983 (Pub. L.
98-21), as extended by section 9220 of the Consolidated Omnibus Budget
Reconciliation Act of 1985 (COBRA) (Pub. L. 99-272), authorized the
original demonstration PACE program for On Lok Senior Health Services
(On Lok) in San Francisco, California. Section 9412(b) of the Omnibus
Budget Reconciliation Act (OBRA) of 1986 (Pub. L. 99-509), authorized
CMS to conduct a PACE demonstration program to determine whether the
model of care developed by On Lok could be replicated across the
country. The number of sites was originally limited to 10, but the OBRA
of 1990 (Pub. L. 101-508) authorized an increase to 15 PACE
demonstration programs. The PACE demonstration program was operated
under a Protocol published by On Lok, Inc. as of April 14, 1995.
The PACE model of care includes, as core services, the provision of
adult day health care and IDT care management, through which access to
and allocation of all health services is managed. Physician,
therapeutic, ancillary, and social support services are furnished in
the participant's residence or on-site at a PACE center. Hospital,
nursing home, home health, and other specialized services are generally
furnished under contract. Financing of the PACE demonstration model was
accomplished through prospective capitation payments under both
Medicare and Medicaid. Under section 4118(g) of the OBRA of 1987 (Pub.
L. 100-203), PACE demonstration programs had to assume full financial
risk progressively over the initial 3 years. As such authority was
removed by section 4803(b)(1)(B) of the Balanced Budget Act of 1997
(BBA) (Pub. L. 105-33), PACE demonstration programs approved after
August 5, 1997 had to assume full financial risk at start-up.
2. Balanced Budget Act of 1997 (BBA) (Pub. L. 105-33)
Section 4801 of the BBA authorized coverage of PACE under the
Medicare program by amending title XVIII of the Act to add section 1894
of the Act, which addresses Medicare payments and coverage of benefits
under PACE. Section 4802 of the BBA authorized the establishment of
PACE as a state option under Medicaid by amending title XIX of the Act
and adding section 1934 of the Act, which directly parallels the
provisions of section 1894 of the Act. Section 4803 of the BBA
addresses implementation of PACE under both Medicare and Medicaid, the
effective date, timely issuance of regulations, priority and special
consideration in processing applications, and extension and transition
for PACE demonstration project waivers.
As directed by section 4803 of the BBA, we published an interim
final rule with comment period (IFC) on November 24, 1999, establishing
requirements for PACE under sections 1894 and 1934 of the Act (64 FR
66234). The 1999 IFC was a comprehensive rule that addressed
eligibility, administrative requirements, application procedures,
services, payment, participant rights, and quality assurance under
PACE.
3. The Medicare, Medicaid, and SCHIP Benefits Improvement and
Protection Act of 2000 (BIPA) (Pub. L. 106-554)
The following three sections of BIPA modified the PACE program:
Section 901 extended the transition period for the PACE
demonstration programs to allow an additional year for these
organizations to transition to the permanent PACE program.
Section 902 gave the Secretary of Health and Human
Services (the Secretary) the authority to grandfather in the
modifications these programs had implemented as of July 1, 2000. This
provision allowed the PACE demonstration programs to continue
[[Page 25613]]
program modifications they had implemented and avoid disruptions in
participant care where these modifications were determined to be
consistent with the PACE model.
Section 903 specifically addressed flexibility in
exercising the waiver authority provided under sections 1894(f)(2)(B)
and 1934(f)(2)(B) of the Act. It authorized the Secretary to modify or
waive PACE regulatory provisions in a manner that responds promptly to
the needs of PACE organizations (POs) relating to the areas of
employment and the use of community-based primary care physicians.
Section 903 of BIPA also established a 90-day review period for waiver
requests. On October 1, 2002, we issued an IFC to implement section 903
of BIPA (67 FR 61496).
4. Medicare Prescription Drug, Improvement, and Modernization Act of
2003 (MMA) (Pub. L. 108-173)
On December 8, 2003, Congress enacted the MMA. Several sections of
the MMA affected POs. Most notably, section 101 of the MMA affected the
way in which POs are paid for providing certain outpatient prescription
drugs to any Part D eligible participant. The MMA altered the payment
structure for Part D drugs for POs by shifting the payer source for
PACE enrollees who are full-benefit dual-eligible individuals from
Medicaid to Medicare, and, in part, from the beneficiary to Medicare
for individuals that are not full-benefit dual-eligible beneficiaries
who elect to enroll in Part D. The MMA did not affect the manner in
which POs are paid for the provision of outpatient prescription drugs
to non-part D eligible PACE participants.
Section 101 of the MMA added section 1860D-21(f) of the Act, which
provides that POs may elect to provide qualified prescription drug
coverage to enrollees who are Part D eligible individuals. The MMA
allows CMS the flexibility to deem POs as MA plans with prescription
drug coverage (MA-PD) local plans and to treat POs that elect to
provide qualified drug coverage in a manner similar to MA-PD local
plans. Due to inconsistencies in the PACE and MMA statutes, we chose to
treat POs in a similar manner as MA-PD plans, thereby avoiding
conflicting requirements. The requirements that apply to POs that elect
to provide qualified prescription drug coverage to Part D eligible
enrollees are described in section II.T.3. of the January 2005 Part D
final rule (70 FR 4426 through 4434).
In addition, section 236 of the MMA amended the Act to extend to
POs the existing statutory Medicare and Medicaid balance billing
protections that had previously applied to POs under the PACE
demonstration program authority.
Section 301 of the MMA amended the Medicare Secondary Payer (MSP)
provisions in section 1862(b) of the Act. These amendments clarify the
obligations of primary plans and primary payers, the nature of the
insurance arrangements subject to the MSP rules, the circumstances
under which Medicare may make conditional payments, and the obligations
of primary payers to reimburse Medicare. To implement section 301 of
the MMA, we issued an IFC published in the February 24, 2006 Federal
Register (71 FR 9466). The provisions in the IFC were finalized in a
final rule published in the February 22, 2008 Federal Register (73 FR
9679). The IFC revised pertinent MSP regulations found at 42 CFR part
411. Our PACE regulations at Sec. 460.180(d) specify that Medicare
does not pay for PACE services to the extent that Medicare is not the
primary payer under part 411. The MSP regulations found at 42 CFR part
411 set forth our current policies regarding MSP obligations involving
other payers.
5. 2006 PACE Final Rule
On December 8, 2006, we issued a final rule (71 FR 71244)
(hereinafter 2006 final rule) that finalized both the PACE IFC
published in the November 24, 1999 Federal Register (64 FR 66234) and
the PACE IFC published in the October 1, 2002 Federal Register (67 FR
61496).
For a complete history of the PACE program, please see the 2006
final rule (71 FR 71244 through 71248).
C. PACE Regulatory Framework
Sections 1894(f) and 1934(f) of the Act set forth the requirements
for issuing regulations to carry out sections 1894 and 1934 of the Act.
Sections 1894(f)(2) and 1934(f)(2) of the Act state that the Secretary
must incorporate the requirements applied to PACE demonstration waiver
programs under the PACE Protocol when issuing interim final or final
regulations, to the extent consistent with the provisions of sections
1894 and 1934 of the Act. However, the Secretary may modify or waive
these provisions under certain circumstances. Sections 1894(a)(6) and
1934(a)(6) of the Act define the PACE Protocol as the Protocol for PACE
as published by On Lok, Inc., as of April 14, 1995, or any successor
protocol that may be agreed upon between the Secretary and On Lok, Inc.
We issued the 1999 and 2002 IFCs and the 2006 final rule under
authority of sections 1894(f) and 1934(f) of the Act.
We believe sections 1894(f) and 1934(f) of the Act primarily apply
to issuance of the initial interim and final PACE program regulations
because they refer to the PACE Protocol,\1\ which has now been replaced
by the PACE program agreement.\2\ Sections 1894(f)(2)(B) and
1934(f)(2)(B) of the Act permit the Secretary to modify or waive
provisions of the PACE Protocol as long as any such modification or
waiver is not inconsistent with and does not impair any of the
essential elements, objectives, and requirements of the PACE Protocol
and, in particular, does not modify or waive any of the following five
provisions:
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\1\ https://www.gpo.gov/fdsys/pkg/FR-1999-11-24/pdf/99-29706.pdf
(Addendum A).
\2\ https://www.cms.gov/Medicare/Health-Plans/pace/downloads/programagreement.pdf.
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The focus on frail elderly qualifying individuals who
require the level of care provided in a nursing facility.
The delivery of comprehensive integrated acute and long-
term care services.
The IDT approach to care management and service delivery.
Capitated, integrated financing that allows the PO to pool
payments received from public and private programs and individuals.
The assumption by the PO of full financial risk.
While we believe sections 1894(f) and 1934(f) of the Act no longer
have direct application to the PACE program in many respects, we
believe the limitations on waivers and modifications continue to apply
to updates to the PACE program to the extent the updates concern
essential elements, objectives, and requirements of the PACE Protocol,
as replaced by the PACE program agreement, or any of the five listed
provisions.
III. Summary of the Provisions of the Proposed Rule, and Analysis of
Responses to Public Comments
In the August 16, 2016 proposed rule, we proposed to revise and
update the policies finalized in the 2006 final rule to reflect
subsequent changes in the practice of caring for the frail and elderly
and changes in technology (for example, the use of electronic
communications, including email, and the automation of certain
processes) based on our experience implementing and overseeing the PACE
program. We explained in the proposed rule that PACE has proven
successful in keeping frail, older individuals, many of whom are
eligible for both Medicare and
[[Page 25614]]
Medicaid benefits (dual eligibles), in community settings.\3\ However,
it is necessary to revise some regulatory provisions to afford more
flexibility to POs and state administering agencies (SAAs) as a means
to encourage the expansion of the PACE program to more states, thus
increasing access for participants, and to further enhance the
program's effectiveness at providing care while reducing costs.
Therefore, we proposed a number of flexibilities, including allowing
non-physician medical providers practicing within the scope of their
state licensure and clinical practice guidelines to serve in place of
primary care physicians in some capacities, and permitting POs to
better tailor the IDTs to improve efficiency, while continuing to meet
the needs of their participants.
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\3\ See the Medicare Payment Advisory Commission's June 2012
Report to the Congress, Medicare and the Health Care Delivery
System, pp. 76-77, available at http://www.medpac.gov/docs/default-source/reports/june-2016-report-to-the-congress-medicare-and-the-health-care-delivery-system.pdf.
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We received approximately 110 public comments on the proposed rule
from POs, individuals, health care providers, advocacy groups, and
states. In the sections that follow, we describe each proposed
provision, summarize any public comments received on each provision,
and provide our responses to the comments.
A. Global Change Regarding Quality Assessment and Performance
Improvement
Part 460 encompasses the regulatory provisions pertaining to PACE.
We proposed to replace all references to ``quality assessment and
performance improvement'' in part 460 of the regulations (including
subpart and section headings) with ``quality improvement.'' We noted in
the proposed rule that we proposed this change because, in practice,
the term ``quality improvement'' is used by the POs, SAAs, CMS, and the
industry when referring to quality assessment and performance
improvement for POs. Furthermore, the term ``quality improvement'' is
used to mean the same thing in other CMS programs, such as the CMS
Quality Improvement Organization Program and the MA Quality Improvement
Program, so this change would allow for consistency in use of language
across CMS programs. We stated that this would be a change in
terminology only and would not designate a change in the requirements
for the PACE quality program. As proposed, the change would affect the
following sections and headings in the current regulations: Sec. Sec.
460.32(a)(9), 460.60(c), 460.62(a)(7), 460.70(b)(1)(iii), 460.120(f),
460.122(i), 460.130(a), 460.132(a) and (c)(3), 460.134(a), 460.136(a),
(b), (c), (c)(1) and (2), 460.138(b), and 460.172(c), and the headings
of subpart H and Sec. Sec. 460.132, 460.134, and 460.136. We noted in
the proposed rule that, because we were proposing to remove Sec.
460.140 in its entirety, we would not need to change the reference in
that section.
As we received no comments on this global change, we are finalizing
it as proposed.
B. Subpart A--Basis, Scope, and Definitions
1. Part D Program Requirements (Sec. 460.3)
In the 2006 final rule (71 FR 71248), we indicated that MA-PD
requirements with respect to Part D prescription drug coverage would
apply to POs that elect to provide qualified Part D prescription drug
coverage. However, the PACE regulations make no mention of Part D
program requirements. To clarify this policy, we proposed to add Sec.
460.3, ``Part D Program Requirements,'' to state that the POs offering
qualified prescription drug coverage and meeting the definition of a
Part D plan sponsor (as defined at Sec. 423.4) must abide by all
applicable Part D program requirements in 42 CFR part 423. We explained
in the proposed rule that when we issue Part D program guidance we
often receive questions regarding applicability to PACE, and it has
been our experience that POs are not always aware they must comply with
Part D requirements unless a specific requirement has been waived. (For
a list of the Part D regulatory requirements that are waived for POs,
see section 2.4 of the Part D application for new POs, available at
https://www.cms.gov/Medicare/Prescription-Drug-Coverage/PrescriptionDrugCovContra/RxContracting_ApplicationGuidance.html.) We
stated that we believed the proposed change is consistent with our
current policy and does not involve any change in the current treatment
of POs offering qualified Part D prescription drug coverage.
The following is a summary of the public comments we received on
the proposed provision regarding Part D program requirements and our
responses to comments.
Comment: Several commenters generally supported the proposal to
include in the PACE regulations the requirement that POs offering Part
D qualified prescription drug coverage comply with Part D program
requirements in 42 CFR part 423. However, one commenter requested that
the regulatory text include a list of Part D requirements that are
waived for PACE and suggested that CMS issue Health Plan Management
System (HPMS) guidance specifying which Part D requirements are
applicable to PACE. The same commenter requested that CMS audits take
into account differences between PACE and MA-PDs and Medicare
prescription drug plans (PDPs). The commenter also requested that CMS
help in reducing Part D premiums and other costs for PACE participants.
Response: Regarding the suggestion to list in the PACE regulations
the specific Part D requirements that are waived for PACE, we prefer to
maintain our current approach of listing the waived regulations in the
Part D application for new POs, as well as the PACE program agreement.
We believe our approach provides greater administrative flexibility
(for example, to remove or add waived requirements) than if we codified
the list in regulation. Further, we believe listing the waived
regulations in the Part D PACE application is appropriate so that this
information is readily available to all entities submitting an
application. However, we agree that when we need to change how a waiver
of Part D requirements is applied in PACE, or revoke a waiver based on
new information or legal requirements, we should issue guidance to
address those changes. For example, we will be issuing an HPMS memo to
clarify the requirements for drug management programs in PACE to
reflect the regulatory changes made in the final rule to implement the
Comprehensive Addiction and Recovery Act (CARA) (83 FR 16440). Because
the other comments concerning audits and assistance with reducing
premiums and other costs address topics that were not covered in our
proposal, we consider those comments to be outside the scope of this
rule. We are finalizing the new Sec. 460.3 as proposed, with one
technical change to refer to the definition of a Part D sponsor ``in''
Sec. 423.4 instead of ``at'' Sec. 423.4.
C. Subpart B--PACE Organization Application and Waiver Process
1. Purpose (Sec. 460.10)
Section 460.10 describes the purpose of subpart B, which sets forth
the processes for an entity to apply to become a PO and to apply for a
waiver of certain regulatory requirements. We proposed to revise this
section to add a new paragraph (a) to address the
[[Page 25615]]
application process and a new paragraph (b) in which we proposed to
move the current language in this section regarding the waiver process
by which a PO may request a waiver of certain regulatory requirements.
We also proposed to add Sec. 460.10(a)(2) and (3) to describe the
process for a PO to seek approval from CMS to expand an existing
service area or add a new PACE center. We did not receive any comments
on this proposal, and therefore, we are finalizing it as proposed.
2. Application Requirements (Sec. 460.12)
Section 460.12 sets forth the application requirements for an
organization that wishes to participate in the PACE program. Section
460.12(a) currently requires an individual authorized to act for an
entity to submit a complete application to CMS that describes how the
entity meets all requirements in part 460 if the entity seeks approval
from CMS to become a PO. As set forth in our PACE manual, an
application must also be submitted for a PO that seeks to expand its
service area and/or add a new PACE center site (see PACE Manual, Ch.
17, Sections 20.4 through 20.7). There are three scenarios specified in
the PACE manual under which a PO may expand operations: (1) It may
expand its geographic service area without building additional sites;
(2) it may open another physical site in the existing geographic
service area; and (3) it may expand its geographic service area and
open another physical site in the expanded area. Currently, POs are
required to submit an application to CMS and the SAA to expand their
geographic service area and/or add a new PACE center to their PO. In
October 2004, we released the PACE expansion application, which was for
existing POs that wish to expand their geographic service areas, and/or
add a new PACE center to their PO.
As with initial applications, our guidance requires POs to submit
an expansion application to CMS through the SAA. However, current
regulations do not specify a process for POs to submit, and the SAA and
CMS to approve, an expansion application. Therefore, we proposed to
amend Sec. 460.12(a) to specify that it also applies to expansion
applications submitted by existing POs that seek to expand their
service area and/or to add a PACE center site. Specifically, we
proposed to add language in Sec. 460.12(a) that an individual
authorized to act for a PO that seeks to expand its service area and/or
add a PACE center site must submit a complete application to CMS that
describes how the PO meets all requirements in this part. We stated in
the proposed rule that we believed including this requirement in Sec.
460.12 will help ensure POs understand our current practice of
requiring an expansion application for a PO that seeks to expand its
service area and/or add a PACE center site.
We also proposed to add the phrase ``in the form and manner
specified by CMS'' to Sec. 460.12(a) when describing the submission to
CMS of a complete application to become a PO or to expand a service
area and/or add a PACE center, to allow for submission of applications
and supporting information in formats other than paper, which was the
required format at the time the proposed rule was issued. As we
explained in the proposed rule, paper applications were often hundreds
of pages long, expensive to reproduce and transmit, and
administratively inefficient, as staff reviewing different parts of the
application are located in different physical locations and must
receive hard copies of the material. We noted that to adapt to the
increased use of electronic communications, electronic health records,
and electronic data storage and exchange, we must continuously update
the form and manner by which we administer our programs. We stated that
we had successfully transitioned the MA application and PDP application
to a fully electronic submission process, enabling a more organized and
streamlined review, and wanted to bring those same efficiencies to the
PACE application process. We also noted that we will provide further
guidance on this process through HPMS or similar electronic system that
may replace HPMS. Effective March 31, 2017, the first quarterly
application submission date, we required POs to submit all applications
electronically via HPMS, including initial applications, and
applications for existing POs to expand their service area and/or add a
PACE center site. POs and applicants may also refer to the CMS online
tools for application submission at https://www.cms.gov/Medicare/Health-Plans/PACE/Overview.html.
Section 460.12(a)(2) provides that we would accept applications
from entities that seek approval as POs beginning on February 22, 2000,
except we would accept applications on earlier dates for certain
entities that qualify for priority processing or special consideration.
We established this provision and two other sections of the PACE
regulations, previously found at Sec. 460.14 and Sec. 460.16, to
implement section 4803(c) of the BBA of 1997. Section 4803(c) directed
us to give priority in processing applications, during the 3-year
period following enactment of the BBA of 1997, to PACE demonstration
programs and then to entities that had applied to operate a PACE
demonstration program as of May 1, 1997. In addition, section 4803(c)
of the BBA of 1997 required that we give special consideration in the
processing of applications during the 3 years following enactment to
any entity that as of May 1, 1997, had indicated specific intent to
become a PO through formal activities such as entering into contracts
for feasibility studies. In the 2006 final rule (71 FR 71253), we
deleted Sec. 460.14 (Priority Consideration) and Sec. 460.16 (Special
Consideration) because the authority to provide these considerations
expired on August 5, 2000. For the same reason, in the proposed rule,
we proposed to delete paragraph (a)(2) of Sec. 460.12, as it is no
longer applicable.
Section 460.12(b) provides that an entity's application must be
accompanied by an assurance from the SAA of the state in which the
program is located indicating that the state (1) considers the entity
to be qualified to be a PO and (2) is willing to enter into a PACE
program agreement with the entity. However, we have received
applications without the required SAA assurance. To help ensure that
our current policy is clear, we proposed to revise the language to
require that the entity's application to become a PO include an
assurance from the SAA that the state considers the entity to be
qualified to be a PO and the state is willing to enter into a PACE
program agreement with the entity. We explained in the proposed rule
that we want entities to understand we would not consider an
application to become a PO to be complete without assurance from the
SAA that the state both considers the entity to be qualified to be a PO
and is willing to enter into a PACE program agreement with the entity.
We noted that we would not review applications that do not include this
assurance.
Similarly, we proposed to redesignate paragraphs (b)(1) and (2) as
Sec. 460.12(b)(1) and add a new paragraph (b)(2) to codify the current
requirement in the PACE expansion application that a PO's application
to expand its service area and/or add a new PACE center site must
include an assurance from the SAA that the state is willing to amend
the PACE program agreement to include the new PACE center sites and/or
expand the PO's service area. We noted that we also expect, as we
stated in the preamble to the 1999 IFC for initial applications (64 FR
66238), that the SAA will verify that an applying entity has qualified
administrative and clinical
[[Page 25616]]
staff employed or under contract prior to furnishing services to
participants in the expanded service area.
In addition, we proposed to move the language in Sec. 460.22,
which requires an entity to state in its application the service area
it proposes for its program, and provides that CMS (in consultation
with the SAA) may exclude an area already covered under another PACE
program agreement, to proposed paragraph Sec. 460.12(c) and remove
Sec. 460.22. As proposed, Sec. 460.12(c)(1) would specify that both
an entity submitting an application to become a PO and a PO submitting
an application seeking to expand its service area must describe the
proposed service area in their application. We also proposed to make a
corresponding change to the Medicare Part D definition of ``Service
area'' in Sec. 423.4 for PACE plans offering qualified prescription
drug coverage by removing the reference to ``Sec. 460.22 of this
chapter'' and adding in its place ``Sec. 460.12(c) of this chapter,''
as our proposed changes would move the language currently in Sec.
460.22 to Sec. 460.12(c).
Finally, to codify CMS' current practice regarding the
permissibility of POs to expand their service area and/or add a new
PACE center site (see PACE Manual, Ch. 17, Section 20.4), we proposed
to add Sec. 460.12(d), which would provide that CMS and the SAA will
only approve an expansion application after the PO has successfully
completed its first trial period audit and, if applicable, has
implemented an acceptable corrective action plan.\4\
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\4\ The PACE manual is available at https://www.cms.gov/Regulations-and-Guidance/Guidance/Manuals/internet-Only-Manuals-IOMs-Items/CMS019036.html.
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We stated in the proposed rule that we believed all of these
changes to Sec. 460.12 would streamline the regulations and make the
requirements clear and consistent with the PACE statutes. We noted that
we will provide subregulatory guidance on application submission
requirements after publication of the final rule.
A discussion of the comments we received on the proposed changes to
the application requirements, and our responses to those comments,
appears below.
Comment: One commenter questioned how the state will ensure that
the required state assurance that is to accompany an initial or
expansion application is accurate without additional monitoring. The
commenter also questioned if the state will be required to perform
additional monitoring (with supporting documentation) to prove that an
expanding PO is indeed qualified to expand its service area or add an
additional PACE center.
Response: The PACE regulations currently require that an entity's
application to become a new PO be accompanied by an assurance from the
SAA that the state considers the entity to be qualified to be a PO and
is willing to enter into a PACE program agreement with the entity. In
proposing to revise Sec. 460.12(b), we sought to clarify in the
regulations that, similar to the requirement for an initial
application, the SAA must provide an assurance to us that the state is
willing to expand the existing PACE program agreement to add to an
existing service area and/or add a new PACE center. Given that we, in
cooperation with the SAA, already conducts ongoing monitoring of a PO,
we expect the state will determine what if any additional information
is needed from a PO before providing the required assurance. As
required by Chapter 17 of the PACE manual (Sections 10, 20.6, 20.7 and
30.2), if the PO is seeking to expand by adding a new PACE center, the
SAA is responsible for conducting the state readiness review (SRR) of
the PACE center to ensure that it meets the regulatory requirements for
environment and staffing, and must provide the results to us before the
expansion application can be approved.
Comment: Some commenters expressed support for CMS' proposal to
modernize the application process for entities that seek to become new
POs or to expand existing service areas or add new PACE center sites,
acknowledging that the electronic exchange of information will expedite
the processing of applications and be less burdensome for both POs and
CMS.
Response: We thank the commenters for their support.
Comment: A variety of commenters, including PACE associations,
supported the proposed requirements related to the submission of
initial applications by entities seeking to become POs, as well as
applications submitted by POs to expand their geographic service areas.
Commenters recommended that CMS not require a PO to submit a formal
expansion application in order to add a new PACE center within an
existing service area. Commenters suggested that instead of requiring
an expansion application for a new PACE center, CMS only require a PO
to provide advance notification (a minimum of 60 days in advance) at
any time (not limited to the quarterly application submission cycle),
and report specific information (for example, location of the new PACE
center, SAA assurance of support, willingness to amend the PACE program
agreement, attestation of financial solvency with supporting
documentation as evidence of the program's financial capacity, etc.),
along with a completed SRR prior to the opening of the new PACE center.
Commenters suggested that subsequently, but still prior to the new PACE
center's opening, the PO would submit any revised marketing materials
to CMS for review. Some commenters also suggested that a similar
process, with no expansion application requirement, would be sufficient
for circumstances in which a PO is simply moving a PACE center to a new
location and relocating the IDT. Other commenters noted that removing
the current requirement to submit applications on a quarterly cycle
would enable POs to open a new PACE center more quickly to build
capacity in response to increasing enrollment.
Response: We do not agree with the suggestion to remove the
expansion application requirement for existing POs seeking to add a new
PACE center within an existing service area for a number of reasons.
First, the submission of an expansion application in which the PO seeks
to add a new PACE center in an existing service area ensures that a
structured, formalized process is employed consistently, regardless of
expansion type, and ensures that the PO is providing proper assurances
that PACE requirements are being met and that appropriate documentation
is provided and included as part of the PACE program agreement.
Furthermore, an expansion application requirement benefits both CMS and
the PO, as both parties are held accountable and are required to adhere
to established timeframes and deadlines. Perhaps most importantly, the
submission of a formal expansion application, regardless of type,
enables us to make a determination based on a standardized mechanism
and affords the PO the opportunity to request reconsideration of
denials by us. Regarding commenters' suggestion that a similar
alternative process, with no expansion application requirement, could
also be employed when a PO is simply moving a PACE center to a new
location and relocating the IDT, we would point to our guidance that
addresses expectations of POs under these circumstances. (See the
October 21, 2016 HPMS memorandum, PACE Replacement Center Transition
Guidance.) POs that seek to relocate an existing PACE center should
follow this subregulatory guidance.
Comment: A commenter suggested that the SRR be appropriately
tailored to situations in which a PO is applying to
[[Page 25617]]
either expand its service area or add a new PACE center site, stating
that the SRR in these instances should not be the equivalent to an SRR
conducted for and included in an initial application.
Response: We note that an SRR is not required for service area
expansion (SAE) applications that do not include the addition of a new
PACE center. We recognize that the SRR is typically the primary driver
of delay in final approval when a PO applies for an expansion that
includes the addition of a new PACE center site. However, the SRR is
also a critical component of an expansion application that includes a
new PACE center, as it assures that all state-based licensure
requirements are met and building and safety codes are satisfied. The
SRR primarily consists of reviewing requirements specific to the PACE
center itself, such as construction, equipment and maintenance to
assure physical safety of participants and personnel. While there are
some SRR requirements that may remain the same as the existing PACE
center(s), such as transportation, contracts and policies and
procedures, that may not be the case if the new PACE center is
geographically distant from the existing PACE center. For example,
there may be a different transportation provider or other new
contractors that are more accessible to the new PACE center location.
Because of those variables, we believe it would be difficult to tailor
the current SRR for an expansion application that includes addition of
a new PACE center.
Comment: Some commenters requested that CMS specify in Sec. 460.12
that an expansion application will not have to include information
previously submitted to CMS as part of the initial application. Another
commenter noted that streamlining the administrative process removes a
burden for both POs and CMS in processing these applications.
Response: While SAE applicants were previously required to submit a
smaller subset of documents than initial PACE applicants, in March
2018, as part of the first quarterly application submission cycle, CMS
began requiring SAE applicants to respond to the same attestations and
upload the same documentation as initial PACE applicants. The PACE
program agreement is the binding document between the PO, CMS and the
SAA. We have found that program agreements, particularly for POs that
have been active for some time, may not fully represent current
operational policies and procedures and other information that is
required content of the program agreement under Sec. 460.32. We
understand commenters' concerns regarding the potential burden
associated with SAE applicants having to upload documents previously
submitted as part of an initial application. However, in addition to
providing added assurance and evidence that an active PO is qualified
to expand its PACE program, we believe the application process is an
appropriate, efficient and effective vehicle for capturing
documentation that is required as part of the PO's PACE program
agreement, including changes to operational policies and procedures,
and eliminates the need to require the PO to submit additional
information separately. While not explicitly addressed in this rule, we
note that comments received from the PACE industry in response to an
information collection request (CMS-10631, OMB 0938-1326) regarding
this approach for SAE applications have generally indicated support for
requesting information as part of the SAE application itself in order
to facilitate efforts to update the PACE program agreement. This
information collection request is subject to renewal and expires on
December 31, 2021.
We believe this approach results in a more streamlined process and
reduced burden for all parties to the PACE program agreement.
Comment: Commenters expressed support for the proposed provision in
Sec. 460.12(d), which would require a PO to have completed its first
trial period audit and, if applicable, implemented an acceptable
corrective action plan before CMS and the SAA will approve a service
area expansion or PACE center expansion, with two specific
modifications. Commenters requested an exception to this requirement
when the PO is relocating its PACE center to a new location due to
unforeseen circumstances or to assure adequate access if program growth
exceeds enrollment projections. In addition, because the timing of the
first trial period audit affects the ability of a PO to grow,
commenters requested that CMS and the SAA commit to conducting trial
period audits in a timely manner, with an expectation that the first
year audit be completed no later than 15 months after the opening of
the PACE program.
Response: We appreciate the support for the proposed provision in
Sec. 460.12(d) and acknowledge that unforeseen or otherwise
exceptional circumstances, such as storm damage from a hurricane, may
require a PO to immediately relocate its PACE center prior to
completion of the first trial period audit. In situations that
constitute emergency events, we would expect the PO to implement its
emergency preparedness plan under Sec. 460.84, which should include
established plans and procedures for continued care of all
participants, including those who had previously required regular PACE
center attendance, as well as those who predominantly or exclusively
receive care at home or in alternative care settings, as applicable. In
the event such emergency circumstances require the relocation of a PACE
center, either on a temporary or permanent basis, we would work with
the PO and the SAA to ensure that the PO's emergency preparedness plan
is implemented effectively and in a manner that maintains the health
and safety of participants and staff. Such circumstances vary widely
and present unique challenges; and we will expect the PO, to the extent
possible, to address the items identified in the transition plan
included as part of the October 21, 2016 HPMS memorandum, PACE
Replacement Center Transition Plan guidance, while recognizing that the
guidance may need to be tailored in response to the emergency situation
presented. The priority under such circumstances will be to ensure that
participants continue to receive necessary medical care and IDT members
are able to continue to function and serve the needs of participants in
a safe environment, regardless of setting. We would not require
submission of an expansion application in this type of emergency
situation, and do not believe it is necessary to amend Sec. 460.12(d)
to address unforeseen or otherwise exceptional circumstances.
We also do not agree that an exception should be made to allow
relocation of a PACE center prior to completion of the first trial
period audit in order to assure adequate access if program growth
exceeds enrollment projections. A PO that intends to relocate its PACE
center in order to satisfy increased enrollment demands would be
required to wait until the first trial period audit is successfully
completed. We believe this is reasonable because it enables us to
ensure the PO is satisfying all requirements of the PACE program within
the initial enrollment capacity constraints prior to accommodating
increased enrollment. We also appreciate the comment regarding the
timing of the first review during the trial period. We are committed to
conducting timely annual reviews during each contract year of the PO's
trial period. We will continue to
[[Page 25618]]
schedule reviews as expeditiously as possible consistent with statutory
and regulatory requirements for the PACE program.
After considering the comments, we are finalizing the changes to
Sec. 460.12 as proposed.
3. CMS Evaluation of Applications (Sec. 460.18)
Section 460.18 describes the information that CMS uses to evaluate
an application under PACE; however, this does not take into account all
the potential sources of information that may be a part of the
evaluation process, including information used in the evaluation of
applications submitted for a PO that seeks to expand its service area
and/or add a new PACE center site. Currently, Sec. 460.18(b) specifies
that CMS will use information obtained through on-site visits conducted
by CMS or the SAA. Section 460.18(c) provides that CMS will use
information obtained by the SAA. As discussed earlier in this section,
we proposed to revise our regulations to reflect that an application
also must be submitted for a PO that seeks to expand its service area
and/or add a new PACE center site. We explained in the proposed rule
that in evaluating expansion applications, CMS may consider additional
information beyond that contained in the application itself,
information obtained through on-site visits, or information obtained
through the SAA. For example, our review of a SAE application might
include information obtained from financial reviews, as well as the
results from ongoing monitoring visits. Therefore, we proposed to
combine the language currently in Sec. 460.18(b) and (c) in revised
Sec. 460.18(b) and delete Sec. 460.18(c). The revised Sec. 460.18(b)
would state that CMS uses information obtained by CMS or the SAA
through on-site visits or any other means. We noted that this change
would take into account the additional information that we use to
review any PACE application, including applications to expand a PO's
service area or add a new PACE center site. We also proposed to make a
conforming change to the introductory language in Sec. 460.18 to
reflect the review of expansion applications, by deleting ``for
approval as a PACE organization.''
A discussion of the comments we received on the proposed changes to
the application evaluation requirements, and our responses to those
comments, appears below.
Comment: One commenter noted the proposed modification would enable
CMS to use information obtained by CMS or the SAA through on-site
visits or any other means in order to evaluate a PACE application, and
requested clarification regarding what encompasses ``any other means.''
Response: As we stated in the proposed rule (81 FR 54671), it is
our intent to capture all the potential sources of information that may
be part of the application evaluation process. Information obtained by
``any other means'' may include, but is not limited to, information
obtained through the SAA, from financial reviews, or from ongoing
monitoring visits.
We are finalizing the modifications to Sec. 460.18 as proposed.
4. Notice of CMS Determination (Sec. 460.20)
Section 460.20 describes requirements for CMS to notify PACE
applicants of the status of PACE applications. Currently, Sec. 460.20
only specifies the requirements for CMS determination of applications
submitted by entities seeking to become POs. As previously discussed in
this section, we proposed to amend the regulations in subpart B to
include, in addition to requirements for applications from entities
seeking to become POs, requirements for applications submitted by
existing POs for service area and/or PACE center site expansions. In
conjunction with that proposal, we proposed changes to Sec. 460.20 to
also include specific language regarding the notification requirements
for CMS determination of applications to expand a PO's service area
and/or to add a new PACE center.
As we explained in the proposed rule, the current requirements in
Sec. 460.20 implement sections 1894(e)(8) and 1934(e)(8) of the Act,
which require that an application for PO status be deemed approved
unless the Secretary, within 90 days after the date of the submission
of the application to the Secretary, either denies such request in
writing or informs the applicant in writing with respect to any
additional information that is needed in order to make a final
determination with respect to the application. The Act further states
that, after the date of receipt of any additional requested information
from the applicant, the application must be deemed approved unless the
Secretary, within 90 days of such date, denies such request.
While the Act requires that CMS provide notice to entities seeking
to become POs of its determination within 90 days, the Act does not set
out requirements for applications submitted by existing POs to expand
their service area and/or to add a new PACE center site. We have
published expansion application requirements in Chapter 17 of the PACE
manual, available at http://www.cms.gov/Regulations-and-Guidance/Guidance/Manuals/Internet-Only-Manuals-IOMs-Items/CMS019036.html. Under
that guidance, a PO is required to submit an expansion application when
the PO is seeking to (1) expand its geographic service area; (2) add a
new PACE center; or (3) expand its geographic service area and add a
new PACE center.
The guidance provides that, when a PO submits an expansion
application to expand its geographical service area without building
additional sites, CMS has 45 days to request additional information
from the PO, approve the application, or deny the application.
Similarly, when a PO submits an expansion application to add a new PACE
center in the existing service area, CMS has 45 days to request
additional information from the PO, approve the application, or deny
the application. In these scenarios, if CMS requests additional
information and the applicant provides the requested information, CMS
has an additional 45 days to review and either approve or deny the
expansion application. The second 45-day review period in this scenario
only commences once CMS has received all of the additional requested
material. If the applicant submits additional information per CMS'
request, but CMS determines that there is still outstanding information
requested from the applicant, CMS notifies the applicant and the
additional 45-day review period does not begin until all requested
information is received. Once we have received all of the requested
information, CMS sends a letter to the applicant indicating that the
second 45-day review period has commenced.
In the third scenario, when a PO submits an expansion application
to expand its geographic service area and open a new PACE center site,
CMS has 90 days to request additional information from the PO, approve
the application, or deny the application. In this scenario, if CMS
requests additional information and the PO provides the requested
information, CMS has an additional 90 days to review and either approve
or deny the expansion application. The second 90-day review period in
this scenario only commences once CMS has received all of the
additional requested material. If the applicant submits additional
information per CMS' request, but CMS determines that there is still
outstanding information requested from the applicant, CMS notifies the
applicant and the additional 90-day review period does not begin until
all requested
[[Page 25619]]
information is received. Once CMS has received all of the requested
information, CMS sends a letter to the applicant indicating that the
second 90-day review period has commenced.
We proposed to codify our current subregulatory requirements for
notifying POs of CMS determinations regarding service area and PACE
center site expansion applications so the regulations include all of
the relevant application timing requirements. Specifically, we proposed
to amend Sec. 460.20(a) to make it clear that the notice of CMS
determination applies to all three types of applications listed in
proposed Sec. 460.10(a), and that the 90-day time limit applies,
except for applications to expand the service area or add a new PACE
center site.
First, we proposed to delete Sec. 460.20(a)(3) and revise Sec.
460.20(b). Currently, Sec. 460.20(a) states that CMS will approve or
deny, or request additional information on, a ``complete application''
within 90 days after submission of the application. We explained in the
proposed rule that we believe it is confusing to state that an
application is complete if we are requesting additional information.
Therefore, we proposed to delete Sec. 460.20(a)(3), which is the
provision that describes CMS requesting additional information needed
to make a final determination, and we proposed to revise Sec.
460.20(b) to state that an application is only considered complete when
CMS receives all information necessary to make a determination
regarding approval or denial. We noted that we would not consider the
application complete without the required state assurance. We also
proposed to revise Sec. 460.20(a) to specify that the time limit for
CMS notification of determination is 45 days for expansion applications
where a PO seeks to expand its service area or add a new PACE center.
Next, we proposed that Sec. 460.20(b) through (d) be redesignated
as Sec. 460.20(c) through (e) and revised as follows. We proposed to
revise redesignated Sec. 460.20(c) to describe the process if CMS
determines that the application is not complete because it does not
include sufficient information for CMS to make a determination.
Specifically, CMS would inform the entity that the application is not
complete and request the additional information, and within 90 days (or
45 days for a service area or new PACE center expansion application) of
CMS receiving all requested information from the entity, CMS would
approve the application or deny it and notify the entity in writing of
the basis of the denial and the process for requesting reconsideration
of the denial. We explained in the proposed rule that we proposed these
changes because it is not possible for CMS to make an informed decision
to approve or deny an application in situations where we do not have
all of the pertinent information. We stated we would consider the SRR,
which SAAs conduct to determine the PO's readiness to administer the
PACE program and enroll participants, as information necessary to make
our final determination and would request that the SRR be submitted in
all applicable requests for additional information if we did not
already have this information. We further noted that, if more than 6
months elapse between the date of submission of the application and the
response to CMS' request for additional information, the entity is
required to update the application to provide the most current
information and materials related to the application; otherwise, we
would consider the application incomplete. We proposed to revise Sec.
460.20(c) accordingly.
Section 460.20(b), which we proposed to redesignate as Sec.
460.20(c), currently outlines the requirements for POs when CMS
requests from an entity additional information needed to make an
application determination. As noted previously, we proposed to amend
the language in this provision to address the different time limits for
expansion applications. We also proposed to amend the language to
specify that the time limits in Sec. 460.20(a) do not begin until CMS
receives all requested information and the application is complete. As
we explained in the proposed rule, with the changes to Sec. 460.20(a)
and the addition of Sec. 460.20(b), it would no longer be necessary to
describe CMS' review process after all requested information has been
received; thus, we proposed to remove Sec. 460.20(b)(1) and (2).
Section 460.20(c), which we proposed to redesignate as Sec.
460.20(d), currently implements sections 1894(e)(8) and 1934(e)(8) of
the Act and provides that an application for PO status will be deemed
approved if CMS fails to act on it within 90 days of the date the
application is submitted or the date CMS receives all requested
additional information. We proposed to amend this language to specify
deemed approval will occur if CMS fails to act after the later of those
dates, and that the provisions relating to deemed approval only apply
to applications to become a PO, not expansion applications from
existing POs. We stated in the proposed rule that this revision is
necessary because, as described previously, we proposed to address
expansion applications in the regulations, and we wanted to make it
clear that only initial applications will be deemed approved if CMS
fails to act on them within the required time period. As previously
noted, the PACE statutes do not set out requirements for applications
submitted by existing POs to expand their service area and/or to add a
new PACE center site. We explained in the proposed rule that CMS does
not currently employ ``deemed approval'' for expansion applications,
and we noted we do not believe there is any reason to do so for these
applications at this time. We further proposed to amend this language
by specifying that the 90-day period commences after CMS has received a
``complete'' application, as this is consistent with the amendments to
Sec. 460.20(a) and Sec. 460.20(b).
Finally, Sec. 460.20(d) currently states that for purposes of the
90-day time limit described in this section, the date that an
application is submitted to CMS is the date on which the application is
delivered to the address designated by CMS. We proposed to redesignate
Sec. 460.20(d) as Sec. 460.20(e), and revise this paragraph to refer
to the time limits described in this section to include applications
for service area expansions or new PACE center sites.
A discussion of the comments we received on the proposed changes to
the CMS notice of determination requirements, and our responses to
those comments, appears below.
Comment: Commenters questioned the necessity of the proposed
provision that would require PACE applicants to update their
applications if more than 6 months elapse between the date of initial
submission of the application and the entity's response to the CMS
request for additional information. Commenters also questioned whether
CMS was proposing to require the applicant to withdraw its application
and resubmit an entirely new application, or if CMS would permit less
burdensome and timelier ways to update the existing application through
submission of additional information. Commenters recommended the latter
approach, and suggested allowing 12 months, as opposed to 6 months, to
elapse between the date of application submission and the entity's
response to the request for additional information before the entity is
required to update its application. Commenters also recommended that
the submission of additional information not be subject to CMS'
quarterly submission timeframes for applications.
Response: After careful consideration of the comments, we have
reconsidered
[[Page 25620]]
the timeframe that would require an update to the application. We agree
with commenters that there may be valid reasons for delay in responding
to our request for additional information (for example, unexpected
delays in construction or licensing of the PACE center, or timing of
the SRR); therefore, we accept the recommendation made by commenters
and will specify that if more than 12 months, instead of 6 months,
elapse between the date of initial submission of the application and
the entity's response to our request for additional information, the
entity must update the application with the most current information
and materials related to the application. This means that, in addition
to addressing the additional information requested by us, the applicant
must submit all other application-specific documentation that may have
changed during the interim 12-month period. We note that, depending on
the nature of those changes and updates, there may be circumstances in
which the applicant will be required to submit a completely new
application; for example, if there is a change in the legal entity that
is applying to become a PO.
With respect to commenters' recommendation that the submission of
additional information not be subject to quarterly submission
timeframes, we note that responses to a request for additional
information are not limited to a quarterly submission cycle. While the
application itself (initial or expansion) must be submitted on the
established quarterly dates, information in response to a request for
additional information may be submitted at any time.
Comment: We received comments in response to the proposed provision
regarding deemed approval of initial applications. One commenter did
not believe that an application should be deemed approved due to CMS'
inability to review and act on an application within the required
timeframes. This commenter believed that all documentation submitted to
fulfill an application as complete must be reviewed and approved by CMS
without any deemed approval. Other commenters noted that CMS, in the
preamble to the proposed rule, stated that it does not believe it is
necessary to allow deemed approval for expansion applications, as it
has not done so in the past. Commenters requested that CMS reconsider
this position and allow deemed approval of applications from POs
seeking to expand a service area, with or without adding a new PACE
center. While recognizing that CMS has always acted on expansion
applications within the timeframes required for initial applications,
the commenters stated there is no reason to preclude deemed approval if
CMS is unable to act on an expansion application in a timely manner for
some reason.
One commenter stated that, in cases in which the deemed approval
requirement is triggered, it is still necessary for CMS to issue
confirmation that deemed approval took place in order to effectively
track the status of the review process.
Response: Sections 1894(e)(8) and 1934(e)(8) of the Act require an
application for PO status to be deemed approved unless the Secretary,
within 90 days after the date of the submission of the application to
the Secretary, either denies the request in writing or informs the
applicant in writing with respect to any additional information that is
needed to make a final determination. The Act further states that,
after the date of receipt of any additional requested information from
the applicant, the application must be deemed approved unless the
Secretary, within 90 days of such date, denies such request. As we
noted in the proposed rule, the PACE statutes do not specifically
address expansion applications. As such, we proposed to specify in
redesignated Sec. 460.20(d) that the deemed approval requirement only
applies to entities that submit an initial application. As stated in
the proposed rule, we do not currently employ deemed approval for
expansion applications and we do not believe there is valid reason to
employ deemed approval for expansion applications at this time. We
appreciate the recognition from commenters that we have, to date,
rendered decisions regarding expansion applications within the
timeframes required for initial applications; however, we do not want
to be in a position in which a deeming process supersedes our ability
to make thoughtful, proactive decisions regarding these expansion
applications. Therefore, we are finalizing our proposal that the deemed
approval requirement will not apply to expansion applications.
Regarding the comment that we must issue confirmation that an
application has been deemed approved, we note that the automated PACE
application system sends communications to applicants regarding the
status of their application, and applicants would receive formal
notification of any deemed approval in the approval letter that
accompanies the applicant's executed PACE program agreement. In light
of these communications, we do not believe separate CMS confirmation of
deemed approval is necessary. However, based on the input received, we
will consider modifications to our auto-generated communications to
include additional information regarding timeframes for review.
Comment: One commenter explained the process one specific SAA must
undergo in order to effectuate service area expansions and expansions
involving new PACE centers, and suggested that CMS and the SAA consider
ways to better coordinate and shorten the timeframes for approval of
expansion applications. The commenter noted that CMS has 90 days after
submission of the SRR to make a determination with regard to the
application and questioned whether it would be possible to allow a PACE
center to open immediately upon receipt of the completed SRR.
Response: We note that our review timeframe may be 45 or 90 days
depending on the type of expansion application. While we seek to review
expansion applications as expeditiously as possible, adequate time must
be afforded to us to review all aspects of an application, including
responses to any requests for additional information, as well as the
SRR. As a party to the PACE program agreement, we must carefully review
all elements of the application, including the SRR, and therefore,
would not consider allowing a PACE center to begin operations
immediately upon our receipt of the SRR. We note that, even after we
receive the SRR and any information submitted in response to a request
for additional information and we determine the application is
approvable, we require additional time to amend and execute the PACE
program agreement and ensure that proper steps have been taken to
accommodate enrollment of participants and payment to the PO. Within
the past year, we have significantly expedited the effective date for
approvals of expansion applications, often making them effective upon
the date of approval of the expansion application.
After carefully considering all comments, we are finalizing Sec.
460.20 as proposed, with one modification. Under Sec. 460.20(c)(2), an
entity will be required to update its application if more than 12
months, as opposed to 6 months, elapse between the date of initial
application submission and the entity's response to the CMS request for
additional information.
5. Service Area Designation (Sec. 460.22)
As discussed in section III.C.2. of this final rule, we proposed to
move the content of Sec. 460.22, in its entirety but with a few
revisions, to Sec. 460.12(c).
[[Page 25621]]
Therefore, we proposed to delete Sec. 460.22.
A discussion of the comments we received on this proposed change,
and our responses to those comments, appears below.
Comment: One commenter questioned whether the proposed removal of
Sec. 460.22 means that zip code expansions will no longer be required,
and if so, whether expansion information will be documented as part of
PACE program agreement updates.
Response: We assume the commenter is questioning whether expansion
applications from POs that seek to expand their approved geographic
service area will no longer be required. We address application
requirements specific to service area expansions in section III.C.2. of
this final rule. However, we wish to clarify that we proposed to move
the current content of Sec. 460.22 to Sec. 460.12(c), which is why we
proposed to delete Sec. 460.22. We note that a description of the
service area will still be required as part of the application, in
accordance with existing requirements and documented as part of
Appendix C of the PACE program agreement.
Comment: A few commenters addressed the provision that states CMS,
in consultation with the SAA, may exclude from designation an area that
is already covered under another PACE program agreement to avoid
unnecessary duplication of services and avoid impairing the financial
and service viability of an existing program. One commenter expressed
support for this provision. Another commenter expressed appreciation of
CMS' goal and emphasized the word ``may'' in this provision, as some
degree of competition between PACE programs in the same geographic area
may be useful to ensure adherence to minimum quality standards and
encourage the provision of quality services.
Response: We note that this provision is based on sections
1894(e)(2)(B) and 1934(e)(2)(B) of the Act, and it is not a new
provision or revision to an existing provision. Rather, we are simply
moving the provision, in its current form, from Sec. 460.22(b) to
Sec. 460.12(c)(2). As a result, we proposed to delete Sec. 460.22(b).
After considering the comments, we are finalizing this change as
proposed.
Comment: One commenter expressed support for current provisions
that require clearly-defined geographic service areas for both initial
and expansion applications. The commenter also expressed the need to
ensure flexibility regarding the designation of service areas. The
commenter noted that traditional reliance on boundaries defined by
county lines or Core Based Statistical Areas (CBSA) may prove arbitrary
in terms of reflecting the actual distribution of a population in need
of services. The commenter also noted innovations such as telehealth
are redefining traditional concepts of a service area, in both rural
and urban settings. The commenter stated that flexibility in defining
service areas enhances the ability to target PACE services to
populations that could support and benefit from coverage by more than
one PO; for example, there could be situations in which a new PO
seeking to enter a market is willing to introduce innovation or serve a
specialized population that an existing PO is unable or unwilling to
match.
Response: We note that Sec. 460.32(a)(1) allows the service area
of a PO to be identified by county, zip code and other means.
Therefore, applicants are not necessarily bound by traditional
geographic designations. With respect to the comment regarding
innovative service delivery approaches that could be considered when
defining service areas, we appreciate this input and may consider it as
part of subregulatory guidance or rulemaking in the future.
Comment: One commenter acknowledged that both the current and
proposed regulations require an applicant entity to identify the
service area the PACE program wishes to serve, noting, specifically,
that CMS, in consultation with SAAs, may exclude an area that is
already being served by another PACE program agreement. One commenter
noted that Tribal Health Programs (THPs) have a unique relationship
with the American Indian/Alaska Native (AI/AN) beneficiaries they are
contracted to serve. Specifically, AI/AN beneficiaries have the ability
under Medicaid to receive services from a THP, even when the AI/AN is
enrolled in a managed care product, and the THP has the right to
receive reimbursement for services provided. Therefore, the commenter
requested that CMS specify an exception to the service area designation
requirement to allow THPs to identify the Indian Health Service (IHS)
Service Area in their application, even if a non-Indian PACE program
already exists in all or part of that IHS Service Area.
Response: We interpret the comment to be specific to a THP that may
apply to offer a PACE program. We note that, under Sec. 460.32(a)(1),
a service area may be defined by county, zip code and certain other
means including tribal jurisdictional area, as applicable, and this is
explicitly stated in the PACE application. We further note that the
regulatory language currently in Sec. 460.22(b) states that CMS, in
consultation with the SAA, may exclude from designation an area that is
already covered under another PACE program agreement to avoid any
unnecessary duplication of services and avoid impairing the financial
and service viability of an existing program. Whether another PO is
currently serving a designated service area is therefore a
consideration in the potential exclusion of that area, not an absolute
requirement for exclusion.
After considering the comments, we are finalizing the changes to
Sec. 460.22 as proposed.
6. Submission and Evaluation of Waiver Requests (Sec. 460.26)
Section 460.26 sets forth the process for submitting and evaluating
waiver requests. We proposed to revise current Sec. 460.26(a)(1) and
(2) so that Sec. 460.26(a)(1) would state that a PO, or an entity
submitting an application to become a PO, must submit its waiver
request through the SAA for initial review. Paragraph (a)(1) would also
specify that the SAA forwards waiver requests to CMS along with any
concerns or conditions regarding the waiver. We proposed that section
460.26(a)(2) would state that entities submitting an application to
become a PO may submit a waiver request as a document separate from the
application or in conjunction with and at the same time as the
application. While we did not propose any policy changes in the
proposed rule, we stated that we believed these changes would make the
requirements for submission of the waiver request more concise and
clear. We noted that we plan to provide additional detail on this part
of the process in subregulatory guidance.
Section 460.26(b) states that CMS evaluates a waiver request from a
PO on the basis of certain information. We proposed to add ``or PACE
applicant'' after ``PACE organization'' because a waiver request can be
submitted by an existing PO or a PACE applicant (an entity that has
applied to be a PO but is not yet a PO, or a PO applying to expand its
service area and/or add a new PACE center site).
A discussion of the comments we received on the proposed changes to
the waiver process requirements, and our responses to those comments,
appears below.
Comment: We received many comments in support of the proposed
changes to the waiver submission process language. Commenters also
requested clarification on whether waiver requests can be submitted as
part of an entity's initial application or
[[Page 25622]]
whether the waiver requests have to be submitted to CMS by the SAA.
Response: Under our current process, entities submitting an
application to become a PO may submit a waiver request either as a
separate document or in conjunction with their initial application. We
are adding language to Sec. 460.26 to clarify that an applicant may
submit a separate waiver request through the SAA or the applicant may
submit a waiver request in conjunction with and at the same time as the
initial application, now that the application submission process is
automated. As previously required, a waiver request submitted with an
initial application must include a letter from the SAA indicating the
State's concurrence, concerns, or conditions related to the waiver
request. We note that our review of any waiver requests submitted in
conjunction with the initial application will be reviewed in accordance
with the 90-day review period for waiver requests in Sec. 460.28. We
are making one additional change to Sec. 460.26(a)(1) to refer to the
SAA's concurrence, as well as any concerns or conditions, regarding the
waiver, to align that provision with the proposed requirement in Sec.
460.26(a)(2) for waiver requests submitted in conjunction with initial
applications.
Comment: One commenter expressed concern that we have not included
provisions for broader waiver types that address a systematic issue and
noted the example of hiring social workers with a bachelor's degree
instead of a master's degree in areas where it is difficult to hire a
Master's-level social worker. The commenter recommended that POs be
afforded the ability to request a blanket waiver, meaning no limitation
on the effective period of the waiver, to allow targeted flexibility
for a specific, documented purpose, such as in the example cited. In
the absence of additional flexibilities, the commenter stated that POs
may have to submit multiple waiver requests over time to address the
same type of flexibility, which is a time-consuming and costly process
for POs.
Response: With the exception of the requirements specified in Sec.
460.26(c), POs have broad latitude to request waivers to address
localized, systematic issues on a long-term basis, such as the example
cited by the commenter, as long as all waiver requirements are met. In
addition, we believe the revisions we are making to the regulations in
this final rule will result in fewer waiver requests. Specifically, the
additional flexibilities we are providing, such as the changes to the
IDT requirements at Sec. 460.102, will permit POs to operate their
programs with these flexibilities and no longer require POs to request
waivers of those requirements. For example, we are finalizing changes
to allow community-based physicians to serve as the primary care
provider on the IDT. Prior to these regulatory changes, POs would have
had to request a waiver of this requirement in order for a community-
based physician to function in the role of the primary care physician
on the IDT.
Comment: One commenter requested that when CMS is seeking to deny a
waiver request that the SAA reviewed and supports, there should be
provisions in place for consultation with the state before CMS makes a
final determination. The commenter acknowledged this practice is
already in place; however, the commenter would like it to be codified
in the regulations to ensure consistency.
Response: We consult with the SAA on all waiver requests and do not
believe it is necessary to codify this practice in our regulations. We
intend to clarify this practice in future guidance.
After considering the comments, we are finalizing the proposed
changes to Sec. 460.26 in part, with modifications to clarify that an
applicant may submit a separate waiver request through the SAA, per the
quarterly deadlines, or the applicant may submit a waiver request in
conjunction with and at the same time as the initial application, and a
change to Sec. 460.26(a)(1) to refer to the SAA's concurrence, as well
as any concerns or conditions, regarding the waiver.
7. Notice of CMS Determination on Waiver Requests (Sec. 460.28)
Section 460.28 discusses the timeframes for CMS determination and
notification regarding approval or denial of waiver requests. As we
explained in the proposed rule, we established this section to
implement section 903 of BIPA, which provides in relevant part that the
Secretary shall approve or deny a request for a modification or a
waiver not later than 90 days after the date the Secretary receives the
request. We proposed to retain most of the language in current Sec.
460.28(a), but to specify that the 90-day time limit starts after CMS
receives a complete waiver request. We discuss the need for a complete
waiver request in subsequent paragraphs. In Sec. 460.28(a), we
proposed to revise the heading to ``General,'' delete the reference to
a denial being ``in writing,'' and state that CMS will take action on
the complete waiver request in the form and manner specified by CMS. We
proposed these changes to reflect how we provide notification, whether
electronically or in another format. We noted in the proposed rule that
CMS would not only provide notification verbally. We proposed to
redesignate Sec. 460.28(a)(2) as new Sec. 460.28(a)(3).
We proposed to add a new Sec. 460.28(a)(2) to address conditional
approval of a waiver request from a PACE applicant when the application
is still pending. We explained in the proposed rule that under CMS'
current process, a PACE applicant may request a waiver while its
application is still pending and receive either a denial of the waiver
request or a conditional approval of the waiver request. The approval
of the waiver request is conditioned on the approval of the
application. CMS will only issue conditional approvals to entities with
pending applications. We noted that issuing a conditional approval
enables CMS to adhere to the BIPA 90-day timeframe for making a
determination with respect to a waiver request in situations where an
application is still under review. Waiver requests that are not
associated with a pending application either receive an approval or
denial.
In addition, we proposed to remove the language in Sec. 460.28(b)
regarding the date of receipt of the waiver, because we believed the
proposed changes to Sec. 460.28(a) and (b) make it clear that the 90-
day clock will start on the day CMS receives a complete waiver request.
We also proposed to change current paragraph (c)(1) regarding deemed
approval of a waiver request to refer to CMS failing to act within 90
days of receipt of a complete waiver request, and redesignate it as
paragraph (c). We stated that CMS will notify POs to confirm receipt of
``complete'' waiver requests.
We proposed new language in Sec. 460.28(b) regarding additional
information requests for waivers. We explained in the proposed rule
that unlike sections 1894(e)(8) and 1934(e)(8) of the Act, which give
CMS 90 days to request additional information from entities applying to
become POs, section 903 of BIPA does not explicitly impose a time limit
for CMS to request additional information that is necessary to make a
determination on a waiver request. In the 2006 final rule, we stated
that there is ``no statutory authority to stop the 90-day clock if
additional information is necessary to make a determination on a waiver
request.'' (71 FR 71255). We noted in the proposed rule that although
we cannot stop the clock, we believe the statute can be read to start
the 90-day clock upon CMS' receipt of a complete waiver request.
Therefore, we proposed
[[Page 25623]]
in new paragraph (b) that a waiver request is complete when CMS
receives all information necessary for CMS to make a determination
regarding approval or denial. We stated that if CMS determines the
waiver request is not complete, CMS would request additional
information needed to make a determination. The 90-day clock would
start when CMS receives the complete waiver request. We noted that we
proposed these changes because it is not possible to make an informed
decision to approve or deny a request for a waiver in situations where
we do not have all of the pertinent information. We further stated that
we believed this change would reduce the administrative burden on CMS,
as well as the POs because, currently, CMS denies incomplete waiver
requests and POs must resubmit new waiver requests that include the
missing information. Under the process we proposed, CMS and the PO
would work together to ensure that the request includes all necessary
information, which should alleviate the need to resubmit a waiver
request.
We explained in the proposed rule that this is similar to the
treatment of PACE applications, and we believed consistency in review
procedures would be helpful to all parties involved. We also noted that
approval of a waiver associated with a PACE application is contingent
upon the approval of that PACE application because there is nothing to
waive if there is no PACE program. Accordingly, waivers that are
submitted for review in conjunction with a PACE application or while a
PACE application is being reviewed would only be approved if that
application is approved. As previously discussed, we proposed to add a
new Sec. 460.28(a)(2) that provides for conditional approval for
entities with a pending application to become a PO.
Currently, Sec. 460.28(c)(2) allows CMS to withdraw its approval
of a waiver for good cause. We proposed to redesignate this provision
as (d)(1) and amend it to provide that CMS ``in consultation with the''
SAA may withdraw approval of a waiver request for good cause. We
proposed to add this language because any significant change to the
PACE program agreement, which includes waivers, should be made in
consultation with the SAA because the SAA also is a signatory of the
agreement. We proposed in Sec. 460.28(d)(2) that, if the waiver
approval is withdrawn, CMS must notify the PO or PACE applicant and the
SAA that approval of a waiver has been withdrawn and specify the reason
for withdrawal and the effective date of the withdrawal in the notice.
We noted that currently, while the regulation enables CMS to withdraw
an approval of a waiver request, it does not require that we notify the
PO or PACE applicant and the SAA of the withdrawal, the reason for
withdrawal, or the date when the withdrawal would be effective. We
stated that we believe this information is critical to the PO or PACE
applicant and the SAA because it likely would require a change in
operation of the PO or could change how an applicant would operate a PO
if its application is approved.
A discussion of the comments we received on the waiver
determination and notification process, and our responses to those
comments, appears below.
Comment: Some commenters requested that we implement a 30-day
timeframe to determine if a waiver request is complete and then reduce
the 90-day timeframe for review to 60 days. Commenters also expressed
that as CMS adds additional flexibilities to the PACE regulations,
there may be fewer waiver requests, and some of the commenters
requested that CMS reduce the 90-day review period to 60 days.
Response: We appreciate the commenters' suggestions. We note that
if we consider the waiver request we receive to be complete, the 90-day
review timeframe would have started upon receipt of that request.
Consequently, it is in our interest, as well as the PO's interest, for
us to make this completeness determination promptly, and we do not
believe it is necessary to implement a shorter timeframe for making
this determination. While we agree with commenters that we anticipate
receiving fewer waiver requests in the future due to the additional
flexibilities provided in this final rule, we note that the length of
time we need to review a waiver request will not be affected by the
number of requests received.
Comment: One commenter described the process one specific SAA must
undergo in order to effectuate service area expansions and expansions
involving new PACE centers and suggested that CMS and the SAA consider
ways to better coordinate and shorten the timeframes for approval of PO
waivers. The commenter noted that CMS has 90 days after submission to
complete the review.
Response: Section 903 of BIPA provides that the Secretary must
approve or deny a waiver request not later than 90 days after receiving
the request, and that is the timeframe we established in Sec. 460.28.
At this time, we are not in a position to commit to a shorter review
period than the established 90-day review period. While we seek to
review waivers as expeditiously as possible, adequate time must be
afforded to review all aspects of the waiver, including responses to
any requests for additional information.
After careful consideration of the comments received, we are
finalizing this proposal without modification.
D. Subpart C--PACE Program Agreement
1. Content and Terms of PACE Program Agreement (Sec. 460.32)
Section 460.32 specifies the required and optional content of a
PACE program agreement. Under Sec. 460.32(a)(12), a PACE program
agreement must contain information about the Medicaid capitation rate
and the methodology used to calculate the Medicare capitation rate.
This requirement is based on sections 1934(d)(2) and 1894(d)(2) of the
Act, which provide that the Medicaid capitation amount and the Medicare
capitation amount, respectively, to be applied for a PO for a contract
year must be an amount specified in the PACE program agreement for the
year.
Section 460.32(a)(12) and Sec. 460.180(b) require the PACE program
agreement to specify the methodology used to calculate the Medicare
capitation rate, as opposed to the actual rate. The PACE Medicare rate
is based on Part A and B payment rates established for purposes of
payments to Medicare Advantage organizations and is subject to certain
other adjustments (see Sec. 460.180). For the Medicaid capitation
rate, however, our current regulations require the PACE program
agreement to specify the actual amount negotiated between the POs and
the SAA (see Sec. 460.32(a)(12) and Sec. 460.182(b)).
As states are moving toward more managed care delivery systems for
the long term care population, some states are redesigning their
methodologies for developing PACE Medicaid capitation rates to more
closely align with these other managed care delivery systems. Some of
the new methodologies result in Medicaid payment variations based on
factors such as frailty adjustments and performance incentive payments.
Additionally, because many states update their PACE Medicaid capitation
rates annually based on the state fiscal year, there are operational
challenges associated with updating the PACE program agreement
appendices to reflect changes to the Medicaid rates because they are
not necessarily updated consistent with a PACE program agreement's
contract year. As a result, we stated in the proposed rule that we
[[Page 25624]]
believed it is not always practical to include the actual Medicaid
capitation rates in the PACE program agreement. Therefore, we proposed
to amend Sec. 460.32(a)(12) to require that the program agreement
include the Medicaid capitation rates or Medicaid payment rate
methodology, as well as the methodology used to calculate the Medicare
capitation rate. Medicaid capitation rates are developed and updated by
the states (in negotiation with the POs) and approved by CMS.
Operationally, states submit documentation to CMS to support their
proposed PACE Medicaid capitation rates. CMS reviews the documentation
to ensure the rates are in compliance with the requirements of Sec.
460.182, and provides the state with written approval of the rates. The
Medicaid capitation rates are then communicated to the POs by the state
in writing.
We also solicited comments regarding other modifications we might
make to the required content of the PACE program agreement,
specifically, those cited at Sec. 460.32(a) and Sec. 460.182(d). We
specifically requested comments regarding the need for capturing the
level of detail currently required within the agreement itself, along
with updated information as may be necessary throughout the contract
period. Much of the required program agreement content relates to
operational components of the PO's program. We explained that our
expectation is that POs regularly review and update this information,
particularly as it relates to policies and procedures, to ensure its
business practices are current, compliant with regulation and guidance,
and consistently employed. We solicited comments on whether specific
policies and procedures, and other existing requirements, should
continue to be part of the PACE program agreement.
A discussion of the comments we received on the PACE program
agreement requirements, and our responses to those comments, appears
below.
Comment: A commenter requested that CMS modify the PACE regulations
to allow a PO to enter into a two-way agreement with CMS to provide
services to Medicare beneficiaries in states that do not establish PACE
as a State option under Medicaid. In these situations, the commenter
recommended that CMS require the potential PO to submit the application
with a statement by the state regarding which, if any, of the state
functions the state is willing to perform; for example, the SRR,
nursing home level of care determination, etc.
Response: We did not propose any changes to the current PACE
program agreement between a PO, CMS and the SAA for the operation of a
PACE program. Therefore, we consider this comment to be outside the
scope of this rule. However, we note that in the 1999 IFC and the 2006
final rule, we articulated, in great detail, requirements an entity
must meet in order to be approved as a PO and the basis for those
requirements, including the requirement for a tripartite agreement and
rationale for requiring that POs participate in both Medicare and
Medicaid (64 FR 66237; 71 FR 71251). As we stated in those rules, the
authorizing PACE statutes (sections 1894 and 1934 of the Act) envision
active collaboration between federal and state governments in the
administration of the PACE program. As described in the 1999 IFC and
2006 final rule, the SAA is responsible for a wide array of functions
related to the operations of a PACE program, including: (1) The SRR
conducted as part of activities to approve an entity as a PO; (2)
assessment of potential participants to ensure nursing facility level
of care requirements are satisfied; and (3) cooperation with CMS in the
oversight of the PACE program (which includes authority to terminate a
PACE program agreement for cause, as a party to the tripartite
agreement), among other key activities. As we stated in those rules, it
is our belief that a state which has not elected PACE as an optional
service would likely be ill-prepared or even unable to perform these
critical activities. We concluded in those rules that a Medicare-only
program could not meet the fundamental concept of an all-inclusive,
integrated, capitated, full-risk program. Our position today has not
changed; we continue to believe that the rationale for structuring the
PACE program as we have is valid and appropriate.
Comment: A number of commenters expressed support for CMS' proposal
to modify the current requirement in Sec. 460.32(a)(12) that the
Medicaid capitation rate be included in the PACE program agreement.
Commenters noted that the proposed change would allow for either the
Medicaid capitation rate(s) or the Medicaid payment rate methodology to
be included in the PACE program agreement. These commenters stated that
the proposed approach effectively streamlines updates to the PACE
program agreements and provides states the flexibility to adapt to
potential payment rate changes and variations.
Response: We thank the commenters for their support.
Comment: One commenter recommended that the final rule provide
clarity on the level of detail expected in the PACE program agreement
for states that opt to include the Medicaid rate methodology. The
commenter noted that states already undergo a comprehensive review of
their PACE Medicaid rate methodology by CMS annually. Therefore,
commenters requested that CMS allow a more general methodology
description to be allowed in the PACE program agreement to further the
flexibility discussed in the proposed rule and recognize the extensive
methodology review process already taking place. The commenter further
noted this would avoid the burden of frequent updates to the PACE
program agreement while leveraging, rather than duplicating, the
comprehensive Medicaid rate review process that CMS already undertakes.
The commenter also requested that CMS clarify the timeframe in which a
state must update the actual Medicaid capitation rate in the PACE
program agreement if the state elects to include the Medicaid rate
instead of the methodology.
Another commenter noted that the PACE Medicaid capitation
methodology is complex and often confusing and that this change removes
any incentive for SAAs to timely ``negotiate'' the monthly capitation
amount with POs and produce rate schedules. In addition, the commenter
urged CMS to clarify the negotiation requirement to establish the
monthly Medicaid capitation amounts. The commenter indicated that in
one state, Medicaid rates are set using an actuarial formula, which
takes into account regulatory requirements and the state's priorities,
which effectively precludes POs from annually negotiating with the SAA.
Instead of focusing on regulatory revisions to reflect the status quo,
the commenter urged CMS to consider including language to affirmatively
require timely Medicaid rate setting for the PACE program and buttress
the ability of POs to negotiate rates.
Response: We are not specifying the level of detail that the state
must include in the PACE program agreement to describe the state's
methodology for Medicaid capitation rates. The state must provide
enough detail about the Medicaid payment rate methodology to ensure it
is in compliance with requirements of Sec. 460.182, but the state will
have flexibility in the level of detail that is provided. In December
2015, we released guidance to states regarding the Medicaid rate
setting process that outlines submission and timeframe expectations
related to development and approval of Medicaid capitation rates under
PACE. The PACE Medicaid
[[Page 25625]]
Capitation Rate Setting Guide was developed as a resource for states
and it includes critical elements of rate setting that incorporate both
the state development of the amount that would otherwise been paid if
individuals were not enrolled in PACE, and development of the PACE
rates. The guide can be found at https://www.medicaid.gov/medicaid/ltss/downloads/integrating-care/pace-medicaid-capitation-rate-setting-guide.pdf. We expect to update the guide in the future to provide more
detail and clarification in certain areas as necessary.
Additionally, while we do review the state Medicaid rate
documentation to ensure that the PACE rates meet all requirements under
Sec. 460.182, including that the monthly capitation amount is less
than the amount that would otherwise have paid under the state plan if
the participants were not enrolled under the PACE program, the state
has flexibility in establishing the rate as long as it meets those
requirements, which includes the flexibility of negotiating with POs.
The process for negotiation of the monthly capitation payment amount
between the PO and the SAA varies by state. We do not require a
specific process for negotiation as long as the rates meet the
requirements of Sec. 460.182(b).
Comment: One commenter encouraged CMS to engage with SAAs to
determine which components of the PACE program agreement are necessary
from the states' perspective. The commenter expressed support for
efforts to remove detailed information that changes with some
frequency, for example, administrative contacts that are available in
CMS' HPMS. It is the commenter's expectation that the PACE program
agreement would generally include high-level requirements as opposed to
specific program policies and procedures.
Response: We appreciate the thoughtful comments and suggestions and
will consider the feedback provided as part of possible future
rulemaking.
Comment: One commenter noted that Sec. 460.34 currently states:
``An agreement is effective for a contract year, but may be extended
for additional contract years in the absence of a notice by a party to
terminate.'' The commenter recommended this language be modified as
follows: ``An agreement is effective for a contract year, but shall be
extended for additional contract years in the absence of a notice by a
party to terminate.''
Response: We did not propose any changes to the regulatory
provision at Sec. 460.34 regarding the duration of PACE program
agreements. Therefore, we consider this recommendation to be beyond the
scope of this regulation. However, we may consider this suggestion as
part of possible future rulemaking. After considering the comments, we
are finalizing the amendment to Sec. 460.32(a)(12) as proposed.
E. Subpart D--Sanctions, Enforcement Actions, and Termination
1. Violations for Which CMS May Impose Sanctions (Sec. 460.40)
To support PACE program integrity and to protect PACE participants,
we proposed to amend provisions related to enforcement actions we may
take when POs fail to comply with the PACE program agreement and/or
program requirements. Currently, Sec. 460.50 identifies some causes
for CMS or an SAA to terminate a PACE agreement. Provisions authorize
terminating for cause in circumstances including, but not limited to,
uncorrected failure to comply substantially with conditions of the PACE
program or with the terms of the PACE agreement, and inability to
ensure the health and safety of participants, such as the presence of
deficiencies that CMS or the SAA determines cannot be corrected. As we
explained in the proposed rule, while current regulations reflect CMS
and the SAA's authority to terminate an organization in these
circumstances, we believed that we needed to clarify our authority with
respect to alternative enforcement actions in the form of sanctions or
civil money penalties (CMPs).
We proposed adding a new provision to Sec. 460.40, designated as
paragraph (b), to allow CMS the discretion to take alternative actions
in the form of sanctions or CMPs when we are authorized to terminate a
PO's PACE program agreement. We noted in the proposed rule that,
consistent with the authorities in sections 1894(e)(6)(B) and (f)(3)
and sections 1934(e)(6)(B) and (f)(3) of the Act, this new provision
would align the PACE enforcement structure with the enforcement
structure that applies to the Medicare+Choice program, renamed, and
hereinafter referred to, as the MA program. The MA program enforcement
authorities in sections 1857(g)(3) and (4) of the Act allow CMS the
discretion to take enforcement actions in the form of sanctions or CMPs
when CMS is authorized to terminate the organization's contract. We
proposed that this approach also be utilized in the PACE program,
consistent with our statutory authority identified in sections
1894(e)(6)(B) and 1934(e)(6)(B) of the Act, and to promote consistency
with the enforcement structure of the MA program. We stated that the
change would give CMS the discretion to impose sanctions and CMPs on
POs for continued noncompliance, in addition to our current authority
to take the most extreme action of termination of the PACE program
agreement. To add paragraph (b), we proposed to redesignate the
introductory language in Sec. 460.40 to paragraph (a) and redesignate
paragraphs (a) through (i) to paragraphs (a)(1) through (a)(9).
2. Civil Money Penalties (Sec. 460.46)
Due to the redesignation of paragraphs in Sec. 460.40, we also
proposed to make technical, non-substantive changes to the citations in
this section to reflect the substantive and technical changes discussed
above. Specifically, we proposed to amend Sec. 460.46(a)(1) by
removing the reference ``Sec. 460.40(c) or (d)'' and adding in its
place the reference ``Sec. 460.40(a)(3) or (4)''. We proposed to amend
Sec. 460.46(a)(2) by removing the reference ``Sec. 460.40(e)'' and
adding in its place the reference ``Sec. 460.40(a)(5)''. We also
proposed to amend Sec. 460.46(a)(3) by removing the reference ``Sec.
460.40(f)(1)'' and adding in its place the reference ``Sec.
460.40(a)(6)(i)''. These changes reflect the new numbering of Sec.
460.40 that was discussed previously.
Additionally, we proposed to revise Sec. 460.46(a), in accordance
with the Federal Civil Penalties Inflation Adjustment Act Improvements
Act of 2015 (the 2015 Act) (Sec. 701 of Pub. L. 114-74). The 2015 Act
requires agencies to adjust the civil money penalties annually for
inflation. The Department of Health and Human Services will publish all
of the Department's adjusted CMP amounts at 45 CFR part 102. To ensure
transparency, we proposed revising Sec. 460.46(a) to state that the
penalty amounts are adjusted for inflation and citing to 42 CFR
1003.102.
The following is a summary of the public comments we received on
the proposed provisions regarding sanctions, enforcement actions, and
termination, and our responses to comments.
Comment: Commenters were supportive of our proposed revisions. A
few commenters mentioned that allowing sanctions or CMPs to be taken
prior to termination would help POs have time to correct identified
issues of noncompliance. Other commenters, while supportive, cautioned
CMS to consider the size and financial stability of POs prior to
implementing a sanction or CMP, stating that a large CMP or enforcement
action could effectively
[[Page 25626]]
drive a PO out of business. One commenter recommended that CMS perform
a risk benefit analysis prior to implementing a sanction or CMP to
ensure the benefit outweighed the potential risk.
Response: We agree with these commenters that revising the
regulations to enable us to take enforcement actions other than
termination will be beneficial to POs by allowing them time to correct
deficiencies. We appreciate commenters concerns regarding the potential
adverse impact of CMPs and sanctions on POs. We intend to use the new
range of penalties in a manner that appropriately accounts for the size
and structure of the PO subject to the enforcement action.
Comment: A few commenters referenced SAAs. One commenter requested
clarification on how the SAA and CMS would work cooperatively on
enforcement actions, and if the SAA would be informed prior to a
sanction being placed on a PO. Another commenter requested that CMS
modify the regulatory language in Sec. 460.40(b) to say that either
CMS or the SAA may take a sanction or CMP. The same commenter requested
that any money collected from a CMP be split evenly between CMS and the
state. Lastly, one commenter requested that we add a new paragraph (c)
to the regulation that discusses a state's authority to take
enforcement actions based on State laws and regulations.
Response: We are committed to maintaining a close partnership with
SAAs in overseeing POs. When taking enforcement actions, we will notify
the SAA prior to taking the action, as appropriate. However, we are not
modifying the regulatory language in the new Sec. 460.40(b) to address
SAAs' ability to take sanctions or CMPs. This regulatory language is
aligned with sections 1894(e)(6)(B) and 1934(e)(6)(B) of the Act, which
do not address the state's ability to take an enforcement action or
require consultation with the SAA before imposing sanctions or CMPs,
and we believe that we should keep the language similar in this
regulation. We are also not accepting the suggestion to add a new
paragraph into the regulation to address a state's ability to use state
laws and regulations to take its own enforcement actions. We do not
believe this level of detail is needed, as nothing in this regulation
would prevent a state from using its own legal authority to impose a
state enforcement action on a PO. However, we encourage states to
coordinate with us prior to taking any enforcement actions against POs
based on state authority. Also, while we appreciate the commenter's
request that we split CMP money between the states and CMS, we are not
authorized to dictate where that money goes, and cannot make that
change.
Comment: A few commenters, while supportive of the proposed
modification to our enforcement provisions, stressed the importance of
consistency in audits, especially if audit findings are used in
enforcement actions against POs. One commenter questioned what the
reference to ``continued non-compliance'' meant, and whether that could
mean repeat audit findings.
Response: In the proposed rule, we discussed the regulations
regarding termination of a PACE program agreement, and that one of the
reasons for termination was ``continued non-compliance'' which is
discussed in 42 CFR 460.50(b). In the proposed rule, we noted that our
proposed expansion to our enforcement authority would allow us to take
other enforcement actions, outside of termination, for continued non-
compliance. We define continued non-compliance as any instance in which
a PO has been made aware it is not in compliance with a regulation or
requirement, and the PO has failed to correct that issue within a
reasonable period of time, or has repeated uncorrected deficiencies.
What will constitute a reasonable period of time for correction may
depend on the severity of non-compliance noted by CMS or the SAA. We
want to clarify that while continued non-compliance may be identified
through repeat audit findings, audits would not be the only source of
information to inform an enforcement action. Although continued non-
compliance could be revealed through audits, it could also be
discovered through routine account management monitoring, quality
reporting, or any other avenue in which CMS or the SAA discovers these
issues. However, audits are one of the ways we would measure continued
non-compliance and we agree that audit consistency is very important.
We continue to make process improvements to PACE audits, including
utilizing a revised audit protocol, continuing to refine and update
internal auditor tools, utilizing a national audit consistency team,
and implementing intensive auditor training specific to PACE.
After considering public comments, we are finalizing the changes to
Sec. Sec. 460.40 and 460.46 as originally proposed with the following
technical changes. First, in Sec. 460.46, we are making a technical
change to the citation in the proposed note from 45 CFR 1003.102 to 45
CFR part 102, and including the language regarding inflation in the
regulatory text and not as a note as originally proposed. Second, in
Sec. 460.40, we are redesignating paragraph (j) that was established
in the November 15, 2016 Federal Register (81 FR 80561) as part of the
final rule entitled, ``Medicare Program; Revisions to Payment Policies
under the Physician Fee Schedule and Other Revisions to Part B for CY
2017; Medicare Advantage Bid Pricing Data Release; Medicare Advantage
and Part D Medical Loss Ratio Data Release; Medicare Advantage Provider
Network Requirements; Expansion of Medicare Diabetes Prevention Program
Model; Medicare Shared Savings Program Requirements'' and later
modified in the April 16, 2018 final rule entitled ``Medicare Program;
Contract Year 2019 Policy and Technical Changes to the Medicare
Advantage, Medicare Cost Plan, Medicare Fee for Service, the Medicare
Prescription Drug Benefit Programs and the PACE Program'' (83 FR
16756), as paragraph (a)(10). Finally, we note that the proposed
regulation text for Sec. 460.40(a)(3) included language concerning the
criteria for sanctions even though our intention was solely to
redesignate the paragraph. Therefore, we are modifying the final rule
to remove the language regarding discrimination on the basis of an
individual's functional, cognitive or psychosocial status, which was
inadvertently included, redesignate the paragraph, and restore the
language that refers to discrimination in enrollment or disenrollment
among Medicare beneficiaries or Medicaid beneficiaries, or both, who
are eligible to enroll in a PACE program, on the basis of an
individual's health status or need for health care services.
F. Subpart E--PACE Administrative Requirements
1. PACE Organizational Structure (Sec. 460.60)
Sections 1894(a)(3)(A)(i) and 1934(a)(3)(A)(i) of the Act require a
PO to be (or be a distinct part of) a public entity or a private,
nonprofit entity organized for charitable purposes under section
501(c)(3) of the Internal Revenue Code of 1986. We implemented these
provisions in Sec. 460.60(a), which provides that a PO must be, or be
a distinct part of, either (1) an entity of city, county, state, or
Tribal government or (2) a private, not-for-profit entity organized for
charitable purposes under section 501(c)(3) of the Internal Revenue
Code of 1986, and it may be a corporation, a subsidiary of a larger
corporation, or a department of a corporation. In this discussion, we
will
[[Page 25627]]
refer to all entities that meet this standard as not-for-profit
entities.
Sections 1894(h) and 1934(h) of the Act direct the Secretary to
waive the requirement that a PO be a not-for-profit entity in order to
demonstrate the operation of a PO by private, for-profit entities.
Section 4804(b) of the BBA of 1997 requires the Secretary to provide a
report to Congress on the impact of the demonstration on quality and
cost of services, including certain findings regarding the frailty
level, access to care, and the quality of care of PACE participants
enrolled with for-profit POs, as compared to not-for-profit POs.
Section 4804(b)(2) of the BBA of 1997 requires the report to Congress
to include findings on whether any of the following four statements is
true with respect to the for-profit PACE demonstration:
The number of covered lives enrolled with entities
operating under demonstration project waivers under sections 1894(h)
and 1934(h) of the Act is fewer than 800 (or such lesser number as the
Secretary may find statistically sufficient to make determinations
respecting findings described in the succeeding subparagraphs).
The population enrolled with such entities is less frail
than the population enrolled with other POs.
Access to or quality of care for individuals enrolled with
such entities is lower than such access or quality for individuals
enrolled with other POs.
The application of such section has resulted in an
increase in expenditures under the Medicare or Medicaid programs above
the expenditures that would have been made if such section did not
apply. (We refer to these statements collectively as the BBA
statements.)
Under sections 1894(a)(3)(B)(ii) and 1934(a)(3)(B)(ii) of the Act,
after the date the report is submitted to Congress, the requirement
that a PO be a not-for-profit entity will not apply unless the
Secretary determines that any of the BBA statements are true.
In 2008, Mathematica Policy Research completed a study of the
permanent not-for-profit POs.\5\ An interim report to Congress based on
this study was submitted in January 2009. At the time of the 2008
Mathematica study, no for-profit entities had enrolled in the PACE
demonstration. Therefore, neither report assessed a for-profit PACE
population nor did the interim report address the BBA statements.
---------------------------------------------------------------------------
\5\ A copy of the 2008 Mathematica study results can be found
here: http://www.cms.gov/Research-Statistics-Data-and-Systems/Statistics-Trends-and-Reports/Reports/Downloads/Beauchamp_2008.pdf.
---------------------------------------------------------------------------
From 2012 to 2013, Mathematica, under contract with CMS, conducted
a study to address quality of and access to care for participants of
for-profit POs, specifically focusing on the third BBA statement. The
2013 Mathematica report also included information that provided insight
into the first and second BBA statements.\6\ Based on the two
Mathematica studies, HHS prepared and submitted the report to the
Congress on May 19, 2015. A copy of the report to Congress is available
at https://innovation.cms.gov/Files/reports/RTC_For-Profit_PACE_Report_to_Congress_051915_Clean.pdf.
---------------------------------------------------------------------------
\6\ A copy of the 2013 Mathematica study results can be found
here: https://innovation.cms.gov/Files/reports/pace-access-qualityreport.pdf.
---------------------------------------------------------------------------
As detailed in the report, HHS could not conclude that any of the
four BBA statements were true. First, the number of covered lives
enrolled with for-profit POs was not fewer than 800, and the sample
size for the survey examining BBA statements two and three was large
enough to make statistically significant determinations of differences.
The report stated that HHS could not conclude that for-profit PACE
participants are less frail than not-for-profit PACE participants. It
also stated that HHS could not conclude that for-profit PACE
participants experienced systematic adverse differences in quality of
care or access to care as compared to not-for-profit PACE participants.
Finally, expenditures were equal between for-profit and not-for-profit
POs after controlling for beneficiary risk score, organization frailty
score, and county rates, so there would not have been an increase in
expenditures if participants in the for-profit POs had been enrolled
with a not-for-profit PO.
Based on the findings in the report to Congress, we determined that
under sections 1894(a)(3)(B) and 1934(a)(3)(B) of the Act, the
requirement that a PO be a not-for profit entity would no longer apply
after May 19, 2015 (the submission date of the report to Congress).
Because the statutory not-for-profit restriction no longer applies, in
the proposed rule, we proposed to remove the corresponding restriction
in Sec. 460.60(a) in its entirety. We also proposed to redesignate
Sec. 460.60(b), (c), and (d) as Sec. 460.60(a), (b), and (c),
respectively.
A discussion of the comments we received on the proposal to remove
the not-for-profit restriction in Sec. 460.60(a), and our responses to
those comments, appears below.
Comment: Commenters expressed concerns about CMS allowing for-
profit entities to be POs. Many commenters believed that although the
evaluation of the for-profit PACE demonstration found no significant
reasons to restrict PACE to not-for-profit entities, CMS should
continue its evaluation to identify and better understand any potential
differences driven by ownership by a for-profit entity and to ensure
that regulatory oversight is applied uniformly to all POs as it
pertains to service utilization, participant frailty and outcomes and
costs and experience. Other commenters recommended CMS consider
requiring all for-profit POs to meet a ratio of services to revenues,
similar to the medical loss ratio requirements set forth in the final
rule published in the May 6, 2016 Federal Register (81 FR 27498)
entitled, ``Medicaid and Children's Health Insurance Program (CHIP)
Programs; Medicaid Managed Care, CHIP Delivered in Managed Care, and
Revisions Related to Third Party Liability.'' One commenter recommended
CMS consider continuing its evaluation for up to 3 years for the for-
profit POs. Another commenter supported the change to allow for-profit
entities to be POs.
Response: As a result of the findings in the May 19, 2015 report to
Congress, sections 1894(a)(3)(B) and 1934(a)(3)(B) of the Act state
that the requirement that a PO be a not-for-profit entity will no
longer apply. The findings of the report did not suggest that we
establish different requirements for POs based on their profit status,
and we see no basis for applying a different set of requirements, such
as medical loss ratio requirements, to for-profit POs. Consequently,
the PACE regulations and requirements apply equally to all POs whether
they are not-for-profit or for-profit. We have no reason to believe
that the results of the evaluation would change if we added additional
years to the study. We note that the majority of active POs are not-
for-profit entities and most new applicants represent not-for-profit
entities.
As a result of the comments, we are making no changes to our
proposal and finalizing this provision as proposed.
In addition, we proposed to revise current paragraph (d)(3)
(redesignated paragraph (c)(3)) regarding changes in the organizational
structure of a PO and add a new paragraph (d) to address PO change of
ownership (CHOW). Section 460.60(d)(3) currently provides that a PO
planning a change in organizational structure must notify CMS and the
SAA, in writing, at least 14 days before the change takes effect. We
have stated in
[[Page 25628]]
guidance that a change in organizational structure is one that may
affect the philosophy, mission, and operations of the PO and affect
care delivery to participants, and would include any CHOW (see PACE
Manual, Ch. 2, Sec. 20.3).
In the 1999 IFC (64 FR 66241), we required POs to notify both CMS
and the SAA at least 60 days prior to any change in their
organizational structure and obtain advance approval for any change
that involved a CHOW. In the 2006 final rule (71 FR 71264), we
discussed the comments we received on this provision and explained it
was not our intent to require POs to notify CMS and the SAA in writing
every time there was a change in personnel or a change in the line of
reporting of direct participant care staff. Based on comments that the
60-day timeframe was unnecessary, we elected to change the requirement
to the 14-day requirement that is currently in place. We also deleted
the requirement that changes in organizational structure must be
approved in advance by CMS and the SAA, agreeing with commenters that
POs have the ability to make such business decisions based on their
individual circumstances. As CMS and the SAA are responsible for the
health care provided to participants, we retained the 14-day
notification requirement in Sec. 460.60(d)(3) to allow CMS and the SAA
sufficient time to monitor whether the change is having a substantial
impact on the participants or their care. However, we reiterated that
in the event of a CHOW, we would apply the general provisions described
in the Medicare Advantage regulations at Sec. 422.550.
Based on our experiences with PO CHOW since we published the 2006
final rule, we stated in the proposed rule that we no longer believed
14 days gives us enough time to review and process a CHOW. A CHOW is
significantly different from other organizational changes in that it
results in the acquiring entity assuming the responsibilities under the
PACE program agreement. We explained we need additional time to
determine whether the acquiring entity meets statutory and regulatory
requirements for entering into a PACE program agreement. We noted that
our ultimate responsibility is to the PACE participants, and we need to
ensure that an entity is able to assume and fulfill the
responsibilities of a PO under the PACE program agreement.
Moreover, we noted that the process to effectuate a CHOW
transaction in our systems requires more time than the 14-day timeframe
in the current regulation. For example, a minimum of 6 weeks is needed
to effectuate changes in our payment systems for the new owner. A 60-
day advance notification requirement is more consistent with that
timing. We also stated that we wanted our regulations to be clear that
the requirements in 42 CFR part 422, subpart L (Effect of Change of
Ownership or Leasing of Facilities During Term of Contract), which
apply to MAOs under the Medicare Advantage program, apply to POs in a
CHOW scenario. Therefore, we proposed to amend newly redesignated
paragraph (c)(3) to indicate that the 14-day timeframe does not apply
to a CHOW, and to add new paragraph (d), which would specify that a PO
planning a CHOW must comply with all requirements in 42 CFR part 422,
subpart L, and must notify CMS and the SAA, in writing, at least 60
days before the anticipated effective date of the change. We stated
that we believed this proposed change would provide the time we need to
determine if the entity acquiring the PO meets all PACE requirements
and would be able to continue providing quality care to the
participants of the PO, and to reflect the change in our systems. We
also noted that we believed the amended language as proposed would
provide greater clarity to POs as to the requirements that will apply
in CHOW scenarios. We stated that we believed the Medicare Advantage
requirements for a CHOW in 42 CFR part 422 subpart L, are appropriate
for the PACE program, and we will only enter into a PACE program
agreement with an entity that is determined to meet PACE program
requirements.
For purposes of the proposed provision, any CHOW as defined in
Sec. 422.550(a), such as an asset transfer, a merger, or change in
partnership, would require a novation agreement, where the contract is
substituted for the former contract. We explained that POs will need to
follow all CHOW requirements in 42 CFR part 422, subpart L, and must
submit all of the necessary documents to CMS for review within the
allotted timeframes. Upon CMS' determination that the conditions for
CMS approval of a novation agreement are met, a new PACE program
agreement will be executed with the acquiring entity.
A discussion of the comments we received on the CHOW proposal, and
our responses to those comments, appears below.
Comment: A few commenters stated the definition of a CHOW may
encompass situations where the PO's parent entity or supporting entity
undergoes a restructuring which has no impact on the PO itself. They
also questioned if the 60-day notice and related requirements would
apply in a restructuring of the PO's parent entity. The commenter
suggested that, in these types of situations, the PO should not have to
submit advance notice and comply with the requirements of 42 CFR part
422, subpart L.
Response: POs may contact us if they have questions on the
applicable requirements and whether a particular scenario is a CHOW or
a different type of change in organizational structure. If a PO is
planning a CHOW as described in Sec. 460.60(d) then the PO must follow
the regulations at Sec. 460.60(d) and provide the required
notification.
Comment: A commenter requested that CMS clarify if the novation
agreement is similar to the PACE program agreement.
Response: The novation agreement and PACE program agreement are two
separate and distinct documents. The novation agreement is an agreement
between the current owner of the PO, the prospective new owner, and us
under which we recognize the new owner as the successor in interest to
the current owner's PACE program agreement. The PACE program agreement
will be the successor's PACE program agreement with CMS and the SAA for
the operation of a PACE program by the successor PO.
Comment: Many commenters supported the proposal to expand the
notification timeframe for a CHOW from 14 days to 60 days. One
commenter requested that we consider the SAA's needs for advance
notification for CHOW scenarios and add additional time to our
requirement for notification.
Response: We work closely with the SAA as the third party to the
PACE program agreement. We expect that as POs are seeking to undergo
CHOW transactions that they communicate with the SAA prior to or at the
same time as they communicate with us. We will consider the
recommendation to allow for additional time to notify the SAA as part
of future rulemaking or guidance.
Comment: A commenter requested that we limit the requirement for an
entity to complete a PACE application for purposes of a CHOW as
discussed in the HPMS PACE CHOW memo, Guidance on Notification
Requirements for PACE Organization Change of Ownership, dated February
18, 2016, to apply only to those entities that have no experience with
PACE program operations. Another commenter suggested that the successor
in interest to the PACE CHOW should not have to go through the PACE
application
[[Page 25629]]
process, but did not suggest an alternative for the qualification
process.
Response: We want to reiterate our policy that in order for an
acquiring entity to become qualified as a PO, the entity must follow
both the CMS and the specific state's PACE application submission
process. The application process provides a level of assurance to us,
as well as the SAA, that the successor in interest to the PO has the
ability to assume the obligation to provide care to the vulnerable
population in PACE.
Comment: One commenter expressed concern that if a PO is seeking a
CHOW due to a financial hardship or experiencing other difficulties,
requiring the acquiring entity to become qualified through the PACE
application process may make it impossible to prevent actions such as a
PACE termination.
Response: We appreciate the comment and will continue to work with
POs that are in these types of hardship situations to help ensure that
their participants continue to receive proper care. Even though we have
designated timeframes to complete the application approval process,
when we are made aware of these types of extenuating circumstances, we
work closely with the PO and the SAA to process the application as
quickly as possible and prevent negative impact to the participants.
We appreciate the commenters' recommendations and will consider
them as we develop subregulatory guidance on PO CHOWs. We will continue
to require all entities that are not currently approved POs, but would
like to be the successor in interest to a PO, to become qualified as a
PO through our PACE application process. The PACE application process
is an administrative process with established requirements that all
entities have to meet in order to qualify as a PO. This application
process demonstrates to us and the SAA that the successor in interest
to the PO is qualified to be a PO and will maintain arrangements to
comply with the legal and regulatory requirements for PACE and other
requirements imposed under the PACE program agreement. This allows us
to maintain a consistent qualification process for all entities. We are
finalizing the CHOW requirements as proposed.
2. Governing Body (Sec. 460.62)
Section 460.62 focuses on the ability of the PO's governing body to
provide effective administration in an outcome-oriented environment. As
we have previously explained in the 1999 IFC (64 FR 66241) and the 2006
final rule (71 FR 71264), the governing body guides operations and
promotes and protects participant health and safety, and it is legally
and fiscally responsible for the administration of the PO.
Additionally, the governing body must create and foster an environment
that provides quality care that is consistent with participant needs
and the program mission. To that end, we proposed to revise the
language in Sec. 460.62(a)(7) and to add new paragraph (a)(8).
Currently, Sec. 460.62(a)(7) references a ``quality assessment and
performance improvement'' program. In addition to replacing that term
with ``quality improvement,'' as discussed in section II.A. of this
final rule, we also proposed to add a reference to the quality
improvement program requirements in Sec. 460.130, to make it clear
that the governing body is ultimately responsible for ensuring the PO
meets those requirements.
As we did not receive any comments on these proposed changes, we
are finalizing this provision as proposed.
In addition, as discussed later in this section, we proposed in a
new Sec. 460.63 to require that all POs adopt and implement effective
compliance oversight. Because the governing body is both legally and
fiscally responsible for administration of the PO, and is responsible
for ensuring that the organization provides quality care (see Sec.
460.62(a)), we stated that we believed adoption and implementation of
compliance oversight requirements is the responsibility of the
governing body. We noted that having legal responsibility over the
governance of the organization requires ensuring that the organization
complies with federal and state regulations, adheres to contract
requirements, and minimizes waste and abuse. To that end, we proposed
to add a new Sec. 460.62(a)(8) that specifies the governing body of
the PO must have full legal authority and responsibility for adopting
and implementing effective compliance oversight as described in Sec.
460.63.
As discussed in detail in the following section, we received
several comments on our compliance oversight proposal and as a result
of those comments, we have decided not to finalize certain aspects of
that proposal at this time, in order to allow CMS additional time to
evaluate the potential burden that implementing certain aspects of the
compliance oversight provision might have on POs. Relatedly, based on
these comments and to allow additional time to evaluate the potential
burden, we are not finalizing the proposal to add a new Sec.
460.62(a)(8) specifying that the governing body of the PO must have
full legal authority and responsibility for adopting and implementing
the compliance oversight program.
3. Compliance Oversight Requirements (Sec. 460.63)
In the proposed rule, we discussed the compliance programs required
under the Medicare Advantage (MA) and Medicare Part D programs, and
noted that those programs have long been recognized as key to
protecting against fraud, waste, and abuse. The importance of these
programs has been highlighted by several of our oversight bodies. As is
authorized by sections 1934(f)(3) and 1894(f)(3) of the Act, we
proposed to adopt compliance oversight requirements in the PACE
regulations. Specifically, at new Sec. 460.63, entitled ``Compliance
Oversight Requirements,'' we proposed to require each PO to have a
compliance oversight program that is responsible for monitoring and
auditing their organization for compliance with our regulations.
Additionally, we proposed to require POs to have measures that prevent,
detect and correct non-compliance with CMS' program requirements, as
well as measures that prevent, detect, and correct fraud, waste, and
abuse.
In determining what compliance oversight CMS should require of all
POs, we considered as potential models the compliance program
requirements for Medicare Part C organizations at Sec.
422.503(b)(4)(vi) and the compliance program requirements for Part D
sponsors at Sec. 423.504(b)(4)(vi). POs offering qualified
prescription drug coverage under Part D are already required to have a
compliance program as a part of their Part D benefit, however, specific
requirements of the Part D compliance program were waived for all POs.
The Part D application took into account PACE as a direct care
provider, as well as a payer, and it weighed the importance of
maintaining compliance with CMS regulations with the need for
flexibility as a direct care provider. All Part D compliance program
elements were waived except the two elements that we proposed.
In Sec. 460.63, we proposed to establish that the two elements of
a Part D compliance program required of POs participating in Part D
will become compliance oversight requirements for the PO as a whole.
Specifically, we proposed to require each PO to adopt and implement
effective compliance oversight, which includes measures that prevent,
detect and correct non-compliance with CMS' program requirements, as
well as measures that prevent, detect and correct fraud, waste and
abuse that would include, at a
[[Page 25630]]
minimum: (1) The establishment and implementation of an effective
system for routine monitoring and identification of compliance risks,
which should include internal monitoring and audits and, as
appropriate, external audits, to evaluate the PO, including
contractors, compliance with CMS requirements and the overall
effectiveness of the compliance oversight program; and (2) the
establishment and implementation of procedures and a system for
promptly responding to compliance issues as they are raised,
investigating potential compliance problems as identified in the course
of self-evaluations and audits, correcting such problems promptly and
thoroughly to reduce the potential for recurrence, and ensuring ongoing
compliance with our requirements. As part of the system for promptly
responding to compliance issues, we also proposed the requirements that
a PO: (1) Conduct a timely, reasonable inquiry if it discovers evidence
of misconduct related to payment or delivery of items or services, (2)
conduct appropriate corrective actions in response to the potential
violation (for example, repayment of overpayments or disciplinary
actions against responsible employees), and (3) have procedures to
voluntarily self-report potential fraud or misconduct to CMS and the
SAA. We noted that the PO should already have these elements
implemented for their Part D benefit to comply with the Part D
regulations, but they would need to expand these efforts to cover all
of the services provided by the PO.
As we explained in the proposed rule, POs are not currently
required to conduct internal organization wide monitoring or auditing
efforts. Through our experiences with MA and Part D organizations, we
stated that we believed conducting monitoring and auditing is key to
identifying and correcting issues of non-compliance with CMS
requirements. We noted that we believed that by adding these two
compliance oversight provisions we are balancing the duty of a PO to
ensure compliance with CMS requirements with the need for flexibility
as a provider of service. We stated that POs will also benefit from
improving their ability to identify and correct compliance risks within
their own organization.
Additionally, we proposed to require the PO to implement
appropriate corrective action in response to any identified issues of
non-compliance that POs may discover. We noted that, if finalized, we
intended to verify compliance with this new requirement through
monitoring or auditing of the PO.
We received public comments from POs, states and advocacy groups
which were supportive of the effort to ensure appropriate protections
are in place, but cautioned CMS about the potential burden associated
with implementing these provisions. We analyzed our proposal and
believe that the majority of the burden on POs associated with the
proposed compliance oversight requirements is due to the first proposed
element, the requirement that a PO develop and implement a system for
monitoring and auditing their PACE operations. While we consider it a
best practice for a PO to adopt a compliance program that includes
conducting internal monitoring and auditing, we are not finalizing our
proposal to require the PO to adopt a system for routine monitoring and
auditing of the PO and its contractors at this time in order to further
evaluate the potential burden of this proposal on smaller
organizations. As Part D plan sponsors, POs must still conduct
monitoring and auditing of their Part D benefit as required under 42
CFR 423.504(b)(4)(vi)(F). The second proposed element of the compliance
oversight requirements, which requires promptly responding to non-
compliance and voluntary reporting of identified issues, does not pose
a significant burden on a PO. Therefore, we are finalizing the second
element of this provision which would require POs to correct identified
non-compliance and voluntarily report fraud and/or potential misconduct
to CMS and the SAA. In large part, POs may utilize their already
established Part D system to comply with these new requirements for
responding to, correcting and reporting non-compliance and potential
fraud, and because we are not increasing the scope of a PO's monitoring
responsibilities, we anticipate only a minimal burden on the
organization by implementing this modified provision.
The following is a summary of the public comments we received on
the proposed compliance oversight requirements in new Sec. 460.63 and
our responses to comments. As a result of these comments, we are
finalizing this provision in part.
Comment: A majority of commenters were supportive of our proposal
to require POs to adopt a compliance oversight program. Commenters
noted that adding compliance oversight requirements is an important
step to ensuring POs are able to stop non-compliance and take
appropriate corrective action. These commenters noted that this
proposal would help ensure the safety of participants, and protect
against fraud, waste and abuse.
Response: We appreciate commenters' support and agree that
implementing a compliance oversight program is a best practice for all
organizations, big or small, in order to ensure compliance with federal
and state regulations. We hope that POs will consider increasing the
scope of their monitoring and auditing efforts as part of their effort
to ensure they are compliant with our requirements. We are not,
however, finalizing the first element of our proposal which would have
required POs to expand the scope of their monitoring efforts. Instead,
we are only finalizing the second element, which requires POs to
respond, investigate and correct non-compliance as it is identified.
While we further evaluate the implications of a required compliance
oversight program on the unique PACE model of care, we will continue to
assess potential risk to participant safety through auditing and
account management oversight, and address any identified fraud, waste
and abuse issues as needed.
Comment: Multiple commenters raised concerns over the potential
burden that implementing this provision would cause POs. Commenters
stated that there are significant differences between MA/Part D
organizations and POs; including the fact that MA/Part D organizations
tend to have larger staffs and greater resources, as well as different
program structures, which would make implementing this proposal more
challenging for POs. Other commenters suggested that the burden on
smaller organizations and rural organizations would be especially
significant. Most commenters also requested that, if CMS finalizes this
provision, that the implementation date be no earlier than 12 months
following the regulation becoming final in order to allow organizations
the appropriate time to determine how to appropriately implement a
compliance oversight program and allocate resources. Several commenters
suggested that CMS had underestimated the cost of implementing a
compliance oversight program in PACE. One commenter requested that CMS
work closely with stakeholders to determine technical assistance needs
and practical implementation schedules before enacting this proposal.
Response: We appreciate commenters' concerns regarding the
potential burden this provision may cause for POs. We have a
significant policy interest in further assessing how to integrate an
effective compliance oversight program,
[[Page 25631]]
as well as the potential burden and benefits related to expanding this
provision across the PACE program. In order to minimize the potential
burden associated with this provision, we re-analyzed the burden
estimates and believe that the majority of costs are associated with
the first element of our proposal, the element that would require POs
to expand their auditing and monitoring efforts to cover their entire
operation. While we consider it a best practice to conduct internal
auditing and monitoring to identify non-compliance with PACE
requirements, we are not finalizing that element of this provision at
this time while we further evaluate the implications of this proposal
on the unique PACE model of care. We are, however, finalizing the
second element which would largely allow organizations to use their
already established system to respond to and correct any non-compliance
discovered in the POs. We anticipate only a minimal burden in
finalizing this element and believe such efforts can be implemented in
the 60 days following publication of the final rule.
Comment: Several commenters posed questions regarding the structure
or administration of a compliance oversight program in PACE. Two
commenters questioned if POs would be required to submit their
compliance oversight program to CMS for approval. The same two
commenters questioned if CMS would require the POs to implement
specific structures, policies or procedures for the compliance
oversight program. Another commenter questioned if CMS would offer
technical assistance to POs.
Response: We appreciate the opportunity to provide clarification on
this proposal. We understand that POs are both payers, as well as
direct care providers. We also understand that POs vary greatly in
size, structure and resources. As such, we believe that a PO should
continue to be free to develop a compliance oversight program that
works best for their specific organization. POs are already required to
have systems in place to correct identified non-compliance and
voluntarily report fraud or potential misconduct to us for their Part D
benefit, and we do not anticipate that substantial changes would need
to be made to the structure of such systems based on this provision as
finalized. Additionally, while we would be willing to provide technical
guidance to POs, we do not expect to collect documentation regarding
the structure of a PO's compliance oversight program or provide an
approval process. Instead, POs will have flexibility in designing their
own compliance oversight programs so long as they ensure they are
satisfying the requirements in the new Sec. 460.63.
Comment: A few commenters questioned how CMS would monitor these
compliance oversight programs in PACE. One commenter suggested CMS
conduct rigorous monitoring of the compliance oversight programs.
Another commenter questioned if CMS would validate the monitoring that
POs did under their compliance oversight programs. One commenter
requested that CMS ensure that any monitoring of the compliance
oversight program is done consistently across regions.
Response: We may begin monitoring compliance with the requirements
in Sec. 460.63 as finalized during audits or other communications with
POs. We agree that CMS monitoring should be done consistently and we
intend to develop specific guidance for auditors or other personnel in
CMS.
Comment: Several commenters expressed their support for our
proposal to reduce the frequency of CMS audits and characterized it as
being in exchange for requiring POs to develop their own compliance
oversight requirements.
Response: We thank the commenters for their support. While we
proposed both to decrease the frequency of our audits and to increase
POs' self-monitoring, these policies were each intended to stand on its
own and were not intended to be an exchange. While we are not
finalizing the element of the proposed compliance oversight
requirements that would have required POs to monitor and audit all
operations, we believe that this is a best practice and would encourage
organizations to expand the scope of their current monitoring and
auditing efforts. We are finalizing the second element within this
provision in order to ensure POs are promptly responding to,
investigating and correcting potential compliance problems as they are
identified. Separately, we are also finalizing our proposal to reduce
the frequency of reviews by us in cooperation with the SAA under Sec.
460.192, as discussed in the final rule below in Subpart K--Federal/
State Monitoring.
Comment: One commenter recommended that the compliance oversight
requirements for POs include all seven elements of the MA and Part D
compliance programs, rather than just the two we proposed.
Response: We thank this commenter for the suggestion. While we
believe that compliance programs are beneficial to all organizations,
regardless of size, we decided at this time not to require POs to
implement the seven compliance program elements required under MA and
Part D. Under the Part D regulations, POs are required to have two of
the seven elements of a compliance program implemented for their Part D
benefit, but the other five elements are waived for POs. While we will
continue to engage POs in discussions regarding the benefits of robust
compliance programs, at this time we do not believe it is appropriate
to require POs to implement the seven elements of the MA/Part D
compliance program.
Comment: Several commenters suggested modifications to our
compliance oversight proposal. A few commenters expressed concern with
the potential burden of a compliance oversight program in PACE, and
recommended we consider modifying the PACE compliance oversight program
to account for the small size of some POs. These commenters recommended
we refer to the OIG guidance on compliance programs for individual and
small physician practices (see 65 FR 59434 through 59452).
Response: We appreciate these concerns and consistent with the OIG
guidance cited by commenters, we took the size and structure of POs
into account when proposing compliance requirements for PACE. As we
mentioned in the proposed rule (81 FR 54677), we balanced the need for
POs to maintain compliance with program requirements with the fact that
they need flexibility as direct care providers. We initially proposed
that of the seven compliance program elements in the MA and Part D
programs, only two of these elements should be regulatory requirements
for all POs. However, after reviewing the comments received, and
because we have a significant policy interest in preventing undue
burden, we are only finalizing one of the two proposed required
elements. We believe there is a need for organizations to be able to
identify non-compliance and fraud, waste and abuse, and to take
corrective action when an issue is discovered. We also believe that
since all POs already have a system in place to respond to identified
compliance issues related to the Part D benefit, that finalizing this
element will only create a minimal burden on POs.
Comment: Two commenters requested clarification on whether the PO
must operate the compliance oversight program, or whether a parent
organization of the PO could comply with the compliance oversight
requirements on behalf of the PO.
Response: The regulation as finalized imposes compliance oversight
[[Page 25632]]
requirements on the PO, but we intended for these requirements to
provide flexibilities for POs. Each PO must have procedures and an
effective system for promptly responding to compliance issues and
correcting problems, but we will not dictate what that system should
look like or how it should be structured. Since POs are already
required to have a system for responding to compliance concerns in
their roles as Part D sponsors, we expect that many organizations will
adapt their existing system to meet the PACE program requirements.
However, the individual organization has discretion to choose to
develop its compliance oversight program, including whether or not the
compliance oversight program is run through the PO or another entity
(such as a parent organization).
As discussed previously, a majority of commenters were supportive
of our proposal to implement a compliance oversight program in PACE,
while some commenters raised concerns regarding implementation and the
associated burden of a compliance oversight program on small, direct
care organizations. We agree with these commenters that further
evaluation should be done to determine the potential burden associated
with implementing this provision as proposed, but we believe that
finalizing the second element within this provision would not impose a
significant burden on organizations as, in large part, they may be able
to use the systems for respond, investigate and correct compliance
issues they have in place to comply with the requirements for Part D
plan sponsors. Based on these comments, we are finalizing our proposed
provision in part to require POs to adopt a compliance oversight
program that requires POs to promptly respond to, investigate and
correct potential non-compliance and fraud, waste and abuse.
4. Personnel Qualifications for Staff With Direct Participant Contact
(Sec. 460.64)
Section 460.64 sets forth the personnel qualifications for staff
with direct participant contact. In the 2006 final rule (71 FR 71267),
we added a requirement at Sec. 460.64(a)(3) that all personnel that
have direct participant contact must have a minimum of 1 year of
experience with a frail or elderly population. Our rationale was that
the PACE population is comprised of frail or elderly individuals who
must be cared for by staff with the specific training and experience
necessary to understand the complexities and differences in geriatric
patients.
However, as we explained in the proposed rule, we are concerned
that many POs, especially those in rural settings, may have candidates
for PO staff positions who meet all other qualifications for a specific
position under Sec. 460.64(a) but do not have 1 year of experience
working with the frail or elderly population. We have approved several
waivers of this requirement. For example, this situation often arises
for positions such as van driver or transportation coordinator. We have
received anecdotal reports that some POs encounter van drivers who have
many years of relevant experience as school bus drivers but are unable
to hire these drivers based on the requirement that staff with direct
participant contact have 1 year of experience working with the frail or
elderly population. We also have approved this type of waiver request
for registered nurses (RNs), social workers, and other direct care
providers.
As we stated in the proposed rule, we believe POs should be able to
hire individuals who meet all other qualification requirements under
Sec. 460.64(a) except for the 1 year of experience requirement under
paragraph (a)(3), and provide training to these individuals upon
hiring. We explained in the proposed rule that this required training
may be provided either through a training entity or directly by the PO.
This training must be based on industry standards in order to provide
these individuals with the skills necessary to work with the frail or
elderly population in PACE. For example, through training, an
individual would be taught about the complexities and differences in
geriatric patients, and that he or she needs to be gentler, more
patient and more observant than with a healthy, younger population.
Therefore, we proposed to amend Sec. 460.64(a)(3) to state that a
member of the PO's staff (employee or contractor) who has direct
participant contact must have 1 year of experience working with a frail
or elderly population or, if the individual has less than 1 year of
experience but meets all other requirements under paragraph (a) of
Sec. 460.64, must receive appropriate training from the PO on working
with a frail or elderly population upon hiring. As we noted in the
proposed rule, this would afford POs the flexibility to hire an
otherwise qualified individual with less than 1 year of experience
working with the frail or elderly population and subsequently provide
the requisite training.
Current language in Sec. 460.64(a)(4) requires staff with direct
participant contact to meet a standardized set of competencies for a
specific position established by the PO and approved by CMS before
working independently. As we explained in the proposed rule, we
continue to believe POs must establish a competency evaluation program
for direct participant care staff as required by Sec. 460.71(a)(2) and
discussed in the 2006 final rule (71 FR 71267) to ensure that staff
have the skills, knowledge and abilities needed to deliver safe care to
participants. However, we stated in the proposed rule that we do not
believe it is necessary for CMS to approve those competency evaluation
programs prior to their use. We expect the PO to use current industry
standards. Therefore, we proposed to revise to this paragraph to remove
the reference to CMS approval. We also proposed to make technical, non-
substantive changes to the language in paragraph (a) by changing the
order of the current language in order to make the provision clearer
and more concise.
A discussion of the comments we received on the proposed revisions
to Sec. 460.64, and our responses to those comments, appears below.
Comment: Commenters supported allowing POs to hire individuals with
less than 1 year experience with the frail or elderly. Some commenters
requested that CMS define ``appropriate training.'' One commenter
requested that we require the training to be completed prior to the
individual performing any direct care activities.
Response: We appreciate the commenters' support and will consider
the request to define ``appropriate training'' and when it must be
completed in the development of future guidance.
After considering the comments, we are making no changes to our
proposal and are finalizing this provision as proposed.
5. Training (Sec. 460.66)
Section 460.66 requires the PO to provide training for staff
members and to develop a specific training program for personal care
attendants (PCAs). Paragraph (b) requires the PO to develop a training
program for each PCA to establish the individual's competency in
furnishing personal care services and specialized skills associated
with the specific care needs of individual participants. Paragraph (c)
states that PCAs must exhibit competency before performing personal
care services independently. We proposed to redesignate Sec. 460.66(b)
and (c) to Sec. 460.71, ``Oversight of Direct Participant Care,'' as
new paragraphs (c) and (d), respectively, because Sec. 460.71 already
includes requirements regarding
[[Page 25633]]
training of staff and competency evaluations for employees and
contracted staff furnishing care directly to participants. As we
explained in the proposed rule, we believe including all of the related
requirements in the same section would reduce confusion over applicable
requirements. We did not propose any changes to the language in Sec.
460.66(a) but proposed to remove the paragraph designation of paragraph
(a).
We did not receive any comments on these proposed changes, and
therefore, are finalizing this provision as proposed.
6. Program Integrity (Sec. 460.68)
Section 460.68 was established to guard against potential conflicts
of interest and certain other risks individuals and organizations could
present to the integrity of the PACE program. Section 460.68(a)
addresses risks presented by a PO employing or contracting with persons
with criminal convictions. Section 460.68(a)(1) addresses individuals
and organizations that have been excluded from participation in the
Medicare or Medicaid programs. Section 460.68(a)(2) addresses
individuals and organizations who have been convicted of criminal
offenses related to their involvement in Medicaid, Medicare, other
health insurance or health care programs, or social service programs
under title XX of the Act. Section 460.68(a)(3) currently states that a
PO must not employ individuals or contract with organizations or
individuals in any capacity where an individual's contact with
participants would pose a potential risk because the individual has
been convicted of physical, sexual, drug, or alcohol abuse.
As we explained in the proposed rule, we believed the current
language in Sec. 460.68(a) may not be tailored to effectively mitigate
the risks that employing or contracting with certain individuals and
organizations with prior convictions may pose to the PACE program,
while still allowing POs to hire and contract with individuals who have
had issues in their past that do not pose a risk to the PACE program.
Accordingly, we proposed to amend Sec. 460.68(a) by adding clarifying
language to current paragraph (a)(3) and by adding two new paragraphs
(a)(4) and (a)(5).
We noted in the proposed rule that the current language in Sec.
460.68(a)(3) may have, in some cases, been overbroad so as to impair
the PO's ability to hire or contract with appropriate staff. For
example, under the current regulation, a PO is precluded from employing
an individual with a conviction related to underage drinking, who has
not had a conviction in adulthood, who is an otherwise appropriately
qualified individual to work in a PO, and who would pose no foreseeable
threat to participants. In such cases, persons who have previously
misused alcohol and drugs and/or been diagnosed with alcohol use
disorder or substance use disorder should not be categorically excluded
from serving PACE participants.
In other instances, however, it is possible that an individual's
past criminal conviction or convictions related to physical, sexual,
drug, or alcohol abuse could provide POs with reason to believe that
the individual may pose a threat of harm to participants. For example,
there is a foreseeable risk of harm to participants if a PO employs a
transportation driver who has a history of multiple Driving Under the
Influence (DUI) convictions. We explained that we believed that it is
important for POs to consider an individual's past criminal convictions
and the potential risk to participants; however, we do not want to
limit POs' ability to hire or contract with qualified individuals. This
reflects the direction we have taken for long term care facilities (for
example, Sec. 483.12(a)(3)(i)), where specific restrictions are
focused on individuals that are found guilty of abusing, neglecting or
mistreating nursing home residents.
As such, we proposed to amend the language at Sec. 460.68(a)(3) to
enable POs to make a determination as to whether an individual's
contact with participants would pose a potential risk because the
individual has been convicted of one or more criminal offenses related
to physical, sexual, drug, or alcohol abuse or use. We noted that POs
are still bound by state laws governing the hiring of individuals that
provide care and services to the frail elderly in state programs. We
also noted that the current language in Sec. 460.68(a)(3), which
refers to ``drug, or alcohol abuse'' does not parallel the terminology
used in criminal statutes, which often do not use the term ``abuse'' to
describe the misconduct at issue, and also does not take into account
criminal convictions that could be related to drug or alcohol use, such
as DUIs, or drunken and disorderly conduct. Therefore, we proposed to
amend the language to include ``drug, or alcohol abuse or use.''
We stated that although we do not want to foreclose POs from
employing or contracting with qualified individuals or organizations
that would pose no harm to participants despite past convictions, we
proposed to add language in paragraphs (a)(4) and (a)(5), to impose
additional limitations on POs employing or contracting with individuals
or organizations that may pose a risk to participants. In new paragraph
(a)(4), we proposed to add a restriction stating that a PO must not
employ individuals or contract with organizations or individuals who
have been found guilty of abusing, neglecting, or mistreating
individuals by a court of law or who have had a finding entered into
the state nurse aide registry concerning abuse, neglect, mistreatment
of residents, or misappropriation of their property. This language
parallels regulatory restrictions applicable to long term care
facilities in Sec. 483.12(a)(3)(i). We noted in the proposed rule that
we believed these safeguards intended to protect residents in long term
care facilities are equally appropriate protections for participants in
the PACE program. In paragraph (a)(5), we proposed to add a restriction
stating that a PO must not employ individuals or contract with
organizations or individuals who have been convicted of any of the
crimes listed in section 1128(a) of the Act. These offenses, which are
bases for mandatory exclusion from federal health care programs, are:
(1) Conviction of program-related crimes; (2) conviction relating to
patient abuse; (3) felony conviction relating to health care fraud; or
(4) felony conviction relating to controlled substance. Because we were
proposing to add two additional paragraphs to paragraph (a), we
proposed to remove the word ``or'' at the end of paragraph (a)(2). We
also invited public comment on whether we should extend this provision
to restrict hiring those with certain criminal justice histories to
also include those with current restraining orders against them.
A discussion of the comments we received on this topic, and our
responses to those comments, appears below.
Comment: Commenters expressed support for our proposal to allow POs
discretion in hiring individuals who have prior convictions but do not
pose a current risk to PACE participants. One commenter agreed with our
proposal, with the caveat that there must be a high level of training
provided to these individuals. One commenter requested we clarify if a
PO could consider a conviction from another state.
Response: We welcome the commenters' support. We will consider the
comments specific to training and convictions from other states in the
development of future guidance and are finalizing the provisions as
proposed.
[[Page 25634]]
Comment: In response to our request for comment related to
excluding individuals with current restraining orders against them,
commenters expressed concern that this would impose a higher standard
than what is required for nursing homes.
Response: We thank the commenters for responding to our request for
comments on a potential restriction for individuals with current
restraining orders against them. Many commenters pointed out that this
would result in inconsistency with regulatory requirements for long
term care facilities. After considering the comments, we are not making
any changes to the PACE rules at this time related to individuals with
current restraining orders against them.
7. Contracted Services (Sec. 460.70)
Sections 1894(b)(1)(A) and 1934(b)(1)(A) of the Act state that,
under a PACE program agreement, a PO must furnish items and services to
PACE participants directly or under contract with other entities.
Accordingly, we require in Sec. 460.70 that all administrative or
care-related services, except for emergency services as described in
Sec. 460.100, that are not furnished directly by a PO must be obtained
through contracts that meet the requirements specified in regulations.
In the proposed rule, we solicited comments on whether contracted
services authorized by the PO or services operated directly by the PO
should comply with the Home and Community-Based Settings (HCBS)
regulation at Sec. 441.301(c)(4) when non-institutional settings are
used to house and/or provide services to PACE participants, provided
they do not conflict with requirements under this section. We noted
that the HCBS settings requirements apply broadly to many different
Medicaid authorities (including state plan services and waivers, such
as sections 1915(c), 1915(i), and 1915(k) of the Act), but currently do
not apply to the delivery of services by a PO under sections
1894(b)(1)(A) and 1934(b)(1)(A) of the Act. Because POs already support
the majority of participants in non-institutional settings, we sought
comments on whether or not CMS should apply the requirements to POs.
Although we did not propose any changes requiring compliance with Sec.
441.301(c)(4) when non-institutional settings are used to house and/or
provide services to PACE participants, we solicited comments on
possible proposals to do so in future rulemaking. Changes we considered
and on which we solicited comments included:
Adding a new paragraph Sec. 460.70(b)(1)(iv) stating, a
contractor must comply with the HCBS regulation at Sec. 441.301(c)(4)
when non-institutional settings are used to house, provide services to,
or house and provide services to PACE participants, provided they do
not conflict with requirements under this section.
Adding a new paragraph Sec. 460.98(b)(4) stating, the PO
must comply with the HCBS regulation at Sec. 441.301(c)(4) when non-
institutional settings are used to house, provide services to, or house
and provide services to PACE participants, provided they do not
conflict with requirements under this section.
A discussion of the comments we received on this topic, and our
responses to those comments, appears below.
Comment: Most commenters on the topic expressed that the PACE model
of care is consistent with the principles and objectives of the HCBS
rule, in that care is person-centered and affords individuals choice in
where, how and from whom care is given. They stated that under current
PACE regulations, POs are already required to ensure an individual's
right to privacy, dignity and respect, and freedom from coercion and
restraint. A commenter noted that participation in PACE is voluntary,
and PACE provides a setting that creates a safe community of
individuals to gather for meals and social stimulation to prevent
isolation. Commenters expressed concern that a strict application of
the HCBS requirement at Sec. 441.301(c)(4) could prevent POs from
providing care in the PACE center, where a large proportion of PACE
participants access services, when it is often necessary for
participants with dementia to attend the PACE center or alternative
care setting to ensure their safety. In addition, commenters expressed
concern that strict application of the HCBS regulation at Sec.
441.301(c)(4) may impact POs' ability to provide care to PACE
participants in ways that have been demonstrated to be successful at
delaying or preventing nursing home placement. Commenters noted that it
is just as important to allow individuals the right to choose to
participate in activities at the PACE center or other congregate
locations as it is to protect their right to participate in activities
in other community settings. Commenters also expressed concern that
application of the HCBS regulation at Sec. 441.301(c)(4) would impact
PACE service delivery. Some commenters suggested that application of
the HCBS regulation at Sec. 441.301(c)(4) has been inconsistent, and
has caused confusion for some providers, and raises safety and access
concerns for those caring for people with certain conditions, such as
dementia.
Response: Based on our review of these comments, we agree with the
commenters that many of the existing PACE objectives and requirements
are consistent with the requirements of the HCBS regulation at Sec.
441.301(c)(4). We also recognize that some of the principles of the
HCBS settings requirements could be adopted in PACE to increase
community integration requirements for POs as they facilitate
participants' ability to reside independently in the community. Because
POs have unique requirements to provide care in both institutional and
non-institutional settings, and the role of the PACE center is so
fundamental to the provision of PACE services, we believe it is
important to be thoughtful before adding or expanding HCBS setting
requirements to PACE. We appreciate all of the comments received on
this issue, and we plan to use the feedback for consideration in future
rulemaking.
Comment: While six commenters expressed support for applying the
HCBS settings requirements to PACE, they also expressed some concerns
that certain elements should or should not apply to PACE. For example,
some commenters supported application of the HCBS regulation at Sec.
441.301(c)(4) to all PACE settings except for the PACE center. One
commenter suggested a delay in implementation of the HCBS regulation in
PACE, or that CMS allow for flexibilities in applying HCBS settings
requirements to PACE. Another commenter recommended that alignment of
the HCBS regulation at Sec. 441.301(c)(4) to PACE be postponed to a
later rulemaking in recognition of the already integrated delivery
structure and person-centered approach in PACE. Another commenter that
supported the application of the HCBS settings requirements for non-
intuitional settings in PACE stated that PACE participants living in
settings such as assisted living and residential care facilities should
be able to move into these types of setting. One commenter expressed
concern that the eviction protection in the HCBS settings rules may
conflict with the PACE involuntary disenrollment regulations. Some
commenters supported application of the HCBS regulation at Sec.
441.301(c)(4) to PACE, but stated that implementation should not have
the unintended consequence of preventing POs or their contractors from
providing housing or services that enable people to live independently
in their homes and communities
[[Page 25635]]
(including supports for family caregivers).
Response: We appreciate the detailed comments about how the HCBS
regulation at Sec. 441.301(c)(4) should or should not apply in PACE,
and will continue to evaluate the appropriateness of the application of
the HCBS regulation in PACE and use this feedback for consideration in
future rulemaking.
Comment: Some commenters stated that the HCBS settings requirements
should be expanded to cover existing PACE programs, and that any HCBS
provider must be held to the same standards and requirements. They
expressed that even though PACE services often are provided at a
specific PACE center, the availability of services at the center should
not have the effect of isolating participants from the broader
community. Some commenters expressed there is no reason why the HCBS
settings requirements should not apply to PACE, since PACE, like other
HCBS options and waivers, is designed to provide a non-institutional
alternative for persons with LTSS needs. Therefore, they stated that
any HCBS provided by POs, either directly or through contractual
arrangements, should be subject to the HCBS regulation at Sec.
441.301(c)(4). Several of the commenters recommended that CMS, in
addition to incorporating the HCBS settings requirements in Sec.
441.301(c)(4), should incorporate paragraph (c)(5). Paragraph (c)(4)
sets standards for HCBS settings, and paragraph (c)(5) describes
settings that cannot be considered home and community-based. Those
commenters stated that POs and their contractors should comply with
both of these paragraphs.
Response: While we believe that many of the existing PACE
objectives and requirements are consistent with the requirements of the
HCBS Settings final rule at 42 CFR part 441, we recognize that some of
the principles of that rule could be adapted in PACE to increase
community integration requirements for POs as they facilitate
participants' ability to reside independently in the community. Because
PACE differs from every other HCBS program in that POs are required to
provide care in institutional and non-institutional settings and the
PACE center is so fundamental to the provision of services, we believe
it is important that we carefully and thoughtfully weigh many factors
before adding or expanding HCBS setting requirements to PACE. As a
result, we are not incorporating any HCBS settings requirements into
PACE at this time. We appreciate all of the comments received on this
issue, and plan to use the feedback for consideration in future
rulemaking.
In addition to soliciting comments on the HCBS settings
requirements, we proposed several revisions concerning contracts with
entities that furnish administrative or care-related services. Section
460.70(d)(5) specifies the required terms for contracts with entities
that furnish administrative or care-related services. Sections
460.70(d)(5)(vi) through (ix) address additional contract requirements
where the PO chooses to contract with individuals as IDT members or key
administrative staff. We explained in the proposed rule that, although
the current provisions do not explicitly reference those individuals,
this was our intent when we adopted the requirements in the 2002 IFC
(67 FR 61498, 61505), and when we addressed these requirements in the
2006 final rule (71 FR 71270, 71335). We noted that this is also how we
have interpreted the regulation in practice, however, we understand it
has caused confusion for POs. To make the regulation clearer and reduce
confusion, we proposed to add a new paragraph (d)(6) under which we
proposed to redesignate Sec. 460.70(d)(5)(vi) through (ix) as Sec.
460.70(d)(6)(i) through (iv) and state that these contract requirements
apply to individuals providing contracted services to the IDT or
performing the duties of the program director or medical director. We
also proposed to make a technical change to the language in former
Sec. 460.70(d)(5)(vii) (proposed Sec. 460.70(d)(6)(ii)) to change
``meeting'' to ``meetings.''
We proposed to make a technical change to Sec. 460.70(e)(2) to
change ``PACE Center'' to ``PACE center'' consistent with the
definition in Sec. 460.6, and other references throughout the
regulation. We proposed to revise Sec. 460.70(e)(2) to correct the
reference contained in that section by changing Sec. 460.98(d) to be
Sec. 460.98(c).
A discussion of the comments we received on the proposed changes to
Sec. 460.70, and our responses to those comments, appear below.
Comment: Some commenters requested that we expand Sec. 460.70, the
existing regulation that requires POs to provide services directly or
under contract with other entities, to allow the use of non-contracted
providers.
Response: Under the scope of benefits described in sections
1894(b)(1) and 1934(b)(1) of the Act, a PO may enter into written
contracts with outside entities to furnish services to participants
that are not provided directly by the PO. Consequently, we require in
Sec. 460.70 that all services, except for emergency services as
described in Sec. 460.100, not furnished directly by a PO must be
obtained through contracts which meet the requirements specified in
regulations.
Comment: One commenter requested that we provide an exception to
the contract requirements in Sec. 460.70 for administrative or care-
related services that are provided by a PO's parent organization.
Response: We would not grant such an exception as we expect the PO
to have contractual arrangements for accountability purposes with all
entities that furnish services not directly furnished by the PO (except
emergency services), including the PO's parent organization. As the
PO's parent organization can change, for example, when a CHOW occurs,
it is essential that a contract is in place to show any existing
relationship and services provided by the parent organization.
Because the statute requires POs to provide PACE services directly
or through contracts with other entities, we do not believe we can
expand Sec. 460.70 to allow the use of non-contracted providers in
PACE as requested by the commenters. After considering the comments, we
are finalizing the changes to Sec. 460.70 as proposed.
8. Oversight of Direct Participant Care (Sec. 460.71)
Section 460.71 identifies PO oversight requirements for employees
and contracted staff with direct patient care responsibilities.
Paragraph (a) requires the PO to ensure that all employees and
contracted staff furnishing care directly to participants demonstrate
the skills necessary for performance of their position, and further
requires, under paragraph (a)(1), that the PO provide an orientation to
all employees and contracted staff. Paragraph (b) requires the PO to
develop a program to ensure that all staff furnishing direct
participant care services meet certain requirements, including, under
paragraph (b)(4) that they are free of communicable diseases and are up
to date with immunizations before performing direct patient care.
We proposed to make some technical, non-substantive changes to
paragraph (a)(1) that would make the provision more concise. We also
proposed to amend paragraph (b)(4). As we explained in the proposed
rule, our intent when we amended Sec. 460.71 in the 2006 final rule
was to reflect our current policy described in Sec. 460.64(a)(5),
which states that PACE staff (employees or contractors) who have direct
[[Page 25636]]
participant contact must be medically cleared for communicable diseases
and have all immunizations up-to-date before engaging in direct
participant contact (71 FR 71273). We noted that Sec. 460.71(b)(4) was
not amended in a consistent manner, which we understood caused
confusion among POs about whether to attach the same meaning to
``medically cleared for communicable diseases'' and ``free of
communicable diseases.'' Therefore, we proposed to amend Sec.
460.71(b)(4) by referencing the language previously added to Sec.
460.64(a)(5) so that both sections would be consistent and contain the
same language.
As noted previously in our discussion of proposed changes to Sec.
460.66, we proposed to move paragraphs (b) and (c) of Sec. 460.66
related to personal care services furnished by PCAs to Sec. 460.71(c)
and (d), respectively.
A discussion of the comment we received on this topic, and our
response to that comment, appears below.
Comment: One commenter stated that the proposed rule does not
specify a minimum curriculum or minimum training standards for PCAs and
suggested that the PACE manual define the minimal competencies that
PCAs are expected to demonstrate before performing personal care tasks
independently.
Response: As we have previously stated in our discussion on
personnel qualifications for staff with direct participant contact (see
subpart E.4. (Personnel Qualifications for Staff with Direct
Participant Contact (Sec. 460.64)), it is our expectation that POs
follow industry standards with respect to the skills required for
working with the frail or elderly population in PACE. Therefore, we do
not believe it is necessary at this time to specify minimum training
standards or competencies for PCAs.
9. Physical Environment (Sec. 460.72)
Section 460.72 of the PACE regulations addresses requirements for
the physical environment of the PACE center, including those pertaining
to space and equipment, fire safety, and building safety. In the
proposed rule, we noted that CMS had published in the December 27, 2013
Federal Register a separate proposed rule that would affect the PACE
requirements for emergency preparedness that, at the time, were
included in Sec. 460.72 (see 78 FR 79802). This proposal has now been
finalized. Specifically, on September 16, 2016, we published in the
Federal Register a final rule titled ``Medicare and Medicaid Programs;
Emergency Preparedness Requirements for Medicare and Medicaid
Participating Providers and Suppliers,'' which revised the PACE
requirements at Sec. 460.72 and added a new Sec. 460.84. The final
rule (81 FR 63860) established national emergency preparedness
requirements for 17 types of Medicare- and Medicaid-participating
providers and suppliers, including POs, to ensure that they adequately
plan for both natural and man-made disasters, and coordinate with
federal, state, tribal, regional, and local emergency preparedness
systems. For a complete discussion of the PACE emergency preparedness
revisions, see the September 16, 2016 final rule (81 FR 63904 through
63906).
10. Marketing (Sec. 460.82)
Section 460.82 addresses requirements governing the marketing
activities of POs. Section 460.82 provides special language
requirements, and paragraph (c)(1) states that a PO must furnish
printed marketing materials to prospective and current participants in
English and in any other principal languages of the community. We
proposed to further clarify this requirement by defining what we mean
by ``principal languages of the community.'' We noted in the proposed
rule that, as we stated in the 2006 final rule (71 FR 71279), we
believed the determination of a principal language of the community is
a state determination. However, we recognized that not all states have
an established standard for when a language is considered to be a
principal language of the community (in other words, a language
threshold). Where a state has not established such a standard, we
proposed the following standard would be applied--a principal language
of the community would be any language spoken in the home by at least 5
percent of the individuals in the PO's service area.
As we explained in the proposed rule, we referred to any language
spoken ``in the home'' because U.S. Census data identifies the
principal language as the primary language spoken in the home. We noted
that we established a similar 5 percent language threshold for
marketing materials in the Medicare Advantage program (Sec.
422.2264(e)), and we believed this threshold is also appropriate for
PACE. Moreover, we stated in the proposed rule, we strive to create
harmony across program requirements when feasible. This reduces
complexity for those organizations that operate multiple CMS programs.
We explained that, currently, in the MA program, we determine which MA
organizations must provide translated marketing materials by using the
U.S. Census Bureau's American Community Survey (ACS) data, and we then
communicate that information to plans via HPMS. We noted that we did
not propose to replace any state-based language thresholds; rather the
goal was to provide a standard in instances where a state standard does
not exist. Additionally, we noted in the proposed rule, we would not
preclude POs from producing materials in alternative languages when
those languages are spoken by less than 5 percent of the individuals in
the PO's service area; rather we aimed to set a more clear standard for
when furnishing such materials is a requirement.
We did not receive any comments on our proposal to use the same
approach to the language threshold determination as we do in the MA
program, and therefore, we are finalizing the provision as proposed.
Paragraph (e) pertains to prohibited marketing practices and places
certain restrictions on PO employees and agents. Paragraph (e)(3)
states that gifts or payments to induce enrollment are prohibited. As
we stated in the proposed rule (81 FR 54680) and the 2006 final rule
(71 FR 71279), this provision does not prevent a PO from offering gifts
of a nominal value. For example, as we explained in the proposed rule
and 2006 final rule, offering gifts to potential enrollees who attend a
marketing presentation is permitted as long as these gifts are of a
nominal amount and are provided whether or not the individual enrolls
in the PACE program. The gift cannot be a cash gift or be readily
converted into cash regardless of the amount. To ensure that our
regulations reflect this distinction, we proposed to amend paragraph
(e)(3) to specify that gifts or payments to induce enrollment are
prohibited, unless the gifts are of nominal value as defined in CMS
guidance, are offered to all potential enrollees without regard to
whether they enroll in the PACE program, and are not in the form of
cash or other monetary rebates. We stated in the proposed rule that CMS
currently defines ``nominal value'' in section 30.10 of the PACE
Marketing Guidelines (https://www.cms.gov/Regulations-and-Guidance/Guidance/Manuals/downloads/pace111c03.pdf) to mean an item worth $15 or
less, based on the retail value of the item, which is consistent with
the values in the marketing guidelines under the Medicare Advantage and
Medicare Part D programs. We noted in the proposed rule that we
believed the revision to paragraph (e)(3) would preserve our goal of
ensuring that current and potential PACE participants and their
families or
[[Page 25637]]
guardians elect PACE based on the merits of the program versus the
enticement of a gift, while clarifying that POs have the ability to
offer prospective participants a small gift such as a pen with the
organization's name and contact information without the concern of
violating the PACE marketing regulations. We stated that similar
flexibility has been permitted under both the MA and Part D programs
for several years with no notable adverse impact to participants. As
such, we explained in the proposed rule, the PACE program will continue
to look to these two programs to define the monetary value that
constitutes a nominal gift. In addition, and consistent with the MA and
Part D programs, we stated in the proposed rule that the PACE
regulatory definition of a nominal gift would exclude any gifts in the
form of cash or monetary rebates.
Section 460.82(e)(4) prohibits contracting outreach efforts to
individuals or organizations whose sole responsibility involves direct
contact with the elderly to solicit enrollment. Due to the particular
nature of the PACE program and the PACE population, we stated in the
proposed rule that we believed it is in the best interest of the
program to only permit POs to market their programs through their own
employees. Therefore, we proposed amendments to this section to
specifically prohibit POs from using non-employed agents/brokers,
including contracted entities, to market PACE programs.
As we explained in the proposed rule, the decision to enroll in a
PACE program is significantly different from the decision to enroll
into other Medicare or Medicaid managed care programs because PACE
participants must agree to receive all medical care (as well as other
services) from the PO into which they enroll. This may mean PACE
participants must give up longstanding relationships with health care
providers, as well as become liable for the costs of any unauthorized
services. We noted that this is an important distinction that non-
employed agents and brokers may overlook when they market PACE programs
to potential participants. Agents and brokers that do not work for POs
often sell other products, such as Medicare Advantage and Medicare PDP
products. These products are significantly different from PACE in many
respects, including the services that are covered, the ways in which
participants receive the services, and the enrollment requirements for
participants.
In the proposed rule, we expressed concern that these substantial
differences, combined with the typical low enrollment numbers
associated with the PACE program, make it difficult for agents and
brokers that are not employed by POs to fully understand and explain
the PACE program to potential participants. We emphasized that our
concern was less about false marketing (which connotes a malicious
action) and more about enrollment numbers not becoming the primary
motivation when marketing PACE. An independent third party would likely
not have the opportunity to develop the necessary expertise to act as
agents employed by a PO. We stated we believed employees of the PO
would be the best equipped to provide potential participants and their
caregivers with accurate information about the PO, the services it
provides and the ramifications of receiving services not approved by
the PO's IDT. We noted this is especially important given the
vulnerable nature of the PACE population, which is elderly and frail
and often has more complex health care needs than Medicare or Medicaid
managed care populations, for which the use of non-employed agents and
brokers for marketing may be more appropriate.
As we discussed in the proposed rule, we believed that only
permitting POs to use employees for marketing activities would help
ensure potential PACE participants fully understand the program, the
rules, how to access services, and the ramifications of not accessing
services through the PO. Accordingly, we proposed to amend Sec.
460.82(e) to remove the term ``agents'' and simplify the language. The
revised provision would preclude POs from using certain prohibited
marketing practices. In conjunction with that revision, we proposed to
amend paragraph (e)(4) to prohibit marketing by any individuals other
than the employees of the PO. We noted that some POs may have existing
arrangements with independent agents and brokers and that, as with
other functions, POs may delegate such responsibilities to an outside
entity. We solicited comments as to whether CMS' proposed prohibition
on the use of independent agents and brokers is appropriate. We stated
that if commenters believed that this prohibition is not appropriate,
they should provide specific reasons for allowing their use,
descriptions of how POs contemplate using agents and brokers, and the
protections POs have in place to ensure accurate information is
provided to potential PACE participants. We describe the comments we
received on this proposal and our responses at the end of this section.
Section 460.82(e)(5) prohibits unsolicited door-to-door marketing.
We proposed to add language to Sec. 460.82(e)(5) specifying that any
other unsolicited means of direct contact, including calling or
emailing a potential or current participant without the individual
initiating contact, is a prohibited marketing practice under PACE. We
explained that unsolicited contact, for example, through telephone
(also known as ``cold calling'') or email, is similar to, and generally
as prevalent if not more prevalent, than door-to-door marketing, which
is already expressly prohibited under Sec. 460.82(e)(5). We stated the
purpose of this addition is to clarify that unsolicited means of direct
contact through telephone and email are not allowed under PACE.
Although we declined in the 2006 final rule to expand this prohibition
beyond door-to-door solicitation, we stated we would continue to
monitor marketing practices by POs and would propose additional
safeguards as appropriate (71 FR 71279). We explained in the proposed
rule that based on the vulnerability of the population served by the
PACE program and the increase in health care fraud we have seen since
2006, we believed a prohibition on other unsolicited means of direct
contact is appropriate for PACE. Moreover, we noted, such a prohibition
is consistent with our marketing requirements for MA organizations
(Sec. 422.2268(d)) and PDP sponsors (Sec. 423.2268(d)).
We also proposed to remove Sec. 460.82(f), which requires that POs
establish, implement, and maintain a documented marketing plan with
measurable enrollment objectives and a system for tracking its
effectiveness. We explained that based on the insight we have gained
through years of oversight responsibility for the PACE program, we
believed the requirement for a marketing plan is redundant. We noted in
the proposed rule that we believed that the pertinent information
captured in the plan is attainable through other account management
activities. For example, POs convey marketing strategy in regularly
scheduled meetings with their CMS Account Managers. We explained that
the CMS Account Managers are also made aware of marketing materials and
messages, as well as the intended audience for such materials and
messages, through the marketing submission and review process. In
addition, CMS has a separate method for tracking enrollment data.
[[Page 25638]]
A discussion of the public comments we received on our marketing
proposals, and our responses to those comments, appears below.
Comment: Commenters expressed concerns that the proposed simplified
language under Sec. 460.82(e)(4) could be construed as also
prohibiting states and advocates from educating potential participants
about PACE. Several commenters expressed that POs should maintain the
flexibility of using contracted entities to assist them with marketing
activities. Two commenters expressed agreement with our proposal to
restrict marketing to employees of the PO. One such commenter expressed
concern with fraud, confusion, and abuse associated with marketing by
non-employees, while the other commenter did not provide a reason for
agreeing with the proposed restriction.
Response: As a result of the comments, we note that the proposal to
restrict marketing to employees of the PO was not intended to preclude
states and advocacy groups from discussing PACE with potential
participants. To clarify this position, we are revising Sec.
460.82(e)(4) to prohibit marketing by any individual or entity that is
directly or indirectly compensated by the PO based on activities or
outcomes, as opposed to marketing by any individuals other than
employees of the PO. We are also revising our proposal to differentiate
between those entities which receive some level of compensation from
the PO based on activities or outcomes in marketing PACE on behalf of
the PO, and those who are educating potential participants on a host of
potential healthcare choices, but are not compensated by the PO based
on any activity or outcome, such as State Health Insurance Assistance
Programs (SHIPs) and other advocates in the community.
Additionally, based on the majority of comments received, we
believe it is best to be less prescriptive with regard to who can and
cannot engage in marketing activities under PACE and to instead revise
our proposal to address the root concerns of non-PO staff marketing
PACE, such as a lack of understanding of the nuances of the PACE
program and/or PO that could lead to an enrollment decision that is
contrary to the best interest of the potential participant.
Specifically, we are revising Sec. 460.82(e)(4) to allow marketing by
an individual or entity that is directly or indirectly compensated by
the PO based on activities or outcomes if the individual or entity has
been appropriately trained in PACE program requirements, including but
not limited to 42 CFR part 460, subparts G and I of this part,
addressing participant rights and participant enrollment and
disenrollment, respectively. We are also adding provisions in Sec.
460.82(e)(4)(i) and (ii) that state POs are responsible for the
activities of contracted individuals or entities who market on their
behalf, and that POs that choose to use contracted individuals or
entities for marketing purposes must develop a method to document
training has been provided, respectively.
By outlining expectations for the appropriate training combined
with reiterating that the PO is responsible for marketing activities
conducted by others on its behalf, we believe we are providing
additional flexibility to POs while still safeguarding potential and
current PACE participants. Moreover, we believe that this change will
address the concerns of fraud, confusion, and abuse expressed by the
commenter who was in favor of the proposed agent marketing prohibition.
We are finalizing the other proposed changes to the marketing
requirements--Sec. Sec. 460.82(c)(1), 460.82(e) introductory text,
460.82(e)(3), and 460.82(e)(5)--as outlined in the proposed rule.
G. Subpart F--PACE Services
1. Service Delivery (Sec. 460.98)
Section 460.98 addresses service delivery under PACE. We proposed
to make a technical change to the heading of Sec. 460.98(d) to replace
``PACE Center'' with ``PACE center'' for consistency with other
references in Sec. 460.98 and throughout part 460. Likewise, in
paragraph (d)(3) we proposed to replace ``Pace center'' with ``PACE
center'' for the same reason.
We also solicited public comments on potential changes to our PACE
center requirements, which originated from the PACE Protocol. As
defined in Sec. 460.6, a PACE center is a facility which includes a
primary care clinic, areas for therapeutic recreation, restorative
therapies, socialization, personal care, and dining, and which serves
as the focal point for coordination and provision of most PACE
services. Under Sec. 460.98(b)(2), PACE services must be furnished in
at least the PACE center, the home and inpatient facilities, and under
Sec. 460.98(c), certain minimum services must be furnished at each
PACE center. Section 460.98(d) requires a PO to operate at least one
PACE center either in, or contiguous to, its defined service area with
sufficient capacity to allow routine attendance by participants. A PO
must ensure accessible and adequate services to meet the needs of its
participants and, if necessary, must increase the number of PACE
centers, staff, or other PACE services. If a PO operates more than one
center, each PACE center must offer the full range of services and have
sufficient staff to meet the needs of participants.
As we explained in the proposed rule (81 FR 54681) and the 2006
final rule (71 FR 71283), we believe the success of the PACE delivery
model has been predicated on the combination of the IDT assessment,
care planning, and the PACE center. The PACE center requirement
established in the original PACE Protocol provides a point of service
where the primary care clinic is located, where services are provided,
and socialization occurs with staff that is consistent and familiar.
The IDT not only works from the PACE center, it also provides the
majority of services to participants at the PACE center, where most
participants come on a regular basis to receive the majority of their
care. Attendance at the center has been considered an important aspect
of the PACE model of care, which helps to differentiate it from home
health care or institutional care. We noted that more recently, CMS has
allowed participants to receive services at alternative care settings.
However, those services are meant to supplement, not replace, the
services that the PACE center must furnish.
We further explained in the proposed rule that, over the years, we
have received a number of requests to provide greater flexibility with
respect to the PACE center operation and service requirements. We have
heard concerns that the development costs and the length of time
required to establish a PACE center can be significant and inhibit
expansion of existing programs. To better understand the issues facing
POs, in the proposed rule, we solicited public comment on ways to
revise the current regulatory requirements to allow greater flexibility
with regard to the settings in which IDT members provide PACE services,
while still ensuring that PACE participants can receive the full range
of services and benefits that has made PACE such a successful model of
care for this population. We stated that we will use public comments to
inform future PACE rulemaking concerning how to allow greater
flexibility with regard to the settings in which IDT members provide
PACE services.
A discussion of the public comments we received on this topic, and
our responses to those comments, appears below.
Comment: Commenters generally supported potentially allowing POs
[[Page 25639]]
greater flexibility to utilize alternative care settings (for example,
adult day care centers, senior centers, or activity areas in
residential communities). One commenter recommended that CMS modify
PACE requirements consistent with certain principles including, for
example, that PACE participants must be assigned to a PACE IDT, but the
IDT does not have to be assigned to a PACE center. Many commenters
stated that the ability to deliver care in alternative care settings
would provide POs more flexibility in responding to participants' needs
and preferences, and promote PACE growth and expansion in ways that are
not constrained by POs' ability to construct new PACE centers. However,
other commenters expressed concern regarding the potential for
significant movement away from delivering care at the PACE center,
which is considered the essence of the PACE model of care, toward
increased reliance on providing care in settings outside the PACE
center. One commenter suggested that increased flexibility in service
delivery settings for PACE may result in the program becoming more like
network-based Medicare and Medicaid managed care programs. Another
commenter suggested that providing more flexibility to POs with respect
to service delivery settings could result in an ``unlevel playing
field'' between POs and other health plans serving similar populations.
Therefore, this commenter recommended that as CMS works to introduce
flexibilities around the PACE program, it should align standards and
requirements for POs with those for other Medicare and Medicaid managed
care plans where appropriate.
Commenters also suggested that CMS would need to consider and
provide an opportunity for comment on the potential need for alignment
across CMS programs of various operational and program requirements.
Response: We appreciate the thoughtful comments and recommendations
provided by commenters. The feedback will help inform future PACE
rulemaking.
Comment: Many commenters supported testing use of the PACE model of
care for new populations under section 1115A of the Act, which was
afforded by the PACE Innovation Act of 2015 (PIA), including testing
the PACE model of care for individuals younger than 55 with
disabilities, who are currently ineligible for PACE because of their
age. Some commenters expressed concern regarding the opportunity to
test expansion of PACE under this authority. For example, one commenter
stated that any future model test under section 1115A of the Act, as
amended by the PIA, to serve individuals with psychiatric disabilities
should be governed by the January 16, 2014 Medicaid final rule \7\ that
establishes the requirements and limits applicable to Medicaid HCBS in
order to restrict the use of a PACE center as a location for the
delivery of services to this population. Another commenter urged us to
use the authority provided by the PIA to find affordable ways to extend
the PACE model of care to older adults with Medicare who need LTSS but
are not eligible for Medicaid. Finally, the Medicare Payment Advisory
Commission (MedPAC) urged us to consider changes to the PACE rate
setting and risk adjustment methodologies to increase the accuracy of
payments under any model test.
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\7\ https://www.federalregister.gov/documents/2014/01/16/2014-00487/medicaid-program-state-plan-home-and-community-based-services-5-year-period-for-waivers-provider.
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Response: We appreciate the recommendations on potential tests of
the PACE model of care under the authority of section 1115A of the Act,
as amended by the PIA. We will continue to consider future
opportunities to conduct model tests under this authority. However, our
focus currently is on developing models through which we would directly
contract with a range of Medicare providers and suppliers, and these
providers and suppliers would agree to be accountable for cost and
quality in providing care to a defined beneficiary population. We are
working to ensure these potential models would provide opportunities to
test innovative ways to serve people of all ages who have complex
chronic conditions and/or functional impairments, building on what has
worked well with the PACE clinical approach. Comments on the PIA are
beyond the scope of this rule, as this rule pertains to the existing
PACE program, and any potential waivers of existing PACE regulations,
changes to payment methodology or modifications to eligibility criteria
for a model test under section 1115A of the Act as amended by the PIA
would be addressed as appropriate for each model. However, we will take
the commenters' input, as well as the comments received in response to
the PACE Innovation Act Request for Information \8\ issued December 23,
2016, into account as we develop future model tests.
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\8\ See https://www.cms.gov/Medicare-Medicaid-Coordination/Medicare-and-Medicaid-Coordination/Medicare-Medicaid-Coordination-Office/PACE/PACE-Innovation-Act.html.
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Comment: In response to a proposed revision to the IDT role of the
primary care provider, commenters suggested a corresponding revision to
Sec. 460.98(c)(1) to state that primary care services furnished at the
PACE center may be provided by a physician, nurse practitioner or
physician assistant.
Response: Section 460.98(c)(1) currently refers to primary care
services as including physician and nursing services. However, as
discussed in section III.G.3. of this final rule, we proposed and are
finalizing changes to Sec. 460.102(b) and (c) to permit primary
medical care to be furnished by a primary care provider, meaning a
primary care physician, a community-based physician, a physician
assistant (provided certain requirements are met), or a nurse
practitioner (provided certain requirements are met). We appreciate the
suggested revision and agree that it would help ensure consistency
between the two sections of the regulation. Therefore, we will revise
Sec. 460.98(c)(1) to refer to the minimum services furnished at each
PACE center as including ``primary care, including services furnished
by a primary care provider as defined in Sec. 460.102(c) and nursing
services.'' This change will recognize that primary care can be
provided not only by physicians and nurses, but also by other types of
primary care providers, as defined in Sec. 460.102(c).
Comment: One commenter requested that we provide more detailed
guidance with respect to alternative care settings in PACE.
Response: We did not propose any changes regarding alternative care
settings, so we consider this topic to be beyond the scope of this
rule. We direct the commenter to the guidance we issued on alternative
care settings in PACE. (See the June 30, 2016 HPMS memorandum,
Clarification on the Requirements for Alternative Care Settings in the
PACE Program.)
2. Emergency Care (Sec. 460.100)
Section 460.100 addresses emergency care under PACE. We proposed to
make a technical revision to Sec. 460.100(e)(3)(i) by replacing
references to ``POs'' and ``PO'' with references to ``PACE
organizations'' and ``PACE organization,'' respectively, to make the
language consistent throughout Sec. 460.100 and with other references
in part 460.
We did not receive any comments on this proposal, and therefore, we
are finalizing the change as proposed.
[[Page 25640]]
3. Interdisciplinary Team (Sec. 460.102)
Section 460.102 sets forth the requirements for an IDT, which are
based on provisions in Part IV, section B of the PACE Protocol (64 FR
66248). As we have stated previously in preambles to rules and
subregulatory guidance (http://cms.gov/Regulations-and-Guidance/Guidance/Manuals/Downloads/pace111c08.pdf), we believe a well-
functioning IDT is critical to the success of the PACE program because
the team is instrumental in controlling the delivery, quality, and
continuity of care. Further, members of the IDT should be knowledgeable
about the overall needs of the participants, not just the needs that
relate to their individual disciplines (64 FR 66248; 71 FR 71285; 81 FR
54682). Section 460.102(a)(1) requires that the PO establish an IDT at
each PACE center to comprehensively assess and meet the individual
needs of each participant. Section 460.102(b) specifies the composition
of the team and provides that it be comprised of at least the 11
members listed in the section.
Under sections 1894(f)(2)(B)(iii) and 1934(f)(2)(B)(iii) of the
Act, the IDT approach to care management and service delivery is a
requirement that cannot be waived. However, we explained in the
proposed rule that we understood there may be circumstances when it
would be difficult for a PO to have a separate individual fill each of
the 11 IDT roles, which may be an obstacle for the expansion of the
PACE program, especially in rural areas. To provide greater flexibility
for POs, we proposed that a PO be permitted to have one individual
fulfill two separate roles on an IDT when the individual meets
applicable state licensure requirements and is qualified to fill each
role and able to provide appropriate care to meet the participant's
needs. For example, we noted, a registered nurse cannot fill the role
of a Master's-level social worker unless the registered nurse also has
a master's degree in social work. Under Sec. 460.190 and Sec.
460.192, CMS and the SAA monitor POs during the trial period and
perform ongoing monitoring after the trial period to ensure that POs
are in compliance with all PACE requirements. We explained in the
proposed rule that these monitoring activities will serve as a
safeguard to help ensure there is no negative impact to the quality of
care being provided. During these reviews, CMS and the SAA can confirm
that when an IDT member is serving in two IDT roles, participants'
needs are still being met. As such, we proposed to revise paragraph
(a)(1) to state that the IDT must be composed of members that fill the
roles described in paragraph (b). We also proposed to revise paragraph
(b) to state the IDT must be composed of members qualified to fill, at
minimum, the following roles, in accordance with CMS guidelines. We
stated that we will publish the IDT guidelines in HPMS following
publication of the final rule. We noted that paragraph (b) would also
state that one individual may fill two separate roles on the IDT where
the individual meets applicable state licensure requirements and is
qualified to fill the two roles and able to provide appropriate care to
meet the needs of participants.
A discussion of the public comments we received on our proposal
regarding IDT roles, and our response to those comments, appears below.
Comment: Commenters supported the proposal to allow one individual
to fill two separate roles on the IDT where the individual has the
appropriate licenses and qualifications for both roles.
Response: We appreciate the support for this proposal and will
finalize the revisions as proposed. As noted previously, we will
publish IDT guidelines in HPMS following the publication of the final
rule.
Section 460.102(b)(1) currently provides that the IDT must include
a primary care physician, and Sec. 460.102(c) requires that primary
medical care be furnished by a PACE primary care physician who is
responsible for managing a participant's medical situations and
overseeing a participant's use of medical specialists and inpatient
care. As we stated in the proposed rule, we are aware that changes in
the practice of medicine and state licensing laws have expanded the
practice of non-physician practitioners (for example, nurse
practitioners), such that these practitioners in many cases are able to
fulfill the role served by the primary care physician. Thus, including
those individuals on the IDT in the role of the primary care provider
may prove to be more operationally feasible and cost-effective,
particularly in rural areas or areas where labor costs may be high. We
noted that we have approved requests by POs to waive the requirement at
Sec. 460.102(b)(1) and (c) so that primary medical care can be
furnished by someone other than a primary care physician on the IDT,
thus allowing POs to deliver care through a non-physician primary care
provider (such as a nurse practitioner or physician assistant) or a
community-based physician. We stated that we have typically granted
such waivers, and we have not encountered any issues or concerns with
the quality of care provided by non-physician primary care providers or
community-based physicians acting in this capacity on behalf of and
working collaboratively with the PACE primary care physician or medical
director.
As we explained in the proposed rule (81 FR 54682), 1999 IFC (64 FR
66248), and the 2006 final rule (71 FR 71285), the role of primary care
physician on the IDT was based on the PACE Protocol and codified in
regulation. In the 2006 final rule, we explained that we considered
expanding this role to include nurse practitioners but decided to
retain the PACE Protocol requirement. We noted our view at the time
that it would be acceptable to include a nurse practitioner on the IDT,
but it should be in addition to rather than instead of a primary care
physician. We also stated in the 2006 final rule that such a change
should be included in a proposed rule in order to allow for public
comment on this issue; and in the meantime we would continue to assess
the appropriateness of allowing nurse practitioners to assume the role
of the primary care physician consistent with state licensure
requirements for nurse practitioners (71 FR 71285).
As discussed in the proposed rule, the PACE program agreement has
replaced the PACE Protocol. We noted that, like certain other
requirements that were based on the PACE Protocol, we believed the
composition of the IDT needs to change to reflect evolving medical
practices and technologies. We stated that we believed it is
appropriate to expand the primary care physician role on the IDT to
include certain other primary care providers. Accordingly, we proposed
to revise Sec. 460.102(b)(1) to specify that a primary care provider,
rather than a primary care physician, must be part of the core IDT.
Further, we proposed to revise Sec. 460.102(c)(1) to permit primary
medical care to be furnished by a primary care physician, a community-
based physician, a physician assistant (provided certain requirements
are met), or a nurse practitioner (provided certain requirements are
met). We also proposed to revise Sec. 460.102(c)(2) to refer to
primary care provider rather than primary care physician. We stated
that these changes would allow all POs to furnish primary care through
these other types of providers, thereby reducing burden on the POs
without compromising care.
For physician assistants and nurse practitioners, we proposed to
add language in paragraphs (c)(1)(iii) and (iv) to require that they be
licensed in accordance with state law and practice within their scope
of practice as defined
[[Page 25641]]
by state laws with regard to oversight, practice authority, and
prescriptive authority. We noted that, with increasing shortages of
primary care providers across the country, we believed affording POs
the flexibility to involve other non-physician practitioners practicing
collaboratively with the PACE primary care physicians would enable the
POs to accommodate more participants and expand their programs, without
comprising quality of care.
We proposed redesignating the current language in paragraph (e) as
paragraph (f) and, in a new paragraph (e), we proposed to add language
that references the requirements in Sec. 460.71, which sets forth
guidelines for the oversight of employees and contracted staff that
have direct patient contact. We explained that referencing Sec. 460.71
should make it clear to POs that they must ensure that all members of
the IDT demonstrate the skills necessary for the performance of their
positions as required under Sec. 460.71. Additionally, we noted, this
will require the PO to confirm that all members of the IDT comply with
state certification or licensure requirements for direct patient care
in their respective settings. The PO and its medical director are
responsible for the oversight of all care provided to PACE
participants.
A discussion of the public comments we received on our proposal
regarding primary care providers on the IDT, and our responses to those
comments, appears below.
Comment: Commenters strongly supported revising the regulations to
require a primary care provider to serve on the IDT instead of
requiring a primary care physician. This would permit nurse
practitioners, physician assistants, and community-based physicians to
fill this role. Some commenters suggested what they believed to be
necessary corresponding revisions to other sections of the PACE
regulations related to the settings in which a primary care provider
provides services. Specifically, commenters suggested that we clarify
in Sec. 460.98 whether a primary care provider may provide services in
a community-based setting. Similarly, the commenters requested a
clarifying revision to Sec. 460.98(c)(1) regarding the primary care
services furnished at the PACE center. A few commenters recommended
that a nurse practitioner be listed as a provider who can serve as the
medical director for a PO. Commenters also questioned if the PO's
medical director must be a medical doctor.
Response: We appreciate the support for the proposed revisions to
Sec. 460.102 regarding the primary care provider and will finalize
that change to the regulation as proposed. Regarding the suggestion
that we clarify whether a primary care provider may provide services in
a community-based setting, we do not believe that a clarification is
necessary in light of the removal of the ``primarily served''
requirement discussed below. We do appreciate the suggested clarifying
revision to Sec. 460.98(c)(1) to ensure consistency between the two
sections of the regulation. As discussed in section III.G.1. of this
final rule, we are revising Sec. 460.98(c)(1) to refer to ``primary
care, including services furnished by a primary care provider as
defined in Sec. 460.102(c) and nursing services''. Regarding the role
of the PACE medical director and which disciplines can serve in this
capacity, we initially proposed regulation text at Sec. 460.60(b) that
would require a PO to employ or contract with a physician in accordance
with Sec. 460.70, to serve as its medical director responsible for the
delivery of participant care, for clinical outcomes, and for the
implementation, as well as oversight, of the quality improvement
program. However, at this time, we are not finalizing the change to
specify that a physician must as serve as the medical director. We
intend to address questions regarding the PACE medical director role in
future guidance or rulemaking.
Currently, Sec. 460.102(d)(3) states that the members of the IDT
must serve primarily PACE participants. The ``primarily served''
requirement was part of the original PACE Protocol (64 FR 66249).
However, section 903 of BIPA authorizes the Secretary to modify or
waive such provisions in a manner that responds promptly to the needs
of PACE programs relating to areas of employment and the use of
community-based primary care physicians. We proposed to revise Sec.
460.102(c)(1) to allow community-based physicians to fill the role of
primary care provider on the IDT. As we explained in the proposed rule,
community-based physicians are different from the PACE primary care
physician. The PACE primary care physician works for the PO and is
responsible for all PACE participants within the PO. The community-
based physician generally works in a different practice, outside of the
PO, but may also contract with the PO in order to work with select PACE
participants who prefer to continue to receive their primary care
services from their community-based physician. Community-based
physicians usually provide care for the patients in community settings,
such as outpatient clinics, and patients in those community settings
often become PACE participants. Newly enrolled PACE participants often
request to continue receiving care from their community-based
physician. We noted in the proposed rule that we wanted to allow this
flexibility for PACE participants because we believed it supports the
continuity of care for participants. Therefore, we proposed to amend
Sec. 460.102(d)(3) to allow flexibility with respect to community-
based physicians by excluding them from the requirement that they serve
primarily PACE participants. As proposed, community-based physicians
would be able to continue working in their community settings while
contracting with the POs to provide PACE services. We also stated in
the proposed rule that, in combination with the revision to paragraph
(b)(1), this would effectively be a global waiver of the IDT member and
``primarily served'' requirements for community-based primary care
physicians.
A discussion of the public comments we received on our proposal
regarding the ``primarily served'' requirement, and our responses to
those comments, appears below.
Comment: Most commenters concurred with eliminating the ``primarily
served'' requirement for community-based physicians and suggested that
this be extended to other types of community-based providers and
possibly all members of the IDT.
Response: We thank the commenters for their support for this
change. In response to these comments, as well as in response to
comments we received on the alternative IDT proposals that are
discussed next, we are finalizing changes to the ``primarily served''
requirement that renders our proposal on community-based physicians
unnecessary. Changes to the ``primarily served'' requirement are
further discussed below.
In the proposed rule, we also considered two alternative
possibilities for revising parts of Sec. 460.102 to provide greater
flexibility to POs without compromising quality of care. In the first
alternative, we considered deleting the requirements in Sec.
460.102(b) related to the composition of the IDT. As noted previously,
under sections 1894(f)(2)(B)(iii) and 1934(f)(2)(B)(iii) of the Act,
the IDT approach to care management and service delivery is a
requirement that cannot be waived. However, the PACE statutes do not
specifically address the composition of the IDT.
As we explained in the proposed rule, we continue to believe that a
well-
[[Page 25642]]
functioning IDT is critical to the success of the PACE program, as the
team is instrumental in controlling the delivery, quality, and
continuity of care. As we stated in the proposed rule (81 FR 54683) and
the 1999 IFC (64 FR 66248), members of the IDT should be knowledgeable
about the overall needs of the patient, not just the needs which relate
to their individual disciplines. In order to meet all of the health,
psychosocial, and functional needs of the participant, team members
must view the participant in a holistic manner and focus on a
comprehensive care approach. We noted in the proposed rule that we
considered whether to provide even greater flexibility to POs, while
maintaining our expectation of a well-functioning, knowledgeable IDT,
by deleting the IDT composition requirements in Sec. 460.102(b). Under
this alternative approach, we would expect the composition of the IDT
could be tailored based on each individual participant and the PO would
continue to assess the need for services and provide all necessary
services. Similar to the revisions to Sec. 460.102(c), we would
require that primary care be furnished by a PACE primary care provider.
CMS and the SAA would continue to monitor POs to ensure that
participants are receiving all necessary care. We noted that these
monitoring activities would serve as a safeguard to help ensure there
is no negative impact to the quality of care being provided. We stated
that we believed this alternative approach of deleting the IDT
composition requirements in Sec. 460.102(b) could provide greater
flexibility to POs without compromising the quality of care. We
solicited public comments on this approach. A discussion of the
comments we received on this option, and our response to those
comments, appears below.
Comment: Most commenters expressed opposition to deleting IDT
composition requirements. Several suggested that we retain the
composition requirement for an IDT but modify it to allow for a range
of health professionals and functions that participate in assessment
and care planning based on the needs of individual PACE participants.
One commenter thought that we should continue to require every member
of the IDT to be present in the development of a participant's plan of
care.
Response: We thank the commenters for their input on the first
proposed alternative approach. In response to a majority of commenters
who expressed concern regarding the deletion of IDT composition
requirements, we have determined that the current requirements should
be retained at this time.
As discussed in the proposed rule, in the second alternative, we
considered deleting Sec. 460.102(d)(3), which requires that members of
the IDT must serve primarily PACE participants. Again, this requirement
was based on the PACE Protocol, which has now been replaced by the PACE
program agreement. As we stated in the proposed rule (81 FR 54683), the
1999 IFC (64 FR 66249) and the 2006 final rule (71 FR 71286), for a
frail elderly population, such as is served by the PACE program, it is
important to support and retain measures that promote quality and
continuity of care. We explained that if team members serve primarily
PACE participants, they are able to develop a rapport with participants
and are better able to plan for and provide their care. Over the years,
we have received and approved numerous requests to waive the
``primarily served'' requirement for members of the IDT, such as the
primary care physician or the Master's-level social worker, in order to
allow POs needed flexibility in staffing their IDTs. We have not
encountered any issues or concerns after granting such waivers. Thus,
we solicited public comments on whether we should extend this
flexibility to all POs without the need to request a waiver.
Comment: Most commenters concurred with eliminating the ``primarily
served'' requirement for community-based physicians and suggested also
eliminating the requirement for other types of community-based
providers and all members of the IDT. In addition, some commenters
believed that the current requirement, i.e. ``primarily serve'' is
vague and has led to misinterpretations of this requirement. In
addition, commenters emphasized the operational challenges POs face,
which can lead to a need for qualified staff that can serve on a part-
time, rather than full-time basis. Other commenters stated that the use
of community-based physicians has expanded the range of primary care
providers PACE participants can choose from, and in many cases has
permitted participants to retain their existing primary care physician
when enrolling in PACE. A few commenters recommended retaining the
``primarily served'' requirement and expressed concern that members of
the IDT should be knowledgeable and experienced with the needs of the
PACE population. One commenter acknowledged that including community-
based physicians on the IDT likely promotes continuity of care for
newly-enrolled participants, but may cause conflicts regarding
treatment and the approval of services over time. This commenter
asserted that the inclusion of community-based physicians should
continue to be addressed through the waiver process. Other commenters
supported the proposals but indicated that protections must be in place
to ensure the integrity of the PACE organization's mission.
Response: We have carefully considered the comments we received on
this proposal, as well as the comments we received on the similar
proposal related to community-based physicians. Overall, commenters
were very supportive of the change to eliminate the ``primarily
served'' requirement for individuals who serve on the IDT. However,
some commenters expressed concerns about eliminating this requirement
based on the belief that providers that primarily serve PACE
participants, with presumably more direct and extensive experience
rendering care to the PACE population, would be best positioned to
understand and address the needs of those participants. While we
understand this concern, we believe that community-based providers,
regardless of their experience serving a PACE population, nonetheless
must have the requisite expertise and ability to practice within the
scope of their licensure. As long as these community-based providers
are willing to fulfill the requirements for members of the IDT, we do
not believe they should be precluded from doing so based on a
requirement that they ``primarily serve'' PACE participants. Comments
received were supportive of our proposals overall and support our
conclusion that the benefits of requiring IDT members to have
experience serving PACE participants, in and of itself, do not outweigh
the benefits of eliminating the ``primarily served'' requirement. We
note, as did certain commenters, that a number of waivers have been
granted of the ``primarily served'' requirement for members of the IDT
in recent years, with beneficial results. Furthermore, we are not aware
of any adverse impact in overall quality of care for POs operating
under such waivers. We agree with commenters that use of community-
based providers has promoted continuity of care, allowed POs greater
flexibility in the delivery of primary care to participants, and has
increased operating efficiencies without compromising quality of care.
We note that quality of care provided by POs will continue to be a
focus of CMS and SAA oversight and monitoring activities. By reducing
operational challenges and expanding PACE participant provider
[[Page 25643]]
choices, we continue to support efforts to ensure PACE participants
have access to quality care and qualified providers. Based on the
supportive comments we received, as well as our positive experience in
granting waivers of the ``primarily served'' requirement, we are
revising the regulations to delete the requirement that members of the
IDT must serve primarily PACE participants. Specifically, we will
update the regulation by removing Sec. 460.102(d)(3).
4. Participant Assessment (Sec. 460.104)
Section 460.104 sets forth the requirements for PACE participant
assessments. As we explained in the proposed rule (81 FR 54683) and the
2006 final rule (71 FR 71288), the information obtained through the
participant assessment is the basis for the plan of care developed by
the IDT. As such, it is important that the assessment be as
comprehensive as possible to capture all of the information necessary
for the IDT to develop a plan of care that will adequately address all
of the participant's functional, psychosocial, and health care needs.
Section 460.104(a) sets forth the requirements for the initial
comprehensive assessment, which must be completed promptly following
enrollment. Currently all members of the IDT must be present for the
initial assessment, representing each required clinical discipline to
appropriately assess the PACE participant's holistic needs and develop
a customized plan of care. We stated in the proposed rule that, under
our proposal to modify Sec. 460.102, to the extent an IDT member
serves multiple roles on the IDT, that member may represent the
clinical expertise for which he or she is qualified. Other team members
may be present as necessary. In Sec. 460.104(a)(2), we state that
certain members of the IDT must evaluate the participant in person as
part of the initial comprehensive assessment but, in paragraph (a)(1),
we do not specify that the initial comprehensive assessment must be an
in-person assessment. Therefore, we proposed to add the phrase ``in-
person'' after ``initial'' in paragraph (a)(1). We explained that our
longstanding policy has been that the initial assessment is an in-
person assessment, so the addition of this language should make this
requirement clear but not change the current practice. We also proposed
to change the requirement that the initial comprehensive assessment be
completed ``promptly following enrollment'' to ``in a timely manner in
order to meet the requirements in paragraph (b) of this section.'' We
noted in the proposed rule that this would allow the PO to complete
this assessment at a time that works for the PO, but within a timely
manner so as to allow the IDT to complete the development of the plan
of care within 30 days of the date of enrollment.
Currently, during the initial comprehensive assessment, a primary
care physician must evaluate the participant and develop a discipline-
specific assessment of the participant's health and social status. We
proposed to change ``primary care physician'' to ``primary care
provider'' in paragraphs (a)(2)(i) and (c)(1) to be consistent with
proposed changes to the composition of the IDT in Sec. 460.102. As
discussed in section III.G.2. of this final rule, we proposed that the
primary care physician role be changed to primary care provider to
allow other licensed primary care providers (specifically, nurse
practitioners, physician assistants, and community-based physicians) to
be part of the core IDT.
In Sec. 460.104(a)(2), we proposed to remove the reference to IDT
members initially evaluating participants ``at appropriate intervals''
because the scheduling of the discipline-specific assessments as part
of the initial comprehensive assessment is up to the POs, and we
believed stating that they must occur ``at appropriate intervals'' is
unnecessary and superfluous language. We proposed to change the
language in Sec. 460.104(a)(3) from ``individual team members'' to
``the interdisciplinary team'' so that language is consistent
throughout these regulations and because it is the IDT's decision
whether to include other professionals in the initial comprehensive
assessment. Additionally, we proposed to add the word ``initial''
before ``comprehensive assessment'' so it is clear that professionals
may be included in the initial comprehensive assessment, as opposed to
a reassessment. We proposed two changes to Sec. 460.104(a)(4) to
clarify that the initial comprehensive assessment covers all aspects of
the participant's physical, social, and mental needs. Currently, the
heading is titled ``Comprehensive assessment criteria.'' We proposed to
revise the heading to ``Initial comprehensive assessment criteria.'' We
also proposed to add ``in-person'' to this section to make it
consistent with the terminology in Sec. 460.104(a)(1) and (2). We
stated in the proposed rule that we believed an initial comprehensive
assessment is a more valuable tool for identifying the participant's
need for services when performed in person.
Section 460.104(b) states that the IDT must ``promptly''
consolidate discipline-specific assessments into a single plan of care
for each participant through discussion ``in team meetings.'' We noted
in the proposed rule that the term ``promptly'' does not provide
definitive direction for an IDT to know when the discipline-specific
assessment should be completed and incorporated into a plan of care. We
proposed to change this provision to specify that the plan of care must
be completed ``within 30 days of the date of enrollment'' to remove the
ambiguity of ``promptly.'' We stated that we believed 30 days balances
the need for time to complete these activities with the need to
complete these activities within a reasonable amount of time.
Moreover, we noted in the proposed rule, it is our understanding
that some POs interpret the term ``team meeting'' as requiring members
of the IDT to be physically present in the meeting. We stated that we
believed POs need the flexibility to determine the format and location
of IDT discussions to best meet the needs of PACE participants while
not burdening the IDT by requiring these discussions to be held in
face-to-face meetings. In paragraph (b), we proposed to change the
words ``discussion in team meetings'' to ``team discussions'' to
indicate that there must be a team discussion, but the format (for
example, video conferencing, conference call, or in-person meeting) and
location of the discussion would be at the discretion of the PO.
We also proposed to create a new paragraph under Sec. 460.104(b).
Under new paragraph (b)(1), we proposed to state that if the IDT
determines from its assessment that any services associated with the
comprehensive assessment criteria listed in paragraph (a)(4) do not
need to be included in a participant's plan of care, the IDT must
document in the participant's plan of care the reasons such services
are not needed and are not being included. We explained in the proposed
rule that if the IDT does not believe a PACE participant needs a
certain service as it relates to the IDT care plan assessment findings,
and therefore, does not authorize that service, the IDT must document
the rationale for not including the service in the plan of care. We
noted that we would expect the plan of care to reflect that the
participant was assessed for all services even where a determination is
made that certain services were unnecessary at that time. We proposed
to move the current requirement in paragraph (b)--that female
participants must be informed that they are entitled to choose a
qualified specialist for women's health services from the PO's network
to furnish routine or preventive
[[Page 25644]]
women's health services--to new paragraph (b)(2).
Currently, Sec. 460.104(c) sets forth the requirements for
periodic reassessments, including semiannual and annual reassessments.
Section 460.104(d) discusses the requirements for unscheduled
reassessments. We noted in the proposed rule that our experience has
demonstrated that the requirement to perform both semiannual and annual
reassessments can be overly burdensome and unnecessary in that
participants are consistently being monitored for changes and are
already reassessed whenever there is a change in their health status.
Accordingly, we proposed to delete the requirement in paragraph (c)(2)
requiring the annual reassessments by the physical therapist,
occupational therapist, dietician, and home care coordinator. We
proposed to delete corresponding references to annual reassessments in
paragraph (d). We proposed to keep the requirement that PACE
participants be reassessed semiannually, every 6 months. We stated that
we would change the list of IDT members that must conduct the
semiannual assessment to include the primary care provider, registered
nurse, Master's-level social worker, and any other IDT members actively
involved in the development or implementation of the participant's plan
of care, as determined by the IDT members whose attendance is required.
We noted in the proposed rule that we believed PACE participants should
be reassessed at least every 6 months as this will better ensure that
PACE participants, who are generally frail, are receiving appropriate
treatment. We proposed to remove ``recreational therapist or activity
coordinator'' from the list of IDT members that must participate in the
semiannual reassessment. As stated in the proposed rule, we believed
reducing the number of IDT members who are required to participate in
the semi-annual assessment will reduce the burden on POs and allow the
POs to allocate their resources more efficiently, while still meeting
the care needs of participants. We explained in the proposed rule that
POs have reported that recreational therapists and activity
coordinators are not needed at every reassessment. POs further report
that to require that recreational therapists or activity coordinators
be present at every semiannual reassessment is unnecessary and can be
overly burdensome. However, recreational therapists and activity
coordinators are part of the IDT and can update the IDT on the
participants' successes or needs for recreational therapy or
involvement in activities. We stated in the proposed rule that we
believed the primary care provider, registered nurse, and Master's-
level social worker can collectively determine, based on the
participant's plan of care and IDT discussions, which other IDT members
should be present during the semiannual assessment. As such, we stated
that we did not believe we needed to require that the recreational
therapist or activity coordinator be present at the semiannual
reassessment unless the primary care provider, registered nurse, and
Master's-level social worker determine that the recreational therapist
or activity coordinator needs to be present because that individual is
actively involved in the development or implementation of the
participant's plan of care.
The requirements for semiannual reassessments are currently at
(c)(1)(i) through (v) and would be redesignated as paragraphs (c)(1)
through (c)(4). In the redesignated paragraph (c)(1), we proposed to
revise ``physician'' to ``provider'' for consistency. We also proposed
to redesignate paragraph (c)(1)(v) as (c)(4) and revise the provision
to delete the examples.
Section 460.104(d) discusses unscheduled reassessments. We proposed
changes to paragraph (d) to remove the reference to annual
reassessments. We proposed to change the language in (d)(1) from
``listed in paragraph (a)(2) of this section'' to ``listed in paragraph
(c) of this section.'' As we explained in the proposed rule, this would
change the requirement for unscheduled reassessments in the case of a
change in participant status so that only the IDT members listed in
paragraph (c) will have to conduct the unscheduled reassessment.
Specifically, the primary care provider, registered nurse, Master's-
level social worker, and other team members actively involved in the
development or implementation of the participant's plan of care would
conduct the participant's unscheduled reassessment. Similarly, we
proposed to change paragraph (d)(2), regarding unscheduled
reassessments at the request of the participant or the participant's
designated representative, to also align with IDT members listed in
paragraph (c). We noted in the proposed rule that we believed reducing
the number of IDT members that are required to conduct the unscheduled
reassessments would reduce the burden on POs and allow the POs to
allocate their resources more efficiently, while still meeting the care
needs of participants.
We noted in the proposed rule that, under Sec. 460.64, PO staff
with direct participant contact must only act within the scope of their
authority to practice. Therefore, if the IDT members believe a
participant may need care that is not within the scope of their
respective practices, those members would need to involve other IDT
members as appropriate. We stated in the proposed rule that, for these
reasons, we did not believe we needed to require all core members of
the IDT to conduct unscheduled reassessments.
A discussion of the public comments we received on our proposals
regarding participant assessments under Sec. 460.104, and our
responses to those comments, appears below.
Comment: Some commenters did not support the proposed changes to
Sec. 460.104(d)(1) and (2) as they believed that not all service
requests require an in-person assessment by each of the IDT members
included in paragraph (c). These commenters suggested the IDT should
retain the ability to determine which members of the IDT should conduct
the reassessment, and include those IDT members that are actively
involved in the participant's plan of care. Another commenter stated
that some PACE participants have become overwhelmed by the large number
of IDT members managing their care and, as a result, have disenrolled
from the PACE program. Several commenters expressed the need to make
the most effective use of IDT resources while meeting the needs of PACE
participants. Lastly, a commenter requested that CMS clarify whether it
has any concerns that providing POs with this greater flexibility could
impact the quality of care for PACE participants.
Response: In an effort to align Sec. 460.104(d)(1) and (d)(2), we
inadvertently increased the number of IDT members required for in-
person reassessments in (d)(2). In support of our efforts to reduce
provider burden and balance the needs of PACE participants and PO
resources, we believe that POs should retain the ability to identify
the appropriate IDT members needed for an unscheduled reassessment at
the request of the participant or designated representative as Sec.
460.104(d)(2) currently permits, and we did not intend to require all
IDT members referenced in Sec. 460.104(c) to participate in conducting
these reassessments. We do not anticipate that maintaining the current
requirement will impact the quality of care for PACE participants as we
will continue to rely on POs to apply their clinical expertise when
conducting unscheduled reassessments and expect that the IDT will
involve other IDT members as appropriate.
[[Page 25645]]
Based on the comments received about unnecessary and potentially
overwhelming IDT member presence at reassessments, as well as the
implications of our inadvertent change to align requirements, we are
not finalizing the IDT member changes to Sec. 460.104(d)(2) as
proposed and will maintain the current requirement.
Comment: In general, commenters concurred with the proposed
revisions to Sec. 460.104. However, commenters expressed concern
regarding the proposed revision to Sec. 460.104(c)(2) that would
eliminate the requirement for annual reassessments that include the
other team disciplines such as physical therapist (PT), occupational
therapist (OT), dietician, and home health coordinator. Commenters
stated that by deleting the annual reassessment by the other team
disciplines, POs may miss an opportunity to identify new or emergent
participant issues. Commenters believed that an annual assessment by
these disciplines is beneficial for the PACE participant.
Response: We appreciate the comments regarding the role of the
other team disciplines, such as PTs, OTs, dieticians and home health
coordinators, in patient assessments and that they continue to be
included in an annual assessment. However, we will continue to require
reassessments to be performed on a semiannual basis, that is, every 6
months. We believe that the primary care provider, registered nurse,
and Master's-level social worker who participate in the semiannual
reassessment can collectively determine, based on the participant's
plan of care and IDT discussions, which other IDT members should be
present during this reassessment. We expect the other disciplines, such
as OTs and PTs, to be included as needed. As previously stated, PO
staff with direct participant contact must only act within the scope of
their authority to practice, so if the IDT members listed in paragraph
(c) believe a participant may need care that is not within the scope of
their respective practices, those members should involve other IDT
members as appropriate. For these reasons, after considering the
comments, we are finalizing the changes to Sec. 460.104(c)(2) as
proposed.
Comment: Commenters suggested that we allow POs to conduct in-
person initial comprehensive assessments and reassessments using modern
technology such as video conferencing, where participants and the IDT
members are able to interact ``face-to-face'' and in real time but from
different locations. Another commenter requested CMS allow for the use
of remote technologies, noting that doing so would be particularly
helpful in rural areas due to longer travel times and higher costs
associated with conducting in-person reassessments. Other commenters
expressed that not all service requests warrant an in-person
reassessment. These commenters noted that in some cases, such requests
could easily be addressed by the IDT members most familiar with the
participant and actively involved in the plan of care. These IDT
members would evaluate the request and update the care plan
accordingly.
Response: We appreciate the recommendations regarding the use of
modern technology in conducting initial assessments and reassessments
and minimizing the burden associated with in-person reassessments for
service requests, especially those requests that do not involve complex
clinical decision making and/or input from specialty providers. In
addition, we recognize that the current in-person requirements for
unscheduled reassessments in response to service requests can sometimes
delay access to services because of the time necessary to coordinate
among the appropriate IDT members and conduct the in-person
reassessment. Based on the comments we received in response to the
discussion of PACE participant assessments in the proposed rule, we
have carefully examined the reassessment requirements to determine
whether it may be appropriate for a reassessment to be conducted via
remote technology in some circumstances, as suggested by commenters, to
ensure timely delivery of services and reduce burden on POs. As a
result of feedback from the industry recommending that we allow the use
of remote technology to reduce the burden associated with in-person
reassessments, and to more efficiently address the care needs of PACE
participants and afford POs more flexibility, we are revising Sec.
460.104(d)(2) to specify that POs may use remote technologies to
perform unscheduled reassessments in some circumstances. Specifically,
when a participant (or his or her designated representative) makes a
request to initiate, eliminate or continue a particular service, also
known as a service request, the appropriate members of the IDT, as
determined by the IDT, may use remote technologies to conduct
unscheduled reassessments when the IDT determines that the use of
remote technology is appropriate, the service request will likely be
deemed necessary to improve or maintain the participant's overall
health status, and the participant or his or her designated
representative agrees to the use of remote technology. While we are not
eliminating the requirement to perform unscheduled reassessments in
response to service requests, or to conduct those reassessments in
person in certain cases, we believe that permitting POs to use remote
technologies to conduct reassessments under the circumstances described
above will facilitate appropriate evaluation of PACE participants and
promote the timely delivery of care and effective communication between
the IDT and the participant and his or her designated representative.
The regulation will continue to require POs to conduct a reassessment
in response to a service request. However, we are revising the
regulation to allow the appropriate member(s) of the IDT, as identified
by the IDT, to conduct the reassessment using remote technology in
specific circumstances. We expect that POs will use remote technology
for service requests that are necessary to maintain participants'
health and well-being in the community setting, and may include
services such as improving sanitary conditions in the home, respite
care, or items needed to manage and treat non-complex medical
conditions. Additionally, POs must still conduct an in-person
reassessment prior to denying a service delivery request and cannot use
remote technology to conduct these reassessments.
We want to emphasize that remote technologies should be used on a
case-by-case basis and may not be appropriate for participants that
have complex medical needs and/or require a more hands-on approach for
conducting unscheduled reassessments. We expect IDT members to utilize
their clinical judgment in determining when remote technologies are
appropriate and when an unscheduled reassessment should be conducted
in-person, without using remote technologies.
In addition, we expect that circumstances may arise that warrant a
follow-up ``in-person'' reassessment. For example, during an
unscheduled reassessment initially conducted using remote video
technology, the IDT may determine that a more extensive evaluation is
needed that cannot be accomplished through remote technologies. We
consider remote technologies that allow interactive and immediate
dialogue between the IDT and the PACE participant, caregiver, and/or
designated representative to be appropriate for conducting
reassessments. This includes reassessments via telephone, video
[[Page 25646]]
conferencing, live instant messaging and chat software, or other media
that allow sufficiently direct and interactive communication to permit
the IDT to assess the participant's health status and evaluate the need
for a particular service.
Based on our audit findings and general oversight of POs, we have
found that the majority of service requests are approved, and can and
should be processed by POs in a more expeditious manner. Audits
conducted during calendar years 2017 and 2018 found that many service
requests were not processed in a timely manner, leading to delays in
the provision of the requested service. According to the 2017 PACE
Annual Report, 55 out of 74 POs were cited for not processing service
requests in a timely manner. Feedback from the POs suggests that the
administrative burden associated with conducting in-person
reassessments often causes delays in processing service requests and
decision making regarding whether to approve or deny a request. Because
the majority of service requests are approved, we have determined that
the use of remote technologies is most appropriate for this type of
unscheduled reassessment because it will reduce travel times and help
to more expeditiously connect the IDT to PACE participants in the
community, especially those who reside in rural settings and/or receive
the majority of care in settings outside the PACE center due to
physical or cognitive limitations or participant preference. We also
believe this policy will help to prevent delays in care for fairly
straightforward service requests that do not involve complex clinical
decision making.
We emphasize that the use of remote technologies will be voluntary
for participants, and POs cannot mandate that participants and/or their
caregivers or designated representatives utilize such technologies
during unscheduled reassessments. If a participant does not wish to
allow for reassessments to be conducted with remote technologies, the
IDT must conduct the reassessment in-person without using remote
technology.
We encourage POs to utilize remote technologies as appropriate to
improve communication with participants in all aspects of care
delivery, however, use of remote technology does not supersede
requirements that mandate in-person reassessments. This includes
unscheduled reassessments at the request of the participant or
designated representative where the PO would deny a request; under
Sec. 460.104(d)(2), we will continue to require POs to conduct an in-
person reassessment before denying a request from a PACE participant.
The timeframe for notifying the participant or designated
representative of the PO's decision to approve or deny the request will
remain unchanged, and must be done in accordance with Sec.
460.104(d)(2)(ii) through (iv). We also note that under Sec.
460.104(e)(4), POs must furnish any approved services in the revised
plan of care as expeditiously as the participant's health condition
requires.
Lastly, at this time we do not believe it would be appropriate to
conduct initial comprehensive assessments and other periodic
reassessments through remote technologies. These assessments must
continue to be performed in-person without the use of remote technology
because they help to establish and/or maintain the therapeutic
relationship between PACE participants and/or their caregivers and the
PO, and we do not want to create circumstances in which the IDT misses
an opportunity to identify new or emergent participant issues due to
the inherent limitations of remote technologies, especially in
circumstances where a more hands-on approach and/or in-person
visualization is needed to more accurately and effectively evaluate
participant care needs. In summary, with the exception of IDT member
requirements in Sec. 460.104(d)(2), we are finalizing all the other
changes to Sec. 460.104 as proposed. In addition, based on public
comments, we are further amending the regulation in Sec. 460.104(d)(2)
to allow for the use of remote technologies to conduct unscheduled
reassessments in response to service delivery requests when the IDT
determines that the use of remote technology is appropriate and the
service request will likely be deemed necessary to improve or maintain
the participant's overall health status and the participant or his or
her designated representative agrees to the use of remote technology.
5. Plan of Care (Sec. 460.106)
Section 460.106 requires that the IDT establish, implement,
coordinate, and monitor a comprehensive plan of care for each
participant. As we noted in the proposed rule, the purpose of the plan
of care is to help support the identification of potential or actual
areas of improvement and monitor progression and outcomes. The current
regulatory language pertaining to the basic requirement and the content
of the plan of care in this section has been described by POs as
confusing and unclear. Therefore, we proposed to revise this section by
adding requirements to provide more clarity without changing the
fundamental aspects of the plan of care process.
First, we proposed to change Sec. 460.106(a) from requiring that a
plan of care be developed promptly to state that the plan of care must
be developed ``within 30 days of the date of enrollment.'' We explained
in the proposed rule that the term ``promptly'' does not provide
definitive direction for an IDT to know when the discipline-specific
assessments under Sec. 460.104(b) should be completed and incorporated
into a plan of care. Requiring that the plan of care be developed
within 30 days of the date of enrollment balances the need for time to
complete the assessments and develop a plan of care with the need to
complete the plan of care within a reasonable timeframe. We noted that
this proposed change is consistent with the proposed changes to Sec.
460.104(b).
Next, we proposed to add language to clarify which members of the
IDT are required to develop the plan of care within 30 days. The
proposed language stated that the IDT members specified in Sec.
460.104(a)(2) must develop the plan of care for each participant based
on the initial comprehensive assessment findings. We noted in the
proposed rule that the added language aimed to clarify for POs which
members of the IDT should develop the plan of care. The IDT members in
Sec. 460.104(a)(2) are members of the IDT that are required to conduct
the initial comprehensive assessment and would remain responsible for
developing the plan of care based on the initial discipline-specific
assessments. We acknowledge here that both Sec. Sec. 460.104(b) and
460.106(a) mention the development of a plan of care, however, only
Sec. 460.106(a) includes changes that reference the IDT members in
Sec. 460.104(a)(2). We clarify here that the intent of Sec.
460.104(b) is to achieve consensus among all IDT team members in
developing one single plan of care, and that requirement is unchanged
in this rule. The changes to Sec. 460.106(a) specify which IDT members
must be involved in the development of the plan of care based on their
expertise and insights gained from conducting those comprehensive
initial assessments, while Sec. 460.104(b) maintains the requirement
that the single plan of care must have the consensus of all IDT members
through team discussions with the full IDT as indicated in the
regulation and preamble discussions. In other words, while the eight
disciplines responsible for conducting initial assessments will
actively develop the proposed plan of care, the care plan
[[Page 25647]]
cannot be finalized without a team discussion with the full IDT
included in Sec. 460.102(b)(1) through (11) to gather input from all
remaining IDT members and consensus from the full team. We believe that
all members of the IDT bring valuable perspectives to this process and
therefore reiterate that the changes to the IDT members required to
develop the plan of care in Sec. 460.106(a) do not impact the
requirement in Sec. 460.104(b) that all IDT members agree upon the
plan of care through team discussions.
Section 460.106(b) sets forth the content of the plan of care and
states that the plan of care must meet the following requirements:
Specify the care needed to meet the participant's medical,
physical, emotional and social needs, as identified in the initial
comprehensive assessment;
Identify measurable outcomes to be achieved.
We noted in the proposed rule that we believed these requirements
are appropriate, but may have, in the past, led to confusion regarding
the overall purpose, goal, creation, implementation and follow-up
process of the plan of care. We stated that current regulations do not
explicitly require POs to follow industry standards in developing and
following care plan interventions. We noted that we believed adding new
requirements will help POs to effectively and efficiently identify and
address each participant's care planning needs. Therefore, we proposed
to add three new requirements to Sec. 460.106(b). In paragraph (b)(3),
we proposed to require that the plan of care utilize the most
appropriate interventions (for example, care improvement strategies)
for each of the participant's care needs that advances the participant
toward a measurable goal and desired outcome. In paragraph (b)(4), we
proposed to require that the plan of care identify each intervention
and how it will be implemented. We stated in the proposed rule that
interventions should be targeted, specific actions implemented to
improve a participant's health care outcome. And finally, in paragraph
(b)(5), we proposed to require that the plan of care identify how each
intervention will be evaluated to determine progress in reaching
specified goals and desired outcomes.
The following is a summary of the public comments we received on
the proposed changes to the plan of care requirements in Sec. 460.106
and our responses to comments.
Comment: Overall, commenters supported the proposed revisions to
Sec. 460.106. A few commenters urged CMS to provide exceptions for
extenuating circumstances (such as when a participant is hospitalized
or out of the service area during the initial 30 days of enrollment, or
services are disrupted due to catastrophic weather-related events) to
the requirement for developing a comprehensive plan of care within 30
days of the date of enrollment.
Response: In consideration of the supportive comments, we are
finalizing this provision as proposed. However, we wish to address the
recommendation regarding an exception to the requirement for developing
a comprehensive plan of care within 30 days of the date of enrollment
due to extenuating circumstances. We recognize that there may be
circumstances, albeit rare, that would prevent a PO from conducting a
timely comprehensive assessment for newly-enrolled PACE participants.
However, this is a fundamental part of care planning and is key to a
PO's ability to fulfill its mission and provide quality care to its
participants. Therefore, it is our expectation that POs will comply
with the 30-day timeframe in Sec. 460.106(b) and make every effort to
conduct timely assessments in order to develop and begin to implement
the individualized plan of care in a timely manner. In those rare
situations in which the circumstances prevent a timely assessment, and
development of a plan of care, the PO is expected to document the
specific circumstances and detail the steps taken to provide immediate
care as needed and complete the assessment and plan of care as soon as
feasible given the circumstances.
H. Subpart G--Participant Rights
1. Specific Rights to Which a Participant Is Entitled (Sec. 460.112)
Section 460.112 describes the specific rights of PACE participants,
including, in paragraph (b)(1), the right to be fully informed in
writing of services available from the PO:
Before enrollment;
At enrollment; and
At the time a participant's needs necessitate the
disclosure and delivery of such information to allow informed choice.
We proposed to combine paragraphs (b)(1)(i) and (b)(1)(ii) into
proposed paragraph (b)(1)(i) to state that information about PACE
services will be provided ``prior to and upon enrollment'' in the PO,
and to redesignate current paragraph (b)(1)(iii) as paragraph
(b)(1)(ii), in an effort to simplify the language and regulatory
construction.
Section 460.112(b)(3) states that each participant has the right to
examine, or upon reasonable request, to be assisted in examining the
results of the most recent review of the PO conducted by CMS or the SAA
and any plan of correction in effect. We proposed to make a technical
change to Sec. 460.112(b)(3) by deleting the language ``to be
assisted'' and replacing it with ``to be helped.'' The changes to Sec.
460.112(b) are not substantive in nature but are intended to simplify
the regulatory language.
Sections 1894(c)(5)(A) and 1934(c)(5)(A) of the Act provide that
participants must be permitted to voluntarily disenroll from PACE
without cause at any time. Accordingly, Sec. 460.112(c)(3) states that
each PACE participant has the right to disenroll from the program at
any time. We explained in the proposed rule that we have
operationalized this requirement by allowing participants to provide
notice of voluntary disenrollment at any time and making that
disenrollment effective on the first day of the month after the PO
receives the notice. Consistent with our current practice, we proposed
to revise paragraph (c)(3) to state that the participant has the right
to disenroll from the program at any time and have such disenrollment
be effective the first day of the month following the date the PO
receives the participant's notice of voluntary disenrollment as set
forth in Sec. 460.162(a). As discussed in the proposed rule (81 FR
54686) and section III.J.5. of this final rule, we proposed a
corresponding revision to Sec. 460.162 that would state, in a new
paragraph (a), that a voluntary disenrollment is effective on the first
day of the month following the date the PO receives the participant's
notice of voluntary disenrollment. We explained in the proposed rule
that, because POs receive a monthly capitation payment from Medicare
and/or Medicaid in advance, we effectuate the disenrollment at the end
of the capitated payment period.
We received no comments on our proposed revisions to Sec. 460.112,
and therefore, we are finalizing this provision as proposed.
2. Explanation of Rights (Sec. 460.116)
Section 460.116 sets forth requirements for POs with respect to
explanation of rights, such as having written policies and procedures
on these rights, explaining the rights, and displaying the rights.
Section 460.116(c)(1) provides that the PO must write the participant
rights in English and in any other principal languages of the
community. Consistent with the
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proposal regarding marketing materials under Sec. 460.82(c)(1),
discussed in section III.F. of this final rule, we proposed to specify
that if a state has not established a standard for making the principal
language determination, a principal language of the community is any
language spoken in the home by at least 5 percent of the individuals in
the PO's service area. As we explained in the proposed rule, we
established a similar 5 percent language threshold for marketing
materials in the MA program (Sec. 422.2264(e)), and we believed this
threshold is also appropriate for PACE because of the similarities in
population make-up between the MA program and PACE. Moreover, we noted
in the proposed rule, we strive to create harmony across program
requirements when feasible. This reduces complexity for those
organizations that operate multiple programs.
Section 460.116(c)(2) states that the PO must display the
participant rights in a prominent place in the PACE center. We proposed
to add the word ``PACE'' before the words ``participant rights'' to
specify that participant rights specific to PACE must be displayed. We
explained in the proposed rule that during CMS audits of POs, we have
observed that POs have displayed rights pertaining to the adult day
center or other rights, and not those specific to the PACE program, in
the PACE center. As proposed, the language would explicitly state that
the PACE participant rights must be posted in the PACE center. We
received no comments on our proposed changes to Sec. 460.116, and
therefore, we are finalizing the changes as proposed.
3. PACE Organization's Appeals Process (Sec. 460.122)
Section 460.122 sets forth the requirements for a PO's appeals
process. Section 460.122(c)(1) states that a PO's appeals process must
include written procedures for timely preparation and processing of a
written denial of coverage or payment as provided in Sec.
460.104(c)(3). In the 2006 final rule, we redesignated paragraph (c)(3)
to paragraph (d) in Sec. 460.104, but we inadvertently did not make
the corresponding change to the citation referenced in Sec.
460.122(c)(1) (71 FR 71292, 71336, and 71337). Therefore, we proposed
to amend Sec. 460.122(c)(1) to provide the correct citation reference
to the standards for a written denial notice by changing it from Sec.
460.104(c)(3) to Sec. 460.104(d)(2)(iv).
We did not receive any comments on our proposed technical change to
Sec. 460.122(c)(1). Therefore, we are finalizing this provision as
proposed.
I. Subpart H--Quality Assessment and Performance Improvement
As discussed in section III.A. of this final rule, to update the
terminology to comport with that used in other CMS programs, we
proposed to replace all references to ``quality assessment'' and
``performance improvement'' with ``quality improvement'' throughout
part 460, including the heading for subpart H and the titles of various
sections. In this section, we discuss the other changes that we
proposed to subpart H.
1. General Rule (Sec. 460.130)
Sections 1894(e)(3)(B) and 1934(e)(3)(B) of the Act require that,
under a PACE program agreement, the PO, CMS, and the SAA shall jointly
cooperate in the development and implementation of health status and
quality of life outcome measures with respect to PACE participants.
Section 460.130 requires a PO to develop, implement, maintain, and
evaluate a quality assessment and performance improvement program,
which reflects the full range of services furnished by the PO. Further,
a PO must take actions that result in improvement in its performance in
all types of care.
Section 460.140 refers to additional quality assessment activities
related to reporting requirements. We proposed to move the requirement
in Sec. 460.140 to Sec. 460.130 as new paragraph (d), so that all of
the general rules for quality improvement would be part of the first
section in subpart H. As we noted in the proposed rule, this change
would leave no requirements under Sec. 460.140, so we also proposed to
remove Sec. 460.140.
2. Quality Assessment and Performance Improvement Plan (Sec. 460.132)
Section 460.132 sets forth our current requirements with respect to
a Quality Assessment and Performance Improvement (QAPI) plan. We
proposed to revise the requirements for a QAPI plan in Sec. 460.132.
In addition to the terminology change that we discussed previously
(replacing all references to ``quality assessment and performance
improvement'' with the term ``quality improvement''), we proposed to
revise paragraph (a) to require a PO to have a written quality
improvement plan that is collaborative and interdisciplinary in nature.
As we explained in the proposed rule, the PACE program is unique in its
structure in that it has a collaborative and interdisciplinary approach
in treatment of PACE participants. We stated that we believed a PO's
quality improvement plan should reflect this collaboration and
interdisciplinary approach in its improvement goals. That is, any time
the PO's governing body develops a plan of action to improve or
maintain the quality of care, the plan should focus on the
collaborative and interdisciplinary nature of the PACE program. For
example, a PO may identify as a goal the need to improve its
organization's overall fall incident rate, and develops a plan of
action to address this need that involves soliciting recommendations
concerning this issue from its staff and contracted resources (for
example, pharmacists, physicians, social workers, transportation
providers, and PTs). This plan of action is collaborative because it
involves input from staff and IDT members with experience and
knowledge, and it is interdisciplinary because those individuals have
different skills, levels of education and professional backgrounds and
different perspectives on how to improve the fall rate. We explained in
the proposed rule that we believed requiring a collaborative and
interdisciplinary quality improvement plan will help POs identify and
improve PACE quality issues more appropriately. Therefore, we proposed
to revise paragraph (a) to require a PO to have a written quality
improvement plan that is collaborative and interdisciplinary in nature.
3. Additional Quality Assessment Activities (Sec. 460.140)
As discussed in section III.I.1. of this final rule, we proposed to
redesignate the content of Sec. 460.140 to Sec. 460.130, and
therefore, we proposed to remove Sec. 460.140.
The following is a summary of the public comments we received on
the proposed changes to the quality requirements in subpart H and our
responses to comments.
Comment: We only received comments on the proposed revision to
Sec. 460.132. The many comments we received were all in favor of the
proposed revision. Commenters believed that the term ``collaborative
and interdisciplinary in nature'' accurately describes the quality
improvement plans that POs have under the current requirements. One
commenter recommended that CMS also require POs to solicit ongoing
collective input from individuals and their families and caregivers
when developing quality improvement plans. Another commenter urged CMS
to put additional protections in place to ensure that any quality
improvement plan is comprehensive and accounts for care provided across
the ``care'' continuum and in various settings.
Response: We appreciate the comments and are finalizing the
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modifications to Sec. 460.132 and the other changes to subpart H as
proposed. Regarding the two recommendations we received on quality
improvement plans, we will take this input into account as we consider
future subregulatory guidance or rulemaking on PACE quality
requirements.
J. Subpart I--Participant Enrollment and Disenrollment
1. Eligibility to Enroll in a PACE Program (Sec. 460.150)
In accordance with sections 1894(a)(5) and (c)(1) and 1934(a)(5)
and (c)(1) of the Act, we established Sec. 460.150 to specify the
requirements for eligibility to enroll in a PACE program.
Section 460.150(c)(1) provides that, at the time of enrollment, an
individual must be able to live in a community setting without
jeopardizing his or her health or safety, and Sec. 460.150(c)(2)
states that the eligibility criteria used to determine whether an
individual's health or safety would be jeopardized by living in a
community setting must be specified in the program agreement. As we
explained in the proposed rule (81 FR 54687) and the 2006 final rule
(71 FR 71309), determining whether an individual's health or safety
would be jeopardized by living in the community involves assessing the
individual's care support network, as well as the individual's health
condition. This assessment is done by the PO based upon criteria
established by the state and specified in the PACE program agreement.
We proposed to codify this longstanding policy in our regulations by
revising Sec. 460.150(c)(2) to include a reference to the SAA criteria
used to determine if an individual's health or safety would be
jeopardized by living in a community setting, to indicate that these
criteria are developed by the SAA.
A discussion of the public comments we received on this proposal,
and our responses to those comments, appears below.
Comment: Several commenters expressed support for our proposal to
codify the longstanding policy of using criteria developed by the SAA
to determine if an individual's health or safety would be jeopardized
by living in a community setting. Another commenter recommended that we
develop a new PACE eligibility criterion for individuals who are
institutionalized but have a realistic potential to return to their
homes. Another commenter requested that CMS work with states to ensure
that SAA criteria are sufficiently clear, so as to ensure consistent
application.
Response: We thank the commenters for their support. We did not
propose any additional criteria for PACE eligibility, and therefore, we
believe the comment regarding development of a new PACE eligibility
criterion is outside of the scope of this regulation. With regard to
the request for us to work with states to ensure that the SAA criteria
they develop are clear, we believe that since the states are
responsible for developing the criteria, it is also the states'
responsibility to ensure the criteria are sufficiently clear.
Comment: One commenter requested that in developing the final rule
we take into consideration the systems and protocols implemented by
states to process PACE eligibility determinations and that we allow for
flexibility in our requirements and accommodate the various state
protocols, some of which may provide beneficiary protections in
addition to what CMS requires.
Response: We did not propose any changes to the requirements for
determining eligibility for PACE, and therefore, we believe this
comment is outside of the scope of this regulation. We are finalizing
this provision as proposed.
2. Enrollment Process (Sec. 460.152)
Section 460.152 specifies the PO's responsibilities during the
intake process and actions required in the event a potential PACE
participant is denied enrollment because his or her health or safety
would be jeopardized by living in a community setting. Section
460.152(b)(4) states that the PO must notify CMS and the SAA if a
prospective participant is denied enrollment because his or her health
or safety would be jeopardized by living in a community setting and
make the documentation available for review. We proposed to add
language to paragraph (b)(4) to require that such notification be in
the form and manner specified by CMS, as this would reflect our current
practice of requiring POs to provide these notifications to CMS and the
SAA electronically.
We received no comments on our proposal to require that
notification to CMS and the SAA be in the form and manner specified by
us; therefore, we are finalizing this provision as proposed.
3. Enrollment Agreement (Sec. 460.154)
Section 460.154 specifies the general content requirements for the
enrollment agreement. Section 460.154(i) states that the enrollment
agreement must contain a notification that enrollment in PACE results
in disenrollment from any other Medicare or Medicaid prepayment plan or
optional benefit. It further provides that electing enrollment in any
other Medicare or Medicaid prepayment plan or optional benefit after
enrolling as a PACE participant is considered a voluntary disenrollment
from PACE. We explained in the proposed rule that we were concerned
about possible misinterpretations of this provision, and therefore, we
proposed to add language to paragraph (i) to state that if a Medicaid-
only or private pay PACE participant becomes eligible for Medicare
after enrollment in PACE, he or she will be disenrolled from PACE if he
or she elects to obtain Medicare coverage other than from his or her
PO.
A discussion of the public comment we received on this proposal,
and our response to this comment, appears below.
Comment: One commenter expressed support for our proposal and urged
us to ensure that messaging regarding the potential for disenrollment
be clear and easy to understand in PACE participant materials.
Response: We thank the commenter for its support. We will take the
suggestion regarding clear messaging into consideration when developing
additional subregulatory guidance on PACE disenrollment and beneficiary
protections. We are finalizing this provision as proposed.
4. Other Enrollment Procedures (Sec. 460.156)
Section 460.156 specifies the documentation and information that a
PO must provide to a PACE participant who signs an enrollment
agreement, as well as to CMS and the SAA. Sections Sec. 460.156(a)(2)
and Sec. 460.156(a)(4) state that, after the participant signs an
enrollment agreement, the PO must give the participant a PACE
membership card and stickers for his or her Medicare and Medicaid
cards, as applicable, which indicate that he or she is a PACE
participant and include the phone number of the PO, respectively. We
proposed to delete the sticker requirement currently at Sec.
460.156(a)(4) and revise the PACE membership card requirement at Sec.
460.156(a)(2) so the PO would give the participant a PACE membership
card that indicates that he or she is a PACE participant and that
includes the phone number of the PO. As we noted in the proposed rule,
this would not only ensure that the participant's Medicare and Medicaid
cards are not damaged if stickers are removed in the event the
participant disenrolls from PACE, but also would save participants from
having to carry their Medicare and Medicaid cards with them, a practice
we generally discourage
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based on the risk that a beneficiary's personal information may be lost
or exposed.
A discussion of the public comments we received on this proposal,
and our responses to those comments, appears below.
Comment: Commenters were generally supportive of our proposal to
delete the sticker requirement and revise the PACE membership card
requirement. One commenter stated that this change may result in POs
having to reissue all PACE membership cards, which could impose
additional administrative burdens on the POs.
Response: We appreciate the commenters' support for this change.
With regard to the potential for additional administrative burden, we
note that this change relieves POs of the requirement to produce and
distribute additional materials (that is, the stickers) for
participants' Medicare and Medicaid cards. Moreover, POs are already
required to provide PACE membership cards. While the new requirement to
include the PO's phone number on the PACE membership card will affect
some POs that do not currently include contact information on their
cards, we believe most POs include this information already. Further,
the elimination of the sticker requirement will lessen ongoing burden
and costs for POs. Therefore, we are finalizing this provision without
modification.
Comment: One commenter requested that CMS revise the enrollment
effective date requirement in Sec. 460.158 to enable enrollment to
become effective on the date of the signed enrollment agreement. The
commenter stated that the current enrollment period (effective the
first day of the calendar month following the date of the executed
enrollment agreement) causes delays in obtaining PACE services and PACE
participant and family dissatisfaction.
Response: Consistent with the PACE Protocol (64 FR 66300), we
established in Sec. 460.158 that a participant's enrollment in the
program is effective the first day of the calendar month following the
date the PO receives the signed enrollment agreement. We did not
propose any changes to Sec. 460.158 in the proposed rule, and
therefore, we believe this comment about revising the enrollment
agreement effective date is outside the scope of this rule. In
addition, we note that enrollment of individuals and payment to POs is
based on whole calendar months. In other words, Medicare and Medicaid
capitation payments are paid to a PO for an entire month and are not
pro-rated. Medicare and Medicaid capitation payment in whole month
increments is consistent with the requirement that enrollment in a PO
is always effective on the first calendar day of a month and
disenrollment is always effective on the last calendar day of a month.
Given that both enrollment and Medicare and Medicaid payment occur in
whole month increments, we would be unable to accommodate such a
request for a change to Sec. 460.158.
5. Voluntary Disenrollment (Sec. 460.162)
In accordance with sections 1894(c)(5)(A) and 1934(c)(5)(A) of the
Act, Sec. 460.162 states that a PACE participant may voluntarily
disenroll without cause from the program at any time. We proposed to
retain this language in new paragraph (b) and add new paragraphs (a)
and (c). As described previously in our discussion of proposed changes
to Sec. 460.112(c)(3), we have operationalized the statutory
requirements regarding voluntary disenrollment by allowing participants
to provide notice of voluntary disenrollment at any time and making
that disenrollment effective on the first day of the month after the PO
receives the notice. To align with the proposed changes in Sec.
460.112(c)(3) and our current practices for Medicare health plan
disenrollment, in paragraph (a), we proposed to add language stating
that a participant's voluntary disenrollment is effective on the first
day of the month following the date the PO receives the participant's
notice of voluntary disenrollment.
Sections 1894(c)(5)(A) and 1934(c)(5)(A) of the Act state that
enrollment and disenrollment of PACE program eligible individuals in a
PACE program must be under regulations and the PACE program agreement
with certain statutory restrictions. Moreover, sections
1894(b)(1)(A)(i) and 1934(b)(1)(A)(i) of the Act state that, under the
PACE program agreement, a PO must provide all items and services
covered under titles XVIII (Medicare) and XIX (Medicaid). As we stated
in the proposed rule, through record review during on-site audits and
follow-up regarding family or participant grievances and complaints, we
have encountered some instances in which a participant needed
additional services and was encouraged to voluntarily disenroll by
either an employee or a contractor of the PO in an effort to reduce
costs for the PO. To help prevent this practice, we proposed to
affirmatively require at Sec. 460.162(c) that POs ensure their
employees or contractors do not engage in any practice that would
reasonably be expected to have the effect of steering or encouraging
disenrollment of PACE participants due to a change in health status. We
noted in the proposed rule that, under Sec. 460.40(c), a PO would be
subject to sanctions for engaging in this type of behavior--that is,
discriminating in disenrollment among Medicare or Medicaid
beneficiaries on the basis of an individual's health status or need for
health care services.
A discussion of the public comments we received on our voluntary
disenrollment proposals, and our responses to those comments, appears
below.
Comment: One commenter requested that we create an exception to the
voluntary disenrollment effective date for participants electing the
Medicare hospice benefit and allow voluntary disenrollments for those
individuals to be effective prior to the first day of the month
following the date the PO receives the participant's notice of
voluntary disenrollment. The commenter stated that the current
requirement may delay the start of hospice services and can lead to
dissatisfaction for participants and their family members.
Response: Enrollment of individuals and payment to POs is based on
whole calendar months. In other words, Medicare and Medicaid capitation
payments are paid to a PO for an entire month and are not pro-rated.
Medicare and Medicaid capitation payment in whole month increments is
consistent with the requirement that enrollment in a PO is always
effective on the first calendar day of a month and disenrollment is
always effective on the last calendar day of a month. Given that both
enrollment and Medicare and Medicaid payment occur in whole month
increments, we are unable to accommodate the request for an exception
for participants electing the Medicare hospice benefit. Therefore, we
are finalizing the proposed change to Sec. 460.162(a) without such an
exception.
Comment: Several commenters opposed the proposal to revise Sec.
460.162 to specify that a participant's voluntary disenrollment is
effective on the first day of the month following the date the PO
receives the participant's notice of voluntary disenrollment. The
commenters requested that we retain the current regulation, which
simply states that a PACE participant may voluntarily disenroll from
the program without cause at any time. One commenter expressed concern
that states' enrollment and disenrollment systems may not allow for
disenrollment from a PACE program to be effective the first day of the
following month if notice is given beyond a certain day of the
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month. This commenter stated that while it is possible to disenroll a
Medicare-only beneficiary effective the first day of the month
following notification, disenrollment of Medicaid-only and dual-
eligible PACE participants involves states' Medicaid systems, which may
require notification to be provided in advance of a ``cutoff date'' in
order for a disenrollment to be effective the first day of the
following month. In these situations, the commenter stated,
disenrollment requests received from Medicaid-only and dual-eligible
PACE participants after a cutoff date may be delayed until the first
day of the second month following receipt.
Response: We note that sections 1894(c)(5)(A) and 1934(c)(5)(A) of
the Act state that PACE participants shall be permitted to voluntarily
disenroll without cause at any time. After carefully considering the
commenters' concerns, we respectfully disagree that concerns about
state enrollment and disenrollment systems outweigh the need to protect
participants by requiring POs to effectuate participant requests for
disenrollment from the PO in an expeditious manner. While we appreciate
the commenter's concern about state systems, we believe that it would
be inappropriate to require that some PACE participants who wish to
leave PACE remain enrolled for an additional month because of the
inability of a state Medicaid agency to react to the participant's
request in a timely manner. Delaying the effective date of a valid
disenrollment request should not be the course of action when a
participant's request for disenrollment is received toward the end of a
month. We also note that imposing an early cutoff date creates
unnecessary delays for participants who do not have Medicaid, even
though the processing of their request does not involve any of the
state systems issues described by the commenter. We believe
establishing a policy of differing disenrollment effective dates based
on PACE participants' eligibility for Medicaid and when they choose to
submit the disenrollment request to the PO, would be challenging for
POs to successfully implement and potentially confusing to
participants. We also believe it would result in inequitable treatment
among PACE participants. We further note that MA organizations and
Medicare PDP sponsors have a longstanding requirement to effectuate
voluntary disenrollment requests on the first day of the following
month, regardless of when the request is received during the month or
whether the beneficiary is eligible for Medicaid. We have
operationalized this requirement for PACE by allowing participants to
provide notice of voluntary disenrollment at any time and making that
disenrollment effective on the first day of the month after the PO
receives the notice. We believe that Medicare participants who have
chosen to receive their Medicare health and drug benefits through PACE,
instead of through an MA plan or a Medicare PDP, should not have their
disenrollment delayed solely because they submit their request for
disenrollment in the latter part of a month.
Comment: One commenter expressed support for the proposed
requirement that POs ensure their employees or contractors do not steer
or encourage disenrollment of PACE participants due to a change in
health status. In addition, this commenter requested that we add
``functional, cognitive, or psychosocial'' as health status changes for
which disenrollment should not be encouraged. In support of the
comment, the commenter referenced the expansion of the non-
discrimination provisions contained within Sec. 460.40(a)(3) to
include prohibitions on discrimination on the basis of ``functional,
cognitive, or psychosocial status.''
Response: We appreciate the comment and agree that these sections
of the PACE regulations should be consistent. However, as we explain in
our discussion of Sec. 460.40(a)(3) in section III.E.1 of this final
rule, we inadvertently included the reference to ``functional,
cognitive, or psychosocial status'' in the proposed rule and have
restored the current language in this final rule. While we may consider
revising the description of health status in future rulemaking, we are
not doing so in this rule, and the reference to ``health status'' will
remain in both Sec. 460.40 and Sec. 460.162. Therefore, we are
finalizing this proposed change to Sec. 460.162(c) without
modification.
6. Involuntary Disenrollment (Sec. 460.164)
Section 460.164 specifies the conditions under which a PACE
participant can be involuntarily disenrolled from a PACE program. The
reasons for involuntary disenrollment are derived from sections
1894(c)(5)(B) and 1934(c)(5)(B) of the Act, additional statutory
requirements (for example, the PACE program agreement is not renewed,
or the participant no longer meets the state Medicaid nursing facility
level of care requirements), and the PACE Protocol. We proposed to
redesignate paragraphs (a) through (e) as paragraphs (b) through (f)
and to add new paragraph (a) that specifies that a participant's
disenrollment occurs after the PO meets the requirements in this
section and is effective on the first day of the next month that begins
30 days after the day the PO sends notice of the disenrollment to the
participant. For example, if a PO sends a disenrollment notice on April
5, the disenrollment would be effective June 1-30 days after April 5 is
May 5, and the first day of the next month after May 5 is June 1. We
proposed to add this requirement to make it clear when a participant's
involuntary disenrollment is effective. Additionally, we proposed to
add this requirement to protect participants' due process, as our
regulations and guidance do not currently include an advance notice
requirement. We noted in the proposed rule that the PO must not send
the disenrollment notice until the SAA has reviewed the involuntary
disenrollment and determined that the PO has adequately documented
acceptable grounds for disenrollment, as required by current paragraph
(e) (proposed paragraph (f)). We stated that we believed 30 days would
provide sufficient time for an individual to gather documentation,
medical records, or other information in order to respond to the PO's
proposed disenrollment action, should he or she disagree. Without the
30 days of advance notice, we noted in the proposed rule, a PO could
notify a participant about an involuntary disenrollment late in the
month and make the effective date of the involuntary disenrollment the
first day of the following month, only a few days later. This would not
allow sufficient time for a participant to contest the disenrollment or
to effectively coordinate a transition to other care and services.
Section 460.164(a) currently states the reasons a participant may
be involuntarily disenrolled from PACE. Paragraph (a)(1) states that
the PO may involuntarily disenroll a participant for failing to pay, or
to make satisfactory arrangements to pay, any premium due the PO after
a 30-day grace period. As noted previously, we proposed to redesignate
(a)(1) as (b)(1) and restructure the sentence to clarify that the 30-
day grace period applies to both failure to pay and failure to make
satisfactory arrangements to pay any premium due the PO. We explained
in the proposed rule that we proposed the change because we believed
the current sentence structure creates confusion as to whether the
grace period applies to both payment of the premium ``and'' making
satisfactory arrangements to pay. We noted that the revision would
[[Page 25652]]
clarify that an involuntary disenrollment cannot be initiated due to a
participant's failure to pay until after a 30-day grace period for the
participant to pay or to make satisfactory arrangements to pay.
Satisfactory arrangements could be, for example, a participant's
agreement to pay through installments, or agreement to pay within a
specific time period.
We also proposed to redesignate paragraphs (a)(2) to (a)(6) as
(b)(4) to (b)(8) and to add two additional reasons for involuntary
disenrollment in new paragraphs (b)(2) and (b)(3). In paragraph (b)(2),
we proposed new language that would permit involuntary disenrollment if
the participant, after a 30-day grace period, fails to pay or make
satisfactory arrangements to pay any applicable Medicaid spend-down
liability or any amount due under the post-eligibility treatment of
income processes as permitted under Sec. 460.182 and Sec. 460.184.
Section 1934(i) of the Act, as well as Sec. Sec. 460.182(c), 460.184,
460.152 and 460.154 pertain to these payment amounts. Under section
1934(i) of the Act and Sec. 460.184(a), a state may provide for post-
eligibility treatment of income for participants in the same manner as
a state treats post-eligibility income for individuals receiving
services under a Medicaid waiver under section 1915(c) of the Act.
Section 460.182(c)(1) requires that the PO accept the Medicaid
capitation payment as payment in full ``except'' for payment with
respect to spend-down liability and post-eligibility treatment of
income. Section 460.152(a)(1)(iv) and (v) requires that PACE staff
explain specific information to the potential participant and his or
her representative or caregiver, including any Medicaid spend-down
obligation and post-eligibility treatment of income. Section 460.154(g)
requires that a participant who is Medicaid eligible or a dual eligible
be notified and required to acknowledge in writing that he or she may
be liable for any applicable spend-down liability and amount due under
the post-eligibility treatment of income process. We explained in the
proposed rule that, operationally, a PO needs the ability to
involuntarily disenroll participants based on nonpayment of these
amounts. We noted that participants are obligated to pay these amounts
as part of the PO's overall reimbursement for care and services
provided through the program. Moreover, we stated that we understood
that a participant's failure to pay these amounts can have a
significant financial impact on the PO. Continued insufficient
reimbursement to the PO on an ongoing basis could affect the PO's
financial viability and its ability to continue operations. We
explained that we have previously addressed this issue for many POs
through approval of waivers, but we believed addressing it through a
regulatory change is more efficient and is permitted under the PACE
statutory authority. Moreover, we noted, as with any involuntary
disenrollment, an involuntary disenrollment based on nonpayment of
applicable Medicaid spend-down liability or any amount due under the
post-eligibility treatment of income process must be reviewed by the
SAA to determine that the PO has adequately documented acceptable
grounds for disenrollment before it becomes effective.
In paragraph (b)(3), we proposed to add language that would permit
involuntary disenrollment in situations where the participant's
caregiver engages in disruptive or threatening behavior. We also
proposed to redesignate current paragraphs (b)(1) and (b)(2) as
paragraphs (c)(1)(i) and (c)(1)(ii), respectively, and to add new
paragraph (c)(2) to describe what we consider to be disruptive or
threatening behavior of a participant's caregiver.
Specifically, we proposed that a PACE participant may be
involuntarily disenrolled from the PO if a participant's caregiver
engages in disruptive or threatening behavior that jeopardizes the
participant's health or safety, or the safety of the caregiver or
others. We noted in the proposed rule that this would include any
family member involved in the participant's care. We stated that we
believed sections 1894(c)(5)(B) and 1934(c)(5)(B) of the Act, which
state that a PO may not disenroll a participant except for engaging in
disruptive or threatening behavior, as defined in such regulations
(developed in close consultation with SAAs), could be read to include a
caregiver. We also noted that the PACE Protocol listed as a basis for
involuntary disenrollment that the participant ``experiences a
breakdown in the physician and/or team-participant relationship such
that the PO's ability to furnish services to either the participant or
other participants is seriously impaired,'' which we believed could
include disruptive or threatening behavior of a caregiver (64 FR
66300).
We explained in the proposed rule that, although we previously
stated in the 2006 final rule (71 FR 71316) that we would not include
as a basis for disenrollment the disruptive or threatening behavior of
family members that are involved in the participant's care, as we
gained more experience with PACE, we realized that it is not always
possible for a PO to establish alternative arrangements that would not
disrupt the PO's ability to provide adequate services to the
participant in situations where the caregiver is engaging in
threatening or disruptive behavior. We noted in the proposed rule that,
given the variety of settings in which POs provide services, including
the PACE center and the participant's home, there may be situations
where the caregiver's disruptive or threatening behavior jeopardizes
the health or safety of the participant, other PACE participants,
staff, or visitors and it is not be feasible to establish alternative
arrangements. We stated that we have already approved waivers for
involuntary disenrollment, several of which address disruptive or
threatening caregiver behavior. The requests for waivers have come from
POs that have experienced situations in which their ability to safely
and effectively care for participants is potentially compromised by the
behavior of the participant's caregiver that jeopardizes the health or
safety of others including other participants, staff, or visitors. We
noted in the proposed rule that the proposed revision would obviate the
need for those waivers, thereby reducing the burden on POs, states, and
CMS.
We emphasized in the proposed rule that a PO must only pursue
involuntary disenrollment of a participant based on a caregiver's
behavior after it has engaged in efforts to resolve the situation and
has documented all of those efforts. As set forth in current paragraph
(e) (proposed paragraph (f)), all involuntary disenrollments require a
review and final determination by the SAA before they can become
effective, so as to ensure that the PO has adequately documented
acceptable grounds for disenrollment. As set forth in Sec. 460.168,
when a PACE participant is disenrolled from the PO, the PO must
facilitate a participant's enrollment into other Medicare or Medicaid
programs for which the participant is eligible and must make sure
medical records are available to the new providers. We explained in the
proposed rule that this will help ensure that the participant receives
needed care. We noted that we did not propose a similar change to Sec.
460.164(b)(2) (proposed paragraph (c)(2)), which refers to involuntary
disenrollment of a participant with decision-making capacity who
consistently refuses to comply with his or her individual plan of care
or the terms of the PACE enrollment agreement. A PO cannot
involuntarily disenroll a participant based on the
[[Page 25653]]
caregiver's noncompliance with the participant's plan of care or terms
of the PACE enrollment agreement.
A discussion of the public comments we received on our involuntary
disenrollment proposals, and our responses to those comments, appears
below.
Comment: Two commenters expressed support for our proposed
clarification of the effective date of an involuntary disenrollment and
the new proposed requirement for advance notice of the disenrollment.
Another commenter expressed general support for these proposals but
requested that we waive the 30-day advance notice requirement when a
PACE participant is out of the PO's service area for more than 30 days
without giving prior notice to the PO or obtaining approval from the
PO.
Response: We appreciate the commenters' support for our proposals;
however, we do not believe it would be appropriate to waive the advance
notice requirement in circumstances where a participant is out of the
PO's service area for a specified time period. We believe the proposed
requirement to notify a participant in advance of the PO's decision to
involuntarily disenroll the participant is an important protection for
all participants, and while we agree that a participant's temporary
absence from the service area may raise coverage challenges, we are
concerned the lack of advance notice would result in some erroneous
disenrollments, given that the participant may not have an opportunity
to address any misunderstanding as to the participant's location before
the disenrollment takes effect. In the absence of a requirement for
advance notice, a PO potentially could issue a disenrollment notice on
the last day of month and effectuate the disenrollment the next day. We
also note that beneficiaries enrolled in MA plans, Medicare PDPs and
Medicare cost plans are provided advance notice of an involuntary
disenrollment. We believe that Medicare participants who have chosen to
receive their Medicare health and drug benefits through PACE, instead
of through an MA plan, Medicare PDP, or Medicare cost plan should have
the same protection that advance notice of involuntary disenrollment
affords.
Comment: One commenter recommended that CMS consider incorporating
into the PACE regulations the grievance and appeals processes available
to Medicaid managed care beneficiaries in involuntary disenrollment
situations.
Response: While there are some similarities between the regulatory
requirements for Medicaid managed care and PACE, they are not
completely aligned with regard to how grievances and appeals are
defined. We have established specific requirements for PACE regarding
grievances (defined in Sec. 460.120 as a complaint expressing
dissatisfaction with service delivery or the quality of care furnished)
and appeals (defined in Sec. 460.122 as a participant's action taken
with respect to the PO's noncoverage of, or nonpayment for, a service).
Moreover, we have specified the limited reasons that a participant may
be involuntarily disenrolled from PACE in Sec. 460.164, and we require
that before an involuntary disenrollment is effective, the SAA must
review and determine in a timely manner that the PO has adequately
documented acceptable grounds for the disenrollment. The state must
provide an appeal avenue for both Medicaid and non-Medicaid
participants related to involuntary disenrollments. Since Medicare-only
participants do not have access to the State Fair Hearings process,
states must develop an administrative review process for PACE
participants who are not eligible for Medicaid to address appeals of
involuntary disenrollments. And while the PACE regulations do not
require the PO to establish an appeal process for an involuntary
disenrollment, they are not prohibited from doing so. Because PACE
already requires prior state review of a proposed involuntary
disenrollment, as well as an avenue of resolution in response to a PO's
action to involuntary disenroll a participant, we do not believe it is
necessary to incorporate additional protections based on Medicaid
managed care requirements.
Comment: One commenter expressed concern about the potential for
POs to involuntarily disenroll participants considered ``difficult to
serve'' based on the actions of their caregivers. However, the
commenter noted that its concerns are mitigated by the expanded anti-
discrimination protections proposed in Sec. 460.40. The same commenter
stated that PACE participants should not be held responsible for the
actions of their caregivers unless the participant is involved to some
extent in the disruptive behavior. Two commenters requested that we
provide guidance to POs for instances in which a caregiver's behavior
is viewed as potentially jeopardizing the health or safety of the
participant, or the safety of others. Another commenter opposed
involuntary disenrollment based on caregiver behavior, viewing such
action as punitive to the participant and creating the potential for
adverse health and safety issues. This commenter requested that POs be
directed to find alternative arrangements instead of disenrolling the
participant.
Response: We do not believe that involuntary disenrollment based on
the disruptive behavior of a caregiver or family member should be
contingent upon the involvement or encouragement of the participant.
Due to the type of individual eligible for and enrolled in a PO (that
is, frail elderly meeting a nursing home level of care) and the type of
services needed, there is a greater prevalence of involvement by
caregivers in most aspects of the participant's care. In addition,
there may be participants who are entirely dependent on a caregiver or
family member to obtain or arrange for care or services, leading to a
greater potential for disruptive or threatening behavior on the part of
the caregiver that hinders the PO's ability to provide services to the
participant or to others or potentially jeopardizes the health or
safety of the participant, or the safety of others. We believe such
instances, while rare, may necessitate the involuntary disenrollment of
the participant for the safety of the participant, the caregiver or
others. We note that all PO requests for involuntary disenrollment due
to disruptive or threatening behavior are reviewed for appropriateness
by the SAA prior to the disenrollment occurring. We expect the PO to
take appropriate action in a manner consistent with the legal
requirements applicable to the jurisdictions in which it operates,
including state laws relating to mandatory reporting of elder abuse,
whenever abuse or neglect of a participant may have occurred. We expect
POs to attempt alternative arrangements; however, as we stated in the
proposed rule, we understand that is not always possible. We thank the
commenters for their concern. Subsequent to the publication of this
final rule, we will provide guidance to POs for instances in which a
caregiver's behavior is viewed as potentially jeopardizing the health
or safety of the participant, or the safety of others.
Regarding the comment referring to expanded anti-discrimination
protections, as we discussed previously in sections III.E.1 of this
final rule, we inadvertently included a reference to ``functional,
cognitive, or psychosocial status'' in Sec. 460.40(a)(3) in the
proposed rule, even though our intention was solely to redesignate the
paragraph, and we have restored the existing language in this final
rule.
Comment: One commenter requested that we establish a process for
expedited
[[Page 25654]]
SAA review of a PO's request for involuntary disenrollment on the basis
of threatening or disruptive behavior and that this process not exceed
30 days. The same commenter suggested that CMS provide advance notice
to PACE participants when an involuntary disenrollment request is filed
with the SAA and that the PO begin transferring the participant to fee-
for-service (that is, non-PACE) providers pending final SAA
determination.
Response: We agree that advance notification to participants of the
potential for involuntary disenrollment based on caregiver behavior may
be helpful; however, we did not propose a new requirement for a notice
that would be issued to the participant when the PO submits a request
for involuntary disenrollment to the SAA. We also did not propose the
creation of a new option for an expedited SAA review of requests for
involuntary disenrollment or a new process in which participants are
transferred to non-PACE providers prior to the SSA approving the
request for involuntary disenrollment. While we believe these
recommendations are outside the scope of this rule, we will take these
comments under consideration for future subregulatory guidance or
rulemaking.
Comment: Commenters were supportive of our proposal to include as a
basis for involuntary disenrollment the disruptive or threatening
behavior of family members that are involved in the participant's care
and involuntary disenrollment based on nonpayment of applicable
Medicaid spend-down liability or any amount due under the post-
eligibility treatment of income process.
Response: We appreciate the support expressed by the commenters to
establish these additional bases for involuntary disenrollment. After
considering the comments, we are finalizing those proposed changes, as
well as our other involuntary disenrollment proposals without
modification.
7. Effective Date of Disenrollment (Sec. 460.166)
Section 460.166 is currently titled ``Effective date of
disenrollment;'' however, it focuses on the PO's responsibilities when
disenrolling a participant. Therefore, we proposed to change the title
to ``Disenrollment responsibilities'' to better describe the subject of
this section.
We received no comments on this proposal, and therefore, we are
finalizing it without modification.
8. Reinstatement in Other Medicare and Medicaid Programs (Sec.
460.168)
Section 460.168 describes the PO's responsibility to facilitate a
participant's reinstatement in other Medicare and Medicaid programs
after disenrollment. Section 460.168(a) states that a PO must make
appropriate referrals and ensure that medical records are made
available to new providers in a ``timely manner.'' To ensure POs
interpret ``timely manner'' uniformly, we proposed to change ``in a
timely manner'' to ``within 30 days,'' which would help ensure a smooth
transition for participants. We proposed 30 days because we believed
this would balance the need to give the PO adequate time to gather the
medical records, make copies, and deliver them to the new providers
with the need to ensure that new providers receive the medical records
as soon as possible to help ensure a smooth transition for the
participant and continued access to medications and other needed
ongoing care.
Comment: One commenter expressed support for our proposal to
require POs to make appropriate referrals and ensure medical records
are made available to new providers ``within 30 days,'' as opposed to
in a ``timely manner.'' Another commenter requested that we clarify the
actions to which the proposed timeframe refers.
Response: We did not propose any changes to the actions the PO must
take to facilitate a participant's reinstatement in other Medicare and
Medicaid programs after disenrollment. We believe the actions to which
the 30-day timeframe applies are adequately specified in the
regulation; just as the current timeliness requirement applies to both
making appropriate referrals and ensuring medical records are made
available to new providers, the PO will be expected to carry out both
of those actions ``within 30 days'' once the final rule takes effect.
We are finalizing this provision as proposed.
K. Subpart J--Payment
1. Medicaid Payment (Sec. 460.182)
Section 1934(d) of the Act requires a state to make prospective
monthly capitated payments for each PACE program participant eligible
for medical assistance under the state plan. The capitation payment
amount must be specified in the PACE program agreement and be less,
taking into account the frailty of PACE participants, than the amount
that would otherwise have been paid under the state plan if the
individuals were not enrolled in a PACE program. As we explained in the
proposed rule, there is no national Medicaid rate-setting methodology
for PACE; rather, each state that elects PACE as a Medicaid state plan
option must develop a payment amount based on the cost of comparable
services for the state's nursing facility-eligible population.
Generally, the amounts are based on a blend of the cost of nursing home
and community-based care for the frail elderly. The monthly capitation
payment amount is negotiated between the PO and the SAA and can be
renegotiated on an annual basis.
We implemented the PACE statutory requirements for Medicaid payment
in Sec. 460.182. Section 460.182(b) states that the monthly Medicaid
capitation payment is negotiated between the PO and the SAA and
specified in the PACE program agreement, and the amount meets certain
criteria set forth in paragraphs (b)(1) through (b)(4). Consistent with
the revisions to Sec. 460.32(a)(12), we proposed to revise Sec.
460.182(b) to require that the PACE program agreement contain the
state's Medicaid capitation rate or the ``methodology'' for
establishing the Medicaid capitation rates. We explained in the
proposed rule that as a result of changes to the methods states are
using to determine capitation rates, which can result in varied payment
based on frailty of the population and performance incentive payments,
we have found that specifying the capitation amount in the program
agreement is sometimes operationally impractical. Additionally, we
noted in the proposed rule, because many states update their PACE
Medicaid capitation rates annually based on the state fiscal year,
there are operational challenges associated with updating the PACE
program agreement appendices to reflect changes to the Medicaid rates.
We stated that we believed providing the option of including the
state's methodology for calculating the Medicaid capitation payment
amount is consistent with the statutory requirement in section
1934(d)(2) of the Act that the program agreement specify how the PO
will be paid for each Medicaid participant, and we believed it would
result in less burden for POs, states and CMS by eliminating the
frequency of updates to the PACE program agreement to reflect the
routine changes to the PACE Medicaid capitation rates.
We also proposed to redesignate paragraphs (b)(3) and (b)(4) as
paragraphs (b)(4) and (b)(5) and add a new paragraph (b)(3), which
would require that the monthly capitation amount paid by the SAA be
sufficient and consistent with efficiency, economy, and quality of
care. Current paragraph (b)(1) requires that the
[[Page 25655]]
Medicaid rate be less than what otherwise would have been paid if the
participants were not enrolled in PACE, which in essence establishes an
upper bound under which the rate must fall. We explained in the
proposed rule that while current paragraph (b)(2) also requires that
the rate take into account the comparative frailty of PACE
participants, the regulation does not require that the rate be adequate
or sufficient to provide the services required under the PACE program
for the enrolled population. Since the rate is only required to be less
than what would have otherwise been paid by Medicaid outside of PACE,
there is no lower bound for the rate. We noted in the proposed rule
that we proposed the new language to ensure that the Medicaid rate paid
under the PACE program agreement is not only less than what would
otherwise have been paid outside of PACE for a comparable population,
but is also sufficient for the population served under the PACE
program, which we believed means not lower than an amount that would be
reasonable and appropriate to enable the PO to cover the anticipated
service utilization of the frail elderly participants enrolled in the
program and adequate to meet PACE program requirements. We proposed
that the monthly capitation amount be consistent with efficiency,
economy, and quality of care. We explained in the proposed rule that,
by efficiency and economy, we meant that the payment amount must
reflect that POs bring more efficiencies to the administration,
management and oversight of participant care because they are
singularly responsible for all of a participant's care (including acute
and long term care services), which in many cases outside of PACE are
managed by multiple provider entities. We noted that while the
efficiencies of providing and coordinating all of a participant's care
can result in lower expenditures as compared to a more fragmented
payment system with multiple providers and entities providing different
aspects of an individual's care, the Medicaid monthly capitation amount
must also enable the PO to ensure participant access to quality care
and services to meet the participant's needs. We stated that failure to
provide adequate reimbursement to POs could negatively affect
participant care through reduced care and service authorizations, as
well as limit resources for the PO to promote program goals such as
quality of care, improved health, community integration of
participants, and cost containment, where feasible.
Additionally, we solicited comments about other rate methodologies
we may consider requiring for Medicaid capitation payment amounts for
PACE. We requested input to determine whether or not there could be
other rate setting methodologies for PACE that are more consistent and
competitive with rate setting methodologies used for other programs
that provide similar services to similar populations on a capitated
basis. We provided as an example that Medicaid rates for many of the
state financial alignment demonstrations require actuarially sound
rates. We noted, however, that any change to the PACE rate setting
requirements would need to ensure that the rates are still less than
the amount that would otherwise have been made under the state plan if
individuals were not enrolled in PACE and be adjusted to take into
account the comparative frailty of PACE enrollees, which is required
under section 1934(d)(2) of the Act. We did not propose changes to the
rate methodology for Medicaid capitation payments, but we stated that
we would use public comment to inform possible future PACE rulemaking
concerning Medicaid capitation payments.
The following is a summary of the public comments we received on
the proposed provisions regarding Medicaid payment and our responses to
comments.
Comment: All commenters supported the proposal to incorporate the
state's Medicaid rate methodology or the Medicaid rates into the PACE
program agreement instead of requiring the actual rates. Most
commenters supported the proposal without reservation. However, one
commenter stated that while the commenter supports the Medicaid rate
methodology proposal, it seems to remove the incentive for the state to
negotiate the Medicaid rates in a timely manner.
Response: We appreciate the support for this proposed change. In
response to the comment expressing concern that states will have less
incentive to update and negotiate their rates in a timely manner, we
will take this into consideration when issuing updated guidance to
states regarding the Medicaid rate setting process.
Comment: All commenters supported the proposal to add the
requirement that Medicaid PACE capitation rates be sufficient and
consistent with efficiency, economy and quality of care. However, two
commenters recommended that CMS use alternate language instead of
``sufficient'', such as ``reasonable and appropriate'' or ``reasonable,
appropriate and attainable'', which is part of the standard in Sec.
438.4(a) for actuarially sound capitation rates in Medicaid managed
care. One commenter recommended defining ``sufficient'' in regulation
to mean not lower than an amount that would be reasonable and
appropriate to enable the PO to cover the anticipated service
utilization of the frail elderly participants enrolled in the program
and adequate to meet PACE program requirements. Two commenters also
requested details or guidance on how the ``lower bound'' would be
calculated. Two commenters suggested requiring sufficient language in
the rate method description to enhance transparency of the Medicaid
rate setting process. Two commenters recommended requirements to ensure
Medicaid rates take into account the full financial risk for all
Medicaid covered services, including nursing home care, without a
restriction or adjustment for length of stay. One commenter recommended
that the final rule promote use of experience and risk based
methodologies in general, and support state flexibility in tailoring
rate setting methods to reflect state circumstances. Another commenter
recommended allowing direct use of appropriate adjusted experience from
Medicaid managed LTC programs in addition to or in place of FFS
experience or PACE experience.
Response: We appreciate the overall support for this proposed
change. In response to the commenter that recommended we modify
language in the final rule to clarify that rates should be actuarially
sound, we are not able to require that PACE rates be actuarially sound
because actuarially sound rates could exceed the amount that was
otherwise paid by the state, if the individuals were not enrolled in
PACE, and PACE rates are required by statute to be less than the amount
that would have otherwise been paid if participants were not in PACE.
In response to the commenters that recommended alternative language to
``sufficient and consistent with efficiency, economy and quality of
care'', which is terminology that governs Medicaid fee-for-service
payments at section 1902(a)(30)(A) of the Act, and instead recommended
language consistent with established standards used in Medicaid managed
care, we agree this standard would be more appropriate because PACE as
a capitated model is more aligned with Medicaid managed care than
Medicaid fee-for-service. In response to commenters' concerns regarding
transparency of the state's rate method,
[[Page 25656]]
and that rates take into account the full financial risk that POs
assume, we will take that into consideration when issuing updated
guidance to states regarding the Medicaid rate setting process. In
response to the commenter questioning how the ``lower bound'' will be
defined, we did not intend to establish or define a specific lower
bound for PACE Medicaid rates, but would expect the state to be able to
demonstrate that the Medicaid rates comply with regulatory
requirements. In response to the comment regarding state use of
Medicaid managed LTC experience in development of PACE rates, the
current regulation requires that the Medicaid rates be less than the
amount that would otherwise been paid under the state plan if the
participants were not enrolled in PACE, among other requirements. That
amount is not limited to a fee-for-service comparable population, and
states are not prohibited from using Medicaid managed care data in
determining the amount that would otherwise have been paid, but they
must be able to demonstrate that the amount meets the existing PACE
requirements. Recognizing that more states will be using managed care
experience for their comparable population, we will take that into
consideration when issuing updated guidance to states regarding the
Medicaid rate setting process in PACE. We appreciate the overall
support for the proposed changes. While we are finalizing Sec.
460.182(b) to require that the PACE program agreement contain the
state's Medicaid capitation rate or the ``methodology'' for
establishing the Medicaid capitation rates, we have decided not to
finalize the proposed language that rates be sufficient and consistent
with efficiency, economy and quality of care. However, we appreciate
all of the comments and feedback and will take this input into account
as we consider any changes during future rulemaking.
Comment: Regarding alternative rate methodologies for PACE Medicaid
payments, some commenters suggested: Using Grade of Membership
methodology to identify a long-term-care admission cohort; permitting a
``tiered'' rate structure that Medicare-only individuals would be
required to pay based on services provided under the program; requiring
actuarial certification of rates; requiring that rates related to LTSS
be consistent across Medicaid and PACE; and that CMS develop a
workgroup with stakeholders including the National PACE Association and
POs regarding alternate methods for rate setting. Two comments related
to the Medicare PACE capitation amounts and suggested: That Medicare
rates for POs be consistent with Medicare Medicaid Plans (MMP) or Dual
Special Needs Plans (DSNP) to create a level playing field; and that
changes to PACE Medicare rates be made to align with MA rules.
Response: We appreciate the feedback provided in response to our
request for comments about other rate methodologies that may be applied
to PACE Medicaid payments. While we did not propose changes to the rate
methodology for Medicaid capitation payments, we will use the public
comments received to inform possible future PACE rulemaking concerning
Medicaid payment. We did not propose any changes to the Medicare
payment requirements under Sec. 460.180, and therefore, we believe the
recommendations for changes to the Medicare PACE rates are outside of
the scope of this rule.
L. Subpart K--Federal/State Monitoring
1. Monitoring During Trial Period (Sec. 460.190) and Ongoing
Monitoring After Trial Period (Sec. 460.192)
Sections 1894(e)(4)(A) and 1934(e)(4)(A) of the Act require the
Secretary, in cooperation with the SAA, to conduct a comprehensive
annual review of the operation of a PO during its trial period in order
to assure compliance with the requirements of sections 1894 and 1934 of
the Act and PACE regulations. The trial period is defined as the first
3 years of the PO's contract with CMS and the SAA. Sections
1894(e)(4)(A) and 1934(e)(4)(A) of the Act further provide that the
review must include: An on-site visit; a comprehensive assessment of
the PO's fiscal soundness; a comprehensive assessment of the PO's
capacity to provide PACE services to all enrolled participants; a
detailed analysis of the PO's substantial compliance with all
significant requirements of sections 1894 and 1934 of the Act and PACE
regulations; and any other elements the Secretary or the SAA considers
necessary or appropriate. Sections 1894(e)(4)(B) and 1934(e)(4)(B) of
the Act provide that the Secretary, in cooperation with the SAA, must
continue to conduct reviews of the operation of the PO after the trial
period as may be appropriate, taking into account the performance level
of a PO and compliance of a PO with all significant requirements of
sections 1894 and 1934 of the Act and PACE regulations. Sections
1894(e)(4)(C) and 1934(e)(4)(C) of the Act provide that the results of
the reviews must be reported promptly to the PO, along with any
recommendations for changes to the PO's program, and made available to
the public upon request.
Sections 460.190 and 460.192 set forth the requirements for
monitoring during and after the trial period, respectively. These
regulations currently incorporate requirements from the PACE Protocol
that are more specific than those provided in statute, in that Sec.
460.190(b)(1) details specific activities that must occur onsite during
the trial period reviews, and Sec. 460.192(b) requires that, after a
PO's trial period ends, ongoing reviews be conducted onsite at least
every 2 years. We proposed to revise these provisions of the existing
regulations.
As we explained in the proposed rule, in the 15 years since the
initial PACE regulations were established, the PACE program has
flourished and we have gained significant program experience with
respect to oversight and monitoring of POs. We noted in the proposed
rule that we no longer believed that the activities listed in Sec.
460.190(b)(1)(i) through (b)(1)(v) must be performed while onsite at
the PACE location; technology affords us the opportunity to complete
these tasks remotely. For example, we have implemented the use of
webinar technology in the performance of similar program audits of
Medicare Advantage organizations and Part D sponsors. This technology
allows the entity being reviewed to provide CMS access to information
on its computer systems in real time, in a secure manner. It also
allows reviewers to interact with the entity being reviewed and its
staff, while not being physically present in the building with them. We
stated in the proposed rule that the use of this technology has saved
significant resources in travel dollars and staff downtime (experienced
while they are traveling). Therefore, we proposed to delete the list of
specific activities that may be performed as part of an onsite visit as
currently set forth in the paragraphs located in Sec. 460.190(b)(1)(i)
through (b)(1)(v).
In addition, we proposed revisions to the language at Sec.
460.190(b)(1) and a new paragraph in Sec. 460.190(b)(2) to more
closely mirror the text of statute. We noted in the proposed rule that
the proposed language retains the obligation that CMS conduct an onsite
visit to observe the PO's operations. However, it affords reviewers the
flexibility to conduct other portions of the review remotely. We
explained that greater flexibility to conduct portions of the review
remotely would allow our reviews of POs to gain some of the same
[[Page 25657]]
efficiencies that CMS currently achieves through the use of web-based
technologies in other programs. Specifically, we proposed in the
revised Sec. 460.190(b)(1) that the trial period review include an
onsite visit to the PO, which may include, but is not limited to,
observation of program operations, and proposed a separate requirement
in the new Sec. 460.190(b)(2) that the trial period review include a
detailed analysis of the entity's substantial compliance with all
significant requirements of sections 1894 and 1934 of the Act and the
PACE regulations, which may include review of marketing, participant
services, enrollment and disenrollment, and grievances and appeals. We
proposed to retain the language found in current (b)(2), (b)(3), and
(b)(4), but proposed to redesignate these as (b)(3), (b)(4), and
(b)(5).
Section 460.192(b) of the current regulations establishes the
obligation for continued oversight after the trial period, including
the requirement for an onsite review of every PO every 2 years. We
explained in the proposed rule that as the PACE program has grown, and
with it the number of POs, the amount of resources spent conducting
both trial period and on-going audits of POs has significantly
increased. We stated that we must balance the responsibilities of
ensuring that all of our beneficiaries are receiving quality care with
our duty to effectively manage our resources and ensure proper
oversight over all of the programs we manage. Sections 1893 and 1894 of
the Act do not require the current level of monitoring.
Consequently, we noted in the proposed rule that we believed that
the frequency of ongoing reviews of POs beyond their trial period
should occur based on a risk assessment that takes into account the
PO's performance level and compliance with the significant requirements
of sections 1834 and 1934 of the Act and the PACE regulations.
Therefore, we proposed to delete the language in Sec. 460.192(b) that
requires onsite review every 2 years and replace it with that
requirement that CMS, in cooperation with the SAA, will conduct reviews
of the operations of POs as appropriate, by utilizing a risk assessment
as the means of selecting which POs will be audited each year. We
stated in the proposed rule that this risk assessment would rely
largely on the organization's past performance and ongoing compliance
with CMS and state requirements. However, we proposed that the risk
assessment also take into account other information that could indicate
a PO needs to be reviewed, such as participant complaints or access to
care concerns. This would mirror our approach in selecting
organizations for audit in other programs such as the MA and Part D
programs, which is a data driven, risk-based approach. We noted that
this risk assessment would utilize important measures specific to PACE,
as determined by us including, but not limited to, length of time
between audits, past performance, and other data measures, such as
grievances and/or self-reported adverse events, also known as PACE
Quality Data, as necessary. We stated that we believe using MA and Part
D is an appropriate model on which to base PACE audits, because like in
MA and Part D, a PO is responsible for providing a participant's
benefits in accordance with our regulations. We also explained that we
have discovered through the MA and Part D programs that sponsors have
varying degrees of compliance and that auditing organizations based on
risk allows CMS to focus on those organizations that require closer
scrutiny. Similarly, program experience has shown that POs also have
varying degrees of compliance; therefore, we noted that we believed
this will be a useful tool in selecting organizations for audit and
will allow continued oversight and monitoring in the PACE program, with
better targeting of resources based on the relative risk each
organization presents.
2. Corrective Action (Sec. 460.194)
Section 460.194(a) requires a PO to take action ``to correct
deficiencies identified during reviews.'' However, as we stated in the
proposed rule, there has been some uncertainty as to which
circumstances trigger the requirement that a PO take action to correct
deficiencies. We proposed to revise this regulation to clarify for POs
the range of circumstances under which CMS or the SAAs may identify
deficiencies that would require action by the POs to correct those
deficiencies. We proposed to change Sec. 460.194(a) to state that a PO
must take action to correct deficiencies identified by CMS or the SAA
as a result of the following:
Ongoing monitoring of the PO;
Reviews and audits of the PO;
Complaints from PACE participants or caregivers; and
Any other instance CMS or the SAA identifies programmatic
deficiencies requiring correction.
We proposed this change to specify that corrective actions will be
required to address deficiencies identified by CMS or the SAA through
any of these mechanisms.
3. Disclosure of Review Results (Sec. 460.196)
As we stated in the proposed rule, PACE participants are a frail
and vulnerable population, and we recognized that in some cases they
may be unable to fully grasp the nature of our review results and use
them to make decisions about their healthcare. Our reviews measure the
PO's compliance with a variety of CMS requirements, such as the ability
of the PO to deliver medically necessary healthcare and medications to
their participants. Currently, the regulations require that POs make
their review results available in a location that is readily accessible
to their participants, without mention of accessibility to other
parties. However, we explained in the proposed rule that we believed
that not only participants but also their family members, caregivers,
or authorized representatives should have access to that information in
order to better inform their decisions about the participants'
healthcare. Therefore, we proposed to amend Sec. 460.196(d) to ensure
that POs make review results available for examination not just by PACE
participants, but by those individuals who may be making decisions
about PACE participants' care, such as family members, caregivers and
authorized representatives, because we believed they should be fully
aware of the PO's performance and level of compliance with statutory
and regulatory requirements. We also encouraged POs to make review
results available to other potential participants and the public, for
example, by releasing a summary of the reports online. We stated in the
proposed rule that posting comprehensive review results online would
satisfy PO requirements under Sec. 460.196(d).
The following is a summary of the public comments we received on
the proposed provisions regarding federal and state monitoring and our
responses to comments.
Comment: The majority of commenters supported our proposal to no
longer mandate an onsite audit every 2 years for every PO following the
3-year trial period. However, while supportive of our proposal to
change how often we audit POs following the trial period, multiple
commenters were concerned with allowing POs to go too long without an
audit. These commenters thought that CMS should set an outer limit (or
maximum length of time) that a PO can go without having an audit. These
commenters referenced the frail population in PACE as a reason to
ensure that POs get an audit on a regular basis. These commenters
[[Page 25658]]
suggested a maximum length of time between audits ranging from 3 to 6
years.
Response: We agree with the commenters that there should be a
defined length of time that a PO can go without an audit following the
trial period. We do not believe that a maximum time limit needs to be
implemented through regulation as it is an internal decision and we
need operational flexibility to modify this timeframe when necessary
based on how the PACE program changes through the years. Therefore, we
intend to implement internal guidelines to ensure that POs are audited
with an appropriate frequency, but not modify the proposed regulatory
text. Additionally, we believe by utilizing a risk assessment for audit
selection, we will be able to appropriately safeguard this frail
population by targeting, as often as necessary, those POs that CMS
believes may present a higher risk to participants' health and safety.
Comment: A few commenters, although not against us finalizing the
proposed regulatory changes to monitoring requirements, urged caution
in expanding the time between PACE audits following the trial period.
One commenter mentioned that increasing the time between audits would
place a heavier burden on SAAs. Another commenter mentioned that if a
PO is embarking on an expansion, the frequency of monitoring should
increase during this period of expansion.
Response: We appreciate these commenters' concerns. We understand
that some SAAs may choose to audit POs more frequently if we decide not
to audit a particular PO for a number of years. We believe this is an
important part of our partnership with the SAAs, and encourage states
to monitor POs as often as they believe necessary. While we may not
continue to audit all organizations as frequently after the trial
period as we did prior to the implementation of this regulation, we
will continue frequent account management monitoring and quality
reporting for all POs. We believe that this account management
monitoring, along with our risk assessment and audits, will help us
maintain an appropriate level of oversight in PACE. We also appreciate
the comment regarding audits when POs are embarking on an expansion,
and we will retain authority to audit POs more frequently if needed.
Comment: Two commenters expressed concern with reducing the number
of onsite audits conducted by CMS after the trial period. One commenter
said reducing the number of onsite audits would be eliminating the
tools that are proven to work in assessing quality of care. The other
commenter suggested that if we audit less frequently, we should collect
documentation from the PO more frequently to compensate.
Response: While we understand these commenters' concerns, we are
confident that we will still conduct effective oversight over POs even
if we no longer require onsite visits at least every 2 years. POs that
present a higher risk to participants will still be audited on a more
frequent basis. Only those organizations that are assessed to be a
lower risk will go longer between reviews. Additionally, while we may
audit an organization less frequently, POs are still subject to routine
account management monitoring and quality reporting. Additionally, the
SAA may audit or monitor POs as they see fit, including requesting
documentation from POs between audits.
Comment: Several commenters requested clarification on the risk
assessment CMS intends to use to select POs for audits. Commenters
encouraged CMS to be transparent in how we select POs, including what
performance measures we will be using for the risk assessment. Some
commenters wanted confirmation that the risk assessment would not be
arbitrary and would utilize reasonable standards. Another commenter
wanted clarification on whether the risk assessment would be consistent
from region to region. Lastly, one commenter requested that grievances
be considered in whatever risk assessment is created.
Response: We appreciate these commenters' questions and comments
concerning the risk assessment. We believe that by utilizing a data
based risk assessment we will be able to appropriately target POs for
audit. While we will strive to be transparent in factors or performance
standards we will use for our risk assessment, this is an internal tool
that will likely change slightly every year based on what CMS PACE
subject matter experts believe is important. At a minimum, this
assessment tool will likely review data related to grievances,
complaints and access to care and take into account when the PO was
last audited. Additionally, the risk assessment will likely include
measures related to performance level of the PO and any referrals made
by either CMS or the SAA. While we do not intend to publish the exact
measures utilized in the risk assessment, we anticipate including
information in an annual audit report that will discuss the risk
assessment for PO audits at a high level, as well as the POs selected
for audit in a given year. The annual report may also include
summarized audit results, including, common conditions/findings cited
and any audit scores applied based on conditions cited. The annual
report will be released by us each year through an HPMS memorandum to
the industry.
Comment: We received several comments on our proposed use of
technology for conducting audits, specifically using webinars to audit
a PO when we would not be onsite for the audit. Most of the commenters
expressed support for our proposal to use technology to conduct audits.
These commenters warned, however, that while the use of technology is
good, POs are small and have limited resources, and reminded us that
not all organizations will be equipped to handle webinar audits in the
same way.
Response: Since PACE is a direct care model, there are times when
audits must be conducted onsite. However, allowing the use of webinar
technology would allow us to conduct comprehensive reviews of a PO's
ability to provide care and services, through review of participant
health records, appeals, grievances, and other key program areas. We
recognize that most POs are small, and some do not have the
sophisticated electronic systems of some larger organizations. Auditors
will work within the systems that POs have when conducting audits.
Comment: One commenter questioned if webinar use would mean that
auditors would no longer need remote access to POs' systems, like
electronic health records.
Response: While we believe that the use of webinars would reduce
the instances where auditors may need remote access to review
participant records, there may still be instances where remote access
is needed. Among other factors, because POs are direct care models,
auditors are sensitive to the amount of time PO staff is required to
spend conducting the audit and away from providing care to
participants. Therefore, auditors may determine that conducting
portions of the audits through remote access, rather than through a
webinar, would be more beneficial to the PO and participants.
Comment: One commenter opposed our proposed removal of specific
program elements from the regulation that might be reviewed while
onsite during the trial period audits, specifically marketing,
enrollment and disenrollment procedures, participant services,
grievances and appeals.
Response: We appreciate this commenter's concerns, however, the
removal of the specific elements from
[[Page 25659]]
the regulation text does not mean we will no longer be reviewing those
elements, either during the trial period or during routine audits.
While we are eliminating the reference to specific portions of the
regulation, it remains our intent that audits are comprehensive reviews
of a PO's compliance with PACE regulations. A key part of that review
will be focused on participant records, and all other services relating
to a participant's experience and access to care which may continue
include review of marketing, participant services, enrollment and
disenrollment procedures, and grievances and appeals.
Comment: One commenter questioned if CMS intends to release a new
PACE manual and audit guide after this rule is finalized.
Response: After publication of this final rule, we intend to update
the PACE manual to reflect the new rules, including the monitoring
section of the manual. The PACE audit protocol (guide) was revised in
2017 and was posted for public comment through the Paperwork Reduction
Act process. Following publication of the final rule, both the PACE
audit protocol and internal auditor instructions will be assessed and
updated as needed. The current PACE audit protocol is available at
https://www.cms.gov/Medicare/Compliance-and-Audits/Part-C-and-Part-D-Compliance-and-Audits/PACE_Audits.html.
Comment: One commenter expressed a concern with for-profit POs, and
recommended for-profit organizations should be audited more often than
not-for-profit organizations.
Response: For purposes of auditing following the trial period, POs
that are selected for audit will be selected using a risk assessment
tool that assesses a number of factors related to PACE performance. We
do not intend to select POs based on for-profit or not-for-profit
status.
Comment: One commenter requested that we make auditors aware of the
differences between MA and Part D plans and POs.
Response: We agree that PACE is a unique program as both a payer
and direct care provider. PACE auditors are trained to understand the
unique nature of the PACE program prior to conducting any audits.
Comment: One commenter encouraged CMS to conduct transparent exit
interviews at the conclusion of a PO audit.
Response: We agree that we should always strive to be transparent
with our audits, including conducting exit conferences to discuss
conditions of non-compliance with the PO prior to auditors concluding
the audit. Our audit process was revised in 2017 and the new audit
protocol for PACE was approved under the Paperwork Reduction Act
approval process. This new audit process includes conducting exit
interviews following the CMS audit in order to ensure we are
transparent regarding the potential non-compliance noted during the
review.
Comment: Multiple commenters were supportive of our proposed
revision to the requirements for disclosure of the results of PO
reviews. Several of these commenters supported our proposal that POs be
responsible for making the review results available for examination in
a place that is readily accessible to not only participants, but also
their family members, caregivers, and authorized representatives. A few
commenters, while supportive of the disclosure requirements, thought
CMS should be responsible for posting the results of the review so that
all consumers can make an informed decision about their PACE program.
Response: We agree that disclosing audit results to more than just
participants is important, particularly for family members, caregivers,
and authorized representatives that are responsible for making informed
decisions regarding appropriate health care. We appreciate commenters'
support for our proposal to require POs to make these disclosures. We
also appreciate the benefits of CMS reporting some results at a
national level in order to continue promoting improvements across the
industry, and allowing participants and others to make informed
decisions.
We published our first annual audit report in 2018 which summarized
audit results from the 2017 audit year, including common conditions/
findings, and provided a general overview of the audit structure. That
report is available at https://www.cms.gov/Medicare/Compliance-and-Audits/Part-C-and-Part-D-Compliance-and-Audits/PACE_Audits.html. As
noted previously in this final rule, we anticipate this report will
continue to be released to the industry via HPMS annually and will
include not only summarized information regarding common conditions,
but information specific to individual POs as well, including audit
scores.
Comment: Two commenters commented on the format of the disclosed
review results. One commenter encouraged CMS to make reports as reader
friendly as possible in order to aid participants and family members
with understanding the results. The other commenter requested that
results be published in a standardized manner to help participants and
caregivers understand them.
Response: We agree with the commenters that reports and results
should be standardized and in an easily readable format. During our
audit redesign, we developed standardized reports and will continue to
refine them based on continued audit experience and PO feedback.
Comment: One commenter encouraged CMS to not only disclose audit
results publicly, but also create a rating system for POs based on
quality measures to help participants and their caregivers in making
informed decisions.
Response: We thank the commenter for the suggestion. We believe
requiring POs to make audit results available to caregivers will help
caregivers, participants and their families make informed decisions
about participants' care. While we currently score POs' performance in
audits, and publish those scores in an annual report, we do not intend
to develop a separate rating system due to the unique nature and
structure of POs around the country.
Comment: Several commenters, while supportive of POs disclosing
audit results to participants and their families, caregivers, and
authorized representatives, were concerned that audit reports are too
negative. These commenters stated that by focusing only on a PO's
deficiencies, the disclosure of these results skew or bias a
participant or a participant's caregiver when making a decision about
care. These commenters stated that the disclosure of results should
focus on positive aspects of the organization, as well as deficiencies.
Response: We understand the concern presented by these commenters.
CMS audits are intended to assess a PO's compliance with PACE
regulations and manual guidance. Our audits focus on those areas in the
PO that are not in compliance and need corrective action implemented.
Our audits also focus on the participant experience and access to care.
POs are currently required to make the results of these reviews readily
available to participants; however, we believe that it is important
that caregivers, family members, and authorized representatives are
also able to see these results.
Comment: Some commenters offered their support for our proposed
modifications to clarify the circumstances when a PO must take action
to correct deficiencies identified by CMS or the SAA.
Response: We appreciate the support for this proposal.
[[Page 25660]]
After considering the comments, we are finalizing the changes to
the federal and state monitoring requirements as proposed.
M. Subpart L--Data Collection, Record Maintenance, and Reporting
1. Maintenance of Records and Reporting of Data (Sec. 460.200)
In accordance with sections 1894(e)(3)(A) and 1934(e)(3)(A) of the
Act, Sec. 460.200 requires POs to collect data, maintain records, and
submit reports, as required by CMS and the SAA. Section 460.200(f)(1)
states that a PO must retain records for the longest of the following
periods: (i) The period of time specified in state law; (ii) 6 years
from the last entry date; or (iii) for medical records of disenrolled
participants, 6 years after the date of disenrollment. We proposed to
change the requirements in paragraphs (f)(1)(ii) and (iii) from 6 years
to 10 years for consistency with the statute of limitations under the
False Claims Act (31 U.S.C. 3731(b)(2)). For enrollee records, under
Sec. 460.200(f)(1)(ii) and (iii), the 10-year requirements would apply
only to records of new and existing enrollees in the PO. We explained
in the proposed rule that Medicare Advantage requirements at Sec.
422.504(d), Medicare Part D requirements at Sec. 423.505(d), and other
CMS programs' record retention requirements, all conform to the statute
of limitations for the discovery of violations under the False Claims
Act. We also noted that POs that offer qualified prescription drug
coverage currently must comply with the Medicare Part D record
retention requirement in Sec. 423.505(d). In addition, we stated that
the 10-year record retention policy is also consistent with
recordkeeping requirements under the Medicaid Drug Rebate Program
(Sec. 447.510(f)). We proposed to extend the 10-year record retention
requirement to all PACE records for consistency with these programs and
to ensure we have proper oversight for investigating the complex
payment and other relationships associated with delivery of Medicare
and Medicaid benefits under the PACE program.
The following is a summary of the public comments we received on
the proposed provisions regarding data collection, record maintenance
and reporting, and our responses to comments.
Comment: One commenter supported our proposal to change the PACE
record retention requirement from 6 to 10 years.
Response: We thank the commenter for its support.
Comment: One commenter requested that CMS require POs to collect
and report participant data for several ``sociodemographic'' factors,
including age, race, ethnicity, primary language, gender identify,
sexual orientation, in connection with PACE quality policies.
Response: We do not currently collect this information from POs,
but will take this suggestion into account as we consider future
subregulatory guidance or rulemaking on PACE quality requirements.
As a result of the comments, we are making no changes to our
proposal and are finalizing the modifications to Sec. 460.200 as
proposed.
IV. Provisions of the Final Rule
For the most part, this final rule incorporates the provisions of
the proposed rule. Those provisions of this final rule that differ from
the proposed rule are as follows:
In section III.C.4. of this final rule, Subpart B--PACE
Organization Applications and Waivers, we are clarifying the timeframes
for applications at Sec. 460.20(c)(2).
In section III.C.6. of this final rule, we are clarifying the PACE
waiver submissions process at Sec. 460.26.
In section III.F.10. of this final rule, we are revising the text
to specify expectations for agent/broker training at Sec.
460.82(e)(4).
In section III.G.3. of this final rule, regarding the IDT for PACE
participants, we are revising Sec. 460.98(c)(1) to refer to ``primary
care, including services furnished by a primary care provider as
defined in Sec. 460.102(c) and nursing services''.
In section III.G.3. of this final rule, we are not finalizing our
changes to Sec. 460.104(d)(2) as proposed and will maintain the
current provision which requires that the appropriate members of the
IDT, as identified by the IDT, must conduct the in-person assessment.
We are however revising Sec. 460.104(d)(2) to specify that unscheduled
reassessments may be performed using remote technology in certain
circumstances. Specifically, when a participant or his or her
designated representative makes a request to initiate, eliminate or
continue a particular service, the appropriate members of the IDT, as
determined by the IDT, may use remote technologies to conduct
unscheduled reassessments when the IDT determines that the use of
remote technology is appropriate and the service request will likely be
deemed necessary to improve or maintain the participant's overall
health status and the participant or his or her designated
representative agrees to the use of remote technology.
In section III.F.3. of this final rule, we are finalizing the
provisions related to the compliance oversight program as proposed at
Sec. 460.63 in part. We are not finalizing the provision that would
require POs to audit and monitor their operations, but we are
finalizing the provision that would require POs to identify, respond to
and correct non-compliance and fraud, waste and abuse.
In section III.F.2. of this final rule, we are not finalizing the
proposal to add a new Sec. 460.62(a)(8) specifying that the governing
body of the PO must have full legal authority and responsibility for
adopting and implementing the compliance oversight program.
In section III J.1. of this final rule, we are revising Sec.
460.182(b)(3) to require that the Medicaid capitation rate provides for
reasonable, appropriate and attainable costs that are required under
the PACE program agreement for the operation of the PO for the time
period and the population covered.
V. Collection of Information Requirements
Under the Paperwork Reduction Act of 1995 (PRA) (44 U.S.C. 3501 et
seq.) we are required to provide 60-day notice in the Federal Register
and solicit public comment before a collection of information
requirement is submitted to the Office of Management and Budget (OMB)
for review and approval. To fairly evaluate whether an information
collection should be approved by OMB, section 3506(c)(2)(A) of the PRA
requires that we solicit comments on the following issues:
The need for the information collection and its usefulness
in carrying out the proper functions of our agency.
The accuracy of our estimate of the information collection
burden.
The quality, utility, and clarity of the information to be
collected.
Recommendations to minimize the information collection
burden on the affected public, including automated collection
techniques.
On August 16, 2016 (81 FR 54692 through 54697), we solicited public
comment on each of these issues for the following sections in the
proposed rule that contained information collection requirements. As
indicated below, we received comments pertaining to the IDT under Sec.
460.102. Otherwise, no PRA-related comments were received and the
provisions were adopted as proposed.
[[Page 25661]]
A. Wage Estimates
To derive average costs, we used data from the U.S. Bureau of Labor
Statistics' May 2016 National Occupational Employment and Wage
Estimates for all salary estimates (www.bls.gov/oes/current/oes_nat.htm). In this regard, Table 2 presents the mean hourly wage,
the cost of fringe benefits and support costs (calculated at 100
percent of salary), and the adjusted hourly wage for the occupation
code, 29-9000, ``Other Healthcare Practitioners and Technical
occupations,'' in the occupational category 29-0000, ``Healthcare
Practitioners and Technical Occupations.'' This code was selected since
it includes PO, CMS and State staff working in healthcare but who do
not have specialist or technical specialist titles.
Table 2--National Occupational Employment and Wage Estimates
----------------------------------------------------------------------------------------------------------------
Fringe benefits Adjusted
BLS occupation title BLS occupation BLS mean hourly and support hourly wage ($/
code wage ($/hr) costs ($/hr) hr)
----------------------------------------------------------------------------------------------------------------
Other Technical Occupations (hereinafter, 29-9000 31.19 31.19 62.38
technical staff)...........................
----------------------------------------------------------------------------------------------------------------
B. Proposed Information Collection Requirements (ICRs)
1. ICRs Regarding Global Change for Quality Assessment and Performance
Improvement (Part 460)
This final rule replaces all references to ``quality assessment and
performance improvement'' to read ``quality improvement'' in Sec. Sec.
460.32(a)(9), 460.60(c), 460.62(a)(7), 460.70(b)(1)(iii), 460.120(f),
460.122(i), 460.130(a), 460.132(a) and (c)(3), 460.134(a), 460.136(a),
(b), (c), (c)(1) and (c)(2) 460.138(b), and 460.172(c). The change also
affects the heading for subpart H and the section headings for
Sec. Sec. 460.132, 460.134, and 460.136.
For each PO, we estimate a one-time burden of 1 hour at $62.38hr
for technical staff to replace or amend existing written materials with
the updated term. In aggregate, we estimate an annualized burden of
41.3 hours ([124 PO x 1 hour] / 3) at a cost of $2576 (41.3 hr. x
$62.38/hr). We are annualizing the one-time estimate since we do not
anticipate any additional burden after OMB's 3-year approval period
expires. The revised requirements and added burden have been submitted
to OMB for approval under control number 0938-0790 (CMS-R-244). This
information request is subject to renewal. The control number's current
expiration date is June 30, 2020.
2. ICRs Regarding Application Requirements (Sec. 460.12)
While Sec. 460.12 sets forth general application requirements for
an entity seeking to become a PO, current regulations do not specify
the process for an existing PO to submit an application to expand its
service area and/or add a new PACE center site. In Sec. 460.12(a), we
proposed revisions to specify that this section also applies to
expansion applications. This change would codify (in the CFR) the
current PACE manual requirements pertaining to application submissions.
Until 2016 for initial PACE applications and 2017 for expansion
applications, PACE applications were submitted in hard copy format.
Applications were often hundreds of pages long, expensive to reproduce
and transmit, and administratively inefficient. This rule finalizes our
proposal to add the phrase ``in the form and manner specified by CMS''
under Sec. 460.12(a) when describing the submission of a complete
application to CMS. This change provides flexibility in the submission
of applications, supporting documentation, and CMS notifications. With
this change CMS expects that PACE applications will be submitted in a
fully electronic submission process, thereby reducing the expense of
submitting a hard copy application. CMS has successfully transitioned
other programs to a fully electronic submission process, thereby
facilitating a more organized and streamlined review.
Section 460.12(b) requires that a PO's application must be
accompanied by an assurance (from the SAA of the state in which the
program is located) indicating that the state considers the entity to
be qualified as a PO and is willing to enter into a program agreement
with the entity. This rule also finalizes our proposal under Sec.
460.12(b)(2) to require that an expansion application include the
state's assurance that the state is willing to amend the PACE program
agreement to include new PACE center sites and/or expand its service
area. This change codifies the current PACE manual provisions
pertaining to the practice of application submissions.
Section 460.12(c)(1) requires that an entity submitting an
application to become a PO or a PO submitting an application to expand
its service area must describe the proposed service area in its
application. As this is current practice, this action would not add any
new burden to the applicants. To become a PO, the requirement for an
entity to submit an application that describes the proposed service
area is set out under Sec. 460.22. The application for a PO to expand
its service area also requires this information. The requirements and
burden are currently approved by OMB under control number 0938-1326.
Subject to renewal, the expiration date specific to this control number
is December 31, 2021.
3. ICRs Regarding the Submission and Evaluation of Waiver Requests
(Sec. 460.26)
Section 460.26 discusses the requirements to submit a waiver
seeking to modify a PACE program requirement. Although current
regulations require that a waiver request be submitted to the SAA for
review prior to submitting to CMS, we finalized our proposal to
reorganize the CFR text so it is clear that both current POs and
applicants must submit a waiver request to the SAA prior to submitting
their request to CMS. The reorganized CFR text also clarifies that a
waiver request may be submitted with the application or as a separate
document. The requirements for submitting a waiver request are being
clarified and are not changing our currently approved burden estimates
for POs and applicants. The preceding requirements and burden are
approved by OMB under control number 0938-0790 (CMS-R-244, expires,
June 30, 2020).
4. ICRs Regarding Notice of CMS Determination on Waiver Requests (Sec.
460.28)
Section 426.28(a) discusses the timeframes for CMS to make a
determination and to send notification about the approval or denial of
a waiver request. While current language requires that CMS approve or
deny a waiver request within 90 days of receipt of the request, we
revised the requirement so
[[Page 25662]]
that CMS must approve or deny a request after receiving a complete
waiver request. Since CMS will request additional information from the
PO if a waiver request is not complete, this change is needed since it
is not possible to make an informed decision for approval or denial
when important information is missing. This change will help facilitate
CMS' ability to work with the PO or applicant to ensure that the
request includes all necessary information. The change is not expected
to change the burden on POs and applicants. The requirements and burden
are approved by OMB under control number 0938-0790 (CMS-R-244, expires
June 30, 2020).
5. ICRs Regarding the PACE Program Agreement (Sec. 460.32)
Sections 460.32 and 460.180(b) require that PACE program agreements
specify the methodology used to calculate the Medicare capitation rate.
For the Medicaid capitation rates, however, the PACE program agreement
must specify the actual amount negotiated between the POs and the SAA
(Sec. Sec. 460.32(a)(12) and 460.182(b)). In this rule we are
finalizing our proposal to amend Sec. 460.32(a)(12) by requiring that
the program agreement include the Medicaid capitation rates or the
Medicaid payment rate methodology. This would be in addition to the
current requirement to include the methodology used to calculate the
Medicare capitation rate.
Medicaid capitation rates are developed and updated by the states
(in negotiation with the POs) and approved by CMS. Operationally,
states submit documentation to CMS to support their proposed PACE
Medicaid capitation rates. CMS reviews the documentation to ensure the
proposed rates are in compliance with the requirements of Sec. 460.182
and provides the state with written approval of the rates. The Medicaid
capitation rates are then communicated to the POs by the state in
writing.
Since current regulations require that the PACE program agreement
include the Medicaid capitation rates, this also requires that the PACE
program agreement be updated to reflect the rates each time they
change, which for most POs is annually. We do not believe it is always
practical or efficient to include the actual Medicaid capitation rates
in the PACE program agreement. In response, we finalized our proposal
to amend Sec. 460.32(a)(12) by requiring that the program agreement
include the Medicaid capitation rates or the Medicaid payment rate
methodology. We do not estimate any additional burden to the PO or the
state as a result of this change. During the next regular rate update,
the PACE program agreement may be revised to include the state's
Medicaid payment rate methodology instead of the new rates. This would
have been an update that would have already been required under the
current requirements at Sec. 460.32(a)(12). By removing the
requirement that PACE program agreements be updated to include the
Medicaid capitation rates, we estimate that each PO would save 30
minutes annually. Therefore, we estimate an aggregate annual reduction
of 62 hours (124 POs x 0.5 hr) at a savings of $3,868 (62 hr x $62.38/
hr).
The revised requirement and burden have been submitted to OMB for
approval under control number 0938-0790 (CMS-R-244, expires June 30,
2020).
6. ICRs Regarding a Governing Body (Sec. 460.62)
Section 460.62 focuses on the ability of the PO's governing body to
provide effective administration in an outcome-based environment. While
Sec. 460.62(a)(7) requires that a PO's governing body be able to
administer a quality improvement program, this rule revises this
section by requiring that the PO's governing body must be able to
administer a quality improvement program as described in the general
rule regarding quality improvement programs found in Sec. 460.130.
Section 460.132 already requires that the PO implement a quality
improvement plan and that the governing body must review the quality
improvement plan on an annual basis. Revisions to Sec. 460.62(a)(7)
simply clarify what quality improvement program the PO's governing body
must be able to administer. The burden associated with the
aforementioned requirements is captured in Sec. 460.132 which is
approved by OMB under control number 0938-0790 (CMS-R-244, expires June
30, 2020).
7. ICRs Regarding the Creation of a Compliance Oversight Program (Sec.
460.63)
In the proposed rule we proposed to create a new section, Sec.
460.63 that would have required all POs to implement compliance
oversight programs for their organizations that was would parallel the
existing compliance program infrastructure required of Part D plan
sponsors. In particular, we proposed requiring that POs have compliance
oversight programs for their entire organization with two compliance
elements, 1) internal monitoring and auditing, and 2) prompt response,
investigation and correction of non-compliance and fraud, waste and
abuse.
As described in section III.F.3. of this final rule, we received
several comments related to underestimating the burden on the proposed
compliance oversight program. Specifically, commenters suggested that
additional staff and resources would be required to implement the two
proposed provisions across the PO's full operations. As a result of
these comments we are not finalizing the proposal to require POs to
adopt compliance oversight requirements related to internal monitoring
and auditing but are finalizing a new Sec. 460.63 which requires POs
to have a compliance oversight program for responding to compliance
issues, investigating potential compliance problems, and correcting
non-compliance and fraud, waste and abuse.
In the proposed rule, based on our experience with the program we
estimated 150 hours to create training materials and devote staff to
implementing the new program. We estimated this burden based on our
combined experience with compliance programs in MA and Part D as those
programs, like PACE are structured so that there is a single
organization responsible for the care of enrollees/participants. We
then used that experience and modified it to account for POs size and
staffing. We believe that given the size of most POs, a one-time burden
of 150 hours would be a reasonable estimate on how long it would take
to ensure new program materials were developed.
In this final rule, because we are not finalizing the requirement
for POs to adopt internal monitoring and auditing we are reducing the
150 hour estimate of the one-time burden for each PO by a factor of 10.
In addition, since we published the proposed rule, the number of POs
has increased from 119 to 124.
For each PO, we estimate a one-time burden of 15 hours at $62.38/hr
for technical staff to create written training materials and written
procedures for the expansion of a PO's existing system of responding to
and correcting non-compliance (that the PO previously established in
its role as a Part D plan sponsor) to prospectively encompass all of
its PACE operations. In aggregate, we estimate an annualized burden of
620 hours ([124 PO x 15 hour] / 3) at a cost of $38,676 (620 hr x
$62.38/hr). We are annualizing the one-time estimate since we do not
anticipate any additional
[[Page 25663]]
burden after OMB's 3-year approval period expires.
To estimate the annual burden of reporting fraud and abuse, we
assume each PO would take 20 hours annually. Therefore, the aggregate
hourly burden is 2,480 hr (124 POs x 20 hours), at an aggregate cost of
$154,702 (2,480 hr x $62.38/hr).
The revised requirements and added burden have been submitted to
OMB for approval under control number 0938-0790 (CMS-R-244, expires
June 30, 2020).
8. ICRs Regarding Personnel Qualifications for Staff With Direct
Participant Contact (Sec. 460.64(a)(3))
Section 460.64(a)(3) requires that employees or contractors of the
PO who have direct participant contact must have 1 year of experience
working with a frail or elderly population. We amended this requirement
by allowing the PO to hire employees or contractors with less than 1
year of experience working with a frail or elderly population as long
as they meet all other qualification requirements under Sec. 460.64(a)
and receive appropriate training on working with a frail or elderly
population upon hiring.
Section 460.71 already includes requirements regarding training of
staff and competency evaluations for employees and contracted staff
furnishing care directly to participants. In this regard the revisions
to Sec. 460.64(a)(3) do not have any effect on the burden that is
currently approved by OMB under control number 0938-0790 (CMS-R-244,
expires June 30, 2020).
9. ICRs Regarding Program Integrity (Sec. 460.68(a))
Section 460.68 was established to guard against potential conflicts
of interest or certain other risks individuals and organizations could
present to the integrity of the PACE program. The amendments to Sec.
460.68(a)(3) enable POs to determine whether an individual's contact
with participants would pose a potential risk because the individual
has been convicted of criminal offenses related to physical, sexual,
drug, or alcohol abuse or use, rather than entirely prohibiting the
hiring of such individuals. To provide POs with more safeguards against
potential hires that may pose a risk to participants, we also added
language in Sec. 460.68(a)(4) and (a)(5) similar to the requirements
found in regulations governing Long Term Care facilities.
In Sec. 460.68(a)(4), we finalized our proposal to add a new
restriction that would prevent POs from employing or contracting with
individuals or organizations who have been found guilty of abusing,
neglecting, or mistreating individuals by a court of law or who have
had a finding entered into the state nurse aide registry concerning
abuse, neglect, mistreatment of residents, or misappropriation of their
property. Further, in Sec. 460.68(a)(5) we finalized our proposal to
add a new restriction that would prevent POs from employing individuals
or contracting with organizations or individuals who have been
convicted of any of the crimes listed in section 1128(a) of the Act.
We anticipate that these changes may result in employers revising
their written policies and procedures related to the hiring of
individuals with criminal histories and revising their employment
applications. We estimate a one-time burden of 10 hr at $62.38/hr for
technical staff to make these revisions to the written policies and
procedures. In aggregate, we estimate an annualized burden of 413.3
hours ([124 POs x 10 hr]/3 yr) at a cost of $25,782 (413.3 hr x $62.38/
hr). We are annualizing the one-time estimate since we do not
anticipate any additional burden after OMB's 3-year approval period
expires. The revised requirements and added burden have been submitted
to OMB for approval under control number 0938-0790 (CMS-R-244, expires
June 30, 2020).
10. ICRs Regarding Marketing (Sec. 460.82)
Section 460.82 sets out requirements governing the marketing
activities of POs. In this final rule, we are allowing the use of non-
employed agents/brokers, provided they are appropriately trained, to
market PACE programs. We also finalized our proposal to expand the
scope of prohibited marketing practices to include additional means of
marketing through unsolicited contact. In addition, we finalized our
proposal to remove Sec. 460.82(f) which requires that POs establish,
implement, and maintain a documented marketing plan with measurable
enrollment objectives and a system for tracking its effectiveness. We
no longer believe that the documented marketing plan is necessary as we
already review all marketing materials used by a PO and enrollments are
already tracked by CMS. We do not believe that a marketing plan is an
integral piece of the PACE program and does not provide value to the PO
or to CMS. In response, we anticipate that these changes may result in
POs needing to review existing policies and procedures to make sure
they incorporate the changes, as well as to update any current
marketing materials that may need to be changed as a result of the
regulatory changes.
We estimate a one-time burden of 5 hr at $62.38/hr for technical
staff to revise the written marketing policies and materials. In
aggregate, we estimate an annualized burden of 206.7 hours ([124 POs x
5 hr]/3 yr) at a cost of $12,894 (206.7 hr x $62.38/hr).
At the same time, we estimate a burden reduction related to
removing the requirements for the marketing plan and the tracking
system. We estimate this will save each PO 10 hours annually. We
estimate an aggregate reduction of 1,240 hours (124 POs x 10 hr) at a
savings of $77,351 (1,240 hr x $62.38/hr).
We are annualizing the one-time estimates since we do not
anticipate any additional burden after OMB's 3-year approval period
expires. The revised requirements and burden have been submitted to OMB
for approval under control number 0938-0790 (CMS-R-244, expires June
30, 2020).
11. ICRs Regarding the IDT (Sec. 460.102)
Section 460.102 currently states that primary medical care must be
furnished to a participant by a PACE primary care physician. This final
rule will allow primary care to be furnished by a ``primary care
provider'' rather than a ``primary care physician.'' The PO must revise
or develop policies and procedures for the oversight of its primary
care providers.
This final rule permits a PO to have one individual fulfill two
separate roles on an IDT when the individual meets applicable state
licensure requirements and is qualified to fill each role and able to
provide appropriate care to meet the participant's needs.
In response to public comments to proposed rule CMS-4168-P, this
final rule further revises Sec. 460.102 to delete the requirement that
members of the IDT must serve primarily PACE participants.
We estimate a one-time burden of 1 hr at $62.38/hr for technical
staff to update their PO's policy and procedures. In aggregate, we
estimate an annualized burden of 41.3 hr ([124 POs x 1 hr]/3 yr) at a
cost of $2,576 (41.3 hr x $62.38/hr). We are annualizing the one-time
estimate since we do not anticipate any additional burden after OMB' 3-
year approval period expires. The revised requirements and added burden
have been submitted to OMB for approval under control number 0938-0790
(CMS-R-244, expires June 30, 2020).
[[Page 25664]]
12. ICRs Regarding Participant Assessment (Sec. 460.104)
Section 460.104 sets forth the requirements for PACE participant
assessments. The information obtained through the assessment is the
basis for the plan of care developed by the IDT. If the IDT determines
from its assessment that certain services do not need to be included in
the participant's care plan, revisions to Sec. 460.104(b) would
require that the IDT must document in the care plan the reasons why
such services are not needed and are not being included in the plan.
As both the development of and updates to the care plan are a
typical responsibility for the IDT we believe that any burden
associated with this would be incurred by persons in their normal
course of business. We believe that the burden associated with the
development of and updates to the care plan are exempt from the PRA in
accordance with 5 CFR 1320.3(b)(2) because the time, effort, and
financial resources necessary to comply with these requirements would
be incurred by persons in the normal course of their activities and is
a usual and customary business practice.
Currently, Sec. 460.104(c) sets forth the requirements for
periodic reassessments, including semiannual and annual reassessments.
In this rule we are finalizing our proposal to remove the requirement
in Sec. 460.104(c)(2) requiring annual reassessments by the physical
therapist, occupational therapist, dietician, and home care
coordinator. In addition to the periodic reassessments, Sec.
460.104(d) sets forth the requirements for unscheduled reassessments.
In this final rule, we are revising Sec. 460.104(d)(2) to specify that
the appropriate members of the IDT may use remote technologies to
conduct unscheduled reassessments when a participant or his or her
caregiver or designated representative makes a request to initiate,
eliminate or continue a particular service, and the IDT determines that
the use of remote technology is appropriate and the service request
will likely be deemed necessary to improve or maintain the
participant's overall health status and the participant or his or her
designated representative agrees to the use of remote technology.
While these requirements involve a collection of information, we
believe that the burden associated with these requirements is exempt
from the PRA in accordance with 5 CFR 1320.3(b)(2). We believe that the
time, effort, and financial resources necessary to comply with these
requirements would be incurred by persons in the normal course of their
activities and in the absence of federal regulation.
13. ICRs Regarding Plan of Care (Sec. 460.106)
Section 460.106(a) requires that a participant's plan of care be
developed by the IDT promptly. This final rule amends this requirement
by specifying that the IDT must develop the plan of care within 30 days
of the participant's date of enrollment. In Sec. 460.106(b), we
finalized the following three new requirements pertaining to the
content of the plan of care: (1) The plan must utilize the most
appropriate interventions for each of the participant's care needs that
advances the participant toward the measurable goals and desired
outcomes; (2) the plan must identify each intervention and how it will
be implemented; and (3) the plan must identify how each intervention
will be evaluated to determine progress in reaching specified goals and
desired outcomes.
We believe these changes provide clarification regarding the
current requirements in Sec. 460.106 on how to develop and implement a
plan of care, and document any changes made to the plan of care in the
participant's medical record. We expect POs to keep up-to-date with
current practice standards related to plans of care and believe that
most POs already implement these requirements. As we stated in the 1999
IFC (64 FR 66276), the development of the plan of care is subject to
the PRA; however, we stated that the burden associated with this
revision is exempt from the PRA in accordance with 5 CFR 1320.3(b)(2)
because the time, effort, and financial resources necessary to comply
with these requirements would be incurred by persons in the normal
course of their activities and in the absence of federal regulation.
14. ICRs Regarding Explanation of Rights (Sec. 460.116)
Section 460.116 sets forth requirements for POs with respect to
explanation of rights, such as having written policies and procedures
on these rights, explaining the rights, and displaying the rights.
Section 460.116(c)(1) provides that the PO must write the participant
rights in English and in any other principal languages of the
community. In this rule we are finalizing our proposal to require that
if a state has not established a standard for making the principal
language determination, a principal language of the community is any
language spoken regularly at home by at least 5 percent of the
individuals in the PO's service area.
We anticipate that these changes may result in technical staff
revising documents. We estimate a one-time burden of 5 hr at $62.38/hr
for technical staff to revise the written material about participant
rights. In aggregate, we estimate an annualized burden of 206.7 hours
([124 POs x 5 hr]/3 yr) at a cost of $12,894 (206.7/hr x $62.38/hr).
Section 460.116(c)(2) states that the PO must display the participant
rights in a prominent place in the PACE center. In this rule we are
finalizing our proposal to add the word ``PACE'' before the words
``participant rights'' to specify that participant rights specific to
PACE must be displayed.
We anticipate that these changes may result in technical staff
revising documents. Since the only change is the addition of the word
``PACE'' and redisplay of notices, we estimate a one-time burden of 0.5
hr at $62.38/hr for technical staff to revise the notices. In
aggregate, we estimate an annualized burden of 20.7 hours ([124 POs x
0.5 hr]/3 yr) at a cost of $1,291 (20.7 hr x $62.38/hr).
We are annualizing the one-time estimates since we do not
anticipate any additional burden after OMB's 3-year approval period
expires. The revised requirements and added burden have been submitted
to OMB for approval under control number 0938-0790 (CMS-R-244, expires
June 30, 2020).
15. ICRs Regarding Quality Improvement General Rule (Sec. 460.130)
Section 460.130 requires a PO to develop, implement, maintain, and
evaluate a quality assessment and performance improvement program which
reflects the full range of their services. Section 460.140 refers to
additional quality assessment activities related to reporting
requirements. In this rule we are finalizing our proposal to combine
Sec. 460.140 with Sec. 460.130 in an effort to combine all the
general rules for quality improvement under the first section in
subpart H, and would entirely remove Sec. 460.140. This regulatory
reorganization has no impact on any requirements or burden estimates.
16. ICRs Regarding Quality Performance Reporting (Sec. 460.132)
Section 460.132 sets forth requirements with respect to a Quality
Assessment and Performance Improvement (QAPI) plan. In this rule we are
finalizing our proposal to revise Sec. 460.132(a) and (c)(3) by
referring to a quality improvement (QI) plan. Revisions would also
require that POs have a written quality improvement
[[Page 25665]]
plan that is collaborative and interdisciplinary in nature. Because POs
are already required to have a written QAPI plan, we anticipate added
burden to update the plan by making it more collaborative and
interdisciplinary in nature.
We estimate a one-time burden of 1 hour at $62.38/hr to update
material. In aggregate, we estimate an annualized burden of 41.3 hours
([124 POs x 1 hr]/3 yr) at a cost of $2,576 (41.3 hr x $62.38/hr) to
update QI plans. We are annualizing the one-time estimate since we do
not anticipate any additional burden after OMB's 3-year approval period
expires. The revised requirements and added burden have been submitted
to OMB for approval under control number 0938-0790 (CMS-R-244, expires
June 30, 2020).
17. ICRs Regarding the Enrollment Process (Sec. 460.152)
Section 460.152(b)(4) states that the PO must notify CMS and the
SAA if a prospective participant is denied enrollment. In this rule we
are finalizing our proposal to add the phrase, ``in the form and manner
specified by CMS'' and to codify current practice in which such
notifications are submitted to CMS and SAA electronically, noting that
this change would not revise any requirements or burden estimates. The
requirements and burden are approved by OMB under control number 0938-
0790 (CMS-R-244). Subject to renewal, the control number's current
expiration date is June 30, 2020.
18. ICRs Regarding the Enrollment Agreement (Sec. 460.154)
Section 460.154 specifies the general content requirements for the
enrollment agreement. Specifically, Sec. 460.154(i) states that the
enrollment agreement must provide notification that enrollment in PACE
results in disenrollment from any other Medicare or Medicaid prepayment
plan or optional benefit. We require additional enrollment agreement
language stating that if a Medicaid-only or private pay PACE
participant becomes eligible for Medicare after enrollment in PACE, he
or she will be disenrolled from PACE if he or she elects to obtain
Medicare coverage other than from his or her PO.
We estimate a one-time burden of 1 hour at $62.38/hr to update
enrollment materials. In aggregate, we estimate an annualized burden of
41.3 hr ([124 POs x 1 hr]/3 yr) at a cost of $2,576 (41.3 hr x $62.38/
hr). We are annualizing the one-time estimate since we do not
anticipate any additional burden after OMB's 3-year approval period
expires. The revised requirements and added burden have been submitted
to OMB for approval under control number 0938-0790 (CMS-R-244). Subject
to renewal, the control number's current expiration date is June 30,
2020.
19. ICRs Regarding the Enrollment Procedures (Sec. 460.156)
While Sec. 460.156(a) currently requires that POs provide
participants with, among other items, stickers for the participant's
Medicare and Medicaid cards, we finalized our proposal to revise this
requirement such that POs would no longer be required to provide
participants with stickers for their Medicare and Medicaid cards.
Instead, POs would be required to include the PO's phone number on the
participant's PO membership card.
Since we would no longer require that POs provide stickers for
participants' Medicare and Medicaid cards, we estimate an annual
decrease of 1 minute for each organization. The aggregate annual
reduction is 2.1 hours (124 POs x 1 minute/response) at a savings of
$131 (2.1 hr x $62.38/hr). The revised requirements and burden have
been submitted to OMB for approval under control number 0938-0790 (CMS-
R-244). Subject to renewal, the control number's current expiration
date is June 30, 2020.
Additionally, we believe that the burden associated with including
the phone number of the PO on the PACE membership card is exempt from
the PRA in accordance with 5 CFR 1320.3(b)(2) because the time, effort,
and financial resources necessary to comply with these requirements
would be incurred by persons in the normal course of their activities
and is a customary business practice that would occur in the absence of
federal regulation.
20. ICRs Regarding Involuntary Disenrollment (Sec. 460.164)
Section 460.164 specifies the conditions under which a PACE
participant can be involuntarily disenrolled from a PACE program,
including when a participant engages in disruptive or threatening
behavior. We have approved several waivers which allow a PO to
involuntarily disenroll a participant in situations where the
participant's caregiver engages in disruptive or threatening behavior.
In this rule we are finalizing our proposal to permit involuntary
disenrollment in situations where the participant's caregiver engages
in disruptive or threatening behavior, which is defined as exhibiting
behavior that jeopardizes the participant's health or safety, or the
safety of the caregiver or others.
The revision would obviate the need for such waivers, thereby
reducing the burden on POs, states, and CMS. Since we continue to
estimate that fewer than 10 POs would submit this type of waiver
request each year, we believe the requirement is not subject to the PRA
in accordance with 5 CFR 1320.3(c)(4).
21. ICRs Regarding the Disclosure of Review Results (Sec. 460.196)
Section 460.196 requires that POs make their review results
available in a location that is readily accessible to their
participants. In this rule we are finalizing our proposal to amend
Sec. 460.196(d) to ensure that POs make review results available for
examination not just by PACE participants, but by those individuals who
may be making decisions about PACE participants' care, such as family
members, caregivers and authorized representatives, because we believe
they should be fully aware of the PO's performance and level of
compliance with statutory and regulatory requirements.
We anticipate that these changes may result in technical staff
redisplaying documents. We estimate a one-time burden of 0.5 hr at
$62.38/hr for technical staff to redisplay the review results. In
aggregate, we estimate an annualized burden of 20.7 hours ([124 POs x
0.5 hr]/3 yr) at a cost of $1,291 (20.7 hr x $62.38/hr). We are
annualizing the one-time estimate since we do not anticipate any
additional burden after OMB' 3-year approval period expires. The
revised requirements and added burden have been submitted to OMB for
approval under control number 0938-0790 (CMS-R-244, expires June 30,
2020).
22. ICRs Regarding the Maintenance of Records and Reporting of Data
(Sec. 460.200)
In accordance with Sec. 460.200(f)(1), POs must retain records for
the longest of the following periods: the period of time specified in
state law; 6 years from the last entry date; or for medical records of
disenrolled participants, 6 years after the date of disenrollment. In
this rule we are finalizing our proposal to change this requirement
from 6 to 10 years.
We believe that the burden to store records for 6 years is
sufficient to cover the storage for 4 more years, especially as data
are increasingly likely to be stored electronically. As for the storage
of electronic records, a server is not needed since a terabyte hard
drive costs under $200 and can store a terabyte of data securely.
Furthermore, most servers have additional capacity which could be used
before more expenses are needed.
[[Page 25666]]
Thus, the expense to go from 6 years to 10 years is minimal so we are
not itemizing this burden. The requirements and burden for storing
records for 6 years are currently approved by OMB under control number
0938-0790 (CMS-R-244, expires June 30, 2020). The revised requirements
have been submitted to OMB under this control number for approval.
C. Summary of Annual Burden Estimates for Requirements
Table 3--Information Collection Requirements and Burden *
--------------------------------------------------------------------------------------------------------------------------------------------------------
OMB control
number Responses Burden per Labor cost Total cost
Section(s) in title 42 of the CFR (expires Respondents (per response Total time per hour ($/ (annual in
June 30, respondent) (hr) (hr) hr) dollars)
2020)
--------------------------------------------------------------------------------------------------------------------------------------------------------
part 460 (global term change)......................... 0938-0790 124 1 1 ** 41.3 62.38 ** 2,578
Sec. 460.32 (program agreement)..................... 0938-0790 124 1 -0.5 -62 62.38 -3,868
Sec. 460.63 (update policies and procedures)........ 0938-0790 124 1 15 620.0 62.38 38,676
Sec. 460.63 (annual report of fraud and abuse)...... 0938-0790 124 1 20 2,480.0 62.38 154,702
Sec. 460.68(a) (program integrity for PACE)......... 0938-0790 124 1 10 413.3 62.38 25,784
Sec. 460.82 (revise policies and written materials). 0938-0790 124 1 5 206.7 62.38 12,892
Sec. 460.82 (remove requirements)................... 0938-0790 124 1 -10 -1240 62.38 -77,351
Sec. 460.102 (update policies and procedures)....... 0938-0790 124 1 1 41.3 62.38 2,578
Sec. 460.116 (revise explanations of rights)........ 0938-0790 124 1 5 206.7 62.38 12,892
Sec. 460.116 (redisplay `participant rights' as 0938-0790 124 1 0.5 20.7 62.38 1,289
`PACE participant rights')...........................
Sec. 460.132 (update QI plan)....................... 0938-0790 124 1 1 41.3 62.38 2,578
Sec. 460.154 (revise enrollment agreement).......... 0938-0790 124 1 1 41.3 62.38 2,578
Sec. 460.156 (removing sticker requirement)......... 0938-0790 124 1 -0.017 -2.1 62.38 -131
Sec. 460.196 (disclosure of review results)......... 0938-0790 124 1 0.5 20.7 62.38 1,289
-------------------------------------------------------------------------------------------------
TOTAL............................................. ............ 124 1 varies 2,829.2 Varies 176,486
--------------------------------------------------------------------------------------------------------------------------------------------------------
* The $154,702 burden for Sec. 460.63 is an annual burden. All other cost burdens are first year burdens which have been annualized by dividing by 3
since we do not anticipate any further burden. All items with savings are annual for each of the 3 years.
** To clarify rounding procedures: 2,578 = 124 total respondents x \1/3\ (annualized for 3 years) x 62.38. However, the 124/3 is displayed as 41.3 not
41.3333.
D. Submission of PRA-Related Comments
We have submitted a copy of this final rule to OMB for its review
of the rule's information collection and recordkeeping requirements.
These requirements are not effective until they have been approved by
OMB.
We invite public comments on these information collection
requirements. If you wish to comment, please identify the rule (CMS-
4168-F) the ICR's CFR citation, CMS ID number, and OMB control number.
Comments and recommendations must be received by the OMB desk officer
via one of the following transmissions: OMB, Office of Information and
Regulatory Affairs, Attention: CMS Desk Officer, Fax: (202) 395-5806
OR, Email: [email protected].
To obtain copies of a supporting statement and any related forms
for the collection(s) summarized in this rule, you may make your
request using one of following:
1. Access CMS' website at https://www.cms.gov/Regulations-and-Guidance/Legislation/PaperworkReductionActof1995/PRA-Listing.html.
2. Email your request, including your address, phone number, OMB
number, and CMS document identifier, to [email protected].
3. Call the Reports Clearance Office at (410) 786-1326.
PRA-related comments are due July 3, 2019.
VI. Regulatory Impact Statement
We have examined the impacts of this final rule as required by
Executive Order 12866 on Regulatory Planning and Review (September 30,
1993), Executive Order 13563 on Improving Regulation and Regulatory
Review (January 18, 2011), the Regulatory Flexibility Act (RFA)
(September 19, 1980, Pub. L. 96-354), section 1102(b) of the Act,
section 202 of the Unfunded Mandates Reform Act of 1995 (March 22,
1995; Pub. L. 104-4), Executive Order 13132 on Federalism (August 4,
1999), the Congressional Review Act (5 U.S.C. 804(2), and Executive
Order 13771 on Reducing Regulation and Controlling Regulatory Costs
(January 30, 2017).
Executive Orders 12866 and 13563 direct agencies to assess all
costs and benefits of available regulatory alternatives and, if
regulation is necessary, to select regulatory approaches that maximize
net benefits (including potential economic, environmental, public
health and safety effects, distributive impacts, and equity). A
regulatory impact analysis (RIA) must be prepared for major rules with
economically significant effects ($100 million or more in any 1 year).
To analyze the impact of this rule we reviewed its 45 provisions.
We determined that 20 of the provisions have no cost or savings so we
are not discussing them in this statement. Twenty two other provisions
are scored in the information collection requirements section with
aggregate annualized burden (for the first 3 years) of $176,486
($257,836 in costs minus $81,350 in savings). One of those 22
provisions, (the compliance oversight provision), has effects outside
of the scope of the PRA, so the additional impacts of it, and the
remaining three provisions are assessed in this regulatory impact
statement.
The provision discussed in section III.K.1. of this final rule, the
modification of Sec. 460.182 regarding Medicaid payment, has no
savings or cost; the provision discussed in section III.L.1. of this
final rule, the modification of Sec. 460.190 regarding monitoring, has
a savings of $1,523,253 to POs and a savings of $2,638,144 to the
government without any transfer to POs; the provision discussed at
III.G.4. of this final rule, the modification of Sec. 460.104(d)(2) to
allow use of remote technologies for certain participant assessments
has a qualitative savings which is not further quantified. It follows
that this final rule has a net savings of 4 million arising primarily
from the monitoring provision. These estimates are summarized in detail
in Table 4. We discuss these four provisions in more detail below.
[[Page 25667]]
Table 4--Impact 1 2 of Final Rule by Provision and Year
----------------------------------------------------------------------------------------------------------------
1st year 2nd and later
Provision name Regulatory citation Section of final rule savings year savings
----------------------------------------------------------------------------------------------------------------
Medicaid Payment.................. Sec. 460.182....... III.K.1.............. $0 $0
Monitoring........................ Sec. 460.190....... III.L.1.............. \3\ 4,161,397 \3\ 4,161,397
Participant Assessment............ Sec. 460.104(d)(2). III.G.4.............. 0 0
Various \4\....................... Various.............. V.................... (382,754) (73,352)
-------------------------------
Total......................... ..................... ..................... 3,778,643 4,088,045
----------------------------------------------------------------------------------------------------------------
Notes:
\1\ Positive numbers indicate savings; negative numbers indicate cost.
\2\ Although the Participant Assessment provision (Section III.G.4, Sec. 460.104(d)(2)) is not scored
quantitatively, it is a savings. The Medicaid provision is neither a savings nor cost. The additional
flexibility for the IDT provision has neither cost nor savings to the government due to the fact that most POs
are currently exercising these flexibilities through PACE waivers.
\3\ The government saves $2,638,144 and the POs save $1,523,253.
\4\ The numbers in this row are derived from the summary Table 3 in the Collection of Information section as
follows: The first year cost is 382,754 and is the sum of three items: (i) The aggregate of all items saved is
$81,350, (ii) The annual cost of reporting fraud and abuse is $154,702, (iii) the aggregate of all items with
cost minus the $154,702 when multiplied by 3 is 309,402 (the numbers in Table 3 are divided by 3 to create an
annualized cost and hence have to be multiplied by 3). The 2nd and later year costs are $73,352, the
difference of $81,350 (the aggregate of all items with savings) and the $154,702 annual cost of reporting
fraud and abuse.
A. Medicaid Payment (Sec. 460.182 (Discussed in Section III.K.1. of
This Final Rule))
The provision aims to ensure that the Medicaid rate paid under the
PACE program agreement is not only less than what would otherwise have
been paid outside of PACE for a comparable population, but is also
sufficient for the population served under the PACE program, which we
believed means not lower than an amount that would be reasonable and
appropriate to enable the PO to cover the anticipated service
utilization of the frail elderly participants enrolled in the program
and adequate to meet PACE program requirements. We will continue to
review and approve Medicaid capitation rates under PACE. Therefore, we
do not believe this provision will affect spending.
B. Participant Assessment (Sec. 460.104(d) Discussed in Section
III.G.4 of This Final Rule)
This provision reduces the required IDT members at a ``change in
participant status'' reassessment under Sec. 460.104(d)(1) from 8 to 3
members and allows use of remote technology to conduct reassessments
for certain participant service requests under Sec. 460.104(d)(2). We
expect the reduction of required IDT members from eight to three will
result in savings by reducing labor costs. Similarly, we expect the use
of remote technology for reassessments related to service delivery
requests will result in savings from reduced travel costs for PO staff
and PACE participants.
We are scoring this as a qualitative savings and not further
quantifying it. The primary reasons for not quantifying it further are
due to our inability to assess the number of these participant service
requests and the typical travel time that would have been required for
such reassessments. Furthermore, removing a travel requirement for
requests might result in an increase in requests and this effect is
difficult to quantify.
C. Monitoring (Sec. 460.190 (Discussed in Section III.L.1. of This
Final Rule))
This provision would result in savings to both the POs and the
government without any transfers to the POs. We estimate separately the
savings for POs and the government below.
To estimate the savings from the monitoring provision we use the
following assumptions, based on our experience with audits. Since
publishing the proposed rule, we have implemented a new PACE audit
protocol. Having used that new protocol for two years, we now have a
better understanding of the costs of audits to both PO's and the
government. We are updating our analysis to reflect our current
projections, which result in significantly increased estimated savings
for both POs and the government.
Under the provision we are finalizing, we estimate that we will
perform 35 audits per year, 20 during PO trial periods and 15 post
trial period (routine) audits. If we did not finalize this provision,
we estimate that we would perform 72 audits per year, 34 during PO
trial periods, and 38 post trial period (routine) audits.
In the proposed rule, we made the following assumptions in
estimating costs of an audit for a PO. Mean hourly wages have been
updated to reflect current estimates. The assumptions are summarized in
Table 5.
Personnel: We estimated:
++ 2 Medical and Health Service Managers, occupational code 11-9111
on the Bureau of Labor Statistics (BLS) website accessible at
www.bls.gov/oes/current/oes_nat.htm, with an average hourly wage of
$53.69
++ 1 Secretary and Administrative assistant, code 43-6010, with an
average hourly wage of $19.74.
However, in the time since the proposed rule was published, CMS has
implemented and operated a new PACE audit protocol which has allowed us
to better estimate the costs of audits on a PO. We now estimate the
following for personnel:
Table 5--National Occupational Mean Hourly Wage and Adjusted Hourly Wage
------------------------------------------------------------------------
Occupation Mean hourly
Occupation title code wage ($/hr)
------------------------------------------------------------------------
Nurse Manager........................... 11-9111 53.69
Executive Assistant..................... 43-6011 28.56
Medical Records and Health Information 29-2071 20.59
Technician.............................
Compliance Officer...................... 13-1041 34.39
------------------------------------------------------------------------
[[Page 25668]]
Additionally, in the proposed rule we estimated 80 hours uniformly
per person; 40 hours the week before the audit and 40 hours the week of
the audit. Based on updated information, we now estimate that audits
will take approximately 150 hours per person for POs to complete. This
estimate includes all of the pre-audit work, including (i) compiling
and (ii) submitting audit documentation; (iii) 2 weeks of audit
fieldwork; the post-audit work of (iv) collecting and (v) submitting
impact analyses, (vi) reviewing and (vii) commenting on the draft audit
report, and (viii) submitting and (ix) implementing corrective action
plans for conditions of non-compliance.
Fringe benefits: We estimate 100 percent (of hourly wage)
for fringe benefits and overhead.
Based on these assumptions, we can compute the difference between
72 and 35 audits per year. In the proposed rule, we estimated that POs
would save approximately $737,336.00. However, based on the new
assumptions, and as a result of more accurate estimates, we now
estimate that savings per year to POs would be $1,523,253. The
calculations are exhibited in Table 6.
Table 6--PO Savings From Finalizing the Monitoring Provision
--------------------------------------------------------------------------------------------------------------------------------------------------------
Number of
Fringe Number audits per year Number of
Occupational title Code Wage/hr benefit staff Hours per if provision audits per year
factor required audit is not if provision
finalized finalized
--------------------------------------------------------------------------------------------------------------------------------------------------------
Nurse Manager.................................................. 11-9111 $53.69 2 1 150 72 35
Executive Assistant............................................ 43-6011 28.56 2 1 150 72 35
Medical Records and Health Information Technician.............. 29-2071 20.59 2 1 150 72 35
Compliance Officer............................................. 13-1041 34.39 2 1 150 72 35
--------------------------------------------------------------------------------------------------------------------------------------------------------
Aggregate cost Aggregated
Summary descriptions Cost per if not cost if
audit finalized finalized
--------------------------------------------------------------------------------------------------------------------------------------------------------
Summary dollar amounts......................................... ......... ......... ......... ......... $41,169 $2,964,168 $1,440,915
--------------------------------------------------------------------------------------------------------------------------------------------------------
Savings (Not finalized minus finalized)........................ ......... ......... ......... ......... ......... ............... 1,523,253
--------------------------------------------------------------------------------------------------------------------------------------------------------
In the proposed rule we used the following assumptions to estimate the
cost of an audit for CMS.
2.5 FTE (Between 2 and 3 per audit). This number is based
on CMS experience across different geographic regions some of which use
2 FTE and some of which use 3 FTE.
Hours spent:
++ 220 hours at the GS-13 level with an hourly average wage of
$46.46
++ 40 hours at the GS-15 level with an hourly average wage of
$64.59
Based on our experiences auditing POs since publishing this proposed
rule, we are now using the revised assumptions:
3 FTEs to conduct each audit and 1 FTE for audit oversight
and 1 FTE to conduct audit close out activities.
Hours spent:
++ 220 hours at the GS-13 level with an hourly average wage of
$46.46 (includes 3 FTEs for 200 hours each and 1 FTE for 20 hours)
++ 60 hours at the GS-15 level with an hourly average wage of
$64.59
In the proposed rule, we estimated that travel cost approximately
$1,395 per audit. However, since this proposed rule was published, we
now estimate that travel costs approximately $5,940 per audit.
Finally, we continue to have the following additional assumptions
related to government costs.
Fringe Benefits: We estimate 100 percent (of hourly wage)
for fringe benefits
Based on these assumptions, we can compute the difference between
72 and 35 audits per year. In the proposed rule, we estimated that the
savings to CMS was $1,029,454.70 per year. Based on the revised
assumptions, we now estimate the savings to the government to be
$2,638,144. The calculations are exhibited in Table 7.
Table 7--Government Savings From Finalizing the Monitoring Provision
--------------------------------------------------------------------------------------------------------------------------------------------------------
Number of
Mean Number audits per year Number of
Occupational title Code hourly Fringe staff Hours per if provision audits per year
wage benefit needed audit is not if provision
finalized finalized
--------------------------------------------------------------------------------------------------------------------------------------------------------
CMS Staff Employee............................................. GS 13-1 $46.46 2 3 200 72 35
CMS Staff Employee............................................. GS 13-1 46.46 2 1 20 72 35
CMS Manager.................................................... GS 15-1 64.59 2 1 60 72 35
Cost of Travel................................................. ......... 1,980.00 1 3 1 72 35
--------------------------------------------------------------------------------------------------------------------------------------------------------
Aggregate cost
Summary descriptions Cost per if not Aggregated cost
audit finalized if finalized
--------------------------------------------------------------------------------------------------------------------------------------------------------
Summary dollar amounts......................................... ......... ......... ......... ......... $71,301 $5,133,686 $2,495,542
Savings (Not finalized minus finalized)........................ ......... ......... ......... ......... ......... ............... 2,638,144
--------------------------------------------------------------------------------------------------------------------------------------------------------
[[Page 25669]]
D. The Compliance Oversight Program (Sec. 460.63 (Discussed in Section
III.F.3. of This Proposed Rule))
In the proposed rule, we pointed out that current regulations do
not require POs to implement compliance programs similar to those
required in the regulations governing the MA and Part D programs, and
we proposed to adopt certain compliance oversight requirements through
the addition of Sec. 460.63.
Currently, POs participating in the Part D program are required to
have a compliance plan with measures that prevent, detect, and correct
fraud, waste and abuse as specified in Sec. 423.504(b)(4)(vi)
governing the Part D program. We proposed adopting PACE program
requirements that would result in POs expanding their already existing
Part D compliance programs under the Part D program to ensure
compliance oversight for the totality of the PO's operations.
Specifically, we proposed to require all POs to establish and implement
compliance efforts geared toward: (1) Routine monitoring and
identification of compliance risks and (2) promptly responding to
compliance issues as they are raised, investigating potential
compliance problems as identified in the course of self-evaluations and
audits, correcting such problems promptly and thoroughly to reduce the
potential for recurrence; and ensuring ongoing compliance with CMS
requirements.
In the proposed rule, we proposed a burden associated with the
requirements under Sec. 460.63 which would be the time and effort for
each of the 119 POs to develop, adopt, and implement procedures for
conducting internal auditing and monitoring to ensure compliance with
CMS program requirements. POs would also be required to develop
measures to detect, correct, and prevent fraud, waste, and abuse. POs
will be required to devote technical staff to developing and
implementing these procedures.
In the proposed rule, we estimated a one-time burden of 150 hours
at $59.44 per hour for technical staff to develop the aforementioned
procedures and measures at an annualized cost of $353,668 (119 POs x
59.44/hour x 150/3) for each of the first 3 years. We estimated this
burden based on our combined experience with compliance programs in MA
and Part D. Since we proposed to utilize two of the same compliance
requirements in PACE as are used in MA and Part D, we believe this
comparison will be accurate. We then used that experience and modified
it to account for POs size and staffing. We believe that given the size
of most POs, a one-time burden of 150 hours would be a reasonable
estimate on how long it would take to ensure new program materials and
measures were developed.
Additionally, once the program has been developed and is running,
we indicated in our proposal that the PO would have to spend some time
going forward monitoring their own compliance, and reporting and
responding to any suspected fraud, waste and abuse. Therefore, in the
proposed rule, we estimated a burden of 200 hours at $59.44 per hour
for technical staff to complete these activities including, when
warranted, revision of the aforementioned program materials and
monitoring measures. Our estimate also included the routine monitoring
and identification of compliance risks as identified in the course of
self-evaluations and audits. We estimated total aggregate annual cost
at $1,414,672 (119 organizations x 200 hour x $59.44 per hour). Again,
given the size of POs and the limited number of participants, we
believed the burden to be small, and we believed that 200 hours would
cover the ongoing responsibilities of each PO. This includes PO
monitoring of its own compliance; corrective action as a result of that
monitoring; and updating PO monitoring measures and procedures.
We solicited comments from POs regarding this burden estimate in
the proposed rule. The following is a summary of the public comments we
received on the ``Compliance Oversight Program'' proposed burden
estimate and our response to those comments.
Comment: Many commenters suggested that we underestimated the
burden of implementing a compliance oversight program in PACE. These
commenters suggested more staff would be needed, and the cost and hours
to both implement and maintain a compliance oversight program were
underestimated. One commenter suggested we use our burden estimates for
the monitoring proposal in Subpart K in order to estimate the burden of
POs implementing an internal monitoring and auditing program as a part
of the compliance oversight program, since the same staff would likely
be used. One commenter mentioned that the time involved in conducting
ongoing internal monitoring would be similar to the time POs currently
spend when undergoing a CMS audit. Another commenter mentioned that
there would be a large increase in manual data collection which needed
to be included in the burden.
Response: Based on comments received, and because we have a strong
policy interest in not creating undue burden, we have reviewed our
proposed provision and the proposed burden associated with it. We
believe that the majority of the burden associated with our initial
proposal is due to the first element of our proposal which would have
required POs to adopt internal monitoring and auditing that would cover
all PACE operations. Because POs are currently required to have a
compliance program as Part D plan sponsors, we estimated the cost of
new PACE requirements would be to update materials and expand efforts
currently in place under Part D to implement these new PACE provisions
and ensure that the full PACE operations were being affirmatively
reviewed and that compliance concerns identified anywhere in the PO's
operation were being promptly addressed. Although we did not separately
analyze the cost of each of these two elements in our first proposal,
the majority of burden was associated with the development and
implementation of the internal monitoring and auditing element. We are
not finalizing that element at this time in order to further evaluate
the anticipated burden. We are finalizing the compliance oversight
requirements which require promptly responding to non-compliance and
fraud, waste and abuse. Because we are not expanding the scope of what
an organization is required to monitor and because we believe POs are
currently addressing compliance concerns in their organizations as they
arise outside of Part D, we anticipate only a minimal burden with this
element. Therefore, we revised our burden estimates and decreased the
hours to implement this revised provision by a factor of 10. The number
of hours would therefore be reduced from 150 hours to 15 hours for one
staff member. Additionally, we decreased the estimate of how many hours
an organization will spend following the implementation of this
provision from 200 to 20 hours. We decreased these numbers because we
are not finalizing the element that would have required POs to expand
their internal monitoring and auditing efforts, and we are only
finalizing the provision that would require an organization to have a
system for responding to, investigating and correcting non-compliance.
Since there will be no increased data collection, we believe this
reduced burden accurately reflects the revised provision.
As discussed above, and as a result of these comments, we have
decided not to
[[Page 25670]]
finalize the first proposed element related to internal monitoring and
auditing, and finalize only the second element of the proposed
compliance oversight program, related to responding to, correcting and
reporting non-compliance and fraud, waste and abuse.
As in the proposed rule we make separate estimates for the initial
year and for subsequent years. Additionally, since the proposed rule
was published the number of POs increased from 119 to 124. Because we
are not adopting the element of the proposal that would have required
POs to establish internal monitoring and auditing the estimates of 150
and 200 hours use in the proposed rule are reduced by a factor of 10.
Table 8 exhibits the estimates under the proposed and final rule. As we
are finalizing, we estimate an initial year burden of $116,026.80 (or
$38,675.6 per year for 3 years) and a subsequent burden of $154,702.40
for later years.
Table 8--Impact of the Compliance Provision (Proposed and Final Rule)
----------------------------------------------------------------------------------------------------------------
Final rule
Item Proposed rule Final rule Proposed rule subsequent
initial year initial year subsequent years years
----------------------------------------------------------------------------------------------------------------
Number of POs............................... 119 124 119 124
Wage estimates per hour..................... 59.44 62.38 59.44 62.38
Hours needed to develop and implement 150 15 200 20
training...................................
-------------------------------------------------------------------
Total burden \1\........................ $1,061,004 $116,027 $1,414,672 $154,702
----------------------------------------------------------------------------------------------------------------
Notes:
\1\ Total burden is the product of the previous three rows: Number of POs * Wages Estimates Per Hour * Hours
needed to develop and implement training.
Based on the above analysis, we have determined that this final
rule does not reach the economic threshold, and therefore, it is
neither an ``economically significant rule'' under E.O. 12866, nor a
``major rule'' under the Congressional Review Act.
The RFA requires agencies to analyze options for regulatory relief
of small entities, if a rule has significant impact on a substantial
number of entities. However, as shown in Table 4, this final rule has a
net impact of savings, not cost, and consequently, we are not preparing
an analysis for the RFA because we have determined, and the Secretary
certifies, that our changes to this regulation would not have a
significant economic impact, nor net additional costs requiring
possible regulatory relief, on a substantial number of small entities.
In addition, section 1102(b) of the Act requires us to prepare a
regulatory impact analysis if a rule may have a significant impact on
the operations of a substantial number of small rural hospitals. This
analysis must conform to the provisions of section 604 of the RFA. For
purposes of section 1102(b) of the Act, we define a small rural
hospital as a hospital that is located outside of a Metropolitan
Statistical Area for Medicare payment regulations and has fewer than
100 beds. As previously explained, this rule will allow for increased
staffing flexibility among POs; therefore, we are not preparing an
analysis for section 1102(b) of the Act because we have determined, and
the Secretary certifies, that this final rule would not have a
significant impact on the operations of a substantial number of small
rural hospitals.
Section 202 of the Unfunded Mandates Reform Act of 1995 also
requires that agencies assess anticipated costs and benefits before
issuing any rule whose mandates require spending in any 1 year of $100
million in 1995 dollars, updated annually for inflation. In 2019, that
threshold is approximately $154 million This rule will not mandate any
requirements for state, local, or tribal governments nor would it
result in expenditures by the private sector meeting that threshold in
any 1 year.
Executive Order 13132 establishes certain requirements that an
agency must meet when it promulgates a proposed rule (and subsequent
final rule) that imposes substantial direct requirement costs on state
and local governments, preempts state law, or otherwise has federalism
implications. Under Executive Order 13132, this final rule will not
significantly affect the states beyond what is required and provided
for under sections 1894 and 1934 of the Act. It follows the intent and
letter of the law and does not usurp state authority beyond what the
Act requires. This rule describes the processes that must be undertaken
by CMS, the states, and POs in order to implement and administer the
PACE program.
As noted previously, sections 1894 and 1934 of the Act describe a
cooperative relationship between the Secretary and the states in the
development, implementation, and administration of the PACE program.
The following are some examples of areas in which we collaborated with
states to establish policy and procedures for PACE, with references to
the relevant sections of the Act:
(1) Establishing procedures for entering into, extending, and
terminating PACE program agreements--sections 1894(e)(1)(A) and
1934(e)(1)(A) of the Act;
(2) Establishing procedures for excluding service areas already
covered under other PACE program agreements in order to avoid
unnecessary duplication of services and impairing the financial and
service viability of existing programs--sections 1894(e)(2)(B) and
1934(e)(2)(B) of the Act;
(3) Establishing procedures for POs to make available PACE program
data--sections 1894(e)(3)(A)(i)(III) and 1934(e)(2)(A)(i)(III) of the
Act;
(4) In conjunction with the PO, developing and implementing health
status and quality of life outcome measures for PACE participants--
sections 1894(e)(3)(B) and 1934 (e)(3)(B) of the Act;
(5) Conducting comprehensive annual reviews of POs during the trial
period--sections 1894(e)(4)(A) and 1934(e)(4)(A) of the Act;
(6) Establishing the frequency of ongoing monitoring--sections
1894(e)(4)(B) and 1934(e)(4)(B) of the Act;
(7) Establishing a mechanism for exercising enforcement authority--
sections 1894(e)(6)(A) and 1934(e)(6)(A) of the Act.
For this reason, prior to publishing the 2006 final rule, we
obtained state input in the early stages of policy development through
conference calls with state Medicaid agency representatives. The
statute requires that states designate the agency of the state
responsible for the administration of the
[[Page 25671]]
PACE program. Although the state may designate the state Medicaid
agency to administer the PACE program, another agency may be named. The
eight agencies that volunteered to participate in these discussions
represented a balanced view of states; some with PACE demonstration
site experience and some who were not yet involved with PACE, but were
interested in providing input to establish a new long term care
optional benefit. The calls were very productive in understanding the
variety of state concerns inherent in implementing a new program. In
addition, in order to formulate processes to operationalize the PACE
program, we have maintained ties with state representatives through
monthly conference calls to obtain information on a variety of topics
including the applications review and approval process, data collection
needs, and enrollment/disenrollment issues. We are committed to
continuing this dialogue with states to ensure this cooperative
atmosphere continues as we administer the PACE program.
Executive Order 13771, titled Reducing Regulation and Controlling
Regulatory Costs, was issued on January 30, 2017 and requires that the
costs associated with significant new regulations ``shall, to the
extent permitted by law, be offset by the elimination of existing costs
associated with at least two prior regulations.'' OMB's interim
guidance, issued on April 5, 2017, https://www.whitehouse.gov/sites/whitehouse.gov/files/omb/memoranda/2017/M-17-21-OMB.pdf, explains that
``E.O. 13771 deregulatory actions are not limited to those defined as
significant under E.O. 12866 or OMB's Final Bulletin on Good Guidance
Practices.'' Accordingly, this final rule is considered an E.O. 13771
deregulatory action. We estimate that this rule generates $3.3 million
in annualized cost savings, discounted at 7 percent relative to year
2016, over a perpetual time horizon.
In accordance with the provisions of Executive Order 12866, this
regulation was reviewed by the Office of Management and Budget.
List of Subjects
42 CFR Part 423
Administrative practice and procedure, Emergency medical services,
Health facilities. Health maintenance organizations (HMO), Medicare,
Penalties, Privacy, Reporting and recordkeeping requirements.
42 CFR Part 460
Aged, Health care, Health records, Medicaid, Medicare, Reporting
and recordkeeping requirements.
For the reasons set forth in the preamble, the Centers for Medicare
& Medicaid Services amends 42 CFR chapter IV as set forth below:
PART 423--VOLUNTARY MEDICARE PRESCRIPTION DRUG BENEFIT
0
1. The authority citation for part 423 is revised to read as follows:
Authority: 42 U.S.C. 1302, 1306, 1395w-101 through 1395w-152,
and 1395hh.
Sec. 423.4 [Amended]
0
2. Section 423.4 is amended in paragraph (4) of the definition of
``Service area (Service area does not include facilities in which
individuals are incarcerated.)'' by removing the reference ``Sec.
460.22 of this chapter'' and adding in its place the reference ``Sec.
460.12(c) of this chapter''.
PART 460--PROGRAMS OF ALL-INCLUSIVE CARE FOR THE ELDERLY (PACE)
0
3. The authority citation for part 460 is revised to read as follows:
Authority: 42 U.S.C. 1302, 1395, 1395eee(f), and 1396u-4(f).
0
4. Section 460.3 is added to read as follows:
Sec. 460.3 Part D program requirements.
PACE organizations offering qualified prescription drug coverage
and meeting the definition of a Part D plan sponsor, as defined in
Sec. 423.4 of this chapter, must abide by all applicable Part D
program requirements in part 423 of this chapter.
0
5. Section 460.10 is revised to read as follows:
Sec. 460.10 Purpose.
(a) Applications. This subpart sets forth the application
procedures for the following:
(1) An entity that seeks approval from CMS as a PACE organization.
(2) A PACE organization that seeks to expand its service area or to
add a new PACE center.
(3) A PACE organization that seeks to expand its service area and
to add a new PACE center.
(b) Waiver. This subpart sets forth the process by which a PACE
organization may request waiver of certain regulatory requirements. The
purpose of the waivers is to provide for reasonable flexibility in
adapting the PACE model to the needs of particular organizations (such
as those in rural areas).
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6. Section 460.12 is revised to read as follows:
Sec. 460.12 Application requirements.
(a) Submission of application. An individual authorized to act for
an entity that seeks to become a PACE organization or a PACE
organization that seeks to expand its service area and/or add a PACE
center site must submit to CMS a complete application in the form and
manner specified by CMS that describes how the entity or PACE
organization meets all requirements in this part.
(b) State assurance. (1) An entity's application to become a PACE
organization must include an assurance from the State administering
agency of the State in which the program is located indicating that the
State considers the entity to be qualified to be a PACE organization
and is willing to enter into a PACE program agreement with the entity.
(2) A PACE organization's application to expand its service area
and/or add a PACE center site must include an assurance from the State
administering agency of the State in which the program is located
indicating that the State is willing to amend the PACE program
agreement to include the new site and/or expand the PACE organization's
service area.
(c) Service area designation. (1) An entity submitting an
application to become a PACE organization or a PACE organization
submitting an application seeking to expand its service area must
describe the proposed service area in its application.
(2) CMS, in consultation with the State administering agency, may
exclude from designation an area that is already covered under another
PACE program agreement to avoid unnecessary duplication of services and
avoid impairing the financial and service viability of an existing
program.
(d) Service area and/or PACE center site expansion. CMS and the
State administering agency will only approve a service area expansion
or PACE center site expansion after the PACE organization has
successfully completed its first trial period audit and, if applicable,
has implemented an acceptable corrective action plan.
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7. Section 460.18 is amended by--
0
a. Revising the introductory text;
0
b. Revising paragraph (b); and
0
c. Removing paragraph (c).
The revisions read as follows:
Sec. 460.18 CMS evaluation of applications.
CMS evaluates an application on the basis of the following
information:
* * * * *
[[Page 25672]]
(b) Information obtained by CMS or the State administering agency
through on-site visits or any other means.
0
8. Section 460.20 is amended by--
0
a. Revising paragraph (a) introductory text;
0
b. Removing paragraph (a)(3);
0
c. Redesignating paragraphs (b) through (d) as paragraphs (c) through
(e);
0
d. Adding a new paragraph (b); and
0
e. Revising newly redesignated paragraphs (c) through (e).
The revisions and addition read as follows:
Sec. 460.20 Notice of CMS determination.
(a) Time limit for notification of determination. Within 90 days,
or 45 days for applications set forth in Sec. 460.10(a)(2), after an
entity submits a complete application to CMS, CMS takes one of the
following actions in the form and manner specified by CMS:
* * * * *
(b) Complete application. An application is only considered
complete when CMS receives all information necessary to make a
determination regarding approval or denial.
(c) Additional information requested. If CMS determines that an
application is not complete because it does not include sufficient
information to make a determination, CMS will request additional
information within 90 days, or 45 days for applications set forth in
Sec. 460.10(a)(2), after the date of submission of the application.
(1) The time limits in paragraph (a) of this section do not begin
until CMS receives all requested information and the application is
complete.
(2) If more than 12 months elapse between the date of initial
submission of the application and the entity's response to the CMS
request for additional information, the entity must update the
application to provide the most current information and materials
related to the application.
(d) Deemed approval. An entity's application to become a PACE
organization is deemed approved if CMS fails to act on the complete
application within 90 days, after the later of the following dates:
(1) The date the application is submitted by the organization.
(2) The date CMS receives all requested additional information.
(e) Date of submission. For purposes of the time limits described
in this section, the date that an application is submitted to CMS is
the date on which the application is delivered to the address
designated by CMS.
Sec. 460.22 [Removed]
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9. Section 460.22 is removed.
0
10. Section 460.26 is amended by revising paragraphs (a) and (b)
introductory text to read as follows:
Sec. 460.26 Submission and evaluation of waiver requests.
(a) A PACE organization, or an entity submitting an application to
become a PACE organization, must submit its waiver request through the
State administering agency for initial review.
(1) The State administering agency forwards a PACE organization's
waiver requests to CMS along with any concurrence, concerns or
conditions regarding the waiver.
(2) Entities submitting an application to become a PACE
organization may:
(i) Submit a waiver request as a document separate from the
application by submitting it first to the State administering agency
which, in turn, will forward the waiver request to CMS indicating the
State's concurrence, concerns or conditions regarding the waiver
request; or
(ii) Submit a waiver request directly to CMS in conjunction with
the application. This request must include a letter from the State
administering agency indicating the State's concurrence, concerns or
conditions regarding the waiver request.
(b) CMS evaluates a waiver request from a PACE organization or PACE
applicant on the basis of the following information:
* * * * *
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11. Section 460.28 is revised to read as follows:
Sec. 460.28 Notice of CMS determination on waiver requests.
(a) General. Within 90 days after receipt of a complete waiver
request, CMS takes one of the following actions, in the form and manner
specified by CMS:
(1) Approves the waiver request.
(2) Conditionally approves the waiver request and notifies the PACE
applicant.
(3) Denies the waiver request and notifies the PACE organization or
PACE applicant of the basis for the denial.
(b) Additional information requested. A waiver request is only
considered complete when CMS receives all information necessary to make
a determination regarding approval or denial. If CMS determines that
the waiver request is not complete because it does not include
sufficient information to make a determination, CMS will request
additional information from the PACE organization or PACE applicant.
The 90-day time limit in paragraph (a) of this section will start when
CMS receives the complete waiver request.
(c) Waiver approval. A waiver request is deemed approved if CMS
fails to act on the request within 90 days after CMS receives a
complete waiver request.
(d) Withdrawal of CMS approval for good cause. (1) CMS in
consultation with the State administering agency may withdraw approval
of a waiver for good cause.
(2) If the waiver approval is withdrawn, CMS must notify the PACE
organization or PACE applicant and the State administering agency that
approval of a waiver has been withdrawn and the reason for doing so and
must specify the effective date of the withdrawal in the notice.
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12. Section 460.32 is amended by revising paragraphs (a)(9) and (12) to
read as follows:
Sec. 460.32 Content and terms of PACE program agreement.
(a) * * *
(9) A description of the organization's quality improvement
program.
* * * * *
(12) The state's Medicaid capitation rate or Medicaid payment rate
methodology, and the methodology used to calculate the Medicare
capitation rate.
* * * * *
0
13. Section 460.40 amended by--
0
a. Redesignating the introductory text and paragraphs (a) through (e),
(f) introductory text, (f)(1) and (2), and (g) through (j) as
paragraphs (a) introductory text and (a)(1) through (5), (6)
introductory text, (6)(i) and (ii), and (7) through (10) respectively;
and
0
b. Adding new paragraph (b).
The addition reads as follows:
Sec. 460.40 Violations for which CMS may impose sanctions.
* * * * *
(b) If CMS or the State administering agency makes a determination
that could lead to termination of a PACE program agreement under Sec.
460.50, CMS may impose any of the sanctions specified at Sec. Sec.
460.42 and 460.46.
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14. Section 460.46 is amended--
0
a. By revising paragraph (a) introductory text.
0
b. In paragraph (a)(1) by removing the reference ``Sec. 460.40(c) or
(d)'' and adding in its place the reference ``Sec. 460.40(a)(3) or
(4)'';
0
c. In paragraph (a)(2) by removing the reference ``Sec. 460.40(e)''
and adding in its place the reference ``Sec. 460.40(a)(5)''; and
0
d. In paragraph (a)(3) by removing the reference ``Sec. 460.40(f)(1)''
and adding in
[[Page 25673]]
its place the reference ``Sec. 460.40(a)(6)(i)''.
The revision reads as follows:
Sec. 460.46 Civil money penalties.
(a) CMS may impose civil money penalties up to the maximum amounts
specified in paragraphs (a)(1) through (4) of this section. These
amounts will be adjusted in accordance with the Federal Civil Penalties
Inflation Adjustment Act Improvements Act of 2015 (Sec. 701 of Pub. L.
114-74) and updated amounts specified in 45 CFR part 102.
* * * * *
0
15. Section 460.60 is amended by--
0
a. Removing paragraph (a);
0
b. Redesignating paragraphs (b), (c) and (d) as paragraphs (a), (b),
and (c);
0
c. Revising newly redesignated paragraphs (b) and (c)(3);
0
d. Adding new paragraph (d).
The revisions and addition read as follows:
Sec. 460.60 PACE organizational structure.
* * * * *
(b) Medical director. The organization must employ, or contract
with in accordance with Sec. 460.70, a medical director who is
responsible for the delivery of participant care, for clinical
outcomes, and for the implementation, as well as oversight, of the
quality improvement program.
(c) * * *
(3) Except as provided in paragraph (d) of this section, a PACE
organization planning a change in organizational structure must notify
CMS and the State administering agency, in writing, at least 14 days
before the change takes effect.
(d) Change of ownership. A PACE organization planning a change of
ownership must comply with all requirements in 42 CFR part 422, subpart
L, and must notify CMS and the State administering agency, in writing,
at least 60 days before the anticipated effective date of the change.
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16. Section 460.62 is amended by revising paragraph (a)(7) to read as
follows:
Sec. 460.62 Governing body.
(a) * * *
(7) A quality improvement program as described in Sec. 460.130.
* * * * *
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17. Section 460.63 is added to read as follows:
Sec. 460.63 Compliance oversight requirements.
A PACE organization must adopt and implement effective compliance
oversight requirements, which must include measures that prevent,
detect, and correct non-compliance with CMS' program requirements, as
well as measures that prevent, detect, and correct fraud, waste, and
abuse. The compliance oversight program must, at a minimum, include
establishment and implementation of procedures and a system for
promptly responding to compliance issues as they are raised,
investigating potential compliance problems as identified in the course
of self-evaluations and audits, correcting such problems promptly and
thoroughly to reduce the potential for recurrence, and ensure ongoing
compliance with CMS requirements.
(a) If the PACE organization discovers evidence of misconduct
related to payment or delivery of items or services, it must conduct a
timely, reasonable inquiry into that conduct.
(b) The PACE organization must conduct appropriate corrective
actions (for example, repayment of overpayments, disciplinary actions
against responsible employees) in response to the potential violation.
(c) The PACE organization should have procedures to voluntarily
self-report potential fraud or misconduct related to the PACE program
to CMS and the State administering agency.
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18. Section 460.64 is amended by revising paragraphs (a) introductory
text, (a)(3), and (4) to read as follows:
Sec. 460.64 Personnel qualifications for staff with direct
participant contact.
(a) General qualification requirements. Each member of the PACE
organization's staff (employee or contractor) that has direct contact
with participants must meet the following conditions:
* * * * *
(3) Have 1 year of experience working with a frail or elderly
population or, if the individual has less than 1 year of experience but
meets all other requirements under paragraph (a) of this section, must
receive appropriate training from the PACE organization on working with
a frail or elderly population upon hiring.
(4) Meet a standardized set of competencies for the specific
position description established by the PACE organization before
working independently.
* * * * *
Sec. 460.66 [Amended]
0
19. Section 460.66 is amended by removing paragraphs (b) and (c) and
removing the paragraph designation from paragraph (a).
0
20. Section 460.68 is amended--
0
a. In paragraph (a)(2) by removing the word ``or'' after ``;'';
0
b. By revising paragraph (a)(3); and
0
c. Adding paragraphs (a)(4) and (5).
The revision and additions read as follows:
Sec. 460.68 Program integrity.
(a) * * *
(3) If the PACE organization determines that an individual's
contact with participants would pose a potential risk because the
individual has been convicted of one or more criminal offenses related
to physical, sexual, drug, or alcohol abuse or use;
(4) Who have been found guilty of abusing, neglecting, or
mistreating individuals by a court of law or who have had a finding
entered into the State nurse aide registry concerning abuse, neglect,
mistreatment of residents, or misappropriation of their property; or
(5) Who have been convicted of specific crimes for any offense
described in section 1128(a) of the Social Security Act.
* * * * *
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21. Section 460.70 is amended--
0
a. By revising paragraph (b)(1)(iii);
0
b. By redesignating paragraphs (d)(5)(vi) through (ix) as paragraphs
(d)(6)(i) through (iv);
0
c. By adding paragraph (d)(6) introductory text;
0
d. By revising newly redesignated paragraphs (d)(6)(i), (ii) and (iii);
0
e. In paragraph (e), by removing the term ``PACE Center services'' and
adding in its place the term ``PACE center services'' wherever it
appears; and
0
f. In paragraph (e)(2) by removing the reference ``Sec. 460.98(d)''
and adding in its place the reference ``Sec. 460.98(c)''.
The revisions and addition read as follows:
Sec. 460.70 Contracted services.
* * * * *
(b) * * *
(1) * * *
(iii) A contractor must comply with the requirements of this part
with respect to service delivery, participant rights, and quality
improvement activities.
* * * * *
(d) * * *
(6) With respect to an individual who is contracting as a program
director or medical director or to be part of the interdisciplinary
team as set forth at Sec. 460.60(a) and (b) and Sec. 460.102(b), the
contract must specify that the individual agrees to:
(i) Perform all the duties related to its position as specified in
this part.
[[Page 25674]]
(ii) Participate in interdisciplinary team meetings as required.
(iii) Be accountable to the PACE organization.
* * * * *
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22. Section 460.71 is amended by revising paragraphs (a)(1) and (b)(4),
and adding paragraphs (c) and (d) to read as follows:
Sec. 460.71 Oversight of direct participant care.
(a) * * *
(1) The PACE organization must provide each employee and all
contracted staff with an orientation that includes, at a minimum, the
organization's mission, philosophy, policies on participant rights,
emergency plan, ethics, the PACE benefit, and any policies related to
the job duties of specific staff.
* * * * *
(b) * * *
(4) Be medically cleared for communicable diseases and have all
immunizations up-to-date before engaging in direct participant contact
as required under Sec. 460.64(a)(5).
* * * * *
(c) The PACE organization must develop a training program for each
personal care attendant to establish the individual's competency in
furnishing personal care services and specialized skills associated
with specific care needs of individual participants.
(d) Personal care attendants must exhibit competency before
performing personal care services independently.
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23. Section 460.82 is amended by revising paragraphs (c)(1), (e)
introductory text, (e)(3), (e)(4), (e)(5) and removing paragraph (f) to
read as follows:
Sec. 460.82 Marketing.
* * * * *
(c) * * *
(1) In English and in any other principal languages of the
community, as determined by the State in which the PACE organization is
located. In the absence of a State standard, a principal language of
the community is any language that is spoken in the home by at least 5
percent of the individuals in the PACE organization's service area.
* * * * *
(e) Prohibited marketing practices. A PACE organization must not
use the following marketing practices, which are prohibited:
* * * * *
(3) Gifts or payments to induce enrollment, unless the gifts are of
nominal value as defined in CMS guidance, are offered to all potential
enrollees without regard to whether they enroll in the PACE program,
and are not in the form of cash or other monetary rebates.
(4) Marketing by any individual or entity that is directly or
indirectly compensated by the PACE organization based on activities or
outcomes unless the individual or entity has been appropriately trained
on PACE program requirements, including but not limited to, subparts G
and I of this part.
(i) PACE organizations are responsible for the activities of
contracted individuals or entities who market on their behalf.
(ii) PACE organizations that choose to use contracted individuals
or entities for marketing purposes must develop a method to document
training has been provided.
(5) Unsolicited door-to-door marketing or other unsolicited means
of direct contact, including calling or emailing a potential or current
participant without the individual initiating the contact.
0
24. Section 460.98 is amended--
0
a. By revising paragraphs (c)(1);
0
b. In paragraph (d) heading by removing the term ``Pace Center'' and
adding in its place the term ``PACE center''; and
0
c. In paragraph (d)(3) by removing the term ``Pace center'' and adding
in its place the term ``PACE center''.
The revision reads as follows:
Sec. 460.98 Service delivery.
* * * * *
(c) * * *
(1) Primary care, including services furnished by a primary care
provider as defined in Sec. 460.102(c) and nursing services.
* * * * *
Sec. 460.100 [Amended]
0
25. Section 460.100 is amended in paragraph (e)(3)(i) by removing the
term ``POs'' and adding in its place the term ``PACE organizations,''
and by removing the term ``PO'' and adding in its place the term ``PACE
organization''.
0
26. Section 460.102 is amended by--
0
a. Revising paragraphs (a)(1), (b) introductory text, (b)(1), (c)
introductory text, (c)(1), and (c)(2) introductory text;
0
b. Removing paragraph (d)(3);
0
c. Redesignating paragraph (e) as paragraph (f); and
0
d. Adding paragraph (e).
The revisions and additions read as follows:
Sec. 460.102 Interdisciplinary team.
(a) * * *
(1) Establish an interdisciplinary team, composed of members that
fill the roles described in paragraph (b) of this section, at each PACE
center to comprehensively assess and meet the individual needs of each
participant.
* * * * *
(b) Composition of interdisciplinary team. The interdisciplinary
team must be composed of members qualified to fill, at minimum, the
following roles, in accordance with CMS guidelines. One individual may
fill two separate roles on the interdisciplinary team where the
individual meets applicable state licensure requirements and is
qualified to fill the two roles and able to provide appropriate care to
meet the needs of participants.
(1) Primary care provider.
* * * * *
(c) Primary care provider. (1) Primary medical care must be
furnished to a participant by any of the following:
(i) A primary care physician.
(ii) A community-based physician.
(iii) A physician assistant who is licensed in the State and
practices within his or her scope of practice as defined by State laws
with regard to oversight, practice authority and prescriptive
authority.
(iv) A nurse practitioner who is licensed in the State and
practices within his or her scope of practice as defined by State laws
with regard to oversight, practice authority and prescriptive
authority.
(2) Each primary care provider is responsible for the following:
* * * * *
(e) Team member qualifications. The PACE organization must ensure
that all members of the interdisciplinary team have appropriate
licenses or certifications under State law, act within the scope of
practice as defined by State laws, and meet the requirements set forth
in Sec. 460.71.
* * * * *
0
27. Section 460.104 is amended by--
0
a. Revising paragraphs (a)(1), (a)(2) introductory text, (a)(2)(i),
(3), (4) introductory text, (b), (c), (d) introductory text, (d)(1) and
(d)(2) introductory text;
0
b. Redesignating paragraphs (d)(2)(i) through (v) as paragraphs
(d)(2)(ii) through (vi);
0
c. Adding new paragraph (d)(2)(i).
The revisions and additions read as follows:
Sec. 460.104 Participant assessment.
(a) * * *
(1) Basic requirement. The interdisciplinary team must conduct an
initial in-person comprehensive assessment on each participant. The
assessment must be completed in a
[[Page 25675]]
timely manner in order to meet the requirements in paragraph (b) of
this section.
(2) Members present. As part of the initial comprehensive
assessment, each of the following members of the interdisciplinary team
must evaluate the participant in person and develop a discipline-
specific assessment of the participant's health and social status:
(i) Primary care provider
* * * * *
(3) Additional professional disciplines. At the recommendation of
the interdisciplinary team, other professional disciplines (for
example, speech-language pathology, dentistry, or audiology) may be
included in the initial comprehensive assessment process.
(4) Initial comprehensive assessment criteria. The initial in-
person comprehensive assessment must at a minimum include the
evaluation of:
* * * * *
(b) Development of plan of care. Within 30 days of the date of
enrollment, the interdisciplinary team must consolidate discipline-
specific assessments into a single plan of care for each participant
through team discussions and consensus of the entire interdisciplinary
team. In developing the plan of care:
(1) If the interdisciplinary team determines that certain services
are not necessary to the care of a participant, the reasoning behind
this determination must be documented in the plan of care.
(2) Female participants must be informed that they are entitled to
choose a qualified specialist for women's health services from the PACE
organization's network to furnish routine or preventive women's health
services.
(c) Semi-annual reassessment. On at least a semi-annual basis, or
more often if a participant's condition dictates, the following members
of the interdisciplinary team must conduct an in-person reassessment:
(1) Primary care provider.
(2) Registered nurse.
(3) Master's-level social worker.
(4) Other team members that the primary care provider, registered
nurse and Master's-level social worker determine are actively involved
in the development or implementation of the participant's plan of care.
(d) Unscheduled reassessments. In addition to semi-annual
reassessments, unscheduled reassessments may be required based on the
following:
(1) A change in participant status. If the health or psychosocial
status of a participant changes, the members of the interdisciplinary
team listed in paragraph (c) of this section must conduct an in-person
reassessment.
(2) At the request of the participant or designated representative.
If a participant (or his or her designated representative) believes
that the participant needs to initiate, eliminate, or continue a
particular service, the appropriate members of the interdisciplinary
team, as identified by the interdisciplinary team, must conduct a
reassessment. The interdisciplinary team member(s) may conduct the
reassessment via remote technology when the interdisciplinary team
determines that the use of remote technology is appropriate and the
service request will likely be deemed necessary to improve or maintain
the participant's overall health status and the participant or his or
her designated representative agrees to the use of remote technology.
(i) An in-person reassessment must be conducted:
(A) When participant or his or her designated representative
declines the use of remote technology.
(B) Before a PACE organization can deny a service request.
* * * * *
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28. Section 460.106 is amended by revising paragraph (a) and by adding
paragraphs (b)(3), (4), and (5) to read as follows:
Sec. 460.106 Plan of care.
(a) Basic requirement. Within 30 days of the date of enrollment,
the interdisciplinary team members specified in Sec. 460.104(a)(2)
must develop a comprehensive plan of care for each participant based on
the initial comprehensive assessment findings.
(b) * * *
(3) Utilize the most appropriate interventions for each care need
that advances the participant toward a measurable goal and outcome.
(4) Identify each intervention and how it will be implemented.
(5) Identify how each intervention will be evaluated to determine
progress in reaching specified goals and desired outcomes.
* * * * *
0
29. Section 460.112 is amended by--
0
a. Revising paragraph (b)(1)(i);
0
b. Removing paragraph (b)(1)(ii);
0
c. Redesignating paragraph (b)(1)(iii) as paragraph (b)(1)(ii); and
0
d. Revising paragraphs (b)(3) and (c)(3).
The revisions read as follows:
Sec. 460.112 Specific rights to which a participant is entitled.
* * * * *
(b) * * *
(1) * * *
(i) Prior to and upon enrollment in the PACE organization.
* * * * *
(3) To examine, or upon reasonable request, to be helped to examine
the results of the most recent review of the PACE organization
conducted by CMS or the State administering agency and any plan of
correction in effect.
(c) * * *
(3) To disenroll from the program at any time and have such
disenrollment be effective the first day of the month following the
date the PACE organization receives the participant's notice of
voluntary disenrollment as set forth in Sec. 460.162(a).
* * * * *
0
30. Section 460.116 is amended by revising paragraphs (c)(1) and (2) to
read as follows:
Sec. 460.116 Explanation of rights.
* * * * *
(c) * * *
(1) Write the participant rights in English, and in any other
principal languages of the community, as determined by the State in
which the PACE organization is located. In the absence of a State
standard, a principal language of the community is any language that is
spoken by at least 5 percent of the individuals in the PACE
organization's service area.
(2) Display the PACE participant rights in a prominent place in the
PACE center.
Sec. 460.120 [Amended]
0
31. Section 460.120 is amended in paragraph (f) by removing the phrase
``quality assessment and performance improvement'' and adding in its
place the phrase ``quality improvement''.
0
32. Section 460.122 is amended by revising paragraphs (c)(1) and (i) to
read as follows:
Sec. 460.122 PACE organization's appeals process.
* * * * *
(c) * * *
(1) Timely preparation and processing of a written denial of
coverage or payment as provided in Sec. 460.104(d)(2)(iv).
* * * * *
(i) Analyzing appeals information. A PACE organization must
maintain, aggregate, and analyze information on appeal proceedings and
use this information in the organization's internal quality improvement
program.
0
33. Subpart H is amended by revising the heading to read as follows:
[[Page 25676]]
Subpart H--Quality Improvement
0
34. Section 460.130 is amended by revising paragraph (a) and adding
paragraph (d) to read as follows:
Sec. 460.130 General rule.
(a) A PACE organization must develop, implement, maintain, and
evaluate an effective, data-driven quality improvement program.
* * * * *
(d) A PACE organization must meet external quality assessment and
reporting requirements, as specified by CMS or the State administering
agency, in accordance with Sec. 460.202.
0
35. Section 460.132 is amended by revising the section heading and
paragraphs (a) and (c)(3) to read as follows:
Sec. 460.132 Quality improvement plan.
(a) Basic rule. A PACE organization must have a written quality
improvement plan that is collaborative and interdisciplinary in nature.
* * * * *
(c) * * *
(3) Document and disseminate to PACE staff and contractors the
results from the quality improvement activities.
Sec. 460.134 [Amended]
0
36. Section 460.134 is amended in the section heading and paragraph (a)
introductory text by removing the term ``quality assessment and
performance improvement'' and adding in its place the term ``quality
improvement''.
Sec. 460.136 [Amended]
0
37. Section 460.136 is amended by--
0
a. In the section heading and paragraphs (b), (c) introductory text,
(c)(1), and (c)(2) by removing the term ``quality assessment and
performance improvement'' and adding in its place the term ``quality
improvement''.
0
b. In paragraphs (a) heading and (b) heading by removing the term
``Quality assessment and performance improvement'' and adding in its
place the term ``Quality improvement''.
Sec. 460.138 [Amended]
0
38. Section 460.138 is amended in paragraph (b) by removing the term
``quality assessment and performance improvement'' and replacing it
with ``quality improvement''.
Sec. 460.140 [Removed]
0
39. Section 460.140 is removed.
0
40. Section 460.150 is amended by revising paragraph (c)(2) to read as
follows:
Sec. 460.150 Eligibility to enroll in a PACE program.
* * * * *
(c) * * *
(2) The State administering agency criteria used to determine if an
individual's health or safety would be jeopardized by living in a
community setting must be specified in the program agreement.
* * * * *
0
41. Section 460.152 is amended by revising paragraph (b)(4) to read as
follows:
Sec. 460.152 Enrollment process.
* * * * *
(b) * * *
(4) Notify CMS and the State administering agency in the form and
manner specified by CMS and make the documentation available for
review.
0
42. Section 460.154 is amended by revising paragraph (i) to read as
follows:
Sec. 460.154 Enrollment agreement.
* * * * *
(i) Notification that enrollment in PACE results in disenrollment
from any other Medicare or Medicaid prepayment plan or optional
benefit. Electing enrollment in any other Medicare or Medicaid
prepayment plan or optional benefit, including the hospice benefit,
after enrolling as a PACE participant is considered a voluntary
disenrollment from PACE. If a Medicaid-only or private pay participant
becomes eligible for Medicare after enrollment in PACE, the participant
will be disenrolled from PACE if he or she elects to obtain Medicare
coverage other than from the participant's PACE organization.
* * * * *
0
43. Section 460.156 is amended by revising paragraph (a)(2) and
removing paragraph (a)(4) to read as follows:
Sec. 460.156 Other enrollment procedures.
(a) * * *
(2) A PACE membership card that indicates that he or she is a PACE
participant and that includes the phone number of the PACE
organization.
* * * * *
0
44. Section 460.162 is revised to read as follows:
Sec. 460.162 Voluntary disenrollment.
(a) Effective date. A participant's voluntary disenrollment is
effective on the first day of the month following the date the PACE
organization receives the participant's notice of voluntary
disenrollment.
(b) Reasons for voluntary disenrollment. A PACE participant may
voluntarily disenroll from the program without cause at any time.
(c) Responsibilities of PACE organization. A PACE organization must
ensure that its employees or contractors do not engage in any practice
that would reasonably be expected to have the effect of steering or
encouraging disenrollment of participants due to a change in health
status.
0
45. Section 460.164 is amended--
0
a. By redesignating paragraphs (a) through (e) as paragraphs (b)
through (f), respectively;
0
b. By adding new paragraph (a);
0
c. By revising newly redesignated paragraph (b)(1);
0
d. By redesignating newly redesignated paragraphs (b)(2) through (6) as
paragraphs (b)(4) through (8), respectively;
0
e. By adding new paragraphs (b)(2) and (3);
0
f. In newly redesignated paragraph (b)(4) by removing the reference
``paragraph (b)'' and by adding in its place the reference ``paragraph
(c)''; and
0
g. By revising newly redesignated paragraphs (c) and (d).
The revisions and additions read as follows:
Sec. 460.164 Involuntary disenrollment.
(a) Effective date. A participant's involuntary disenrollment
occurs after the PACE organization meets the requirements set forth in
this section and is effective on the first day of the next month that
begins 30 days after the day the PACE organization sends notice of the
disenrollment to the participant.
(b) * * *
(1) The participant, after a 30-day grace period, fails to pay or
make satisfactory arrangements to pay any premium due the PACE
organization.
(2) The participant, after a 30-day grace period, fails to pay or
make satisfactory arrangements to pay any applicable Medicaid spend
down liability or any amount due under the post-eligibility treatment
of income process, as permitted under Sec. Sec. 460.182 and 460.184.
(3) The participant or the participant's caregiver engages in
disruptive or threatening behavior, as described in paragraph (c) of
this section.
* * * * *
(c) Disruptive or threatening behavior. (1) For purposes of this
section, a participant who engages in disruptive or threatening
behavior refers to a participant who exhibits either of the following:
(i) A participant whose behavior jeopardizes his or her health or
safety, or the safety of others; or
(ii) A participant with decision-making capacity who consistently
[[Page 25677]]
refuses to comply with his or her individual plan of care or the terms
of the PACE enrollment agreement.
(2) For purposes of this section, a participant's caregiver who
engages in disruptive or threatening behavior exhibits behavior that
jeopardizes the participant's health or safety, or the safety of the
caregiver or others.
(d) Documentation of disruptive or threatening behavior. If a PACE
organization proposes to disenroll a participant based on the
disruptive or threatening behavior of the participant or the
participant's caregiver, the organization must document the following
information in the participant's medical record:
(1) The reasons for proposing to disenroll the participant.
(2) All efforts to remedy the situation.
* * * * *
0
46. Section 460.166 is amended by revising the section heading to read
as follows:
Sec. 460.166 Disenrollment responsibilities.
* * * * *
0
47. Section 460.168 is amended by revising paragraph (a) to read as
follows:
Sec. 460.168 Reinstatement in other Medicare and Medicaid programs.
* * * * *
(a) Make appropriate referrals and ensure medical records are made
available to new providers within 30 days.
* * * * *
Sec. 460.172 [Amended]
0
48. Section 460.172 is amended in paragraph (c) by removing the
reference ``quality assessment and performance improvement'' and adding
in its place the reference ``quality improvement''.
0
49. Section 460.182 is amended by revising paragraph (b) introductory
text to read as follows:
Sec. 460.182 Medicaid payment.
* * * * *
(b) The monthly capitation amount is negotiated between the PACE
organization and the State administering agency, and the amount, or the
methodology used to calculate the amount, is specified in the PACE
program agreement. The amount represents the following:
* * * * *
0
50. Section 460.190 is amended by--
0
a. Revising paragraph (b)(1);
0
b. Redesignating paragraphs (b)(2) through (4) as paragraphs (b)(3)
through (5); and
0
c. Adding a new paragraph (b)(2).
The revision and addition read as follows:
Sec. 460.190 Monitoring during trial period.
* * * * *
(b) * * *
(1) An onsite visit to the PACE organization, which may include,
but is not limited to, observation of program operations;
(2) Detailed analysis of the entity's substantial compliance with
all significant requirements of sections 1894 and 1934 of the Act and
this part, which may include review of marketing, participant services,
enrollment and disenrollment, and grievances and appeals.
* * * * *
0
51. Section 460.192 is amended by revising paragraph (b) to read as
follows:
Sec. 460.192 Ongoing monitoring after trial period.
* * * * *
(b) CMS in cooperation with the State administering agency will
conduct reviews of the operations of PACE organizations as appropriate,
as determined by a risk assessment of each PACE organization which
takes into account the PACE organization's performance level and
compliance with the significant requirements of sections 1834 and 1934
of the Social Security Act and this part.
0
52. Section 460.194 is amended by revising paragraph (a) to read as
follows:
Sec. 460.194 Corrective action.
(a) A PACE organization must take action to correct deficiencies
identified by CMS or the State administering agency through the
following:
(1) Ongoing monitoring of the PACE organization.
(2) Reviews and audits of the PACE organization.
(3) Complaints from PACE participants or caregivers.
(4) Any other instance CMS or the State administering agency
identifies programmatic deficiencies requiring correction.
* * * * *
0
53. Section 460.196 is amended by revising paragraph (d) to read as
follows:
Sec. 460.196 Disclosure of review results.
* * * * *
(d) The PACE organization must make the review results available
for examination in a place readily accessible to participants, their
families, their caregivers, and their authorized representatives.
0
54. Section 460.200 is amended by revising paragraphs (f)(1)(ii) and
(iii) to read as follows:
Sec. 460.200 Maintenance of records and reporting of data.
* * * * *
(f) * * *
(1) * * *
(ii) Ten years from the last entry date.
(iii) For medical records of disenrolled participants, 10 years
after the date of disenrollment.
* * * * *
Dated: March 15, 2019.
Seema Verma,
Administrator, Centers for Medicare & Medicaid Services.
Dated: April 3, 2019.
Alex M. Azar II,
Secretary, Department of Health and Human Services.
[FR Doc. 2019-11087 Filed 5-28-19; 4:15 pm]
BILLING CODE 4120-01-P