CMS Provides Flexibility in the New PACE Final Rule

The Centers for Medicare & Medicaid Services (CMS) recently announced a new final rule updating the requirements for Programs of All-Inclusive Care for the Elderly (PACE), which is aimed at increasing flexibility for PACE organizations. The final rule will take effect  August 2, 2019.

PACE is a capitated managed care benefit for the frail elderly population, most of whom are dually eligible for Medicare and Medicaid.  The benefit provides comprehensive medical and social services through an interdisciplinary team approach in adult day health centers supplemented by in-home services consistent with participants’ needs. This comprehensive service package allows most participants to remain in the community rather than residing and receiving care in a nursing home. More than 45,000 adults are currently enrolled in more than 100 PACE organizations in 31 states. Although the current enrollment figures are modest, PACE enrollment has grown rapidly. Enrollment has increased by over 120% since 2011, and this growth is expected to continue with the implementation of more flexible standards under the new final rule.

The new final rule is the first comprehensive update to the PACE regulations since the original final rule was published in 2006. The updates under the new final rule provide operational flexibility to PACE organizations. Specifically, the following provisions make it easier for PACE organizations to staff their interdisciplinary teams:

1. PACE organizations are now permitted to fill two roles on an interdisciplinary team with a single person, provided that such person is duly qualified and licensed to fill each role.
2. Consistent with developments in the practice of medicine and state licensing laws expanding the scope of practice for non-physician practitioners, the new final rule broadens the type of providers who may be responsible for managing a participant’s medical situations and overseeing a participant’s use of medical specialists and inpatient care by allowing community-based physicians or non-physician practitioners, such as nurse practitioners and physician assistants, to fill that role.[1]
3. The new final rule revised the current requirement that personnel with direct participant contact have a minimum of one year of experience working with a frail or elderly population. The new rule now allows PACE organizations to hire individuals who meet all other personnel requirements except for the experience requirement, provided that the PACE organization provides training to those individuals upon hiring.

The new final rule also makes changes to the monitoring and oversight of PACE organizations. Again, the revisions focus on providing greater flexibility by removing the requirement that organizations undergo on-site visits every two years following the organization’s initial three-year trial period. Instead, CMS will conduct audits as determined by a risk assessment, taking into account each organization’s past performance and ongoing compliance with both CMS and state requirements. The risk assessment would also consider information such as participant complaints or access to care concerns in making audit decisions.

On the other hand, the new final rule imposes a new requirement under which PACE organizations must develop and implement compliance oversight programs, which include measures that prevent, detect, and correct non-compliance with program requirements as well as waste, fraud, and abuse. Compliance oversight programs must include procedures for promptly investigating, responding to, and correcting compliance issues. Specifically, PACE organizations must conduct a timely and reasonable inquiry upon discovering evidence of noncompliance, take appropriate corrective actions in response to potential noncompliance, and implement procedures to voluntarily self-report potential fraud or misconduct to CMS and the organization’s respective state administering agency.

Notably, CMS had proposed, but ultimately declined to adopt in the final rule, a requirement that PACE organizations establish and implement a system for routine monitoring and audits to evaluate compliance with PACE requirements. CMS cited the potentially significant burden this requirement would impose on the PACE organization, which could take key staff away from providing care to participants.

In addition to the provisions highlighted above, the new final rule includes a number of additional revisions to the original PACE regulations, most of which clarify regulatory language and codify existing practices.

View the full text of the new PACE final rule.

[1] The original PACE regulations only allowed a primary care physician to be responsible for managing a participant’s medical situations and overseeing a participant’s use of medical specialists and inpatient care.