[Federal Register: December 8, 2006 (Volume 71, Number 236)]
[Rules and Regulations]
[Page 71243-71337]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr08de06-16]
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Part II
Department of Health and Human Services
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Centers for Medicare & Medicaid Services
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42 CFR Parts 460, 462, 466, 473, and 476
Medicare and Medicaid Programs; Programs of All-Inclusive Care for the
Elderly (PACE); Program Revisions; Final Rule
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DEPARTMENT OF HEALTH AND HUMAN SERVICES
Centers for Medicare & Medicaid Services
42 CFR Parts 460, 462, 466, 473, and 476
[CMS-1201-F]
RIN 0938-AN83
Medicare and Medicaid Programs; Programs of All-Inclusive Care
for the Elderly (PACE); Program Revisions
AGENCY: Centers for Medicare & Medicaid Services (CMS), HHS.
ACTION: Final rule.
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SUMMARY: This rule finalizes the interim final rule with comment period
published in the Federal Register November 24, 1999 (64 FR 66234) and
the interim final rule with comment period published in the Federal
Register on October 1, 2002 (67 FR 61496). The November 1999 interim
final rule implemented sections 4801 through 4803 of the Balanced
Budget Act of 1997 (Pub. L. 105-33) and established requirements for
Programs of All-inclusive Care for the Elderly (PACE) under the
Medicare and Medicaid programs. The interim final rule with comment
period published on October 1, 2002 (67 FR 61496) implemented section
903 of the Medicare, Medicaid, and SCHIP Benefits Improvement and
Protection Act of 2000 (BIPA) (Pub. L. 106-554).
DATES: Effective Date: These regulations are effective on January 8,
2007.
FOR FURTHER INFORMATION CONTACT: Jana Petze, (410) 786-4533, or Carrie
Smith, for State technical assistance, (410) 786-4485.
SUPPLEMENTARY INFORMATION:
Table of Contents
I. Background
A. Program Description
B. Legislative History
1. Demonstration Project
2. Balanced Budget Act (BBA) of 1997 (Pub. L. 105-33)
a. Use of the PACE Protocol
b. Consultation With States
c. Consultation With State Agency on Aging
d. State Medicaid Plan Requirement
e. Interaction with Medicare + Choice (Now Medicare Advantage)
f. Flexibility Under the BBA
3. The Medicare, Medicaid, and SCHIP Benefits Improvement and
Protection Act of 2000 (BIPA)
a. Background
b. Contracting for IDT Members and Administrative Staff
c. Contracting With Another Entity to Furnish PACE Center
Services
d. Oversight of Direct Patient Care Services
e. Waiver Process
4. Medicare Prescription Drug Improvement and Modernization Act
of 2003, (MMA)
II. Analysis of Public Comments
A. Summary of Comments on the 1999 Interim Final Rule
B. Summary of Comments on the 2002 Interim Final Rule
III. Provisions of the 1999 Interim Final Rule With Comment and the
2002 Interim Final Rule With Comment, Analysis of and Response to
Public Comments and Final Rule Actions
IV. Provisions of the Final Rule
V. Collection of Information Requirements
VI. Regulatory Impact Statement
Regulation Text
Addendum--PACE Protocol (1999)
ACRONYMS for the PACE Final Rule
ADLs Activities of Daily Living
BBA Balanced Budget Act of 1997
BIPA Medicare, Medicaid and SCHIP Benefits Improvement and Protection
Act of 2000
CAP Corrective Action Plan
CBRR Consumer Bill of Rights and Responsibilities
CMS Centers for Medicare & Medicaid Services
COBRA Consolidated Omnibus Budget Reconciliation Act of 1985
COP Condition of Participation
CHSPR Center for Health Services and Policy Research
CMS-HCC CMS Hierarchical Conditions Category
ESRD End-Stage Renal Disease
FFP Federal Financial Participation
HOS Health Outcomes Survey
HPMS Health Plan Management System
IDT Interdisciplinary Team
IRE Independent Review Entity
LCS Life Safety Code
MA Medicare Advantage (formerly Medicare + Choice(M + C))
MA-PDP Medicare Advantage--Prescription Drug Plan
M + C Medicare + Choice (now Medicare Advantage (MA))
MMA Medicare Prescription Drug[fxsp0]Improvement
and[fxsp0]Modernization Act of 2003
NF Nursing Facility
NPA National PACE Association
OBCQI Outcome-Based Continuous Quality Improvement
PACE Programs of All-inclusive Care for the Elderly
PCA Personal Care Attendant
PCP Primary Care Physician
PHS PACE Health Survey
PO PACE Organization
QAPI Quality Assessment and Performance Improvement
RAI Request for Additional Information
SAA State Administering Agency
SFH State Fair Hearing
SPA State Plan Amendment
SSA Social Security Administration
Requirements for Issuance of Regulations
Section 902 of the Medicare Prescription Drug, Improvement, and
Modernization Act of 2003 (MMA) (Pub. L. 108-173 enacted on December 8,
2003, amended section 1871(a) of the Social Security Act (the Act))
requires the Secretary, in consultation with the Director of the Office
of Management and Budget, to establish and publish timelines for the
publication of Medicare final regulations based on the previous
publication of a Medicare proposed or interim final regulation. Section
902 of the MMA states that the timelines for these regulations may vary
among different regulations but shall not exceed 3 years after
publication of the preceding proposed or interim final regulation
except under exceptional circumstances. Section 902 also directs the
Secretary to establish an appropriate period for finalizing those
interim final regulations that were published before the enactment of
MMA on December 8, 2003. Pursuant to this requirement, we published a
notice in the Federal Register (69 FR 78442) establishing a publication
deadline of 3 years from MMA enactment, that is December 8, 2006, for
finalizing interim final rules published prior to MMA enactment.
This final rule finalizes provisions set forth in the November 24,
1999 and October 1, 2002 interim final rules with comment. These
interim final regulations will be finalized within the 3-year period
after MMA enactment that was established under section of the MMA 902.
Therefore, we believe that this final rule is in accordance with the
Congress' intent to ensure timely publication of final regulations.
I. Background
A. Program Description
The Program of All-inclusive Care for the Elderly (PACE) program is
a unique model of managed care service delivery for the frail
community-dwelling 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 standards
established by their respective States.
B. Legislative 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
[[Page 71245]]
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. Section 9412(b) of Pub. L. 99-509, the
Omnibus Budget Reconciliation Act of 1986 (OBRA, 1986), authorized us
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 Omnibus Budget
Reconciliation Act of l990 (Pub. L. 101-508) authorized an increase to
15 PACE demonstration programs.
The PACE model of care includes as core services the provision of
adult day health care and interdisciplinary team (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 of
both Medicare and Medicaid. PACE demonstration programs had been
permitted by section 4118(g) of Pub. L. 100-203 (OBRA 1987) to assume
full financial risk progressively over the initial three 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.
The PACE demonstration program was operated under a Protocol
established and published by On Lok, Inc. on April 4, 1995.
2. Balanced Budget Act of 1997 (BBA) (Pub. L. 105-33)
The BBA built on the success of the PACE demonstration program.
Section 4801 of the BBA, authorized coverage of PACE under the Medicare
program. It amended title XVIII of the Act by adding section 1894,
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. It amended title XIX of the Act by adding
section 1934, which directly parallels the provisions of section 1894.
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 transition from PACE demonstration program status.
As directed by section 4803 of BBA, we published an interim final
rule on November 24, 1999, permitting entities to establish and operate
PACE programs under section 1894 and 1934 of the Act (64 FR 66234).
The 1999 interim final rule was a comprehensive rule that addressed
eligibility, administrative requirements, application procedures,
services, payment, participant rights, and quality assurance.
a. Use of the PACE Protocol
Throughout the 1999 interim final rule, when we referred to ``the
Protocol'' we meant the PACE Protocol, as published by On Lok, Inc.,
the parent company of On Lok Senior Health Services. A copy of the
Protocol was included as an attachment to the 1999 interim final rule
with comment period.
We were directed by sections 1894(f)(2) and 1934(f)(2) of the Act
to incorporate into regulation the requirements applied to PACE
demonstration programs under the Protocol, to the extent consistent
with the provisions of sections 1894 and 1934 of the Act. We also were
authorized to modify or waive certain provisions of the Protocol in the
development of the regulation, if the modification or waiver were not
inconsistent with and would not impair the essential elements,
objectives, and requirements of sections 1894 and 1934 of the Act.
b. Consultation With States
Sections 4801 and 4802 of Pub. L. 105-33 clearly dictate a
cooperative relationship between the Secretary and the States in the
development, implementation and administration of the PACE program. In
order to fulfill these requirements, we utilized the American Public
Human Services (formerly, the American Public Welfare Association) as
the conduit to solicit States for volunteers to consult with CMS staff.
The participating State staff members represented States with a range
of PACE experience. Each State staff volunteer selected a specific
target area to provide information.
In order to efficiently and effectively obtain a large amount of
feedback in a short period of time, CMS staff arranged a series of
conference calls to discuss a wide range of issues pertaining to PACE
including requirements on the application process, enrollment, and
payment and related financial data collection. Each subject area
discussion included CMS staff and two to three State representatives.
The feedback obtained during these meetings was an invaluable source of
information in understanding State operational concerns and in
constructing the regulation. We believed that this approach would
minimize operational barriers that are frequently inherent when new
programs are initiated. For this reason, CMS continues to regularly
consult and receive feedback from States regarding PACE policy by means
of teleconferences and forums.
c. Consultation With State Agency on Aging
Under the Older Americans Act, State Agencies on Aging were charged
with the responsibility of promoting comprehensive and coordinated
service systems for older persons in their States. Consistent with this
responsibility, State Agencies on Aging oversee important programs for
home and community-based services which are funded through title III of
the Older Americans Act, State revenues, and the Medicaid home and
community-based waiver program.
The State agencies also implement and oversee important planning,
referral, case management, and quality assurance functions. In
addition, State agencies are responsible for administering the State
Long Term Care Ombudsman Program through which service quality in
nursing homes and board and care homes are monitored in every State.
Each State agency that administers the PACE program should
regularly consult with their respective State Agency on Aging in order
to avoid service duplication in the PACE service areas and to assure
the delivery and quality of services to PACE participants. In our 1999
interim final rule, we indicated we were considering the extent to
which the State Long Term Care Ombudsman Program would be useful in
promoting the rights of PACE participants and in monitoring the quality
of care provided by PACE organizations (POs). We received a number of
comments on this issue that we discuss in Subpart G ``Participant
Rights'' of this final rule.
d. State Medicaid Plan Requirement
The State Medicaid plan is a comprehensive written statement
submitted by the State and approved by CMS describing the nature and
scope of the Medicaid program and giving assurance that the Medicaid
program will be administered according to Federal law and policy. The
State plan preprint sets forth the scope of the Medicaid program,
including groups covered, services furnished, and
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payment policy. When a State completes a new State plan preprint page
because of changes in its Medicaid program (called a ``State plan
amendment (SPA)''), the preprint page must be approved by CMS in order
for the State to receive Federal matching funds.
Section 1905(a)(26) of the Act, as added by section 4802(a)(1) of
the BBA, provided authority for States to elect PACE as an optional
Medicaid benefit. The State plan electing the optional PACE program
must be approved before CMS and the State enter into a program
agreement with a PO. To aid States in modifying their State plans, the
CMS Center for Medicaid and State Operations developed an interim State
plan preprint for PACE. A State Medicaid letter dated March 23, 1998,
provided information and guidance to State Medicaid agencies on how to
satisfy the State plan amendment requirement. Additional directions for
completing the State plan amendment were provided in a State Medicaid
Director letter that was issued November 9, 2000. The most current
version of the State Plan preprint is available on the CMS PACE
homepage, http://www.cms.hhs.gov/PACE/04_InformationforStateAgencies.asp
.
e. Interaction With Medicare+Choice (Now Medicare Advantage)
The BBA also established the Medicare+Choice (M+C) program, which
expanded the health care options available to Medicare beneficiaries.
Under the M+C program, beneficiaries could elect to receive Medicare
benefits through enrollment in one of several private health plan
choices beyond the original (fee-for-service) Medicare program or
choose a plan previously available through managed care organizations
under section 1876 of the Act.
The BBA set forth the requirements for M+C organizations in a new
Part C of title XVIII of the Act. The interim final rule that
implemented the M+C program was published June 26, 1998 (63 FR 34968).
The final regulation addressing comments was published on February 17,
1999 (64 FR 7968).
Significant changes were made to the M+C program by the Medicare
Prescription Drug, Improvement, and Modernization Act of 2003 (MMA)
(Pub. L. 108-173, enacted on December 8, 2003). The two final
regulations that implemented the MMA were published January 28, 2005
(70 FR 4194 and 4588). The first regulation established the Medicare
Prescription Drug Benefit or Medicare Part D and the second regulation
established the Medicare Advantage (MA) program which replaced the M+C
program.
In this final rule, we are finalizing our regulations that
implement the PACE provisions of the BBA and BIPA statutes. We are
limiting our discussion of the effects of MMA provisions to those
issues that have been addressed in other MMA rulemaking. We think our
regulations on Part D and MA provide sufficient and appropriate
guidance to all affected entities, including POs. However, we believe
it is essential to highlight the impact of MMA, particularly with
respect to how Medicare Part D relates to a PO. Specifically, the MMA
provides that POs electing to provide Part D coverage to their
enrollees shall be treated in a manner similar to Medicare Advantage
Prescription Drug Plans (MA-PDPs). A more detailed discussion of the
relevant MMA provisions is provided later in this section.
Although the PACE program has certain fundamental similarities to
M+C (now MA), PACE is not a M+C plan. The BBA established separate and
distinct requirements for the PACE program. PACE is similar to some M+C
options in these ways: it is capitated; it is risk-based; it provides
managed care; and it is an elective option. However, PACE differs
significantly from M+C plans in other ways such as: it is not available
nationwide (only in a limited number of sites); statutory waivers
expand the scope of Medicare covered services; it is not available to
all beneficiaries (only to a defined subset of frail elderly); and it
is a joint Medicare/Medicaid program. However, the BBA directed us to
consider some of the requirements established for the M+C program as we
developed regulations for POs in certain areas common to both programs,
for example, beneficiary protections, payment rates, and sanctions.
f. Flexibility Under the BBA
As noted above, the PACE demonstration program was operated
pursuant to a Protocol developed by On Lok, Inc. The Protocol provided
authority for CMS and the State Administering Agency (SAA) (that is,
the State Agency designated to administer the PACE program) to waive
specific requirements of the Protocol, if, in their judgment, the
following criteria were met:
The intent of the requirements was met by the proposed
alternative and
Safe and quality care would be provided.
In addition, written requests for waivers were required to be approved
by CMS and the SAA before implementation of the proposed alternative.
Flexibility was limited to the requirements in the section on
service coverage and arrangement. That section includes the following
requirements:
POs must provide all Medicare and Medicaid services and
provide care 7 days per week, 365 days per year;
A listing of required and excluded services and minimum
services;
Each participant be assigned to an IDT;
The composition and duties of the IDT;
The assessment and reassessment requirements.
Flexibility was not authorized for other sections of the Protocol,
such as participant rights, enrollment and disenrollment, and
administration.
Sections 1894(f)(2)(B) and 1934(f)(2)(B) of the Act give the
Secretary the authority to waive regulatory provisions as follows:
In order to provide for reasonable flexibility in adapting the
PACE service delivery model to the needs of particular organizations
(such as those in rural areas or those that may determine it
appropriate to use non-staff physicians according to State licensing
law requirements) * * * the Secretary (in close consultation with
State administering agencies) may modify or waive provisions of the
PACE protocol as long as the modification or waiver is consistent
with and would not impair the essential elements, objectives, and
requirements of this section * * *.
The statute also specifies the following essential elements that
may not be waived:
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 multidisciplinary team approach to care management and
service delivery.
Capitated, integrated financing that allows the provider
to pool payments received from public and private programs and
individuals.
The assumption by the provider of full financial risk.
To implement sections 1894(f)(2)(B) and 1934(f)(2)(B) of the Act,
in the 1999 interim final rule, we identified specific waivers that
were intended to encourage the development of PACE programs in rural
and Tribal areas. The waivers included the following three
requirements:
A prohibition on members of the governing body and their
family members from having a direct or indirect interest in contracts
with the organization (see Sec. 460.68(c));
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A requirement that members of the IDT primarily serve PACE
participants (see Sec. 460.102(g)); and
A requirement that the primary care physician (PCP) must
be employed by the PO (see Sec. 460.102(g)).
The regulation included specific criteria for each waiver related
to whether the PO's service area is rural or Tribal, the accessibility
of individuals who meet the three regulatory requirements listed above,
and a requirement that the proposed alternative does not adversely
affect the availability or quality of care furnished to PACE
participants.
Our rationale for this initial, limited view of the flexibility
provision was based on our belief that all PACE demonstration programs
were in compliance with the Protocol, necessitating only minor changes
in their operations to meet the PACE regulatory requirements. Our
intention was to allow some flexibility to promote PACE in rural and
Tribal areas while maintaining consistency of the requirements for
other PACE programs. We intended to provide more flexibility to all POs
once we had gained sufficient experience in administering the PACE
program.
However, after publication of the 1999 interim final rule, we
learned that although the early PACE demonstration programs initially
complied with the Protocol, most of them modified the Protocol
requirements as they expanded, using the flexibility authorized in the
Protocol. While many of these modifications were related to the
allowable areas of service coverage and arrangement provisions, many
others were not authorized by the flexibility clause in the Protocol.
Furthermore, many of the later PACE demonstration programs also
inappropriately exercised the flexibility clause in the Protocol,
especially with regard to direct employment of staff. Finally, very few
of the waivers were requested in writing or approved by CMS or the SAA
before implementation.
We subsequently revised our regulations on the waiver process in
response to comments on the 1999 interim final rule and in accordance
with the requirements of section 903 of the Medicare, Medicaid, and
SCHIP Benefits Improvement and Protection Act of 2000 (BIPA) (Pub. L.
106-554, enacted on December 21, 2000), as discussed below. A detailed
discussion of waivers and the waiver process is located in section III,
subpart B of this final rule.
3. The Medicare, Medicaid, and SCHIP Benefits Improvement and
Protection Act of 2000 (BIPA)
a. Background
BIPA modified the PACE program in the following three ways:
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 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 program modifications they had implemented and avoid
disruptions in participant care where these modifications were
determined to be consistent with the PACE model. These sections were
implemented administratively.
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 CMS to modify or waive PACE
regulatory provisions in a manner that responds promptly to the needs
of POs relating to the areas of employment and the use of community-
based PCPs. Section 903 of BIPA also established a 90-day review period
for waiver requests. As the flexibility language is part of the
statutory section dealing with regulations (sections 1894(f) and
1934(f) of the Act), we believed it was intended that waiver
requirements be incorporated into the PACE regulations. In order to
implement section 903 of BIPA, we published the 2002 PACE interim final
rule.
b. Contracting for IDT Members and Administrative Staff
In the 2002 interim final rule, we amended the PACE regulations to
replace the term ``multidisciplinary'' with ``interdisciplinary'' to
more accurately reflect the interactive and collaborative approach of
the PACE care team.
In the 2002 interim final rule, we responded to public comments
regarding flexibility, including comments on Sec. 460.102(f) of the
1999 interim final rule, which required that the PACE IDT members be
employees of the PO or PACE center. In the 2002 interim final rule, we
deleted Sec. 460.102(f) and revised Sec. 460.60 to allow the PO to
employ or contract with the program director and the medical director.
We also added requirements at Sec. 460.70 that must be met when the PO
is contracting for services.
A more detailed discussion of Sec. 460.60 and Sec. 460.70 is
located in section III, subpart E of this final rule.
c. Contracting With Another Entity To Furnish PACE Center Services
After publication of the 1999 interim final rule, we learned that
in 1995, On Lok, Inc. had changed the Protocol to reflect a contractual
arrangement they entered into with another organization to provide all
PACE center services. Under this arrangement, the IDT was employed and
managed by the contracting organization but On Lok retained
responsibility for all care provided to and all risk entailed in
meeting the healthcare needs of the participants attending the center.
Through this contractual relationship, On Lok was able to expand PACE
services within their service area. As this approach was reflected in
the PACE Protocol, we amended the PACE regulations in the 2002 interim
final rule to allow POs to provide PACE center services through
contractual arrangements. We also revised Sec. 460.70 to identify the
criteria that a PO must meet to contract out PACE center services. A
more detailed discussion of Sec. 460.70 is located in section at IV.B.
of this final rule.
d. Oversight of Direct Patient Care Services
As discussed above, in the 2002 interim final rule, we revised the
requirements of the 1999 interim final rule to allow for the
contracting of IDT members, program director, medical director, and all
PACE center services. For this reason, we believed it was essential to
establish oversight criteria that POs must implement for all employees
and contracted staff who furnish direct patient care. This was
accomplished with the addition of Sec. 460.71. A more detailed
description of Sec. 460.71 is located in section IV, subpart E of this
final rule.
e. Waiver Process
To implement section 903 of BIPA, we established a process for
submission and approval of waiver requests. The 2002 interim final rule
amended the 1999 interim final rule by adding Sec. 460.26, which
specifies the requirements for submission and evaluation of waiver
requests and Sec. 460.28, which addresses requirements related to CMS
review of waiver requests. In the 2002 interim final rule, we also
removed the restrictive waiver provisions for rural and Tribal
[[Page 71248]]
organizations that were included in the 1999 interim final rule.
A more detailed description of Sec. 460.26 and Sec. 460.28 is
located in section III, subpart B of this final rule.
4. Medicare Prescription Drug Improvement and Modernization Act of 2003
(MMA)
On December 8, 2003, the Congress enacted the MMA of 2003 (Pub. L.
108-173). Several sections of the MMA impact 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. As specified in sections 1894 and 1934 of the Act, POs
shall provide all medically necessary services including prescription
drugs, without any limitation or condition as to amount, duration, or
scope and without application of deductibles, co-payments, coinsurance,
or other cost sharing that would otherwise apply under Medicare or
Medicaid. Up until January 1, 2006, payment for drugs covered under
Medicare parts A and B was included in the monthly Medicare capitation
rate paid to POs for Medicare beneficiaries, while payment for
outpatient prescription drugs was included in the monthly Medicaid
capitation rate paid to POs for Medicaid recipients, or as a portion of
the amount equal to the Medicaid premium paid by non-Medicaid
recipients.
Consequently, in order for POs to continue to meet the statutory
requirement of providing prescription drug coverage to their enrollees,
and to ensure that they receive adequate payment for the provision of
Part D drugs, beginning January 1, 2006, POs could begin to offer
qualified prescription drug coverage to their enrollees who are Part D
eligible individuals. The MMA did not impact the manner in which POs
are paid for the provision of outpatient prescription drugs to non-part
D eligible PACE participants.
Section 1860D-21(f) of the Act, added by section 101 of the MMA,
provides that POs may elect to provide qualified prescription drug
coverage to enrollees who are Part D eligible individuals.
This section also provides that in the case of a PACE program that
elects to provide qualified Part D prescription drug coverage, the
requirements under Part D apply to the provision of such coverage in a
manner that is similar to the manner in which those requirements apply
to the provision of such coverage under an MA-PD local plan. However,
because we did not believe that Congress intended for the MMA to alter
the way in which PACE services, including outpatient prescription drugs
are provided to PACE enrollees, we indicated in the final rule that
implements Part D (70 FR 4194) that POs would not be deemed to be MA-PD
local plans, but rather, would be treated in a manner similar to an MA-
PD local plan for purposes of payment under Part D. We stated that this
approach is consistent with section 1894(d)(1) of the Act, which
provides that payments will be made to POs ``in the same manner and
from the same sources'' as payments are made to a MA organization.
The MMA allows CMS the flexibility to deem POs as MA-PD plans or to
treat POs that elect to provide qualified drug coverage in a manner
similar to MA-PD plans. Due to inconsistencies in the PACE and MMA
statutes, we chose to treat POs in a similar manner as MA-PD plans
avoiding conflicting requirements. The requirements that apply to POs
that elect to provide qualified prescription drug coverage to Part D
eligible enrollees are set forth in subpart T of the preamble to the
Part D final rule (70 FR 4194). To the extent that we need to address
additional issues regarding Part D as it applies to POs, we will do so
in a future rulemaking.
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 PACE demonstration
program authority. Specifically, provisions of the Act that limit
balance billing against MA organizations by non-contract physicians,
providers of service, and other entities with respect to services
covered under title XVIII now include PACE providers. Similarly,
Medicaid billing limitations specified in the Act now apply to
providers participating under the State plan under title XIX that do
not have a contract or other agreement with a PACE provider. Both MMA
provisions apply to services furnished on or after January 1, 2004.
Section 301 of the MMA amends 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 interim final rule with comment period (71 FR
9466), published on February 24, 2006, revising our MSP regulations at
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 interim final rule
establishes our current policies regarding the obligations of other
payers. If there are any provisions specific to PACE organizations that
result from issuance of the final MSP rule, we will address those
provisions in a future PACE rulemaking.
Finally, as discussed above, under the rulemaking requirements of
section 902 of the MMA and our notice in the Federal Register on
December 30, 2004 (69 FR 78442), interim final regulations issued
before enactment of MMA on December 8, 2003 must be finalized within 3
years of the date of enactment or the regulations shall not continue in
effect. This rule finalizes both the PACE interim final rule with
comment period published in the Federal Register November 24, 1999 (64
FR 66234) and the PACE interim final rule with comment period published
in the Federal Register on October 1, 2002 (67 FR 61496).
II. Analysis of and Response to Public Comments
This final rule responds to public comments received on both the
November 24, 1999 interim final rule with comment (64 FR 66234) and the
October 1, 2002 interim final rule with comment (67 FR 61496).
A. Summary of Comments on the 1999 Interim Final Rule
We received 34 items of correspondence containing more than 500
specific comments on the 1999 interim final rule. In this document, we
will refer to this regulation as the 1999 interim final rule.
Commenters included representatives of professional associations, State
and county governments, PACE demonstration programs, potential PACE
programs, various health care providers, and advocacy organizations.
Consistent with the scope of the 1999 interim final rule, most of
the commenters addressed multiple issues, often in great detail. Some
commenters expressed concerns about Medicare and Medicaid issues that
do not pertain to the PACE program.
Numerous commenters disapproved of the limited flexibility provided
in the regulation, stating that the regulation restricts programs from
developing innovatively and responsively to participant preferences,
community needs, and the healthcare marketplace. They asked for
operational and service delivery flexibility, while permitting
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liberal exceptions for established programs that have proven success in
furnishing the PACE benefit. Commenters also noted the regulatory
language was too prescriptive in several key areas (personnel
qualifications) and too vague in others (Medicare rate-setting), saying
that prescriptive language also reduces flexibility in organizational
design and limits innovative strategies for service delivery.
Commenters indicated that the application of M+C requirements was
often made without considering the differences between the PACE program
and M+C plans and that the differences between PACE and nursing
facilities should be recognized in the final requirements.
In addition, commenters indicated that the numerous written notices
required by the 1999 interim final rule were unduly burdensome.
Comments also indicated that in some instances requirements from
other programs (for example, the Outcome Assessment Information Set
(OASIS) for home health agencies) have been applied to PACE, thereby
disregarding the differences between the programs and adding the burden
of information collection.
Finally, commenters opposed the prescriptive language that they
thought limited State discretion and usurped traditional State
regulatory activities rather than optimizing the opportunity to
encourage cooperation with the States. We respond to the particular
comments as they relate to specific provisions discussed in section III
of this final rule.
Listed below are the six areas of the 1999 interim final rule that
generated the most concern:
Subpart D: Sanctions, Enforcement Actions and Termination including
civil money penalties;
Subpart E: PACE Administrative Requirements including
organizational structure, personnel qualifications, contracted services
and marketing;
Subpart F: PACE Services including the interdisciplinary team and
participant assessment;
Subpart G: Participant Rights including the appeals process;
Subpart I: Participant Enrollment and Disenrollment which includes
eligibility to enroll, enrollment process, continuation of enrollment,
and involuntary disenrollment;
Subpart J: Payment including Medicare payment.
B. Summary of Comments on the 2002 Interim Final Rule
We received 4 letters of public comment on the October 1, 2002
interim final rule (67 FR 61496) containing more than 17 specific
comments. Commenters included representatives of professional
associations, a State government, and an advocacy organization. In this
document, we will refer to this regulation as the 2002 interim final
rule.
Commenters expressed opposing opinions on the flexibility permitted
in the 2002 interim final rule. In general, commenters expressed
concerns about flexibility related to all aspects of the program,
including waivers and the waiver process, contracted services including
staff and contractors, and oversight of direct participant care. Listed
below are the three areas that generated the most concern:
Subpart B: PO Application and Waiver Process;
Subpart D: Sanctions, Enforcement Actions and Termination;
Subpart E: Administrative Requirements.
III. Provisions of the 1999 Interim Final Rule With Comment and the
2002 Interim Final Rule With Comment, Analysis of and Responses to
Comments and Final Rule Actions
The purpose of this final rule is to respond to public comments and
finalize the regulations established in the 1999 and 2002 interim final
rules. Below we will list each PACE regulation, note any comments and
responses, and then note our final action.
Subpart A--Basis, Scope, and Purpose
This subpart provides the basis for this regulation, the scope and
purpose, and defines terms specific to the PACE benefit.
Section 460.2 Basis
As stated in the 1999 interim final rule, the regulations set forth
in 42 CFR part 460 are based on Sections 1894, 1905(a), and 1934 of the
Act. Section 1894 of the Act authorizes Medicare payments to and
coverage of benefits under PACE. Sections 1905(a) and 1934 of the Act
authorize the establishment of PACE as an option under the State
Medicaid plan to provide for Medicaid coverage of services furnished by
the PACE program.
No comments were received on this section.
Final rule actions:
This final rule will finalize Sec. 460.2 as published in the 1999
interim final rule.
Section 460.4 Scope and Purpose
We stated in the 1999 interim final rule that the purpose of the
regulation was to set forth the requirements that an entity must meet
in order to be approved as a PO under Medicare and Medicaid. It also
sets forth how individuals may qualify to enroll in PACE, how Medicare
and Medicaid payment will be made for PACE services, provisions for
Federal and State monitoring of PACE programs, and procedures for
sanctions and termination.
We stated the purpose of a PACE program is to provide pre-paid,
capitated, comprehensive health care services that are designed to:
Enhance the quality of life and autonomy for frail, older
adults;
Maximize dignity of and respect for older adults;
Enable frail, older adults to live in their homes and in
the community as long as medically and socially feasible; and
Preserve and support the older adult's family unit.
This philosophy is based on Part I, section A, of the Protocol.
Adopting a mission or philosophy statement that includes these elements
indicates that an entity is guided by a set of values that influence
its structure, planning, and day-to-day operations that is consistent
with the purpose of PACE.
No comments were received on this section.
Final rule actions:
This final rule will finalize Sec. 460.4 as published in the 1999
interim final rule.
Section 460.6 Definitions
This section of the 1999 interim final rule included the following
definitions based on those in sections 1894(a) and 1934(a) of the Act
and other terms determined necessary by CMS.
Contract year means the term of a PACE program agreement, which is
a calendar year, except that a PO's initial contract year may be from
12 to 23 months, as determined by CMS.
Medicare beneficiary means an individual who is entitled to
Medicare Part A benefits or enrolled under Medicare Part B, or both.
Medicaid participant means an individual determined eligible for
Medicaid who is enrolled in a PACE program.
Medicare participant means a Medicare beneficiary who is enrolled
in a PACE program.
PACE stands for Programs of All-inclusive Care for the Elderly.
PACE center means a facility operated by a PO where primary care is
furnished to participants.
[[Page 71250]]
PACE organization (PO) means an entity that has in effect a PACE
program agreement to operate a PACE program under this part.
PACE program agreement means an agreement between a PO, CMS, and
the State administering agency for the operation of a PACE program.
Participant means an individual who is enrolled in a PACE program.
Services include both items and services.
State administering agency means the State agency responsible for
administering the PACE program agreement.
Trial period means the first 3 contract years in which a PO
operates under a PACE program agreement, including any contract year
during which the entity operated under a PACE demonstration program.
In developing the definition of PACE organization, we explained in
the 1999 interim final rule that sections 1894(a)(3) and 1934(a)(3) of
the Act defined a ``PACE provider.'' We changed that term to ``PACE
organization'' (PO) because we believed that the term ``PACE provider''
would be confusing. Medicare regulations (at 42 CFR 400.202) and
Medicaid regulations (at 42 CFR 400.203) define the word ``provider,''
but the definitions are different and neither applies to entities that
operate PACE programs. Those definitions denote individual providers of
individual services under conventional fee-for-service systems. We
selected the alternative term, PO, since ``organization'' is a term
used in both titles XVIII and XIX when referring to managed care
organizations, which are more similar to entities under PACE. In the
few places where we use the term ``provider'' in this regulation, we
are using it in the broad generic sense to refer to an individual or an
entity that furnishes health care services. Our use of the term is not
limited to the narrower Medicare definition in Sec. 400.202.
Also, in defining contract year, we explained that a PO's initial
(start-up) contract year may be from 12 to 23 months, as determined by
CMS, to enable us to adjust the length of the initial (start-up)
contract year so that subsequent years are on a standard annual
calendar year cycle.
Comment: One commenter suggested that we clarify the term
``center'' by replacing it with the term ``PACE center.''
Response: We agree and have replaced the term ``center'' with
``PACE center'' throughout the regulation.
Comment: We received several comments requesting that we clearly
define PACE, what constitutes a PO, and what constitutes a PACE center
including clarification that a PACE provider is considered a PACE
program and may have more than one center.
It was also recommended that we adopt the definition of PACE center
as contained in the Protocol, which explicitly addresses the full range
of services and benefits available at the PACE center.
Response: In response to these comments, in this final rule, we are
redefining ``PACE center'' to be more consistent with the definition
provided in the Protocol and the statute by defining it as 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.
In addition, as noted below we are adding a definition of ``PACE
program''. However, we disagree with the commenter who requested that
we adopt the definition of ``PACE center'' as contained in the Protocol
which explicitly identifies the full range of services and benefits
available at the PACE center. We believe that our modification is more
appropriate and less cumbersome than including every required service
in the definition. We also believe that by expanding the definition of
``PACE center'' that was published in the 1999 interim final rule, we
are clarifying that a PACE center is a facility where most PACE
services are provided, not just primary care.
As noted earlier in this section, in the 1999 interim final rule,
we defined PACE center as ``a facility operated by a PO where primary
care is furnished to participants.'' This definition was based on
section IV. B. 2 of the Protocol, which states: ``The PACE center is
the focal point for coordination and provision of most PACE services.
The PACE center is a facility which includes a primary care clinic, and
areas for therapeutic recreation, restorative therapies, socialization,
personal care and dining.'' The Protocol identified other requirements
for a PACE center, which were included in other sections of the 1999
interim final rule. Those requirements are included in the following
sections: The list of required services is at Sec. 460.98; the
requirement that POs operate at least one PACE center is in Sec.
460.98(d)(1); the requirement that the frequency of attendance is
determined by the IDT based on each participant's needs is at Sec.
460.98(e); and the requirement that the PACE center is designed,
equipped, and maintained to provide for the physical safety of
participants, personnel, or visitors and to ensure a safe and sanitary
environment is at Sec. 460.72.
We believe the list of explicit services and benefits belongs in
Sec. 460.98 which relates to ``Service delivery,'' and in Sec.
460.72, which relates to ``Physical environment.''
Comment: A commenter requested that we add a definition of a ``PACE
program'' and use the following language ``all centers and service
provision by an approved PACE provider in an approved service area.''
Response: ``PACE program'' is defined in the Act at sections
1894(a)(2) and 1934(a)(2) as an entity that meets the statutory
requirements to be a PACE provider and provides comprehensive health
care services to PACE program eligible individuals in accordance with
the PACE program agreement and regulations. We have not included a
definition for ``PACE program'' in our regulations at Sec. 460.6.
However, we agree with the commenter that doing so would help to
clarify and standardize PACE terminology. As noted above, we changed
the term ``PACE provider'' to ``PACE organization'' and defined that
term in the 1999 interim final rule.
Based on sections 1894(a)(2) and 1934(a)(2) of the Act, we are
defining a PACE program as a program of all-inclusive care for the
elderly that is operated by an approved PACE organization and that
provides comprehensive health care services to PACE enrollees in
accordance with a PACE program agreement. As noted above, we are
defining a PACE center as 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. We do not
think the commenter's language would be needed to ensure that PACE
centers are included within the definition of a PACE program.
Final rule actions:
In this final rule we are:
Replacing the term ``center'' with the term ``PACE
center'' throughout the regulation.
Redefining the term ``PACE center'' as ``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.''
Defining ``PACE program'' to mean a program of all-
inclusive care for the elderly that is operated by an approved PACE
organization and that provides
[[Page 71251]]
comprehensive health care services to PACE enrollees in accordance with
a PACE program agreement.
Subpart B--PO Application and Waiver Process
Section 460.10 Purpose
We established in the 1999 interim final rule, that this subpart
sets forth application requirements for an entity that seeks approval
from CMS as a PO. In the 2002 interim final rule, we amended Sec.
460.10 to clarify that subpart B also establishes a process by which a
PO may request a waiver of certain regulatory requirements in order to
provide for reasonable flexibility in adapting the PACE service
delivery model to the needs of particular organizations (such as those
in rural areas).
PACE Under Both Medicare and Medicaid
We require that each PO must enter into a program agreement under
both sections 1894 and 1934 of the Act, that is, that each organization
participate in both Medicare and Medicaid. Most of the text in those
two sections is identical and our analysis indicates that key language
contemplates entities acting as POs under both programs.
Sections 1894(f)(2) and 1934(f)(2) of the Act require that we
incorporate in our regulations the requirements applied to PACE
demonstration programs under the PACE Protocol, to the extent
consistent with the provisions of sections 1894 and 1934 of the Act.
Under the Protocol, PACE demonstration programs operated under both
Medicare and Medicaid. We believe that the directive to incorporate the
requirements in the Protocol reflected an expectation by the Congress
that all POs would participate in both Medicare and Medicaid. This view
is reinforced by paragraph (f)(2)(B) of these sections, which permits
us to modify or waive provisions of the PACE Protocol ``so long as such
modification or waiver is not inconsistent with and would not impair
the essential elements, objectives, and requirements'' of sections 1894
and 1934 of the Act, but which forbids modifying or waiving, among
others, the following provisions:
Capitated, integrated financing that allows the
organization to pool payments received from public and private programs
and individuals; and
The assumption by the organization of full financial risk.
We concluded that both of these provisions preclude the possibility
of a Medicare-only or Medicaid-only PACE program. For example, if a
program could collect capitation payments from Medicare but bill fee-
for-service under Medicaid, not all financing would be capitated, nor
would financing be integrated, nor would the organization assume full
financial risk.
However, the law does not require that States offer the PACE
benefit under Medicaid. As indicated by its title, section 4802 of BBA
provides for the ``Establishment of PACE Program as Medicaid State
Option.'' If an entity attempted to become a PO under Medicare in a
State which has not included PACE program services as an option under
its Medicaid program, it would not be possible for that entity to be
both a Medicare and a Medicaid PO. While this would curtail the
availability of PACE programs in those States, we have concluded that
this result was intended because a Medicare-only program could not meet
the fundamental concept of an all-inclusive, integrated, capitated,
full-risk program.
Moreover, both sections 1894 and 1934 of the Act contemplate the
active collaboration of Federal and State governments in the
administration of PACE. Each State must have a SAA that is responsible
for administering PACE program agreements in their State under sections
1894 and 1934 of the Act. The SAA closely cooperates with CMS in
establishing procedures for entering into, extending, and terminating
PACE program agreements. The SAA cooperates with CMS and the PO in the
development of participant health status and quality of life outcome
measures. The SAA also cooperates with us in conducting oversight
reviews of PACE programs and has the authority to terminate a PACE
program agreement for cause. If Medicare-only programs had been
contemplated in a State that does not elect the PACE option, there
would have been no reason to assign such a significant role to an SAA.
We believe that a State which has not chosen PACE as an optional
service would be ill-prepared or unable to perform this role.
As mentioned earlier, most of the text of section 1894 of the Act
is identical to text in section 1934 of the Act. Portions of both text
reflect the concept of entities acting as POs under both programs. The
scope of Medicare PACE program benefits includes ``all items and
services covered under this title (for individuals enrolled under this
section [section 1894]) and all items and services covered under title
XIX.'' Similarly, section 1934 of the Act, defines the Medicaid benefit
package as ``all items and services covered under title XVIII (for
individuals enrolled under section 1894) and all items and services
covered under this title.'' In addition, to be eligible for PACE, an
individual must require the nursing facility (NF) level of care covered
under the State Medicaid plan.
Section 1894(e) of the Act provides that ``CMS, in close
cooperation with the SAA'' will establish program agreements for
``entities that meet the requirements for a PO under this section,
section 1934, and regulations.'' A corresponding provision is found at
section 1934(e) of the Act, referring to ``entities that meet the
requirements for a PO under this section, section 1894, and
regulations.'' We believe that the use of the correlative ``and''
indicates that PACE entities would have to meet all three sets of
requirements.
A parallel provision provides for termination of PACE program
agreements (see paragraphs (e)(5) of sections 1894 and 1934 of the
Act). Termination of an agreement under both sections 1894 and 1934 of
the Act may be accomplished by either ``CMS or a SAA.''
Nonetheless, it is highly unlikely that any entity could be a
viable PO without approval under both Medicare and Medicaid. The
majority of potential participants are Medicare beneficiaries who also
are eligible for Medicaid. Those who are not currently Medicaid-
eligible may eventually exhaust their financial resources and become
eligible. Medicare participants who are not enrolled in PACE under
Medicaid must pay premiums equal to the Medicaid capitation rate. Aside
from the technicality that there would not be an established Medicaid
capitation rate in a State that does not elect the PACE option, most of
these participants would lack the ability to pay these significant
premiums.
As the above citations illustrate, some provisions of the law are
conflicting and thus ambiguous. We therefore interpreted them to give
effect to many of the provisions and policy objectives that they
advance. Furthermore, in keeping with the congressional intent that the
Protocol guide our implementation of the PACE program, we determined
that POs must be approved under both Medicare and Medicaid.
Based on this interpretation, if a State should choose not to amend
its State Medicaid plan to adopt PACE as an optional Medicaid service,
we would not accept PACE applications from entities in that State.
Also, if a State has elected the optional benefit but declines to
recommend a particular entity as a PO, we would not accept an
application from that entity.
[[Page 71252]]
We stated in the 2002 interim final rule that to implement section
903 of BIPA, we amended the PACE regulation by adding Sec. 460.26 and
Sec. 460.28 to establish a process for a PO to request waiver of
regulatory requirements. This process allows for variations while
achieving the intent of the regulatory provision and responding to the
needs of POs to develop and expand within their States' long-term care
delivery system.
Waivers will be discussed in detail under Sec. 460.26 and Sec.
460.28.
Comment: Another commenter recommended that social support services
and participant care be more clearly defined so beneficiaries and
caregivers may make informed decisions about the type and level of care
to be provided.
Response: In response to the comment regarding a more defined
regulation where social services and participant care is concerned, we
disagree with this commenter, as required services are participant
specific. After the IDT determines a participant requires a service and
it is included in their plan of care, those services become required
for that participant for that specific need. Therefore, it would not
truly represent the PACE model to constrain the benefit by defining it
in regulatory language.
Final rule actions:
This final rule will finalize Sec. 460.10, as published in the
2002 interim final rule.
Section 460.12 Application Requirements
We established Sec. 460.12 to set forth the application
requirements for the PACE program. In order for CMS to determine
whether an entity qualifies as a PO, an individual authorized to act
for the entity must submit an application that describes thoroughly how
the entity meets all the requirements specified in this regulation. In
recognition of the 90-day review timeframe specified in the statute and
described below and the numerical limit on the number of PACE program
agreements, we will review and take action to approve, deny, or request
additional information only on complete applications; those
applications that address all elements of the PACE program agreement.
We will send a letter to each applicant indicating whether or not the
application is complete and specifying when the 90-day review period
ends.
We require in Sec. 460.12(b) that applications for PO status be
accompanied by an assurance from the SAA indicating that it considers
the entity to be qualified to be a PO and that the State is willing to
enter into a PACE program agreement with the entity. We will not accept
applications from entities that have not obtained these assurances.
To enable a SAA to make these assurances, an entity would have
established to the satisfaction of the State that it is committed to
the PACE model of care, that there is sufficient funding for program
development and facilities, that there is adequate demand for PACE
services as shown by demographic analysis.
Entities that are interested in developing a PACE program agreement
should contact their SAA to determine whether the State has submitted
or plans to submit a SPA to elect PACE as an optional benefit under its
State Medicaid plan and if the State has established additional
requirements for POs. Section 1905(a)(26) of the Act provides authority
for States to elect PACE as an optional Medicaid benefit. The State
plan electing the optional PACE program must be approved before we can
approve an application for a PO in that State. We received three
comments related to application requirements.
Comment: Commenters questioned the requirement that POs must be
approved by their SAA. Further, they requested that we specify an
absolute role for SAA, and revise the regulatory language to reflect
the SAAs' responsibility to submit the program application and the
States' role in the application process.
Response: As we explained in the 1999 interim final rule, States
have played a significant role in the development of the PACE
demonstration program as well as other community-based alternatives to
institutionalization. Most States have implemented home and community
based programs that provide comprehensive coordinated services to
various groups of Medicaid recipients. As a result, States have gained
extensive experience in demographic analysis and contracting with
entities that are capable of delivering a specified range of services.
Although the PACE statute does not specify the States' role in the
application approval process, many aspects of implementing PACE in
Medicare and Medicaid will necessitate extensive involvement of the
SAAs and the State Medicaid Agencies. The State must elect to provide
PACE services as an option under the Medicaid State plan and PACE
applications must 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 program agreement with them.
With regard to applications, we continue to believe the States are
in the best position to work with potential organizations to develop
programs that meet our requirements and are integrated into the States'
overall long-term care delivery system.
Comment: One commenter asked us to clarify the regulatory provision
related to the hiring requirements of non-operational programs before
submission of their program application. The commenter stated that it
is unreasonable to expect the applicant would have hired core staff
before application submission.
Response: Although hiring requirements for non-operational PACE
programs do not appear in our regulations at Sec. 460.12, we addressed
these requirements in the preamble of the 1999 interim final rule (64
FR 66238). We stated, ``To enable a State to make such assurances, an
entity would have established to the satisfaction of the State that it
is committed to the PACE model of care, that there is sufficient
funding for program development and facilities, that there is adequate
demand for PACE services as shown by demographic analysis, and that the
entity has hired core PACE staff and has developed contracts for
referral arrangements and other program services that the site will not
furnish directly.''
When the 1999 interim final rule was developed, there were several
PACE demonstration programs that needed to transition to permanent
provider status. As they were operational and had key staff members in
place before submitting their PACE provider applications, this
requirement was not an issue.
However, as all PACE demonstration programs have transitioned to
permanent provider status, applications will now be primarily from non-
operational providers. We acknowledge that start-up costs are extensive
and paying salaries for top management staff without a revenue stream
is unrealistic. We do not believe that it is appropriate to hold non-
operational applicants to the same standard as POs that had been fully
operational under the PACE demonstration program. Therefore, we are not
requiring that core staff be hired before application approval.
However, at the time of an organization's Readiness Review, we do
expect documentation that core staff have been chosen and accepted
those specific key positions. Language related to staff contracts of
non-operational organizations has been included on page ix of the
Provider Application, which
[[Page 71253]]
can be found on the PACE Web site under Provider Application and
Appendices at http://www.cms.hhs.gov/pace/. This signed certification
guarantees us, among other things, that the SAA will verify that the PO
has qualified staff employed or under contract before furnishing
services. This document must be signed by the SAA and included as part
the PACE provider application.
In the 2002 interim final rule, we revised Sec. 460.12 by removing
and reserving paragraph (a)(2) to clarify that although we may begin
review of PO applications, we may sign a program agreement only with a
PO located in a State with an approved SPA electing PACE as an optional
benefit under its Medicaid State plan. We are finalizing this provision
by deleting Sec. 460.12(a)(2) entirely. For the sake of continuity we
are redesignating Sec. 460.12(a)(3) as Sec. 460.12(a)(2).
Final rule actions:
In this final rule we are redesignating Sec. 460.12(a)(3) to Sec.
460.12(a)(2).
Section 460.14 Priority Consideration
Section 4803(c) of the BBA directed us to give priority in
processing applications, during the 3-year period following enactment
of the BBA on August 5, 1997, to PACE demonstration programs and then
to entities which had applied to operate a PACE demonstration program
as of May 1, 1997.
In the 1999 interim final rule, we established Sec. 460.14 to
address priority applications and stated that to give priority in
processing applications from entities that met the criteria, we would
accept applications only from those entities beginning on the effective
date of the 1999 interim final rule and continuing for 45 days.
Applications from other entities would not be accepted during this
period. Moreover, during the subsequent 45 days, extending to 90 days
after the effective date of that regulation, we stated we would
continue to accept applications from entities that met the priority
processing criteria and we would also accept applications from entities
that qualify for special consideration as described in the following
section.
We did not receive any requests for priority consideration.
Comments related to Sec. 460.14 also address Sec. 460.16 and will
be addressed at the end of Sec. 460.16.
Section 460.16 Special Consideration
Section 4803(c) of the BBA 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 Sec. 460.16, we established a process for special consideration
of a PACE application. Similar to the process for priority
consideration, to give special consideration in processing applications
from entities that meet the criteria in the 1999 interim final rule, we
indicated we would accept applications from these entities beginning 45
days after the effective date of the 1999 interim final regulation. We
further noted that during the 45-day period that extends from 45 days
after the effective date to 90 days after the effective date, we would
accept applications only from entities that met the priority processing
criteria or entities that qualified for special consideration.
Applications from other entities would not be accepted during this
period.
Applications from entities that believed they were entitled to
special consideration were to include information regarding the formal
activities they were engaged in towards becoming a PO. If we agreed
that special consideration was appropriate for applications submitted
after the special 45-day window, we would identify those applicants and
factor in the entity's special status in the event that we had a
greater number of applications under review than available capacity for
PACE program agreements.
We did not receive any requests for special consideration.
Comment: Six commenters requested clarification regarding the
criteria and process applied to applications under the BBA mandate
providing priority and special consideration in processing PACE
applications.
Response: We believe the 2002 interim final rule provided
sufficient information as to the criteria and process needed for
priority and special consideration for PACE applications. More
importantly, however, we note that as the authority to provide these
considerations expired on August 5, 2000, it is no longer necessary to
retain these regulations.
Final rule actions:
In this final rule we are deleting Sec. 460.14 and Sec. 460.16.
Section 460.18 CMS Evaluation of Applications
We established the information used to evaluate a PO application in
the 1999 interim final rule. We approve entities based upon a review of
the materials submitted as part of the application, as well as
information obtained from the SAA or through onsite visits.
No comments were received on Sec. 460.18.
Final rule actions:
This final rule will finalize Sec. 460.18 as published in the 1999
interim final rule.
Section 460.20 Notice of CMS Determination
Sections 1894(e)(8) and 1934(e)(8) of the Act require us to approve
or deny an application for PO status within 90 days after the date of
the submission of the application unless additional information is
requested. Applications are deemed approved unless we deny PO status in
writing or request additional information within the 90-day timeframe.
In the 1999 interim final rule, we established procedures for
implementing these requirements at Sec. 460.20. We clarified that, for
purposes of the 90-day time limit described in this section, the date
that an application is considered to be submitted to CMS is the date on
which the application is delivered to the address designated by CMS.
These statutory sections also provide that we may request in
writing additional information as may be required in order to make a
final determination regarding the application and, after the date we
receive that information, the application shall be deemed approved
unless, within 90 days of that date, we deny the request.
Based on this authority, we may take up to 90 days to request
additional information and, once the information is received, may take
an additional 90 days to complete processing of the application. It is
important to note that there is no corresponding requirement that the
SAA or the PO respond to our request for additional information (RAI)
within a specified timeframe.
If the additional information proves insufficient to approve the
application, the application will be denied. We will notify each
applicant of our determination and the basis for the determination in
writing. If the application is denied, we will provide the basis for
the denial and the process for requesting reconsideration of the
application.
No comments were received on Sec. 460.20.
Final rule actions:
This final rule will finalize Sec. 460.20 as published in the 1999
interim final rule.
Section 460.22 Service Area Designation
Sections 1894(e)(2(B) and 1934(e)(2)(B) of the Act permit the
Secretary, in consultation with the SAA, to exclude from a service area
designation an area that is already
[[Page 71254]]
covered under another PACE program agreement. In the 1999 interim final
rule, we specified in Sec. 460.22 that each applicant must designate
the service area of the program. We stated that CMS (in consultation
with the SAA) may exclude from the proposed service area designation
any area that is already covered under another PACE program agreement.
Consistent with the statute, we believe this was required to avoid
unnecessary duplication of services and impairing the financial and
service viability of an existing PO.
No comments were received on Sec. 460.22.
Final rule actions:
This final rule will finalize Sec. 460.22 as published in the 1999
interim final rule.
Section 460.24 Limit on Number of PACE Program Agreements
This provision implements sections 1894(e)(1)(B) and 1934(e)(1)(B)
of the Act establishing a limit on the number of PACE program
agreements that may be in effect on August 5 of each year, that is, the
anniversary of the enactment of the PACE statute. Those sections state
that we shall not permit the number of POs with which agreements are in
effect under those sections or PACE demonstration programs under
section 9412(b) of the OBRA of 1986 to exceed--
Forty as of August 5, 1997, the date of the enactment of
the PACE statute, or
As of each succeeding anniversary of that date, the
numerical limitation for the preceding year plus 20. The annual
increase in the number of PACE program agreements is not tied to the
actual number of agreements in effect as of a previous anniversary
date.
Based on this statutory language, we may enter into up to 80 PACE
program agreements as of August 5, 1999, and the limit on the number of
PACE program agreements increases by 20 each year thereafter.
No comments were received on Sec. 460.24.
Final rule actions:
This final rule will finalize Sec. 460.24 as published in the 1999
interim final rule.
Section 460.26 Submission and Evaluation of Waiver Requests
Section 460.28 Notice of CMS Determination on Waiver Requests
These sections were established in the 2002 interim final rule to
implement section 903 of BIPA. As we explained in that rule, we
considered amending the 1999 interim final rule to identify each
requirement that is eligible for waiver and provide separate waiver
criteria for each requirement. However, we were concerned that amending
the regulation for each waiver would: (1) Create a regulatory level of
specificity that might make it difficult to apply to future requests
for similar but not identical waivers; and (2) cause a significant
delay between when the need for a waiver is identified and when it may
be implemented.
As an alternative, we amended the PACE regulation by adding Sec.
460.26 and Sec. 460.28 to establish a process for a PO to request
waiver of regulatory requirements.
As noted previously, the PACE Protocol and the 1999 interim final
rule have been proven effective as POs grow and reach financial
solvency. We have learned a great deal about variations in the model
through the information we received in processing grandfathering
requests under section 902 of BIPA and numerous discussions with the
National PACE Association (NPA), POs, and States. Allowing for waivers
provides a unique opportunity for POs, the States, and CMS to
experiment with new approaches within the structure of the PACE model.
This process allows for variations while achieving the intent of the
regulatory provision and responding to the needs of POs to develop and
expand their States' long term care delivery system. The POs will serve
as an ongoing laboratory that over time will establish best practices
that may ultimately replace the current regulatory requirements.
We realize that in order to foster innovation and creativity within
the PACE program, POs must be granted some degree of flexibility in
their operation and service delivery. However, we must balance this
need for flexibility with our responsibility to ensure quality, cost
effective care for all beneficiaries.
Based upon our experience and review of grandfathering requests
under section 902 of BIPA, we established two types of waivers in the
2002 interim final rule, that is, general waivers and conditional
waivers subject to evaluation. We discuss the waiver types below:
1. General Waivers
A general waiver may be granted to a PO that has successfully
implemented a specific operating arrangement, for example, an operating
arrangement approved under section 902 of BIPA. General waivers
continue indefinitely; however, approval may be withdrawn for good
cause if periodic monitoring of the organization's operations and
policies indicates participant care is being jeopardized, there is
fiscal instability, or the goals of the PACE model are not maintained.
2. Conditional Waivers
A conditional waiver, subject to evaluation, is a provisional
waiver we would approve for a specific period of time to a new or
experienced organization. During the conditional period, the PO would
need to submit specific data, that we prescribed, that would allow us
to monitor and evaluate the conditional waiver to determine whether the
waiver may become permanent. This category of waiver may include the
following scenarios:
(a) A request for waiver without which a PO would be prevented from
entering the program. For example, if a prospective PO has been unable
to hire or contract with a social worker with a Master's degree, we may
consider approving a conditional waiver request to allow a social
worker with a baccalaureate degree to operate in this capacity until a
qualified social worker is hired. This waiver would only be in effect
until the PO could hire or contract for an appropriate staff member.
(b) A request for approval of an arrangement with which a PO does
not have any experience. We want to encourage creative approaches to
improving the PACE model and view conditional waivers as a responsible
way to balance the need of a PO with protection of participant health
and safety. We need to be cautious in approving arrangements in which
the PO does not have a proven record of success. In approving a
conditional waiver request, we may limit the number of participants
exposed to the waiver or approve the waiver for a limited period of
time or at a specific PACE center until we are assured through
evaluation that (1) the intent of the regulation is met; and (2) the
approach is not inconsistent with nor impairs the essential elements,
objectives, and requirements of PACE. At that time, we may approve a
general waiver so that the PO may expand the arrangement to other PACE
centers it manages without jeopardizing participant care.
Each of the conditional waivers is subject to periodic monitoring.
A PO approved for a conditional waiver must submit any prescribed data
at specified intervals. We have learned that, in most cases, conducting
a detailed review of a waiver request allows us to implement waiver
approvals without having to require data submission. This evaluation
serves a dual purpose. It allows us to monitor the impact on
participant care as well as enable us to determine if any permanent
changes to
[[Page 71255]]
PACE should be implemented through regulations. In addition, it allows
us to provide technical assistance to other POs requesting a similar
waiver.
In the 2002 interim final rule, we discussed the process necessary
to obtain any waiver. To obtain either a conditional or general waiver,
a PO must provide a detailed description of how its proposed
modification differs from the regulatory requirement and how it meets
the intent of the regulatory provision. The burden is on the PO to
explain why a waiver is needed to start up or expand their program.
Where a PO has not completed the trial period, attained financial
solvency, and demonstrated competence with the PACE model as evidenced
by successful CMS and State onsite reviews and monitoring activities,
it will be necessary for the organization to explain how the waiver is
necessary to meet those objectives. For a new organization, it will be
necessary for the organization to explain why a waiver is needed for
the organization to begin serving participants.
Consistent with the process developed for initial PACE provider
applications, all waiver requests must be submitted to the SAA for
initial review. The SAA forwards the waiver request to CMS along with
any concerns or conditions they may have regarding the waiver. We will
not accept waiver requests directly from POs. Waiver requests submitted
with an initial application process must be prepared as a separate
document. These requests are reviewed simultaneously and in conjunction
with the application. Where an existing PO is requesting a waiver, the
request must be submitted through the State to the CMS address for BIPA
903 waiver requests indicated on the PACE home page (http://www.cms.hhs.gov/PACE
). We intend to process waiver requests as
expeditiously as possible in order to be responsive to the needs of new
organizations to develop their programs and to the needs of mature
organizations as they expand.
Section 903 of BIPA directs us to approve or deny a request for a
modification or waiver no later than 90 days after the date of receipt.
We clarified in Sec. 460.28(b) that the date of receipt is the date
the request is delivered to the address designated by CMS. We note 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.
Thus, it is in the PO's best interest to provide all pertinent
information relevant to their request. Where additional information is
necessary, the CMS PACE Team Leader will inform the PO as early as
possible in the review process. The PO will then be responsible for
submitting the additional information in a timely enough manner to
allow us to evaluate the additional information and make a
determination on the waiver request within the allotted 90 days. If the
reply from the PO is not received in a timely manner, we would have to
deny the request. The PO may then reapply for the waiver, starting a
new 90-day clock.
Consistent with sections 1894(f)(2)(B) and 1934(f)(2)(B) of the
Act, we specified in Sec. 460.26(c) the following requirements that
would not be waived:
(1) A focus on frail elderly qualifying individuals who require the
level of care provided in a nursing facility;
(2) The delivery of comprehensive, integrated acute and long-term
care services;
(3) The IDT approach to care management and service delivery;
(4) Capitated, integrated financing that allows the provider to
pool payments received from public and private programs and
individuals; and
(5) The assumption by the provider of full financial risk (we note
that assuming full financial risk does not preclude an organization
from utilizing reinsurance, stop-loss protection, or other mechanism to
meet its financial obligations).
In addition to these five provisions, we will not grant waivers
that we believe are inconsistent with or would impair the essential
elements, objectives, and requirements of sections 1894 and 1934 of the
Act.
In addition to the requirements specified in sections 1894(f)(2)(B)
and 1934(f)(2)(B) of the Act, we believe there are other requirements
that must not be waived. For example, health care is focused at a PACE
center; the IDT is composed of certain health care professionals that
manage all of the health care provided to participants; a comprehensive
assessment by the IDT is conducted before admission into the PACE
program; and reassessment occurs at least every 6 months or whenever
there is a significant change in a participant's health status.
Further, we believe that PACE participants are entitled to the same
patient rights' protection available in the Medicare or Medicaid fee-
for-service or managed care programs. Therefore, we will not approve
waiver or significant modification of these requirements.
Two waiver issues specifically mentioned in section 903 of BIPA are
requirements related to employment and the use of community-based
primary care physicians (PCP). In this approach, the PCPs work out of
their offices rather than from the PACE center and do not primarily
serve PACE participants.
The 2002 interim final rule removed the restrictive waiver
provisions at Sec. 460.68(c) regarding direct or indirect interest in
contracts, which was limited to rural and Tribal organizations. In
addition, the 2002 interim final rule also removed the two waivers in
Sec. 460.102(g) related to employment of the PCP and the requirement
that the IDT primarily serve PACE participants. These waivers were
available if CMS and the SAA determined that there was ``insufficient
availability in the PO's service area of individuals who meet the
requirement, or State licensing laws make it inappropriate for the
organization to employ physicians.'' Although we deleted the specific
waivers that were intended to encourage development of PACE in rural or
Tribal or other medically underserved areas, we continue to recognize
the special need for flexibility in these areas and remain committed to
allowing waivers to promote PACE in medically underserved areas.
Deletion of the specific waiver language was intended to provide
greater flexibility within the overall PACE regulatory structure. We
remain committed to working with rural and Tribal communities to help
them address the challenges of developing successful PACE programs.
Organizations that seek waiver of these or any other regulatory
requirements must follow the requirements specified in Sec. 460.26.
We note that a PO requesting a waiver of the prohibition on direct
or indirect interest in contracts must develop policies and procedures
for disclosure of financial interest to the governing body, establish
recusal restrictions, and a process to record recusal actions for
review by CMS and the SAA in its waiver request.
Comment: We received two comments expressing concern about
compromising the integrity of the PACE model by providing expanded
flexibility.
One commenter offered assistance in evaluating PACE policy,
program, and practice on a continuing basis. The second commenter was
concerned that the PACE regulations lack sufficient safeguards to
preserve the model as established by the Protocol. The commenter
indicated that maintaining the PACE center as the focal point for
delivery of services and retaining the central role of the IDT in
managing the health care and other services provided to PACE
participants were critical to the PACE model. The commenter also
emphasized the important role of the PCP in the Protocol, stating,
``the
[[Page 71256]]
ultimate responsibility for managing participant medical care rests
with the PCP; therefore, if this team member is not present during team
meetings the ability to fulfill this obligation will be compromised.''
Response: We share the commenter's concerns regarding the integrity
of the PACE model, and thank the commenter who offered assistance in
evaluating the PACE program. We believe the flexibility permitted by
the 2002 interim final rule has sufficient safeguards to ensure the
integrity of the model. We instituted contracting and oversight
requirements we believe will ensure quality of care for PACE
participants. During the development of the 2002 interim final rule, we
made a concerted effort to develop a waiver process that would allow
modification of the model without excessive controls, while at the same
time not being too burdensome for POs. We believe we achieved that
balance.
The PACE model has been proven successful when the PACE center is
the focal point for delivery of services and when the IDT's central
role of managing the health care and other services provided to PACE
participants is retained. Therefore, we believe there are few
circumstances when it would be appropriate to waive these elements of
the PACE model without substantial justification by a PO or potential
PO, for example, the entity being a rural or Tribal organization.
However, according to sections 1894(f)(2)(B) and 1934(f)(2)(B) of the
Act, we do not have the authority to waive the provision requiring the
IDT's central role managing the health care and other services provided
to PACE participants, since it is statutorily mandated.
Although we have permitted the use of community-based PCPs, we
require that effective and consistent communication be maintained.
Whenever we have received a request for waiver pertaining to use of
community-based PCPs, the PO has had to provide in-depth justification
and meet our conditions for waiver. Among other conditions for waiver
approval, the community-based PCP must perform all the requirements of
the staff PCP including but not limited to participation in IDT
meetings related to their participants' participation in Quality
Assurance and Performance Improvement (QAPI) activities and agree to PO
oversight by the medical director.
Comment: One commenter submitted comments related to the submission
and evaluation of waiver requests. This commenter supported reasonable
waiver requests for community-based PCPs for flexibility and innovation
within PACE which will allow the program to grow. The commenter also
supported conditional waivers, which would allow CMS to monitor the
performance of organizations utilizing community-based PCPs as well as
participant outcomes. The commenter recommended that we focus on
processes for integrating care while utilizing community-based PCPs.
Response: In general, we are not inclined to approve waiver
requests allowing POs to utilize community-based PCPs without
identifying a substantial need. However, we believe there are
circumstances when the use of community-based PCPs may be appropriate.
For example, it is important for a participant to have a physician that
speaks their language and understands their culture's mores and
traditions, which can improve participant compliance with their plans
of care and, therefore, their health outcomes. We have approved a
limited number of waiver requests allowing community-based PCPs
contingent on their compliance with specific requirements. We plan to
monitor and review the impact of the interactions between the
community-based PCPs and the IDT and participant care before we alter
the conditions currently applied to these waiver requests.
Comment: Commenters asked whether PACE programs which are operating
under grandfathering arrangements would be required to request a waiver
in order to continue operations. They believe having to request waiver
of operational arrangements grandfathered under BIPA 902 will be
administratively burdensome, and they recommend POs be allowed to
expand grandfathering arrangements ``organization wide'' provided the
expansion is ``* * * reasonably consistent with the objectives of the
PACE program.'' They suggested the PO could file a notice with CMS
describing the expansion arrangement and how it is consistent with
program objectives.
Response: PACE demonstration program sites were granted BIPA 902
``grandfathering'' of certain operational arrangements that did not
meet the 1999 interim final rule, if the identified practice was in
place before July 1, 2000. As the approved ``grandfathering'' was
effective, only to the extent it existed on July 1, 2000, we believe it
was not intended to cover a new or expanded site. As a result, POs need
to submit BIPA 903 waiver requests of grandfathered practices for
expansion sites.
Based on our experience with the waiver process, we believe there
is value in CMS and SAA review and approval of waivers. The
consultations involved in the waiver process allows CMS and the SAA to
discuss the PO's ability to implement the requested waiver, any
concerns either agency has regarding the waiver request, request
further information or clarification of the PO's operations, and
determine any requirements or conditions that will be included in the
waiver approval. CMS and the SAA collaborate in the review and approval
of waivers. We have found that the SAA generally has a better knowledge
and understanding of the PO and its operations and relevant State laws
and requirements.
Comment: One commenter indicated that the regulatory language fails
to address entities that are not already a PO, saying that prospective
POs (as well as established POs) should be eligible for waivers of
regulatory requirements. The commenter requested clarification
regarding whether PACE demonstration programs transitioning to
permanent provider status, pre-PACE programs, and previously ``non-
operational'' entities are eligible to request waivers of regulatory
requirements.
Response: Any entity submitting a PACE provider application may
submit a request for waiver. The PO demonstration programs had been
operating in some cases for years and the implementation of the 1999
interim final rule could have disrupted operations and care to the
participants as the demonstration programs transitioned to permanent
provider status and were required to be in compliance with the 1999
interim final rule. BIPA provided flexibility for those transitioning
demonstration programs to continue their existing operational
arrangements and a waiver process for those organizations that did not
meet the grandfathering criteria but were unable to comply with the
1999 interim final rule. We believe the intent of the waiver provision
in BIPA was to assist organizations to participate in the Medicare and
Medicaid PACE benefit program.
We believe that there may be circumstances when applicants are not
able to comply with the regulations. The BIPA section 903 waiver
process allows developing organizations to work with CMS and the SAA to
develop an appropriate alternative rather than abandon their efforts to
become a PACE program when they discover they can not meet the
regulatory requirements. Therefore, we have allowed these entities to
submit waiver requests. A waiver request must be submitted as a
[[Page 71257]]
separate document from the provider application and must contain
substantial justification for the request. Pre-PACE organizations are
Medicaid pre-paid health plans that provide Medicare services under
Medicare fee-for-service rules and certain Medicaid services paid by
Medicaid on a capitated basis. These organizations may submit a waiver
request and their PACE provider application simultaneously but as
separate documents.
We will accept waiver requests from non-operational entities and
pre-PACE applicants, in an attempt to assist new organizations that
would otherwise be unable to meet regulatory requirements. All waiver
requests must be submitted through the SAA, who will review and forward
to CMS. Regardless of the prior status of the entity, a request for a
waiver is reviewed on a case-by-case basis.
Comment: Commenters also requested that we make information
regarding approved waiver requests available to current and potential
POs.
Response: At this time, we do not agree that making information on
particular PACE programs available is warranted. We believe it would be
more beneficial for each PO to develop their own unique waiver request
and rationale. Each PO is a unique operational entity that has specific
circumstances and experience that influence the appropriateness for
approving a waiver. Therefore, approving all similar requests for a
waiver of a specific requirement is inappropriate. Our intention is
that all POs comply with the PACE regulations.
Final rule actions:
In this final rule, we are expanding the regulatory requirements of
Sec. 460.26 to permit POs and entities applying to become POs to
submit waiver requests.
Section 460.28 Notice of CMS Determination on Waiver Requests
Comment: One commenter requested clarification as to whether an
entity submitting a PACE application is permitted to submit a waiver
request separate from the provider application, as prompt CMS
determination will be important to the organization's ability to move
forward with PACE development. The commenter also asked whether the CMS
timeframe for responding to waiver requests is affected by the status
of the request, or whether the applicant is an operational or a
prospective PO.
Response: Waiver requests may accompany an application, but must be
prepared and submitted as a separate document. Requests will be
reviewed simultaneously and in conjunction with the application.
Alternatively, waiver requests can be submitted independently of the
application by POs that are currently operational.
The timeframe for our response to a waiver request is the same
regardless of the operational status of the requestor. We have a
statutory 90-day timeframe to approve or deny waiver requests. As a
result, when we request additional information, regarding a waiver
request, it is incumbent upon the organization to respond as
expeditiously as possible to provide CMS and the SAA time to review
their responses. We provide a written approval or denial letter to the
PO or PACE applicant with the determination and any additional
conditions.
Final rule actions:
In this final rule, we are amending paragraph (a)(2) by adding ``or
PACE applicant,'' thereby requiring CMS to notify the PO or PACE
applicant in writing of the decision to deny the submitted waiver
request.
Subpart C--PACE Program Agreement
The purpose of subpart C is to establish requirements for the PACE
program agreement establishing the entity as a provider of PACE
benefits under Medicare and the Medicaid State plan.
Section 460.30 Program Agreement Requirements
In accordance with sections 1894(a)(4) and 1934(a)(4) of the Act,
we established Sec. 460.30 to require that each PO have an agreement
with CMS and the SAA for the operation of a PACE program by the
organization under Medicare and Medicaid. This three-party agreement
must be signed by an authorized official of the organization, as well
as by an authorized CMS official and an authorized State official.
We received no public comments on Sec. 460.30 of the 1999 interim
final rule.
In the 2002 interim final rule, we revised the regulatory language
to reflect that the PACE program agreement is a three-party agreement
that is signed by CMS, the SAA, and the PO. Also, we added regulatory
language to clarify that CMS may sign a program agreement only with a
PO that is located in a State with an approved SPA electing PACE as an
optional benefit under its Medicaid State plan.
We received no comments on this section of the 2002 interim final
rule.
Final rule actions:
This final rule will finalize Sec. 460.30 as published in the 1999
and 2002 interim final rules.
Section 460.32 Content and Terms of PACE Program Agreement
In Sec. 460.32(a), we stipulate the required content of a PACE
program agreement.
We require that each PACE program agreement designate the service
area of the program, specifically identifying the area by county, zip
code, street boundaries, census tract, block, or tribal jurisdictional
area, to the extent that those identifiers are appropriate. Any changes
in the designated service area would require advance approval by CMS
and the SAA. This requirement implements the provisions of sections
1894(e)(2)(A)(i) and 1934(e)(2)(A)(i) of the Act and reflects Part I,
section D of the Protocol.
Each PO must agree to meet all applicable requirements under
Federal, State, and local laws and regulations, including provisions of
the Civil Rights Act, the Age Discrimination Act, and the Americans
with Disabilities Act. These requirements include, but are not limited
to, all requirements contained in the regulations implementing those
Acts. This requirement implements in part the provisions of sections
1894(e)(2)(A)(iv) and 1934(e)(2)(A)(iv) of the Act.
We require that the program agreement indicate the effective date
and term of the agreement as well as information related to:
Organizational structure of the PO; participant rights; processes for
grievances and appeals; eligibility; enrollment and disenrollment
policies; service description; QAPI; capitation rates; names and
numbers of administrative contacts in the organization; and program
agreement termination procedures. These requirements are based on
sections 1894(b)(2) and 1934(b)(2) of the Act and on Part X, section A
of the Protocol.
Each PACE program agreement includes a statement of the levels of
performance that we require the organization to achieve on standard
quality measures and the data and information on participant care that
CMS and the State require the organization to collect. A detailed
discussion of the levels of performance and the standard quality
measures are contained in the preamble discussions for Sec. 460.134
and Sec. 460.202(b) in the 1999 interim final rule.
In Sec. 460.32(b), we specify that a PACE program agreement may
provide additional requirements for individuals to qualify as PACE
program eligible individuals. This provision implements sections
1894(e)(2)(A)(ii) and 1934(e)(2)(A)(ii) of the Act. However,
[[Page 71258]]
the eligibility criteria in Sec. 460.150(b)(1)-(3) cannot be modified.
In addition, a PACE program agreement may contain additional terms and
conditions as the parties agree to, if the terms and conditions are
consistent with sections 1894 and 1934 of the Act and with these
regulations. This provision implements sections 1894(e)(2)(A)(v) and
1934(e)(2)(A)(v) of the Act.
We received five comments on the 1999 interim final rule related to
the program agreement, which are listed below.
Comment: One commenter requested that we clarify whether the
program agreement content is meant as a substitute for all provisions
or only some of the provisions of the State Medicaid contract
requirements in 42 CFR part 434. The commenter also asked whether
additional terms and conditions could be included in the PACE program
agreement to meet specific State law requirements.
Response: The PACE program agreement is a three-way contract
between the PO, the SAA and CMS, and contains the PACE requirements
from the Federal statute and regulations. If the SAA has requirements
beyond those in the three-way PACE program agreement, those
requirements should be addressed in a separate contract between the
State and the PO. The PACE three-way program agreement can be an
attachment to the State-PO contract. As we stated above, each PO must
agree to meet all applicable requirements under Federal, State, and
local laws and regulations.
States may implement additional or more stringent requirements if
they are consistent with sections 1894 and 1934 of the Act and with
Federal laws and regulations. However, if there is a conflict between
the State and Federal requirements, the Federal requirements would
generally take precedence.
Comment: We were asked to describe the mechanism for revising a
signed program agreement.
Response: We will provide the PO and the SAA with written
notification of any revisions and include updated pages of the program
agreement. The PO and the SAA have 30 days to send written notification
to us of any disagreement with the revisions. We have provided
information on the program agreement on the PACE home page, in the PACE
Fact Sheet, which is located at http://www.cms.hhs.gov/PACE/Downloads/PACEFactSheet.pdf
.
Comment: One commenter asked that we define the procedure for
expanding a service area.
Response: The procedure for expanding a service area differs
depending on whether a new PACE center is also being opened. The
abbreviated PACE expansion application and additional information
regarding the procedures for expanding a service area on the PACE home
page, in the PACE Fact Sheet, which is located at http://www.cms.hhs.gov/PACE/Downloads/PACEFactSheet.pdf
.
Comment: Two commenters asked when we would provide the
requirements on standard quality measures, the requirements for
participant care data and information and asked whether the
requirements are the same for all PACE programs. A number of commenters
inquired when the data would be collected and what the specific
measures would be.
Response: The program agreement identifies the data elements for
monitoring that must be submitted quarterly by all POs. A further
discussion on standard quality measures, Outcome-Based Continuous
Quality Improvement (OBCQI), and COCOA-B is in section III subpart H of
this final rule.
Comment: Commenters asked when CMS would provide the Medicare
capitation rates.
Response: Section 1894(d) of the Act directs the Secretary to make
prospective monthly payments of a capitation amount for each PACE
program eligible individual enrolled under the agreement under this
section in the same manner and from the same sources as payments are
made to the Medicare+Choice (formerly M+C, now MA) organizations and to
specify the capitation amount in the PACE program agreement. Therefore,
in the 1999 interim final rule, we required that the Medicare
capitation rates be included in the program agreement. The Balanced
Budget Act of 1997(BBA) mandated that a risk adjustment payment
methodology incorporating information on beneficiaries' health status
be implemented in the M+C program. The resulting PACE payment
methodology that began in 2004 includes a risk adjusted methodology
that results in a unique payment for each participant. As a result, it
is not possible to include the Medicare capitation rates in the program
agreement. Therefore, we are amending our regulation to remove the
requirement that the program agreement include the Medicare capitation
amount and to require, instead, that the program agreement must include
the Medicare payment methodology. This requirement is included in
Appendix ``M'' of the program agreement, which can be found at http://www.cms.hhs.gov/pace/Downloads/programagreement.pdf.
Medicare rates are
annually updated, published, and posted on the CMS Web site. Current
Medicare payment rates can be found at http://www.cms.hhs.gov/healthplans/rates/default.asp
.
Final rule actions:
This final rule will amend Sec. 460.32 to indicate that the
program agreement must include the ``Medicare payment methodology''
which replaces the ``Medicare capitation rate.''
Section 460.34 Duration of PACE Program Agreement
In Sec. 460.34, we specify that each program agreement will be
effective for a contract year, but may be extended for additional
contract years in the absence of a notice by a party to terminate, in
accordance with the requirements of sections 1894(e)(2)(A)(iii) and
1934(e)(2)(A)(iii) of the Act.
Comment: It was recommended that we extend the program agreement's
designated 1-year contract period to a longer period of time with an
automatic extender.
Response: As noted above, the statute specifies a 1-year
contracting period. We provided for a flexible initial contract year
that could be as long as 23 months to allow us to adjust the length of
the initial or start-up contract year so that subsequent years are on a
standard calendar year cycle.
PACE program agreements are considered to be ``evergreen'' meaning
they will be automatically renewed without having to be re-signed. We
believe the term of the program agreement is appropriate and consistent
with overall Medicare policy, as well as in compliance with the
requirements of the Act.
Final rule actions:
This final rule will finalize Sec. 460.34 as published in the 1999
interim final rule.
Subpart D--Sanctions, Enforcement Actions and Termination
In subpart D of the 1999 interim final rule, we specified the
violations identified in sections 1857(g)(1) and 1903(m)(5)(A) of the
Act that could result in the imposition of sanctions under sections
1894(e)(6) and 1934(e)(6) of the Act. We also specified in accordance
with paragraph (e)(5) of section 1894 and 1934 of the Act, that CMS or
the SAA may terminate the PACE program agreement at any time for cause
and that a PO may terminate an agreement after appropriate notice to
CMS, the SAA, and participants. We also specified, in accordance with
paragraphs (e)(5)(C) of sections 1894 and 1934(e)(5)(C) of the Act,
Part IX of the Protocol, the transition procedures that must be
followed by an entity
[[Page 71259]]
whose PACE program agreement is in the process of being terminated.
Those procedures can be found in Sec. 460.50.
Section 460.40 Violations for Which CMS May Impose Sanctions
In Sec. 460.40 we specified, based on paragraph (e)(6)(B) of
sections 1894 and 1934 of the Act, that we can impose, in addition to
any other remedies authorized by law, any of three types of sanctions
if we determine that a PO has committed any of nine listed violations.
The following PO violations specified in this section are based on
provisions of sections 1857(g)(1) and 1903(m)(5)(A) of the Act:
Fails substantially to furnish to a participant medically
necessary items and services that are covered PACE services, if the
failure has adversely affected (or has substantial likelihood of
adversely affecting) the participant.
Involuntarily disenrolls a participant in violation of
Sec. 460.164.
Discriminates in enrollment or disenrollment among
Medicare beneficiaries or Medicaid recipients, 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.
Engages in any practice that would reasonably be expected
to have the effect of denying or discouraging enrollment, except as
permitted by Sec. 460.150, by Medicare beneficiaries or Medicaid
recipients whose medical condition or history indicates a need for
substantial future medical services.
Imposes charges on participants enrolled under Medicare or
Medicaid for premiums in excess of the premiums permitted.
Misrepresents or falsifies information that is furnished
to CMS or the State under this part; or, to an individual or any other
entity under this part.
Prohibits or otherwise restricts a covered health care
professional from advising a participant who is a patient of the
professional about the participant's health status, medical care, or
treatment for the participant's condition or disease, regardless of
whether the PACE program provides benefits for that care or treatment,
if the professional is acting within his or her lawful scope of
practice.
Operates a physician incentive plan that does not meet the
requirements of section 1876(i)(8) of the Act.
Employs or contracts with any individual who is excluded
from participation in Medicare or Medicaid under section 1128 or 1128A
of the Act (or with any entity that employs or contracts with such an
individual) for the provision of health care, utilization review,
medical social work, or administrative services.
We received the following comments on Sec. 460.40.
Comment: A commenter stated that the 1999 interim final rule did
not include sanctions or enforcement actions that would apply if a
program fails to comply with the data collection, record maintenance
and reporting requirements in subpart L. The commenter asked what is
the authority to require the POs to comply with these requirements.
Response: Under the terms of the program agreement (Sec.
460.32(a)(2)) the PO is committed to meet all applicable requirements
under Federal, State and local laws and regulations, which would
include the requirements under subpart L. The reporting requirements in
subpart L impact our ability to calculate Medicare capitation payments.
Lacking the necessary data to compute an appropriate payment, the PO
might receive an inaccurate payment or possibly no payment at all for
the corresponding month(s).
Moreover, failure to submit required reports could be interpreted
as a failure by the PO to comply substantially with conditions for a PO
under this part (Sec. 460.50(b)(1)(ii)) or to comply with the terms of
its PACE program agreement. Therefore, CMS and the SAA have the option
of terminating the PACE program agreement due to uncorrected
deficiencies.
We believe that Sec. 460.40 as published in the 1999 interim final
rule sufficiently addresses the availability of sanctions for
violations of subpart L requirements.
Comment: A commenter indicated it was not clear how CMS intended to
monitor performance in an identified deficient area nor how CMS and the
SAA would cooperate on investigations, agree on findings, and impose
sanctions, enforcement, and termination.
Response: In a cooperative effort, CMS and the SAA jointly perform
onsite monitoring reviews on a regular basis to ensure quality of
participant care as well as to verify clinical and administrative
compliance with the PACE regulations. Both CMS and the SAAs engage in a
collaborative relationship to sustain oversight of the PO. We stress
communications to ensure that each party has the information necessary
to take appropriate actions.
Comment: A commenter also requested we clarify the violation
incorporated into Sec. 460.40(d), which concerns practices that would
have the effect of denying or discouraging enrollment.
Response: Under Sec. 460.40(d), CMS may impose a sanction if the
PO engages in any practice that would deny or discourage a participant
from enrolling in PACE whose medical condition or history indicates a
need for substantial medical service. The exception to this sanction is
if the applicant is otherwise ineligible under Sec. 460.150 (that is,
they are under 55 years of the age, they do not live in the PO's
service area, they do not meet the level of care indicated in the
State's Medicaid plan, living in the community would jeopardize their
health or safety under the criteria as specified in the program
agreement, or any additional eligibility requirements approved by CMS
and included in the PACE provider agreement).
Final rule actions:
This final rule will finalize Sec. 460.40 as published in the 1999
interim final rule.
Section 460.42 Suspension of Enrollment or Payment by CMS
We described the two types of sanctions that we may impose in Sec.
460.42 and Sec. 460.46 (civil money penalties). Each of the sanctions,
or remedies, that are specified in these sections for specific
violations are based on provisions of sections 1857(g)(2), 1857(g)(4),
and 1903(m)(5)(B) of the Act. With respect to suspension of enrollment
in PACE, we may suspend enrollment of Medicare beneficiaries after the
date we notify the organization of the violation. Suspending enrollment
of Medicaid recipients is an action taken by the SAA rather than CMS.
With respect to suspension of payment, we may suspend Medicare payment
to the PO and deny payment to the State of Federal financial
participation (FFP) for medical assistance services furnished under the
PACE program agreement.
Comment: One commenter recommended that a decision to suspend
enrollment should be a collaborative agreement by CMS and the SAA or
the SAA should have the ability to do so on its own. Therefore, the
commenter recommended establishing an expectation of collaboration
between CMS and the SAA, at a minimum.
The commenter also recommended that we revise Sec. 460.42(b)(2) to
prospectively notify the State that FFP will be discontinued 60 days
from receipt of the notice.
Response: In the event of any violation or imposition of sanctions,
we work closely with the SAA of the State in which the PO is located.
The interaction between CMS and the SAA is by nature a collaborative
one and any action decided upon is the result of this
[[Page 71260]]
collaborative effort. We do not believe that adding regulatory language
will enhance the inherent collaborative working relationship between
CMS and the SAAs.
Moreover, should we exercise the sanction option at Sec.
460.42(b)(2), we will use existing procedures and timeframes for the
disallowance of FFP claims. These provisions can be found at 42 CFR
430.42.
Final rule actions:
This final rule will finalize Sec. 460.42 as published in the 1999
interim final rule.
Section 460.46 Civil Money Penalties
In addition to suspension of enrollment, CMS may impose civil money
penalties as specified in Sec. 460.46. These include penalties of
$100,000 plus $15,000 for each individual not enrolled as a result of
the PO's discrimination in enrollment or disenrollment or practice that
would deny or discourage enrollment; $25,000 plus double the excess
amount above the permitted premium charged a participant by the PO;
$100,000 for each misrepresentation or falsification of information;
and $25,000 for any violation specified in Sec. 460.40.
Comment: One commenter requested clarification of CMS' authority to
assess financial penalties for violations to dual eligible individuals
(Medicare beneficiaries that are also Medicaid eligible individuals) as
well as Medicare-only beneficiaries.
Response: Authority to assess monetary penalties is provided in
sections 1894(e)(6) (Medicare provisions) and 1934(e)(6)(Medicaid
provisions) of the Act. If it is determined that a provider has failed
to comply with the requirements of those sections of the Act and the
regulations, CMS has the authority to impose monetary penalties for
violations impacting either dual eligible or Medicare-only
participants.
Comment: Several commenters expressed concern that the civil
monetary penalties for POs are the same or greater than those of
Medicaid managed care and MA organizations. The commenters pointed out
that significant size and revenue differences between MA and POs
warrant lower penalties for POs. In addition POs have a smaller pool of
potential participants than managed care organizations, which must
enroll all individuals regardless of need.
Response: We believe the current requirement as published is
appropriate in that it allows for imposition of a range of penalty
amount from one dollar up to and including the amounts identified in
Sec. 460.48. It is not CMS' intent to close any PACE program. We
believe the imposition of the maximum financial penalty is an option
that would only be used in cases of egregious violations. We believe it
is appropriate to maintain the current regulatory requirements, which
provide CMS the ability to impose a broad range of penalty amounts
including the maximum sanction should the situation warrant.
Comment: Six commenters indicated that the level of penalties is
too severe and recommend the penalties be proportionate to the size of
the PACE program. One commenter recommended penalties be left to the
discretion of the State, while several others indicated that an
appropriate amount would be one-quarter of the amount required for
Medicaid managed care and M+C plans.
Response: As noted in the previous response, the rule permits a
range of amounts to be imposed and provides CMS with the necessary
flexibility to impose an appropriate amount depending upon the nature
of the violation. In addition, we note that statute requires CMS to
make the determination (after consultation with the SAA) to impose any
sanctions.
Comment: One commenter relayed the regulation did not indicate to
whom the fines should be paid. They recommended the fines be shared
equally between the Federal government and the SAA.
Response: Should CMS impose a fine, the PO will be informed in
writing and directed where to send the penalty. The PACE statute and
regulations at Sec. 460.46(b) specify that section 1128A of the Act
governs disposition of civil money penalties. It is not the purpose of
this rule to further address disposition of amounts recovered.
Final rule actions:
This final rule will finalize Sec. 460.46 as published in the 1999
interim final rule.
Section 460.48 Additional Actions by CMS or the State
In Sec. 460.48 we specified, based on paragraph (e)(6)(A) of
sections 1894 and 1934 of the Act, that if CMS, after consultation with
the SAA, determines that a PO is not in substantial compliance with
requirements in these regulations, CMS or the SAA can take one or more
of the following actions: Condition the continuation of the PACE
program agreement upon timely execution of a corrective action plan;
withhold some or all payments under the PACE program agreement until
the organization corrects the deficiency; or terminate the program
agreement.
Comment: One commenter questioned whether CMS and the SAA could
independently take action against a PO for violations providing there
was prior consultation.
Response: The statute allows CMS to take an enforcement action but
only after CMS has consulted with the SAA, and determines that the PACE
provider has failed substantially to comply with the PACE requirements.
While the SAA may take action based on its own regulations, we believe,
that in light of the collaborative relationship between CMS and the
SAA, the SAA would consult with CMS before taking any independent
action.
Final rule actions:
This final rule will finalize Sec. 460.48 as published in the 1999
interim final rule.
Section 460.50 Termination of PACE Program Agreement
In Sec. 460.50 we specified, in accordance with paragraph
(e)(5)(A) of sections 1894 and 1934 of the Act, that CMS or a SAA may
terminate at any time a PACE program agreement for cause and that a PO
may terminate an agreement after appropriate notice to CMS, the SAA,
and its participants. In accordance with paragraph (e)(5)(B) of
sections 1894 and 1934 of the Act, we specified that CMS or a SAA may
terminate a PACE program agreement with a PO if CMS or the SAA
determines that:
Either there are significant deficiencies in the quality
of care furnished to participants, or the PO has failed to comply
substantially with conditions under these regulations or with the terms
of its PACE program agreement; and
The PO has failed to develop and successfully initiate,
within 30 days of the date of the receipt of written notice, a plan to
correct the deficiencies, or has failed to continue implementation of
such a plan.
Based on the Protocol, Part IX, section A.1, we also provided for
termination if CMS or the SAA determines that the PO cannot ensure the
health and safety of its participants. This determination may result
from the identification of deficiencies, which CMS or the SAA
determines cannot be corrected. Based on the Protocol, Part IX, section
A.2, we also required that if the organization terminates the
agreement, a minimum of 90 days' notice must be given to CMS and the
SAA regarding the organization's intent and that participants must be
given a minimum of 60 days notice.
Comment: Termination of the PACE program and transitional care
during transition were topics of several comments and recommendations
we received. Recommendations included
[[Page 71261]]
adding regulatory language requiring CMS and the SAA to agree and
coordinate their actions related to termination of a PACE program
agreement. Another recommendation was to require that CMS and the State
consider the likelihood of institutionalization of community
participants in determining whether termination should be imposed.
Response: Neither CMS nor the State considers termination lightly,
and our primary concern is protecting the health and safety of the
participants. All possible ramifications of terminating a program
agreement, including the likelihood of participants becoming
institutionalized, will be considered before taking such a severe
action. However, we disagree with the commenters and do not believe
revisions to the regulations are warranted. As stated in response to
previous commenters, we believe the cooperative nature of the
relationships between CMS and the SAAs will lead to agreement on a
decision to terminate a program agreement. We note however, the statute
and regulations specify that CMS or the SAA may independently terminate
a PACE program agreement.
Comment: A commenter suggested that the regulations include the
appointment of a temporary manager to supervise the operation of the
PACE program as an alternative to termination of the program agreement.
Response: To date our experience with the POs does not indicate the
necessity of including this remedy in regulation. We will continue to
assess the performance of POs and we may consider this sanction in the
future. We note that Sec. 460.48(a) states that CMS or the SAA may
condition continuation of the PACE program agreement upon timely
execution of a corrective action plan (CAP). The appointment of a
``temporary manager'' could be included within the provisions of a CAP.
As such, it would be unnecessary to specify specific remedies
(including a temporary manager) that CMS might include in the CAP for a
particular PO.
Final rule actions:
This final rule will finalize Sec. 460.50 as published in the 1999
interim final rule.
Section 460.52 Transitional Care During Termination
Based on the Protocol, Part IX, section B, we require that the PO
develop a detailed written plan for phase-down in the event of
termination which includes the following: The process for informing
participants, the community, CMS and the SAA in writing about
termination and transition procedures; and steps that will be taken to
help assist participants to obtain reinstatement of conventional
Medicare and Medicaid benefits, transition their care to other
providers, and terminate marketing and enrollment activities. This
information can be located at http://www.cms.hhs.gov/pace/, Chapter 1,
section 3. Also, in accordance with paragraphs (a)(2)(C) and (e)(5)(C)
of sections 1894 and 1934 of the Act, we specified in Sec. 460.52 that
an entity whose PACE program agreement is in the process of being
terminated must provide assistance to each participant in obtaining
necessary transitional care through appropriate referrals and making
the participant's medical records available to new providers.
Comment: We were asked what constitutes ``community'' in Sec.
460.52(a)(1).
Response: In the context of the Sec. 460.52(a)(1) of the 1999
interim final rule, the term ``community'' refers to the general
public. Notification to the community would include publishing
information regarding the termination in one or more of the generally
circulated newspapers in each community or county located in the PO's
service area.
Comment: A commenter asked when the transition plan is due (upon
notification of termination, or at an earlier point such as at the
readiness review or in the context of the program agreement).
Response: A written plan for transition in the event of termination
is a component of the PACE provider application and is due at the time
the POs application is submitted.
Comment: A commenter was concerned that the regulation needed to
provide additional participant protection against loss of services in
the event of PO termination. More specifically, the commenter
recommended that except where there is an immediate threat of health
and safety of the participants, the PO should be required to continue
services until such time as a participant is receiving alternative
services under Medicare and/or Medicaid, or both, as appropriate, in
accordance with the plan of care.
Response: In the event a PACE program agreement is terminated, we
believe the regulation provides for sufficient participant safeguards.
These safeguards are applicable regardless of who initiates the
termination; the PO, CMS, or the SAA. Section 460.52(b) provides that a
PO must have a written plan for phase-down in the event of termination
which describes how the organization plans to provide assistance to
each participant in obtaining necessary transitional care through
appropriate referrals.
If the PO initiates the termination, it must provide CMS 90 days'
notice, which should provide sufficient time to transition participants
to alternative care. If a participant is eligible for Medicaid, the
State should provide assistance in arranging for alternative care.
For Medicare beneficiaries, disenrollment from PACE permits
reinstatement into original Medicare fee-for-service or enrollment into
an MA plan through a special election period.
Final rule actions:
This final rule will finalize Sec. 460.52 as published in the 1999
interim final rule.
Section 460.54 Termination Procedures
In Sec. 460.54, we specified termination procedures based on
paragraph (e)(7) of sections 1894 and 1934 of the Act, which provide
that:
The provisions of section 1857(h) of the Act apply to
termination of a PACE program agreement in the same manner as they
apply to a termination of a contract with a M+C organization under Part
C of title XVIII of the Act.
The provisions of section 1857 of the Act authorize
termination of an agreement with an organization based on the
following:
CMS provides the organization with the reasonable
opportunity to develop and implement a corrective action plan to
correct the deficiencies that were the basis of the determination that
cause exists for termination; and
CMS provides the organization with reasonable notice and
opportunity for hearing (including the right to appeal an initial
decision) before terminating the agreement.
However, termination is authorized by section 1857(h)(2) of the Act
without invoking these procedures if we determine that a delay in
termination, would pose an imminent and serious risk to the health of
participants enrolled with the organization.
Comment: A commenter asked what is meant by ``reasonable
opportunity'' in relation to the development and implementation of a
CAP and ``reasonable notice'' for a hearing before terminating the
program agreement.
Response: Under normal circumstances, the PO is allowed 30 days
from the time they receive the written report following a monitoring
review to submit a written response with the CAP to CMS and the SAA. If
the PO is unable to submit a CAP within the 30 day period, they may
request an extension. The determination to permit
[[Page 71262]]
the extension is made based on the particular circumstances at issue.
If participant health and safety is in jeopardy, the monitoring
team will inform the PO before their departure that a quicker response
is required.
Implementation of the CAP is dependent on the intensity and
complexity of the deficiencies identified. Initiation of the CAP should
be as immediate as possible. In the event the deficiency relates to the
health and safety of participants, implementation of the CAP must be
immediate. On the other hand, should the deficiency be related to the
physical facility itself, (for example, an electrical or plumbing
issue) it may take time to retain the appropriate experts to receive a
quote for required construction or repair, prepare and sign a contract
to perform the services, arrange for permits, materials, staff required
and then to have the construction/repair performed.
Comment: A commenter asked how CMS expects to become aware of any
imminent and serious risks to participants, as described in Sec.
460.54(b).
Response: In addition to our usual monitoring procedures, there are
a number of mechanisms in place that could provide CMS and the SAA with
information indicating imminent and serious risk to participants. The
participant's family or caregiver is actively involved in the plan of
care and the PO is required to have a robust grievance and appeals
process. In this manner, we could be directly notified on any concerns
about quality of care. In addition, there may be an ombudsman program
in the State, which could be accessed if there were concerns about
quality of care. POs are also required to report quarterly data
elements for monitoring and financial reports. CMS and the SAA
routinely review the reports, which would provide indications that
there could be issues with patient care.
For example, there is an unexpected shortfall in revenues reported
and a sudden increase in the number of falls. In this case, CMS or the
SAA would follow up with the PO to inquire about the changes in their
patterns, and ensure that participants are receiving adequate care.
As noted above, CMS may terminate an agreement without invoking the
procedures described in Sec. 460.54(a), if CMS determines that a delay
in termination, resulting from compliance with these procedures before
termination, would pose an imminent and serious risk to the health of
participants enrolled with the organization.
POs are also required to inform CMS and the State by e-mail within
24 hours of the occurrence of a ``sentinel event'' (or as soon as a
determination is made that the occurrence may be a sentinel event).
We have defined a sentinel event as an unexpected occurrence that
caused a participant death or serious physical or psychological injury
that included permanent loss of function. We included in this
definition any medical equipment failures that could have caused a
death and all attempted suicides.
The sentinel event policy for PACE can be found at http://www.cms.hhs.gov/PACE/Downloads/sereporting.pdf
.
The purpose of the sentinel event reporting policy is to provide
guidance to the PO regarding their responsibility should a sentinel
event occur. CMS views these events as opportunities to conduct
analyses of the underlying root causes, which will reduce the risk of
recurrence of a similar event. We also note that generally when a
concern or complaint other than a sentinel event is brought to the
attention of CMS or the SAA, fact finding activities are initiated,
which can include but are not limited to a desk review of
documentation, conference calls, or an onsite review, depending upon
the case-specific circumstances.
Lastly, POs can request to have quarterly conference calls with CMS
and the SAA to discuss policy or operational issues. We believe
quarterly calls between the PO, the SAA and CMS are of great benefit in
facilitating more open communications. Quarterly calls foster a good
working relationship that is helpful when CMS or the SAA need to
investigate a concern or complaint they have received.
Final rule actions:
This final rule will finalize Sec. 460.54 as published in the 1999
interim final rule.
Subpart E--PACE Administrative Requirements
The purpose of subpart E is to establish the administrative
requirements for entities applying for participation in the PACE
benefit. In this subpart, we established requirements relating to
organizational structure, the governing body, and program integrity of
the entity, as well as relationships between entities. In addition, we
specified personnel qualifications and on-going training that must be
implemented by the PO for employed and contracted staff, requirements
for contracting services, and oversight of employed and contracted
staff requirements. This section also established requirements related
to physical environment, infection control, transportation services,
dietary services, fiscal soundness, and marketing.
Section 460.60 PACE Organizational Structure
We established Sec. 460.60 to specify the structural requirements
for a PO. As we explained in the preamble to the 1999 interim final
rule, we believe that the requirements specified in Sec. 460.60 are
essential to the PO's ability to ensure the health and safety of the
participants. The performance of certain basic organizational functions
is a minimum condition for an environment in which appropriate care can
occur. We based the organizational structure requirements on Part I of
the Protocol.
We require that the PO have a current organizational chart showing
officials in the PO. The chart for a corporate entity must indicate the
PO's relationship to the corporate board and to any parent, affiliate,
or subsidiary corporate entities. In the 1999 interim final rule, we
required a PO that is planning a change in organizational structure to
notify CMS, the SAA, and its participants, in writing, at least 60 days
before the change takes effect. Further, we required changes in
organizational structure to be approved by CMS and the SAA, and after
approval, to be forwarded to the PO's consumer advisory committee
(described later in this preamble). Finally, in the event of a change
of ownership, we would apply the general provisions described in 42 CFR
422.550.
The Protocol requires that a PO have a project director. In the
1999 interim final rule, we included this requirement, but changed the
term to ``program director'' and further defined the role of this
individual. The PO must have a program director who is responsible for
the oversight and administration of the entity. The program director is
responsible for the effective planning, organization, administration,
and evaluation of the organization's operations. The program director
would also ensure that decisions about medical, social, and supportive
services are not unduly influenced by fiscal managers. The program
director is responsible for ensuring that appropriate personnel perform
their functions within the organization. The program director would
inform employees and contract providers of all organization policies
and procedures. If the PO is part of a larger health system, the
program director would clearly define and inform PO staff (employees
and contractors) of the policies applicable to the PO.
[[Page 71263]]
In the 1999 interim final rule, we also maintained the Protocol's
requirement for a medical director, but we further delineated the
responsibilities of this position. The PO must have a medical director
who is responsible for the delivery of participant care, clinical
outcomes, and the implementation and oversight of the QAPI program.
Thus, the medical director is responsible for achieving the best
possible clinical outcomes for all participants. Under this
requirement, we would expect the medical director to use the
organization's data to demonstrate internal improvements in outcomes
over time.
The 1999 interim final rule established Sec. 460.60 that required
that the PACE program director and the medical director be employees of
the PO. In order to allow for contracting of the PACE program director
and medical director, in the 2002 interim final rule, we amended Sec.
460.60(b) and (c) to require that the PO employ these staff members
directly or have contracts for these staff that meet the contracting
requirements specified in Sec. 460.70.
Comment: We received several comments related to the possibility of
PACE being operated as a for-profit entity. Commenters provided
examples of organizations that are unable to participate in PACE due to
the requirement that POs maintain non-profit status.
Response: We note that sections 1894(a)(3)(B) and 1934(a)(3)(B) of
the Act allow private, for-profit entities to participate in PACE,
subject to a demonstration waiver described in section 1894(h) of the
Act. Should for-profit entities wish to participate in PACE, they
should apply for a demonstration waiver under section 1894(h) of the
Act. While participating in the PACE for-profit demonstration, they
must meet all requirements set forth in PACE regulations. We explicitly
stated that we would expect the PO to retain all key administrative
functions including marketing and enrollment, quality assurance and
program improvement, and contracting for institutional providers and
other key staff.
Comment: We received conflicting opinions regarding whether to
allow flexibility in contracting for various members of the IDT, the
program director, the medical director, as well as PACE center
services. The majority of commenters advocated for flexibility in order
to be responsive to the needs of individual POs. However, some
commenters expressed concern that by allowing the PO to contract for
the medical director and program director, the PACE model would lose
dedicated management. This concern was submitted in response to both
the 1999 interim final rule and the amended 2002 interim final rule.
Response: We note that in the 1999 interim final rule, we retained
the Protocol's requirement that the program director and medical
director be employees of the PO.
However, in response to the large number of public comments
received on Sec. 460.60 of the 1999 interim final rule, we revised the
regulatory requirements in the 2002 interim final rule to allow POs the
flexibility to contract for all members of the IDT, the program
director, and medical director as well as all PACE center services. We
also expanded Sec. 460.70 to include additional contract requirements.
In response to the comment about losing dedicated management
because of contracting for the program director and medical director,
we do not believe that a personal commitment to the PACE model is
related to employment status. We continue to believe that anyone,
contractor or employee, PCA, or director can believe in the PACE
philosophy and wish to provide care through this model. Therefore, we
are not amending this requirement in this final rule.
Comment: Several commenters stated that, as currently written, the
regulatory requirement assigns responsibility for QAPI to both the
governing body and the medical director. They requested confirmation
that the governing body's responsibility is to affect a program-wide
approach to quality, ensuring alignment of unit activities with overall
objectives, whereas the responsibilities of the medical director would
be more narrowly focused on clinical aspects of care.
Response: The commenters are correct. Although QAPI activities and
objectives affect every staff member and contractor, the governing body
has overall responsibility for the QAPI program and the medical
director has overall clinical responsibility.
Comment: In response to our solicitation for comment regarding the
extent to which changes in organizational structure are important to
participants, we received a number of suggestions that we revise the
requirement to notify CMS, or CMS and the SAA, of changes in
organizational structure. Commenters were consistent in their
recommendations that notification should only be required for a change
in ownership, governing board, or delivery system, focusing on those
changes that significantly impact service delivery.
All commenters recommended deleting the requirement to report
changes in staffing. Several commenters requested that we clarify which
changes in organizational structure require notifying CMS and the SAA
because it appeared that any change of job title or the creation of a
position or unit within the PO would warrant prior approval by CMS and
the SAA. It was also noted that various staffing changes and shifts in
reporting relationships can be implemented seamlessly with no
disruption in service to the participants.
Approval of organizational changes was another topic that elicited
comments. Some commenters suggested that the requirements regarding
approval by CMS and the SAA of changes in organizational structure be
deleted because micromanagement could impede a PO's ability to
proactively adjust its structure to meet prevailing concerns as well as
to respond to the needs of enrollees. Other commenters thought that
advance approval by the SAA should be sufficient.
There were also a number of recommendations of timeframes for
submitting advance notification. Suggestions ranged from not informing
CMS at all to 60 days, which would include time for CMS and the SAA to
review and approve the proposed organizational change. If CMS and the
SAA did not respond within the 60-day period, the PO's organizational
changes would be deemed approved. Some commenters suggested we follow
the State Medicaid regulations of some States, which require
notification at least 14 calendar days before the effective date of the
change. Another commenter suggested that we require prior notification
and approval of changes in ownership and only require notification of
other changes in clinical or administrative structure.
One commenter recommended the regulatory language specify that the
PO is responsible for forwarding information relating to changes in
organizational structure to the consumer advisory committee.
Several commenters agreed that changes that impact the day-to-day
experience of the participants or alter their normal patterns of
interaction with the PACE program should be communicated to
participants in sufficient time for them to adjust to the changes, and
that this notification should be the responsibility of the PO.
Response: Comments on this section address three separate
requirements, the requirement for CMS and the SAA to be notified in
writing at least 60 days before a change in organizational
[[Page 71264]]
structure, the requirement that CMS and the SAA approve changes in
organizational structure, and the requirement that changes in
organizational structure approved by CMS and the SAA be forwarded to
the consumer advisory committee.
We established this section in the 1999 interim final rule to
require disclosure of organizational changes that affect the
philosophy, mission, and operations of the PO and impact care delivery
to participants. At that time, we believed that any change in
ownership, relationships to another corporate board and to any parent,
affiliate, or subsidiary corporate entities, the PACE governing body,
its officials, program director, and medical director could result in a
substantial impact on the participants and their care. However, it was
not our intent to require the PO 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.
The 1999 interim final rule required that POs planning to change
their organizational structure must notify CMS and the SAA, in writing,
at least 60 days before the change takes place. This timeframe was to
allow sufficient time for CMS and the SAA to approve or deny the
proposed change. We agree with the commenters that notification of 60
days before implementing a change in organizational structure is
unnecessary.
Therefore, in response to the numerous comments relating to the
disclosure of changes in organizational structure, in this final rule
we are amending this section to require any PO who is planning a change
in organizational structure to notify CMS and the SAA, in writing, 14
days before the change takes place. We believe that 14 days advance
notice provides an adequate timeframe for CMS and the SAA to review the
changes, and is consistent with some States Medicaid notification
requirements.
We are also deleting the requirement that changes in organizational
structure must be approved in advance by CMS and the SAA. We agree with
the commenters that POs have the ability to make such business
decisions based on their individual circumstances. However, as CMS and
the SAA are responsible for the health care provided to participants,
requiring notification will allow CMS and the SAA to monitor whether
the change is having a substantial impact on the participants or their
care.
In the 1999 interim final rule, the PO was required to forward the
CMS and SAA approval of their organizational changes to the consumer
advisory committee. As changes will no longer need to be approved by
CMS and the SAA we believe the requirement to forward the CMS and SAA
approvals to the consumer advisory committee is now unnecessary and
should also be removed.
We reiterate that in the event of a change of ownership, CMS would
apply the general provisions described in Sec. 422.550 (Effect of
change of ownership or leasing of facilities during term of contract.)
Comment: Another commenter questioned whether two organizations
wishing to develop PACE as a cooperative venture must establish a
separate and distinct entity to comply with all requirements and
provisions of the regulations. The commenter believed this approach
would impede PACE development by restricting opportunities for entities
to jointly approach PACE development. This commenter also requested
clarification of the regulations to clearly permit flexibility within
the provider community, including the ability for the PO to contract
for the PACE center services.
Response: We view this comment as addressing two different issues.
First, in response to whether a separate and distinct entity would need
to be established if two organizations developed a cooperative venture,
the organizations involved would need to establish a separate and
distinct entity to be the PO that is responsible for complying with all
requirements and provisions of the regulations. Because the PO signs a
three-way program agreement and is the entity responsible for the
management of the organization, we believe that this needs to be a
single entity. The PO is the responsible entity for assuming full
financial risk, administration activities, and comprehensive
coordinated participant care. We do not believe these responsibilities
can be split up and still maintained under a single entity. In our
experience, this requirement has not unduly restricted organizations
from developing a PO through a cooperative agreement.
The second issue is whether the cooperative venture arrangement
would be precluded from using subcontractors. As long as the
arrangements designated a PO, as noted above, the 2002 interim final
rule provided flexibility to allow for contracting out all required
PACE services as well as the PACE center services, providing that the
PO retains all key administrative functions including marketing,
enrollment, QAPI, and contracting for institutional providers and other
key staff, as well as retaining ultimate responsibility for oversight
of all direct participant care.
Final rule actions:
In this final rule, we are changing the requirements related to
changes in organizational structure by:
Requiring 14-days notice before making organizational
changes;
No longer requiring CMS and SAA approval; and
No longer requiring the PO to forward the CMS approval to
the consumer advisory committee.
Section 460.62 Governing Body
In the 1999 interim final rule, we established the requirements and
responsibilities of the governing body that is legally and fiscally
responsible for the administration of the PO. We left the specific
approach to administration of the PO to the discretion of the governing
body, reflecting our goal of promoting the effective management of the
organization without limiting flexibility in determining how to achieve
that goal.
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, the primary requirement is that an
identifiable governing body, or designated person(s) so functioning,
have full legal authority and responsibility for the governance and
operation of the organization, the development of policies consistent
with the mission, the management and provision of all services
(including the management of contractors), fiscal operations, and the
development of policies on participant health and safety. Also, the
governing body will establish personnel policies and contract
provisions with respect to employees or contractors with patient care
responsibilities giving adequate notice before leaving the PO's
network. These provisions would be intended to avoid disruptions in
care and permit orderly transition of responsibilities.
We included a requirement that the governing body be responsible
for the QAPI program. The purpose of this requirement is to link the
development, implementation, and coordination of the ongoing QAPI
program with all aspects of the PACE program. We believe this
requirement will stimulate an aggressive effort by the organization to
identify and use the best available practices for all participants. As
discussed in the section on the QAPI program, the PO has the
flexibility to design its own quality improvement program.
Consistent with the Protocol, we also included a requirement that
the PO
[[Page 71265]]
must ensure community representation on issues related to participant
care. This may be achieved by having a community representative on the
governing body. In addition, the PO must establish a consumer advisory
committee to provide advice to the governing body on matters of concern
to participants. As we indicated in the 1999 interim final rule,
consumer participation through advisory committees is a well-accepted
community organization vehicle to maximize the involvement of
participants in a program designed to serve them. With the use of such
a committee, the governing body will have the benefit of participant
input, including information on quality of care issues. Participants
also are likely to feel a greater stake in the operation of the
program. In order to ensure appropriate representation, participants
and representatives of participants must constitute a majority of the
membership of this committee. One specific duty of the participant
advisory committee is to receive information from the governing body to
be disseminated to participants.
Comment: We received several comments regarding community
representation on the governing body. Commenters noted that a single
consumer representative did not have a sufficient impact on health
programs when the governing body is made up almost entirely of provider
representatives. The commenters requested that the regulations be
changed to require at least one-third of the governing body to be
community representatives who are Medicare or Medicaid beneficiaries or
are designated by organizations that advocate for these persons. In
addition, they recommended that the governing body should include at
least one PACE program participant and one family member of a
participant. They also requested that we include a requirement that the
PO provide information to CMS and the SAA to ensure compliance with
community representation on the governing body.
One commenter stated that because POs are small programs, they may
find it difficult to comply with the requirement of a consumer advisory
committee in that it may be difficult to get enough consumers or their
representatives to serve on an ongoing committee. They suggested
instead that POs be allowed to request a waiver of this requirement,
where they can demonstrate that sufficient opportunities exist for
obtaining input from consumers and their representatives on matters of
concern to participants.
Response: In response to these commenters, we are revising the
regulation by changing the names and focus of the ``consumer advisory
committee'' to the ``participant advisory committee'' and the
``community representative'' to the ``participant representative.'' We
are also adding a definition of ``participant representative,'' which
defines the responsibilities of this individual. We disagree with the
commenters who indicated that the governing body needs to have a
greater number of consumer representatives. By changing the names and
objectives of the consumer committee and community representative, we
anticipate participants and their representatives becoming more
involved in topics that impact their care. We believe that the more
participants feel they are stakeholders, the more involved they will be
in their PO.
The interactive nature of the PACE model is such that participants
are encouraged to be involved and voice their opinions. Therefore, we
expect the governing body to be more receptive to participant input
presented by the participant representative. This collaborative
relationship is expected to achieve higher quality of care and higher
participant satisfaction. Therefore, we would not be inclined to waive
this requirement without significant justification on the part of the
PO.
We do not specify how large the participant advisory committee must
be, but we expect it to be representative of the size and population of
the PO's participants.
We also understand that there may be topics or times when the
governing body would believe that it is inappropriate for participants
to attend the entire governing body meeting. When this occurs, we would
expect the meeting agenda to be arranged such that the participant
representative could attend a portion of the meeting to present
participant issues.
We also disagree with the commenter that requested we require POs
to submit information to ensure compliance with community
representation on the governing body. Minutes and other official
documents pertaining to governing body meetings must be available for
review by CMS and the SAA during onsite visits and at the request of
either agency.
Final rule action:
In this final rule we are:
Changing the names and responsibilities of the consumer
advisory committee, community representative to the participant
advisory committee, and participant representative; and
Rearranging the order of the requirements.
Section 460.64 Personnel Qualifications for Staff With Direct
Participant Care Contact
We indicated in the 1999 interim final rule that although the
Protocol does not specify personnel requirements for the various staff
employed by or under contract with the PO, we believe that certain
minimum standards must be met in order to ensure quality of care for
the frail elderly population being served. To this end, we established
Sec. 460.64.
Our approach to personnel qualifications in the 1999 interim final
rule followed principles described in a March 10, 1997 Federal Register
publication proposing changes to the COPs for home health agencies (62
FR 11022). This is a flexible approach, which relies on State
requirements as much as possible.
The personnel qualifications fall into three categories: (1)
Personnel for whom there are statutory qualifications; (2) personnel
for whom all States have licensure, certification, or registration
requirements; and (3) personnel for whom we have specified requirements
if the State does not have licensure, certification, or registration
requirements.
Category 1: This category consists of personnel for whom the Act
contains qualifications, which in Sec. 460.64(b) pertains specifically
to physicians. Section 1861(r) of the Act defines a physician as a
doctor of medicine or osteopathy, legally authorized to practice
medicine and surgery by the State in which that function or action is
performed, or certain other practitioners for limited purposes. We
adopted the definition as reflected in regulations at 42 CFR 410.20.
In addition, to reflect the key role of the PCP in the PACE model,
we required the PCP to have a minimum of 1 year's experience in working
with a frail or elderly population.
Category 2: For this category of personnel qualifications, we
deferred to State law. We specified that all staff (employee or
contractor) of the PO must meet applicable State requirements. That is,
they must be legally authorized (currently licensed or, if applicable,
certified or registered) to practice in the State in which they perform
the function or action and must act within the scope of their authority
to practice. For example, to practice nursing, every registered nurse
in the State must be licensed and practice within their State's scope
of practice authority.
[[Page 71266]]
Category 3: This category of personnel qualifications includes
certain professions for which not all States had licensure,
certification, or registration requirements. Our intention was that if
a State has licensure, certification, or registration requirements for
a professional listed in this section, then the State qualifications
would apply. The following requirements would only apply to those
personnel in Category 3 when the State they practice in does not have
licensure, certification, or registration requirements.
After reviewing the personnel requirements of other Medicare and
Medicaid providers that serve populations similar to PACE participants
(for example, home health agencies, nursing facilities), in the 1999
interim final rule, we established personnel requirements for POs that
were as consistent as possible with those applicable to other Medicare
providers. If a State does not have licensure, certification, or
registration requirements applicable to the following professions, then
the qualifications specified below apply.
We required that the registered nurse be a graduate of a school of
professional nursing and have a minimum of 1 year's experience working
with a frail or elderly population.
We required that the social worker (1) have a Master's degree in
social work from an accredited school of social work; and (2) have a
minimum of 1 year's experience working with a frail or elderly
population.
We required that the physical therapist (1) be a graduate of a
physical therapy curriculum approved by the American Physical Therapy
Association, the Committee on Allied Health Education and Accreditation
of the American Medical Association, or the Council on Medical
Education of the American Medical Association and the American Physical
Therapy Association or other equivalent organizations approved by CMS;
and (2) have a minimum of 1 year's experience working with a frail or
elderly population.
We required that the occupational therapist (1) be a graduate of an
occupational therapy curriculum accredited jointly by the Committee on
Allied Health Education and Accreditation of the American Medical
Association and the American Occupational Therapy Association; (2) be
eligible for the National Registration Examination of the American
Occupational Therapy Association; (3) have 2 years of appropriate
experience as an occupational therapist and have achieved a
satisfactory grade on a proficiency examination conducted, approved, or
sponsored by the U.S. Public Health Service, except that this
determination of proficiency does not apply with respect to persons
initially licensed by a State or seeking initial qualification as an
occupational therapist after December 31, 1977; and (4) have a minimum
of 1 year's experience working with a frail or elderly population.
We required that the recreation therapist or activities coordinator
have 2 years experience in a social or recreational program providing
and coordinating services for a frail or elderly population within the
last 5 years, one of which was full-time in a patient activities
program in a health care setting.
We required that the dietitian (1) have a baccalaureate or advanced
degree from an accredited college with major studies in food and
nutrition or dietetics; and (2) have a minimum of 1 year's experience
working with a frail or elderly population.
We required that all PACE center drivers (1) have a valid driver's
license to operate a van or bus in the State of operation; and (2) be
capable of and experienced in transporting individuals with special
mobility needs.
We did not define personnel requirements for the PACE center
manager or the home care coordinator. We gave POs the flexibility to
determine who is best suited to fill these positions as each PACE
center may have different needs. Because the home care coordinator is
responsible for acting as the liaison between the IDT and the home care
providers, she or he should possess good leadership and communication
skills. In addition, the home care coordinator should be able to
identify and understand participants' medical and social needs in order
to evaluate the home care needs of participants. As a result, we
indicated that a registered nurse or social worker would be a good
candidate to fill this position. However, it was not our intention to
deter the PO from considering another candidate with appropriate
qualifications because they were neither a registered nurse nor a
social worker.
We did not impose personnel requirements for personal care
attendants (PCAs) as these individuals will primarily be providing non-
skilled, personal care services (such as bathing, toileting, and
transferring). In the 1999 interim final rule, we solicited comments on
whether to include specific personnel requirements for PCAs. It is
important that PCAs possess certain basic skills necessary to provide
quality care to PACE participants. Thus, we required POs to implement a
training program for each PCA to ensure that they exhibit competency in
basic skills in personal care services. Although we did not define the
parameters of the training program, we indicated the training program
should include maintenance of a clean, safe, and healthy environment;
appropriate and safe techniques in personal hygiene and grooming; safe
transfer techniques and ambulation; reading and recording temperature,
pulse, and respiration; and observation, reporting, and documentation
of patient status and the care or service furnished. In addition, the
training program developed for each PCA must include other elements
consistent with their assigned duties for specific participants.
Finally, we acknowledged that PCAs in the home environment may
furnish not only personal care services, but also home care services.
Therefore, when the participant needs home care services, the PO must
ensure that it has qualified staff (either employees or contractors)
that meet the competency requirements established by the PO and
approved by CMS for home care aides to furnish these services.
We received a large number of comments regarding personnel
requirements.
Comment: Numerous commenters were concerned that the 1999 interim
final rule did not appropriately emphasize that State licensure laws,
certification, and registration requirements take precedence over the
requirements specified in the 1999 interim final rule which may lead to
creating unnecessary and unintended conflicts between the PACE
regulation and State requirements.
Commenters believe establishment of provider qualifications is
traditionally a State function. The commenters indicated it would be
sufficient for the regulation to specify that individuals providing
PACE services meet applicable State requirements. It was suggested that
States be permitted to define a combination of education and experience
qualifications and that CMS grant a waiver of these educational and
experience requirements if there are staff development procedures in
place for those waived individuals, and where the PO's decision to hire
staff without the required qualifications will not adversely impact the
quality of care. Commenters also recommended that services that do not
require State licensure or certification not be subject to additional
requirements in Federal regulations.
[[Page 71267]]
There was also concern that the requirements set forth in the 1999
interim final rule would be adopted as minimum Federal requirements,
regardless of whether State licensure, certification, or other
registration exists. If this adoption takes place, the PO's burden of
locating adequate numbers of staff will be magnified. Recommendations
ranged from removing personnel qualification requirements to allowing
health professionals to be permitted to minimally meet State
requirements for medical professional practice.
Response: In establishing personnel qualifications, we did not
intend to usurp the State's authority. Throughout the regulation, we
have indicated that POs must meet all Federal, State, and local
regulations and laws. We believe that the present qualifications
established for PACE set forth the necessary qualifications to ensure
the health and safety of this frail elderly population. Should State
regulations be more stringent than those of this regulation, then the
PO must meet the State requirements as well.
We believe there was considerable confusion and misunderstanding of
the personnel qualification requirements published in the 1999 interim
final rule. In that rule, we based personnel qualifications on whether
the State had licensure, certification, or registration requirements
for a profession. In States where there was no State licensure,
certification, or registration, we required minimum educational
qualifications for each profession.
In response to the comments and to reduce the confusion over
personnel qualifications, we are amending the title of Sec. 460.64 and
the personnel qualifications to clarify that the qualifications apply
to all PACE staff with direct participant contact, to ensure the health
and safety of the participants. We are accomplishing this by
consolidating and clarifying requirements in Sec. 460.64(a) that were
previously located in other sections of the PACE regulations and by
deleting paragraph Sec. 460.64(c).
We are amending the title of Sec. 460.64 and the personnel
qualifications to clarify that the qualifications apply to all PACE
staff with direct participant contact and decrease the burden in hiring
and contracting for adequate numbers of staff members. We are removing
the educational requirements and other qualifications at Sec.
460.64(c) that we established where no States required licensure,
certification or registration.
We believe that it is essential that all professionals be legally
authorized (licensed, certified or registered) to practice in the State
in which they practice if the State has established requirements. All
States have licensed, certified or registered requirements for
physicians, registered nurses, social workers, physical therapists,
occupational therapists, and dietitians. All other direct care
providers, must meet the State requirements that authorize them to
practice in their State. We believe that all professions must act
within the scope of their authorized practice guidelines. Each
profession has established guidelines that define the services that may
be performed within the scope of the minimum level of knowledge and
training for each professional level. For example, the scope of
practice is different for licensed practical nurses, registered nurses,
clinical nurse specialist and nurse practitioners. Regardless, each
nurse is expected to practice within his or her respective level.
In the 1999 interim final rule, each profession listed in Sec.
460.64 (b) and (c) was required to have one year of experience working
with the frail or elderly population (except for the Recreational
Therapist/Activity Coordinator who was required to have two-years
experience). The PACE population is comprised of the frail elderly who
need to be cared for by staff that has the specific training and
experience to understand the complexities and differences in geriatric
patients. It is essential for staff to have the knowledge of geriatric
practices and skill to work with these individuals. Experienced staff
will be conscious that when dealing with the frail or elderly they need
to be gentler, more patient and observant than with a healthy younger
person. For example, a frail elderly person's skin is more likely to
tear, a bone is more likely to break, a joint more likely to be stiff
and painful, and medications are more likely to affect them differently
with a potentially wider variety of adverse reactions. Therefore, we
believe that all personnel having direct participant contact must have
a minimum of one year of experience working with a frail or elderly
population and are adding this requirement to the general requirements
in paragraph (a)(3).
In the 2002 interim final rule, we established requirements for the
oversight of direct participant care (Sec. 460.71), which included
requiring the PO to ensure all employees and contracted staff
furnishing direct care to participants demonstrated the skills
necessary for performance of their position. We also required the PO to
establish a competency evaluation program, which has to be evidenced as
completed before an individual may perform participant care. We believe
that demonstrating competency prior to performing direct participant
care is essential to ensure the delivery of safe care. Therefore, we
are adding competency as paragraph (a)(4) to the general personnel
qualification requirements for staff performing direct participant
care.
Section 460.71, Oversight of direct participant care required the
PO to develop a program to ensure all staff furnishing direct
participant care was free of communicable disease. We believe this is
even more important with a frail elderly population considering their
complex medical conditions and increased susceptibility. It is standard
practice in the health care industry that an individual must be cleared
as free of communicable disease prior to employment. We are therefore
amending Sec. 460.64 to require that all PACE staff with direct
participant contact be medically cleared of communicable disease and
have all immunizations up-to-date before engaging in direct contact
with participants.
For those professions where not all States have licensure laws,
State certification or registration requirements, specifically
Recreation therapist/Activity coordinator and drivers, we believe that
all States have minimum requirements to ensure that services are
provided safely. For example, States require a special class of
driver's license to transport people for money. In addition to the
general personnel qualifications, we expect that any such State
qualification requirements be met.
Comment: A large number of commenters opposed the Federally-defined
qualifications for the physician which were not included in the
Protocol.
Response: As stated above, section 1861(r) of the Act generally
defines a physician and is reflected in 42 CFR 410.20, which defines
physician, physician services and the limitations on services under the
Medicare program. As all physicians participating in the Medicare
program must meet Sec. 410.20, we require that all physicians
participating in the PACE program meet the qualifications of Sec.
410.20, and also meet the general qualification requirements as stated
in Sec. 460.64(a).
To emphasize the key role of the PCP in the PACE model, we require
the PACE PCPs to have one-year's experience working with a frail or
elderly population to ensure their knowledge and skill with geriatric
[[Page 71268]]
patients. We require they demonstrate their competency prior to
employment or contract. The PO must ascertain the competency of
prospective physicians through the PO's established competency program.
We also require the PCPs be cleared of communicable diseases to ensure
that infectious diseases are not passed by the close physical proximity
necessary to treat participants.
Comment: We received numerous comments related to specific staffing
requirements. A large number of commenters opposed the detailed
personnel requirements in the 1999 interim final rule, stating that
they unnecessarily limited flexibility in the development and
implementation of PACE programs.
The commenters recommended we require all POs establish an adequate
staff development process to ensure that all staff members understand
the unique needs of the PACE population. However, commenters wanted the
States to have the option to waive these requirements. They also
recommended we require that the PO also consider factors such as
languages spoken and cultural sensitivity.
Response: To the extent the State has licensure, certification, or
registration requirements, these apply and not the requirements in
Sec. 460.64(c)(1).
These qualification requirements, as noted in the 1999 interim
final rule, were to be the regulatory foundation of PACE as a new
Medicare benefit and State plan option. We believe that in clarifying
the 1999 interim final rule in the 2002 interim final rule, permitting
contracting of personnel and providing a waiver process to assist POs
where they are unable to comply with regulations, we have addressed and
resolved commenters concerns related to limited flexibility and
personnel qualifications when no State licensure, certification, or
registration laws exist.
We believe we addressed the recommendation regarding the
establishment of an adequate staff development process to ensure all
staff members understand the unique needs of the PACE population in the
2002 interim final rule, which required that all POs develop a
competency evaluation program that identify those skills, knowledge and
abilities that must be demonstrated by direct participant staff.
In response to the recommendation that we require that the
PO also consider factors such as languages spoken and cultural
sensitivity, we believe that each PO understands the cultural diversity
of their particular population. To be in compliance with the
requirements of participant rights they must provide for language and
cultural diversity, we expect that POs will take these important areas
into consideration when hiring staff. As a result, we do not believe
that it is necessary to repeat the requirement in this section of the
regulation.
Final rule actions:
In this final rule we are making revisions to Sec. 460.64,
including:
Amending the title to ``Personnel qualifications for staff
with direct participant contact,'' to clarify that the qualifications
apply to all PACE staff with direct participant contact.
Amending paragraph (a) by adding (1) one year of
experience working with a frail or elderly population, (2) meeting
standardized competencies prior to providing participant care, and (3)
being medically cleared of communicable diseases and have all
immunizations up-to-date before engaging in direct participant contact.
Deleting paragraph (c).
Section 460.66 Training
In Sec. 460.66, we require the PO to provide ongoing training to
maintain and improve the skills and knowledge of each staff member with
respect to their specific duties. The training should result in the
staff's continued ability to demonstrate the skills necessary for the
performance of their specific positions or job duties. The ability of
the PO to ensure patient safety and to achieve patient-specific
performance measures necessitates competent staff. We believe there is
a direct relationship between the quality of an organization's staff
and patient well-being. The training requirement is intended to ensure
that all staff are able to adapt to new or changing job demands. The PO
is responsible for ensuring that individuals are educated and trained
for their specific jobs. The individuals would continue to be
responsible for their own professional education and for any continuing
education needed to maintain licensure or professional certification
unless the organization chooses to assume this responsibility. In
addition, we included a specific training requirement for PCAs as
described in Sec. 460.66(b).
Comment: Commenters' opinions regarding the training requirements
varied, with recommendations that the SAA should be authorized to
establish a minimum training curriculum, and criticisms that the PO
should be permitted to utilize training from other sources available in
the community.
We were also asked to clarify whether PCAs, who have demonstrated
competency in furnishing personal care services through certification
as nursing assistants or home health aides, are required to receive
redundant or additional training unless it is deemed necessary by the
PO.
Response: We are retaining the requirement that POs provide ongoing
training to maintain and improve the skills and knowledge of each staff
member with respect to their specific duties in order to ensure that
PACE participants receive the highest quality care possible. We believe
POs have the ultimate responsibility for all care provided to their
participants and, therefore, it is in the best interest of PACE
participants and the PO that they provide training specific to their
participant population. Ongoing in-service training for all staff will
ensure that skills remain current and any detrimental practices are
caught and rectified as early as possible.
In this final rule, we wish to clarify Sec. 460.66(b), which
requires the PO to develop a training program for each PCA in order to
establish the individual's baseline competency in furnishing personal
care services, including specialized skills associated with the
specific care needs of individual participants. We intend that the PO
evaluate the skills of each newly hired PCA and develop a training
program specific to the competencies or deficiencies that they
demonstrate. This training must be performed by qualified
professionals. Again, the intent of this training requirement is to
identify and resolve any knowledge or skill deficits of each person and
educate them to a level where they can demonstrate competency in all
basic skills required to provide personal care services. This
clarification is intended to prevent redundant training of skills
already displayed by PCAs and to reduce the burden on PO resources.
Final rule actions:
In this final rule, we are clarifying the requirement in Sec.
460.66(b) that POs develop a training program for PCAs where there are
competency deficits and that personal care attendants must exhibit
competency before performing personal care services independent of
supervision.
Section 460.68 Program Integrity
We established Sec. 460.68, based on Part I, section E of the
Protocol to guard against potential conflicts of interest or other
program integrity problems for POs. An organization must not have any
staff (employees or contractors) who have been convicted of a criminal
offense related to their involvement in Medicaid, Medicare, other
health insurance or health care programs, or
[[Page 71269]]
any social service program under Title XX of the Act. We expanded this
provision from the Protocol in order to prevent an organization from
employing any staff who have been excluded from participation in
Medicare or Medicaid, or employing staff, in any capacity, where the
employee's contact with participants would pose a potential risk
because the individual had been convicted of physical, sexual, drug, or
alcohol abuse. In addition, members of the PO's governing body, and
their family members, are prohibited from having a direct or indirect
interest in contracts with the PO. Examples of indirect interests are
holdings in the name of a spouse, dependent child, or other relative
who resides with the member of the governing body. These requirements
are intended to protect participants by preventing fraud under Medicare
and Medicaid by members of the governing body with conflicts of
interest from inappropriately influencing PO decisions.
We recognize that in rural, Tribal, or urban Indian communities
there may be limited availability of individuals willing to and capable
of performing key functions for the PO. Therefore, the 1999 interim
final rule provided for CMS and the SAA to grant a waiver of the
conflict of interest requirement for POs in rural or tribal areas to
allow individuals who have a direct or indirect interest in a contract
or the provision of services to the PO to recuse themselves from
decisions directly or indirectly affecting those interests, rather than
barring them entirely from serving on the PO's governing body or
serving as directors, officers, partners, employees, or consultants of
the PO.
We also included a requirement that the PO must have a process to
gather information on program integrity issues and respond to any
request from CMS within a reasonable amount of time.
As discussed previously, in the 2002 interim final rule, we
established a process for submission and approval of waiver requests
and deleted Sec. 460.68(c) that limited waivers to direct or indirect
interest in contracts of rural and Tribal organizations. Although we
deleted Sec. 460.68(c), we continue to recognize the special need for
flexibility in rural and Tribal areas, and remain committed to allowing
waivers to promote PACE in medically underserved areas. We also remain
committed to working with rural and Tribal communities to help them
address the challenges of developing successful PACE programs.
Organizations that seek waiver of these or any other regulatory
requirements would follow the requirements specified in Sec. 460.26.
Comment: We received several comments regarding program integrity.
Commenters requested that we permit the PO the discretion to determine
whether an individual's past convictions (which vary greatly in type
and severity) would pose a serious threat to PACE participants and
suggested modifications to Sec. 460.68(a)(3).
Response: We believe our current policy is consistent with Medicare
policy related to other provider types and do not agree that the threat
posed by an individual's past convictions should be left to the
discretion of the PO. PACE participants are the most frail and
vulnerable members of the community, and it is their right to expect
care that is free from the risk of harm by their caregivers. Therefore,
it is the responsibility of Medicare, Medicaid, and the PO to ensure
that every individual hired to provide care to PACE participants poses
the least risk possible. We believe that facilitating contact with
individuals who have a prior conviction for physical, sexual, drug or
alcohol abuse increases the potential risk to the PACE participants.
Comment: One commenter recommended that conflict of interest
disclosure regulations apply to the program director, medical director,
and the contractor liaison. This commenter also recommended requiring
disclosure of conflicts of interest to the SAA. Another commenter
recommended the disclosure requirement also apply to the SAA.
Response: We discuss the SAA's role with regard to conflict of
interest in this section. However, as the program director, medical
director, contractor liaison, and the SAA are not on the governing body
and have no voting responsibility, we do not think they are in a
position to unduly influence PO decisions. Therefore, we do not believe
it is necessary to amend the program integrity requirements to include
them. We note that Sec. 460.68 does not preclude a PO from developing
disclosure requirements for other staff.
Comment: Two commenters requested we clarify whether the regulatory
intent of Sec. 460.68(b) is to limit contracting with related
organizations or just related individuals, as many providers establish
related corporations which provide services to participants and which
were not prohibited in the PACE demonstration program.
Response: The intent of this requirement was to limit an unfair
advantage that might be gained by any member of the governing body, or
their family member, who would have a direct or indirect interest in an
entity contracting with the PO for items or services.
We acknowledge that it is quite common for a PO to be part of or
have a relationship with a larger entity. Consistent with Sec.
460.60(d) and Chapter 1, Section VII of the PACE provider application,
the POs' relationship to the corporate board and to any parent,
affiliate, or subsidiary corporate entity must be described in the
provider application under the requirements for organizational
structure. In this type arrangement it would be customary to contract
for services with other entities within the system. As these are
entity-to-entity arrangements and no individual would personally
benefit, these kinds of common business practices do not give rise to
the type of conflict of interest contemplated under Sec. 460.68(b).
Since implementation of the 2002 interim final rule, we have also
received numerous requests for waiver of this section of the rule.
These waivers have been approved as general organization-wide waivers
contingent upon the PO developing policies and procedures for: (1) Full
disclosure to the governing body of the direct or indirect conflict or
potential conflict of interest of the member or an immediate family
member related to the conflict; (2) recusal of voting, discussions,
negotiations or any activity that would directly or indirectly affect
the interest of the PO; and (3) inclusion of the disclosure and recusal
actions in official records and that are readily accessible to CMS and
the SAA.
In response to commenters' requests, and based on our experience
with reviewing waiver requests relating to conflicts of interest
procedures, we are amending Sec. 460.68(b) to clarify our requirements
for managing conflicts of interest that may involve members of the
governing body or any immediate family members. We are requiring that
POs establish policies and procedures for handling such conflicts of
interest, that members of the governing body must disclose any such
conflicts, and that members must recuse themselves from discussing,
negotiating, or voting on any matter that involves an inappropriate
conflict of interest.
To illustrate, we believe the following is a conflict of interest
of an immediate family member: The wife of a board member owns a supply
company which is the only one in the area that provides institutional
laundry services, so the PO has no option but to contract with this
company. The governing body member must make full disclosure of the
situation to the body, and recuse themselves when the contract
[[Page 71270]]
negotiations are in progress as well as when voting on the contract
occurs.
In response to the comments related to the SAA, we do not believe
it is appropriate for CMS to impose conflict of interest restrictions
on the SAA as they are not on the PO's governing body. Our concern is
that decisions made by the governing body could be made specifically
for the financial benefit of certain members of the governing body or
their immediate family members.
All disclosure and recusal information must be recorded in the
governing body's official records, which must be available for CMS and
SAA review. CMS and SAA are both authorized to review this information,
which can be accomplished during on-site monitoring and survey
activities, or by requesting the information from the PO. Additionally,
if a conflict exists at the time a provider submits their PACE provider
application, we expect the PO to disclose the conflict as part of the
application.
Comment: One commenter asked if the conflict of interest
requirements may be waived in rural, Tribal and urban Indian
communities. The commenter also asked if those areas have been
designated eligible for conflict of interest waivers, and if so, they
requested that the information be shared with the States.
Response: The 1999 interim final rule provided for a waiver of
conflict of interest in rural, Tribal, and urban Indian communities. As
a result of expanding waiver flexibility to all POs in accordance with
section 903 of BIPA, that specific waiver authority, located in Sec.
460.68(c), was deleted in the 2002 interim final rule. We established
Sec. 460.26 to implement the expanded waiver process. As previously
noted, POs will now be required to have written policies and procedures
in the event of a conflict of interest, and, therefore, waiver of
conflict of interest will not be necessary.
Comment: Two commenters addressed conflict of interest disclosure
related to the SAA. One commenter asked whether States have the
responsibility to ensure the disclosure requirement is met.
Response: The SAA is not delegated the responsibility of ensuring
that conflicts of interests are disclosed. The regulation does not
require full disclosure to CMS or the SAA, but the PO must be able to
provide documentation should CMS or the SAA request it.
Final rule actions:
In this final rule, we are providing for disclosure and recusal in
the event of a conflict of interest of a member of the PO's governing
body or their immediate family member(s).
Section 460.70 Contracted Services
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 each
outside entity to furnish services to participants. 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. In the 1999 interim final rule, we adopted
the contracting provisions in Part VII, section A of the Protocol.
We specified in Sec. 460.70(b) that a PO may only contract with
entities that meet all applicable Federal and State requirements, and
provided some examples of the types of requirements that contractors
would be expected to meet. For example, institutional contractors
(hospital and nursing home) must meet Medicare and Medicaid
participation requirements. To avoid breakdowns in communication or in
the provision of care, we required that POs designate an official
liaison to coordinate activities between contractors and the
organization. Effective coordination of services is necessary to avoid
duplicative or conflicting services. Designating an individual as
liaison provides a conduit for sharing information. The liaison would
inform contractors of PO policies, changes in participants' plans of
care, information from team meetings, and quality improvement
activities and goals. Contractor staff would inform the PO, through the
liaison, of updates and changes in a participant's status, personnel
changes in the contractor, and any other information necessary for the
continuity of participant care. All care must be evaluated by the PO,
with particular attention to care provided by contracted personnel.
This requirement provides a mechanism to ensure that contracted
personnel are adhering to organization policies and procedures. It also
affords the organization an opportunity to identify any education or
training needs of contracted personnel.
We specified in paragraph (c) that the PO is required to maintain a
current list of contractors at the PACE center and provide a copy to
anyone upon request and in paragraph (d) that copies of signed
contracts for inpatient care must be furnished to CMS and the SAA.
Under the specific contract content requirements listed in
paragraph (e), we require each contract to be in writing and contain
the following information:
Name of contractor.
Services furnished.
Payment rate and method.
Terms of the contract, including the beginning and ending
dates, as well as methods of extension, renegotiation, and termination.
Contractor agreement to: Furnish only those services
authorized by the PACE IDT; accept payment from the PO as payment in
full and not to bill participants, CMS, the State Medicaid agency or
private insurers; hold harmless CMS, the State and PACE participants if
the PO cannot or will not pay for services performed by the contractor
under the contract; not assign or delegate duties under the contract
unless prior written approval is obtained from the PO; and submit
reports as required by the PO.
We did not establish a specific notice requirement for termination
of contracts. We believe that POs will contract with individuals and
entities that understand and embrace the organization's mission and
commitment to participants. As discussed previously, we required in
Sec. 460.62 that the governing body establish personnel policies that
address adequate notice of termination by contractors and employees
with direct patient care responsibilities to permit an orderly
transition and avoid disruptions in care.
In the 2002 interim final rule, we amended Sec. 460.70(e) to
include additional contract requirements where the PO chooses to
contract for IDT members or key administrative staff. In amended
paragraph (e), we required that contractors: (1) Agree to perform all
the duties of their position; (2) participate in IDT meetings; (3)
agree to be accountable to the PO; and (4) cooperate with the
competency evaluation program and direct participant care requirements
in Sec. 460.71.
The PACE Protocol at section IV.B.13.a. provided that the IDT may
be employed by the PO or the PACE center. In developing the 1999
interim final rule, we did not address this issue because we believed
that in all cases the PO and the PACE center were the same
organization. After publication of the 1999 interim final rule, we
learned that in 1995, changes were made to the Protocol to permit
contractual arrangements for all PACE center services, which reflected
an operating arrangement engaged in by one of the PACE demonstration
programs, On Lok Senior Health Service. Through this contractual
arrangement, On Lok, Inc. had been able to expand PACE services to a
different part of their service area without disrupting the care that
[[Page 71271]]
traditionally had been provided by the other organization.
As described above in the 2002 interim final rule, we amended the
1999 interim final rule to allow POs to provide PACE center services
through contractual arrangements. As we explained in the 2002 interim
final rule, we did not view this approach as a waiver authorized by
BIPA. Rather, we established specific requirements for this approach
consistent with the On Lok, Inc. arrangement (67 FR 61499). We added a
new paragraph (f) to Sec. 460.70 to identify the criteria that a PO
must meet to contract out PACE center services. We explained in the
2002 interim final rule that we are not inclined to approve this
arrangement for a PO unless it is financially stable and has
demonstrated competence with the PACE model by successful CMS and State
onsite reviews and monitoring efforts.
We expect the PO to retain all key administrative functions
including marketing and enrollment, QAPI, and contracting for
institutional providers and other key staff. We noted that, consistent
with Sec. 460.70(e)(5)(iv), any subcontracting arrangements by the
PACE center would need to be approved in writing by the PO. The PACE
center may employ or contract for the team and provide PACE services in
accordance with the PACE regulation. However, the PO receives all
payment from CMS and the State and remains responsible for all the care
provided in these centers. In addition, we emphasized that contracting
out PACE center services does not change the participants' relationship
to the PO. All participants, whether assigned to the PO-operated PACE
center or assigned to a PACE center that contracts with the PO, are
enrolled with the PO and are afforded all benefits and protections
offered by the PO.
On Lok, Inc. is able to monitor the care provided in the contracted
PACE center through the sharing of electronic medical records. While we
did not require electronic medical records as a condition of approval,
we believe it is necessary for a PO wishing to pursue this type of
arrangement to describe how it will monitor the care provided and
perform all the administrative duties required by the PACE regulation.
In the 2002 interim final rule, we also discussed the obligation of
the PO to monitor the care provided by contracted entities providing
PACE center services now allowed by the amended requirements in that
final rule. Given the vulnerable frail population served by the PACE
program and the increased opportunity for a PO to contract out
participant care services, it is important to reiterate the PO's
obligation to monitor the care furnished by direct participant care
staff. This obligation applies not only to employees of the PO, but
extends to the care provided by contracted staff, including employees
of organizations with which the organization contracts (for example, a
home health agency, rehabilitation agency, nursing facility,
transportation service, or staffing agency). It is especially important
for the PO to monitor the care provided in all settings, including the
PACE center and the participant's home, as well as in offsite locations
such as physician offices and institutional providers to ensure quality
care. To effectively monitor care provided outside the PACE center, the
PO must be vigilant in following up on all unusual occurrences and
complaints. In addition, the PO must foster an atmosphere that promotes
the voicing of participant complaints about quality of care to assist
the PO in monitoring the care provided by contracted staff and
organizations.
In the 1999 interim final rule, Sec. 460.66 required the PO to
provide training to maintain and improve the skills and knowledge of
each staff member that results in his or her continued ability to
demonstrate the skills necessary for the performance of the position.
In conjunction with the decision to allow POs to contract for key
staff, in the 2002 interim final rule, we created a new Sec. 460.71 to
identify PO oversight requirements for PACE employees and contractors
with direct patient care responsibilities. We address these
requirements later in greater detail and respond to specific comments
on this issue. We revised Sec. 460.70(e) to require contractors who
furnish direct participant care to cooperate with the requirements of
Sec. 460.71 as well.
We received the following questions and requests for clarification
regarding contracted services.
Comment: One commenter requested we explain why a contractor must
be prohibited from accepting private insurance payments directly.
Response: PACE is a capitated program at full financial risk for
all services required by their participants. PACE participants sign an
enrollment agreement, which states they must get all services (directly
or indirectly) from the PO. To ensure coordination of care directed by
the IDT, the PO needs to be aware of all services provided.
If a contractor receives payment directly from a private insurer,
the contractor would have been paid twice, once by the PO and once by
the private insurer. Therefore, we included Sec. 460.70(e)(5)(ii) to
require contractors to accept payment from the PO as payment in full
and agree not to charge CMS, the State, the participant, or private
insurers for services to PACE participants.
Comment: One commenter asked which entities are considered
``organizational contractors'' that must meet the COPs.
Response: The term ``organizational contractors'' was replaced with
``institutional contractors'' in the 2002 interim final rule.
Institutional providers include but are not limited to acute care
hospitals, rehabilitation hospitals and distinct part rehabilitation
units of acute care hospitals, psychiatric hospitals and distinct part
psychiatric units of acute care hospitals, and critical access
hospitals, nursing facilities and skilled nursing facilities. The PO
must contract only with institutional entities that meet all applicable
Federal and State requirements. There are provider-specific COPs for
institutions that participate in the Medicare program. Therefore, all
institutional contractors must be in compliance with their respective
COPs.
Comment: One commenter requested the rationale for singling out
inpatient services contracts for submission while contracts with other
entities need only be on file.
Response: We agree with the commenter and do not believe the
requirement is necessary. For this reason, we are revising Sec. 460.70
to delete paragraph (d). Our experience has indicated that having
inpatient service contracts on file, provides sufficient accessibility.
CMS and the SAA will review these contracts during routine monitoring
surveys.
Comment: One commenter requested clarification of the role CMS
expects the SAA to play in ensuring contracts are appropriate.
Response: We expect the SAA to ensure that the PO's contracts meet
applicable State and local laws and requirements.
Comment: Commenters asked whether it is acceptable for an entity to
submit a prepared but unsigned contract with the initial application
and, following a readiness review, submit the signed contract with
language specifying that the contract is not effective until the PO's
program agreement is signed.
Response: We have determined that it is inappropriate for entities
that are not operational to submit signed and dated contracts when they
submit their PACE application. Rather, it is acceptable for entities to
submit contract templates
[[Page 71272]]
with their initial applications. As part of the State readiness review,
the SAA determines that all contracts are signed and dated. However,
the contracts may not become effective until a program agreement with
the entity is signed.
Comment: One commenter indicated that it is unnecessary to
designate one official liaison to coordinate contracted services and
urged us to leave the coordination of contracted services to the
discretion of each PO. The commenter requested that we require the POs
to establish a mechanism for the coordination of contracted services,
but not specify the means by which to effect this objective.
Response: We do not agree with the commenter that the means of
coordinating contracting services should be left up to the discretion
of each PO. To ensure the health and safety of the participants, we
require a contract liaison to ensure that there is a designated
individual with the responsibility and authority to facilitate
communication and coordinate activities, to track delivery and follow-
up of services related to contractor provided care, and to act as a
conduit for contractor issues whether raised by the contractor, the PO,
or a participant.
Comment: In the 1999 interim final rule, we requested comments on
whether to include a notification timeframe for termination of
contractor or employee contracts. Three commenters supported a
requirement for prior notification to terminate a subcontract, but each
with a different timeframe. One commenter suggested a minimum of 60
days notice, one suggested 90 days, and the last suggested a timeframe
that is consistent with M+C (now MA) and Medicaid managed care
requirements.
Two commenters did not support a prior notification requirement.
One commenter indicated a termination notice can be difficult and may
even be contrary to the needs of the participants while the other
commenter believed this was a subject best left to the POs and
individual contractors. Finally, one commenter indicated that the
regulations are sufficiently flexible to allow the POs to structure
their employee/contractor agreements in a way that maximizes benefits
to the organization and participant.
Response: We agree with the commenter who pointed out that the
current regulations are flexible enough to allow the POs to take into
account the needs of the organization and the participants. The 1999
interim final rule established the requirement in Sec. 460.70 that the
terms of a contract include a specified method of termination. The
intent of advanced notice of termination is to provide the participants
sufficient time to adjust to a change in providers. We believe the
current regulation makes adequate provision for establishing any
notification timeframe for termination and are retaining the language
in the 1999 interim final rule.
Comment: One commenter indicated that the wording of the 2002
interim final rule may lead to unintended legal implications for
contractors and POs. Specifically, the commenter believes that terms
``agree'' and ``accountable'' may be construed as evidence of an
employment relationship between the PO and the contractor. The
commenter recommended deletion of the accountability provision. In
place of the provision, they suggested a written agreement with the
contractor which sets forth the contractor's duties and
responsibilities.
One commenter responded to our request for comments related to the
criteria for contracting out PACE center services by recommending that
we should exempt applicants in rural areas from the requirement to have
demonstrated competence with the PACE model before they contract out
for PACE center services. This commenter also expressed concern
regarding contracting for IDT members. The commenter was concerned that
contracted IDT members might be unavailable in person, participating in
IDT meetings via telephone which would distance them from care
planning.
Response: We require POs to have formal written contracts with all
service providers, and that these contracts specifically identify the
services to be provided and the responsibilities of both parties. The
use of the terms questioned by the commenter does not imply an
employment relationship. The PO has the ultimate responsibility for all
care and services provided to participants including those provided
under contract. The PO is also responsible for oversight of participant
care. We are, therefore, retaining the requirement for PACE contractors
to be accountable to the PO for their performance.
As we indicated in the 2002 interim final rule, we are more likely
to allow POs to contract out PACE center services when they have
attained experience in delivering services and managing the risk
associated with the frail elderly. We continue to believe that an
experienced organization will be better equipped to adequately monitor
this arrangement and ensure that participants assigned to contracted
PACE centers are afforded all benefits and protections offered by the
PO.
We are not inclined to exempt all POs in rural areas, as we believe
a PO needs experience in operating a PACE center and providing the
range of services to understand exactly what they will be ultimately
responsible for when they contract for services. The waiver process
established in the 2002 interim final rule provides new POs the
opportunity to indicate in detail the specific barriers to meeting
requirements that would be resolved by contracting for services.
In response to the concern regarding the contracted IDT members
being unavailable for care planning, we believe that as the PO has
oversight responsibility of all care provided to participants, they
will ensure that care planning is performed appropriately by all IDT
members.
Comment: We received one comment suggesting that when services are
contracted, funds should be allocated to permit contractual staff to
participate in all clinical and administrative activities with the PACE
program.
Response: Although we agree with the commenter that this could be a
beneficial arrangement, we believe CMS should not dictate how POs
allocate or spend their resources; thus, making this a regulatory
requirement would be inappropriate. However, staff refers to both
employed and contracted staff, with no distinction in job duties or
responsibilities. Contracted staff are required to perform all the
duties of a PACE employee related to their position including, but not
limited to, being oriented to the PACE model's philosophy, mission,
policies on participant right, emergency plan, ethics, and the PACE
benefit, and policies related to job duties; participate in IDT
meetings; meet competency requirements; and be accountable to the PO.
Therefore, we expect contractual staff to participate in all clinical
and administrative activities with the PACE program.
Final rule actions:
In this final rule, we are:
Deleting Sec. 460.70(d),
Redesignating paragraph (e) as paragraph (d), and
Redesignating paragraph (f) as paragraph (e).
Section 460.71 Oversight of Direct Participant Care
We intend that personnel requirements apply to both staff and
contractors. In this section, we intend to clarify the requirements for
the oversight of direct participant care.
As noted previously, in the 2002 interim final rule, we created a
new
[[Page 71273]]
Sec. 460.71 to identify PO oversight requirements for PACE employees
and contractors with direct patient care responsibilities. These
requirements fall into two categories, that is, (1) competency
evaluation and (2) staff and contractor requirements.
The PO must ensure that employees and contracted staff
providing care directly to participants demonstrate the skills
necessary for performance of their positions.
The PO must provide each employee and all contracted staff
with an orientation. The orientation must include at a minimum the
organization's mission, philosophy, policies on participant rights,
emergency plan, ethics, the PACE benefit, and policies and procedures
relevant to each individual's job duties.
The PO must develop a competency evaluation program that identifies
those skills, knowledge, and abilities that must be demonstrated by
direct participant care staff (employees and contractors). The program
must be evidenced as completed before performing participant care and
on an ongoing basis by qualified professionals. The PO must designate a
staff person to oversee these activities for employees and work with
the PACE contractor liaison to ensure compliance by contracted staff.
We note that the PO may satisfy this requirement for contract staff
through receipt of competency evaluation documentation from certain
independent contractors where licensure requirements include a
competency evaluation component, or from organizations or agencies that
employ these individuals and contract with the PO.
The PO must develop a program to ensure that all staff providing
direct participant care services meet the requirements listed below.
The PO will verify that direct participant care staff or contractors
meet the following requirements:
Comply with any State or Federal requirements for direct
patient care staff in their respective settings;
Comply with the requirements of Sec. 460.68(a) regarding
persons with criminal convictions;
Have verified current certifications or licenses for their
respective positions;
Are free of communicable diseases;
Have been oriented to the PACE program; and
Agree to abide by the philosophy, practices, and protocols
of the PO.
Comment: One commenter indicated that the requirements pertaining
to contracted staff are administratively burdensome and may compromise
the PO's ability to contract with high quality providers.
Response: We believe the requirements pertaining to contractual
staff are essential for appropriate participation in the PACE benefit.
All staff (employees and contractors) need to understand what the PACE
service delivery model is and how it differs from other models. With
regard to the competency evaluation requirements, we believe they are
consistent with PACE, Medicare, and health care industry standards.
Comment: One commenter asked that we clarify the relationship
between Sec. 460.71(a) and (b) because they seem to cover similar
points (staff and orientation).
Response: We believe Sec. 460.71(a) is a requirement directed
towards the education of staff of the PACE model; specifically, Sec.
460.71(a) requires that all staff and contractors receive an
orientation to the PACE model, what it is and how it works, and
demonstrate clinical competency before performing direct participant
care. Section 460.71(b) pertains more to the quality of the staff, as
well as ensuring that the PO verify that staff and contractors have
certification or licensure, pass a criminal background check, have been
determined free from communicable diseases, and are up-to-date with
immunizations. As discussed previously in Sec. 460.64, staff
furnishing direct participant care must be free of communicable
diseases and are up-to-date with immunizations. Thus, we are applying
this provision to both contractors and staff, amending Sec.
460.71(b)(4) to clarify that direct participant care staff or
contractors must be determined to be free from communicable diseases
and are up-to-date with immunizations before performing patient care.
Comment: A commenter requested clarification regarding who is
considered a contractor.
Response: A contractor is an entity with a legally binding written
agreement to deliver items or services for the PO in return for payment
and is not considered an employee of the PO. All contractors must meet
PACE competency requirements except for staff in inpatient and nursing
facilities that must meet provider-specific COPs.
Comment: One commenter asked that we clarify if references to staff
include contracted staff.
Response: In Sec. 460.71(a), we state that the PO must ensure that
all employees and contracted staff furnishing care directly to
participants demonstrate the skills necessary for performance of their
position. In most other provisions of Sec. 460.71, we similarly
specify that oversight requirements related to direct participant care
apply to all employees and contracted staff. For purposes of this
regulation, references to staff are intended to include contracted
staff. Their orientation to the PACE model, specifying their direct
care responsibilities, the days and hours they provide services for the
PO to PACE participants, and their demonstration of clinical competency
must be accomplished in the same manner as employed staff. We also
assume that the PO is aware of the work schedule availability of the
staff, both employed and contracted.
Comment: One commenter asked if individual provider competency is
required and if mechanisms such as contracting requirements established
by the PO for contract providers, credentialing of staff and
contractors, State licensing requirements, and Medicare certification
requirements would be sufficient for ensuring compliance with Sec.
460.71(b).
The commenter also indicated that requiring orientation of the
employees of contracted provider entities (for example, hospitals,
nursing homes, home care agencies, transportation providers) will not
have any impact on the quality of care provided. The commenter stated
that the PO's scarce resources would be better spent in focusing on the
quality of communication between the PO and its contractors to ensure
participant services are provided appropriately. Communication is
viewed as more important than provider knowledge about the PACE
program. They requested that POs be granted the discretion to orient
contract providers to the program as they deem appropriate.
This commenter also views the requirement that competency
evaluation must be completed before performing participant care as
problematic. The commenter pointed out that emergency situations may
exist where fulfilling this requirement may not be possible (for
example, when temporary staff must be called upon to fill in during
unanticipated absences).
Response: In response to this comment, we want to clarify that
individual provider competencies are required and that contractual
agreements, credentialing for physician staff and contractors, State
licensure, and Medicare certification are not in themselves proof of
competency. The PO must follow-up to validate individuals' competency.
We continue to believe that all direct care providers need to
understand the philosophy of the PACE service delivery
[[Page 71274]]
model and recognize its unique features that have been proven effective
in managing the health care needs of the frail elderly. We expect that
during the orientation, the importance of communication will be
emphasized as a pivotal aspect of the PACE model. Therefore, we are
retaining the current requirement for orienting contractual providers.
Competent staff is of paramount importance when dealing with this
frail population. Although we understand that emergency staffing needs
may arise, we expect the PO to contract with providers that have
provided information and competency evaluation documentation before
assigning temporary staff.
Final rule actions:
In this final rule, we are amending Sec. 460.71(b)(4) to clarify
direct participant care staff or contractors must be determined to be
free from communicable diseases and are up-to-date with immunizations
before performing patient care in order to be consistent with the
general requirements of Sec. 460.64(a).
Section 460.72 Physical Environment
As we explained in the 1999 interim final rule, we established
Sec. 460.72 to ensure that the PACE center and home are free of
hazards that may cause harm to the participants, staff, or visitors.
Because issues of adequate space, infection control, fire prevention,
dietary services, and the safety of transportation services are
important to ensure quality care, we added requirements for each in the
regulation.
We maintained the following requirements from the PACE Protocol,
with the modifications noted below:
The PACE center must be designed, constructed, equipped,
and maintained to provide for the physical safety of participants,
personnel, and visitors;
The PACE center must ensure a safe, sanitary, functional,
accessible, and comfortable environment for the delivery of services,
that protects the dignity and privacy of the participant; and
The PACE center must include sufficient suitable space and
equipment to provide primary medical care and suitable space for team
meetings, treatment, therapeutic recreation, restorative therapies,
socialization, personal care, and dining. (We believe that a PO should
furnish primary care services in the PACE center, but this provision
allows flexibility to avoid duplicating an entire primary care clinic
if that is not necessary.)
The PO must establish, implement, and maintain a written plan to
ensure that all equipment is maintained in accordance with the
manufacturer's recommendations to keep all equipment (mechanical,
electrical, and patient care) free of defect. Based on the
manufacturer's experience with the equipment, we believe it has the
most knowledge about routine maintenance and recommended repair
schedules necessary to keep the equipment in good operating condition.
With respect to protecting participants from fire and fire-related
events, we incorporated by reference in our regulation at Sec. 460.72,
the Life Safety Code (LSC). The LSC was developed by the National Fire
Protection Association and adopted by the Department of Health and
Human Services as the standard which ensures reasonably fire-safe
facilities. The LSC specifies requirements for building construction
features such as walls and doors, exits and exit access, and fire
protection devices such as sprinklers, smoke detectors, and fire
extinguishers.
In the 1999 interim final rule, we adopted the 1997 edition of the
LSC, which was divided into occupancy chapters, including Business,
Education, and Health Care Occupancies. Business occupancies include
clinics and offices, and educational occupancies cover schools and day
care centers. Health care occupancies include facilities where the
patients are rendered incapable of self-preservation and where they
remain overnight. Unfortunately, the LSC does not designate a specific
category for comprehensive outpatient services provided to nursing home
eligible individuals, so we chose to stipulate that the PACE center
must meet the occupancy provisions of the 1997 edition of the LSC for
the type of setting in which it is located (for example, hospital,
office building, etc.).
Each type of LSC occupancy requires a fire alarm system. A fire
alarm system must provide three functions: (1) Initiation--a method of
initiating the alarm, such as a pullbox; (2) Notification--a method of
notifying the occupants, such as a loud bell, horn, chimes, or flashing
lights for those patients who are deaf; and (3) Control--a method of
controlling other fire protection functions and features, such as air
conditioning shutdown, automatic release (closing) of fire doors, etc.
We require a PACE center to meet the requirements for a fire alarm
system in accordance with the occupancy section of the LSC that applies
to the building in which it is located. Each occupancy section also
requires evacuation plans, fire exit drills, and fire procedures. The
purpose of the drills is to test the efficiency, knowledge, and
response of the staff and to ensure that safe care will be provided to
participants during an emergency.
The statute and implementing regulations governing some Medicare
providers (nursing facilities, hospitals, and hospices) authorize us to
accept a State code in lieu of the LSC if it adequately protects
patients. Likewise, under these regulations the LSC will not apply in a
State where CMS finds that a fire and safety code imposed by State law
adequately protects PACE participants and staff.
We recognize that it could be burdensome to require strict
adherence to all of the requirements of the LSC. PACE centers may be
established in a variety of building types (for example, hospitals or
office buildings), which must be considered in requiring adherence to
the LSC. We also recognize that some PACE centers may have alternative
features that provide an equivalent level of protection to that
required by the specific requirements of the LSC. In some buildings it
may be impractical or impossible to provide a specific feature due to
the construction of the building. Therefore, we specified that CMS may
waive specific provisions of the LSC which, if rigidly applied, would
result in unreasonable hardship on the organization. Specific
provisions may be waived only if the waiver does not adversely affect
the health and safety of the participants and staff.
We established four requirements that we believe are fundamental
for a PO to effectively prepare for emergency situations. The PO must
establish, implement, and maintain documented procedures to manage
medical and nonmedical emergencies or disasters that are likely to
threaten the health or safety of participants, staff, or the public
including, but not limited to, fire, equipment, water or power
failures, care-related emergencies, and natural disasters likely to
affect their geographic location. We also stated that we do not expect
organizations to develop emergency plans for natural disasters that
typically do not affect their geographic area. For example,
organizations in the Southeast would not typically need to develop
emergency procedures for earthquakes.
POs must train each staff member (employee and contractor) on the
actions necessary to address different medical and nonmedical
emergencies. This requirement is designed to ensure the safety and
security of both the participants and the staff. In addition, the
participants must be appropriately trained on the organization's
emergency procedures since they may need to take
[[Page 71275]]
steps to protect themselves during an emergency. PACE participants need
to be informed of what to do, where to go, and whom to contact if a
PACE center emergency occurs.
Appropriate medical practice dictates that the organization must
have trained personnel, drugs, and emergency equipment immediately
available at every PACE center at all times to adequately support
participants until an Emergency Medical System (EMS) responds to the
PACE center. We defined the minimum emergency equipment that must be on
the premises and immediately available as easily portable oxygen,
airways, suction, and emergency drugs. In addition, the PACE center
must have a documented plan to obtain EMS services from sources outside
the PACE center when needed.
At least annually, a PO must test, evaluate, and document the
effectiveness of its emergency and disaster plans to ensure and
maintain appropriate responses to the situations and needs that may
arise from both medical and nonmedical emergencies. Drills and
emergency episodes often reveal a weakness or flaw in the design of the
emergency plan. An annual review will allow flaws or potential problems
to be identified and corrected.
In the January 10, 2003 Federal Register, we published a final
rule, ``Fire Safety Requirements for Certain Health Care Facilities''
(68 FR 1374), which among other changes, amended Sec. 460.72(b) to
adopt the 2000 edition of the LSC for Medicare and Medicaid health care
facilities. It is important to note that the 2000 LSC prohibits the use
of roll latches on corridor doors in buildings not fully protected by
an approved sprinkler system and requires replacement with positive
latching devices in both existing sprinklered and unsprinklered
buildings. It also requires that, effective March 13, 2006, emergency
lighting must provide illumination for at least a 90-minute duration.
Section 460.72(b) was further amended by the March 25, 2005 (70 FR
15229) publication of the interim final rule, ``Fire Safety
Requirements for Certain Heath Care Facilities; Amendment,'' which
allows certain health care facilities, including PACE facilities, to
place alcohol-based hand rub dispensers in egress corridors under
specified conditions.
Comment: One commenter stated they believe that identification and
enforcement of physical plant standards for PACE centers are
responsibilities of the State. The commenter indicated that the
provisions allowing CMS to waive the LSC effectively permits an
organization to disregard State requirements.
Response: Current regulations require that PACE centers meet the
LSC with the following limited exceptions: (1) The LSC provisions do
not apply in a State in which CMS determines that a life and safety
code imposed by State law adequately protects participants; and (2) CMS
may waive specific provisions of the LSC that, if rigidly applied,
would result in unreasonable hardship on the PACE center, but only if
the waiver does not adversely affect the health and safety of
participants and staff.
Although there is specific waiver authority under Sec. 460.26 and
Sec. 460.28, it does not apply to the approval of LSC waivers. CMS
staff responsible for LSC compliance would approve LSC waivers.
However, we note that PACE centers are often licensed as adult day
health centers or clinics, which are not among the types of Medicare
providers that we typically survey for compliance with the LSC. As a
result, in these cases, we will accept State licensure requirements for
fire and safety as meeting the LSC.
Comment: Three commenters indicated that a PO's responsibility
related to safety in the home should be limited.
One commenter indicated the regulation only mentions POs being
responsible for safety of the physical environment of the PACE center
and the primary care clinic, while the background description states
that this section's purpose is ``to ensure that the PACE center and
home are free of hazards.'' The commenter continued by stating the
regulation does not address the PO's responsibility for ensuring that
an enrollee's home is free of hazards. The enrollee is living at home
and not in a licensed health care facility subject to Federal and State
oversight. However, the local fire marshal, health department, Adult
Protective Service, and building inspectors have specific
responsibilities to ensure a safe living environment. Therefore, the
commenter recommended that we limit PO responsibilities by requiring
that the initial comprehensive assessment includes an assessment of the
home environment and that the participants must be determined as able
to live in a community setting without jeopardizing their health or
safety.
Response: We disagree with the commenters. POs are at risk for all
health care services the participant receives, and, therefore, we
expect that POs will be involved in assuring the health and safety of
participants at all times, including when they are at home.
However, PACE staff will not have the ultimate authority regarding
potential hazards. PACE staff performing the initial assessment should
identify all potential hazards and make all reasonable attempts to
explain them to the participant and caregiver. Should staff be unable
to rectify the potential hazard before enrollment, they should document
the hazard, their attempts to have the hazard rectified, and all other
pertinent information. Should the participant and caregiver agree to a
resolution of the hazard, that information should be included in the
participant's care plan. If the participant and caregiver do not agree
to rectify the hazard potential, the PO staff are expected to document
the hazard, their suggestions to resolve the hazardous issue, and all
other pertinent information.
Comment: One commenter recommended that the regulations require
that accessibility requirements be met in accordance with the Americans
with Disabilities Act and section 504 of the Rehabilitation Act.
Response: Both the 1999 and 2002 interim final rules state
repeatedly that POs must meet all applicable Federal, State, and local
laws and regulations, which include the Americans with Disabilities Act
and section 504 of the Rehabilitation Act. We note the Americans with
Disabilities Act is specifically addressed in Sec. 460.32.
Comment: Another commenter recommended that this section of the
regulation include suggestions for addressing the common visual
deficits of the PACE population and provided the following as examples
of potential safety concerns: High gloss floors and surfaces which
provide high contrast in floors, steps, and walls and installing low
glare but sufficient lighting.
Response: We expect each PO to assess their participants and to
implement all appropriate safety precautions. We do not believe it is
necessary to establish regulatory requirements specific to individual
health issues. We believe the addition of specific common deficits to
the regulation would be unreasonably burdensome. Therefore, we are not
including specific requirements regarding visual deficits or other
individual health deficits. We will continue to assess LSC and State
licensure developments to ensure participants receive services in a
safe manner.
Comment: Two commenters requested clarification of the emergency
equipment requirement, which states that staff be on the premises of
the PACE center at all times. The
[[Page 71276]]
commenter indicated that it would be helpful to clarify what emergency
drugs are required to be available at the PACE center.
One of the commenters requested that we clarify that the
requirement that the POs are required to establish, implement, and
maintain a written plan to ensure maintenance in accordance with
manufacturer's recommendations refers only to equipment deemed to be
life-sustaining and biomedical equipment.
Response: The intent of the staffing requirement is that we believe
POs should have staff qualified to operate emergency equipment on the
premises whenever the PACE center is open.
For purposes of this regulation, emergency drugs are those
pharmaceuticals that would be used in an emergency that follow current
emergency practice guidelines/protocol.
We agree with the commenter asking for clarification on the
equipment maintenance requirement, and we are clarifying that in
addition to written policies, the PO is responsible for implementing
the manufacturer's recommendations for emergency and biomedical
equipment maintenance.
Final rule actions:
In this final rule, we are clarifying that POs must perform the
manufacturer's recommended maintenance on all equipment as indicated in
their written plan.
Section 460.74 Infection Control
Infection control is vital to the health and safety of
participants, so we require in Sec. 460.74 that the PO adhere to
accepted policies and standard procedures, including the standard
precautions developed by and available from the Centers for Disease
Control and Prevention (CDC). These guidelines have been developed by
the CDC in collaboration with industry representatives and have proven
effective as a means of diminishing the spread of blood-borne pathogens
and other infectious agents. The PO must establish, implement, and
maintain a documented infection control plan that will ensure a safe
and sanitary environment and prevent and control the transmission of
disease and infection. At a minimum, the infection control plan must
include the following:
(1) Procedures to identify, investigate, control, and prevent
infections in every PACE center and in a participant's place of
residence;
(2) Procedures to record any incidents of infection; and
(3) Procedures to analyze the incidents of infection, to identify
trends, and develop corrective actions related to the reduction of
future incidents.
Comment: We received several comments regarding infection control.
One commenter did not find the requirements overly onerous, while
another commenter was concerned this provision preempts State's
regulatory authority regarding infection control practices.
Another commenter requested we clarify that the intent of this
section is to hold POs responsible for universal precautions. Five
commenters requested we distinguish between what can be required in a
PACE center and what can be expected in a participant's home.
Response: It is not our intent to usurp the State's authority in
this area. Should State requirements be more stringent than those of
CMS, we would expect States to enforce their more strict requirements.
We believe these regulations to be the minimum acceptable requirements
for infection control.
In response to the question on universal precautions, the intent of
these regulations is to require the POs to practice universal
precautions. Universal precautions are CDC guidelines accepted as
routine practice by the health care industries at large.
Moreover, POs are expected to observe infection control practices
in all settings including the participant's residence and teach and
reinforce infection control practices to participants and their
caregivers. This would include reinforcing the simple practices such as
handwashing after using the restroom or blowing one's nose, and
refrigerating foods appropriately. It is in the PO's interest to work
with participants and caregivers to minimize the risk of infections.
Final rule actions:
This final rule will finalize Sec. 460.74 as published in the 1999
interim final rule.
Section 460.76 Transportation Services
Transportation services are a critical component of PACE service
delivery, so it is crucial that the PO take appropriate steps to ensure
that participants can be safely transported from their homes to the
PACE center and to appointments. We established Sec. 460.76 to require
that the PO's transportation services must be safe, accessible, and
equipped to meet the needs of each participant. In addition, we require
that the organization's transportation program include procedures on at
least the following: (1) Maintaining of transportation vehicles
according to the manufacturer's recommendations; (2) equipping
transportation vehicles to communicate with the PACE center; (3)
training transportation personnel on the special needs of participants
and appropriate emergency response; and (4) as part of the IDT process,
communicating relevant information about the participants' to
transportation personnel or other PACE staff in accordance with the
PO's policies and procedures.
Comment: We received two comments that addressed concerns regarding
transportation. The first commenter emphasized that transportation must
meet the special needs of persons with disabilities while the second
commenter indicated that there are situations in which routine
transportation services can not be safely provided to participants. The
commenter believes this point needs to be a consideration when
determining if a participant can be cared for appropriately in PACE.
Response: We agree with the commenter, that transportation services
that meet the special needs of disabled participants are crucial
especially for frail elderly PACE participants. The requirements
established in the 1999 interim final rule were intended to ensure that
safe and appropriate transportation practices are used with this frail
participant population.
We also agree that when the PACE staff performs their initial
assessment, it is the PO's responsibility to determine if they can
adequately address the transportation needs of the individual, and that
this should be a consideration in determining whether or not a
prospective enrollee can be cared for safely in their community.
However, we believe that transportation considerations alone would
rarely, if ever, be the reason to deny enrollment.
Final rule actions:
This final rule will finalize Sec. 460.76 as published in the 1999
interim final rule.
Section 460.78 Dietary Services
In the 1999 interim final rule, we established that it is important
that each PACE center provide participants with nourishing, palatable,
well-balanced meals that meet the daily nutritional and special dietary
needs of each participant. We required that each meal must meet
specific requirements, including preparation by methods that conserve
nutritive value, flavor, and appearance; preparation in a form designed
to meet individual needs; and preparation and service at the proper
temperature. The PACE center must provide substitute foods or
nutritional supplements that meet the daily nutritional and special
dietary needs of any participant who refuses the food served, cannot
tolerate the food served,
[[Page 71277]]
or who does not eat adequate amounts. In addition, the PO must provide
nutritional support (that is, tube feedings, total parenteral
nutrition, or peripheral parenteral nutrition) to meet the daily
nutritional needs of a participant if indicated by his or her medical
condition or diagnosis.
It is vital to the health and safety of participants that the food
provided meets acceptable safety standards. Therefore, we require the
PO to:
(1) Procure foods (including nutritional supplements and items to
meet special nutrition needs) from sources approved or considered
satisfactory by Federal, State, Tribal, or local authorities that have
jurisdiction over the service area of the organization;
(2) Store, prepare, distribute, and serve foods (including
nutritional supplements and items to meet special nutrition needs)
under sanitary conditions; and
(3) Dispose of garbage and refuse properly.
Comment: We received several comments regarding dietary services,
with several proposed language changes. One commenter reiterated these
are areas under State responsibility. Dietary and food service
sanitation practices in a variety of establishments, including those
under which PACE would operate, are regulated by the State. This
commenter recommended that the regulation simply state that the PACE
center will provide the enrollee a meal when necessary.
Response: In response to the comment regarding State requirements,
we want to clarify that we believe the requirements in our regulation
to be the minimum acceptable requirements for dietary services. If
State requirements are more stringent than those under this regulation,
we expect the State to enforce its more stringent requirements.
In response to the suggestion that we amend the requirement as
recommended, we believe that as a participant protection, the PACE
dietary services requirement must be more specific. Again, due to the
frailty of the targeted population, a greater effort must be made to
ensure that the appropriate nutrition is received by the most
appropriate method in a safe and sanitary manner.
Comment: One commenter provided two technical suggestions. First,
to ensure that dietary needs are provided in accordance with the
participant's treatment plan, the commenter recommended inserting the
phrase ``In accordance with each participant's plan of care'' at the
beginning of Sec. 460.78(a)(1), Sec. 460.78(a)(2), and Sec.
460.78(a)(3).
The second suggestion was to replace the phrase ``provide each
participant'' with ``offer each participant'' ensuring participant
choice with respect to meals.
Another commenter disagreed with the requested language change of
``offer each participant'' stating there is a high proportion of PACE
participants with some form of dementia who may require supervision or
assistance with eating. The commenter requested the language be
modified to read ``Except as specified in paragraphs (a)(2) or (a)(3)
of this section, the PO shall ensure, through the assessment and care
planning process, that each participant receives nourishing, well-
balanced meals that meet the participant's daily nutritional and
special dietary needs.''
Another commenter requested that we clarify that the requirement is
meant to apply when PACE participants are institutionalized or to limit
the requirement to individuals when the provision of meals is specified
in the plan of care. Alternatively, they recommended that the
regulations could specify that the PO must ``assure that each
participant has access to meals to meet the daily nutritional
requirement,'' which would enable the PACE provider to document the
provision of meals by family or others, as appropriate.
Response: In response to comments on provision of meals, we want to
clarify that meals are a required service in the PACE program. Dietary
services are to be provided when a participant is attending the PACE
center, when he or she is institutionalized, and when he or she is in
the home as indicated in the participant's plan of care. The PO must
assess each participant's individual situation when determining the
most appropriate method of assuring that each participant's daily
nutritional needs are met in the most appropriate manner. The POs must
ensure that each participant is receiving adequate nutrition by the
required modality, as prescribed in the participant's plan of care. We
agree with this commenter and recognize that in the geriatric
population, for a number of medical and psychosocial reasons, eating is
not a high priority for many individuals. Thus, we do not believe that
language such as ``offering'' or ``has access to'' is sufficient to
ensure participants receive adequate and appropriate nutrition.
Therefore, in this final rule we are revising the first sentence of
Sec. 460.78(a)(1) by adding the requirement that the ``PO must ensure,
through the assessment and care planning process,'' that each
participant receives nourishing, palatable, well-balanced meals that
meet the participant's daily nutritional and special dietary needs.
Comment: One commenter indicated that the regulation fails to
mention the special needs of those with swallowing problems.
Response: In response to this comment, we believe that although
choking is a serious issue, particularly in this population, and has
been known to lead to death, this problem should be assessed by the
appropriate professional, as part of the participant assessment. This
comment provides a good example of where it would be appropriate for an
additional discipline (for example, a speech therapist) to be included
in the initial comprehensive assessment and periodic reassessments.
Final rule actions:
In this final rule, we are amending the regulatory language of
Sec. 460.78(a) by revising the first sentence to read as follows:
``Except as specified in paragraphs (a)(2) or (a)(3) of this section,
the PO must ensure, through the assessment and care planning process,
that each participant receives nourishing, palatable, well-balanced
meals that meet the participant's daily nutritional and special dietary
needs.''
Section 460.80 Fiscal Soundness
Part I, section F of the Protocol addresses fiscal soundness and
paragraph (e)(4)(A)(ii) of section 1894 and section 1934 of the Act
requires that, during the trial period, we conduct a comprehensive
assessment of a PO's fiscal soundness. We established Sec. 460.80 to
address requirements for fiscal soundness.
As we indicated in the 1999 interim final rule, each PO must have a
fiscally sound operation as demonstrated by total assets being greater
than total unsubordinated liabilities, sufficient cash flow and
adequate liquidity to meet obligations as they become due, and a net
operating surplus or a plan for maintaining solvency.
Each organization must have a documented insolvency plan approved
by CMS and the SAA which, in the event of insolvency, provides for the
continuation of benefits for the duration of the period for which
capitation payment has been made; the continuation of benefits to
participants who are confined in a hospital on the date of insolvency
until their discharge; and protection of participants from liability
for payment of any fees which are the legal obligation of the PO.
Each organization must have adequate arrangements to cover expenses
if it becomes insolvent. To this end, we specified requirements in this
section that are consistent with the Protocol.
[[Page 71278]]
We received comments from five commenters regarding fiscal
soundness.
Comment: Two commenters indicated that this section of the
regulation made no reference to meeting applicable State requirements,
which in some situations may be inconsistent with these requirements.
Response: As with any type of regulatory requirement, States may
establish or impose more restrictive requirements applicable to the PO
regarding fiscal soundness as long as they do not conflict with the
Federal PACE regulations. We recognize that some States have specific
fiscal requirements applicable to the POs, particularly based on State
licensure programs for POs. We also acknowledge the State's role in
relation to fiscal soundness; however, we do not believe the
regulations would need to reflect the States' role in this case.
Comment: Two commenters recommended that CMS specify that POs must
have requirements to cover expenses of $250,000.
Response: We appreciate that a minimum amount of capital is
critical to ensure that the organization can adequately cover the costs
of meeting the needs of a frail elderly population. However, we are not
inclined to impose specific dollar amounts because we assess each
organization's financial situation individually. In addition, an amount
set at a particular point in time may not be adequate over an extended
period due to inflationary and economic factors.
Comment: Two commenters agreed with the fiscal soundness
requirements, but pointed out that the measure of fiscal soundness is
different for a new PACE program than for an established program. One
commenter questioned whether fiscal soundness should apply during the
trial period because it could inhibit the start-up of new programs. The
commenters recommended that POs be permitted to utilize a variety of
arrangements to cover expenses in case of insolvency.
The other commenter indicated that the requirements are based on a
shared-risk model of an established PACE program that enrolls the
certain number of participants and spreads its risk among all its
enrollees. The commenter believes that the measures are too stringent
for a program just starting operations. The commenter recommended that
CMS consider the measure for fiscal soundness and differentiate the
measure for new PACE programs and established programs. The commenter
suggested that for an established program, the minimum of 1 month of
cash available be liquid financial assets and not merely line-of-
credit. However, for new POs, cash in the form of line-of-credit would
be appropriate.
Response: We assess each PO's fiscal soundness individually taking
into account whether it is an established or newly operational
organization. However, we believe that it is critical for the
organization to meet the established requirements upon start-up to
ensure that the organization can adequately cover the costs to meet the
needs of a frail elderly population. As each situation is different, we
do not dictate the means for providing arrangements to cover expenses.
Organizations have flexibility to meet the requirements, and the
regulation offers potential options such as letters of credit or other
guarantees.
Final rule actions:
This final rule will finalize Sec. 460.80 as published in the 1999
interim final rule.
Section 460.82 Marketing
Based on Part III, section B of the Protocol, we established Sec.
460.82 to address marketing activities of PACE programs. POs must
conduct marketing activities that inform the general public about their
programs.
As we indicated in the 1999 interim final rule, all marketing
material must be approved by CMS and the SAA. Initial marketing
material is reviewed as part of the application process. After an
organization is under a PACE program agreement, any new or revised
marketing materials must be submitted for review by CMS and the SAA. We
will complete our review within 45 days after we receive the
information from the organization or the material will be deemed
approved. We included the requirement for review and approval of
revised marketing materials as revisions could potentially introduce
false or misleading information. Although the Protocol includes a 30-
day review and approval timeframe, we adopted a 45-day period to be
consistent with the process used by CMS for review of changes to M+C
organization (now MA) marketing materials.
Printed marketing materials must meet participants' special
language requirements. Marketing materials must also provide complete
and clear information regarding the requirement that all services
(other than emergency services), including primary care and specialist
physician services, be furnished by or authorized by the PO and that
participants may be fully and personally liable for the costs of
unauthorized or out-of-PACE program agreement services.
POs must ensure that their employees or agents do not conduct
prohibited marketing activities such as discrimination of any kind
among individuals who meet PACE eligibility standards; activities that
could mislead or confuse potential participants or misrepresent the PO,
CMS, or the SAA; activities that involve gifts or payments to induce
enrollment; contracting outreach efforts to individuals or
organizations whose sole responsibility involves direct contact with
the elderly to solicit enrollment; or unsolicited door-to-door
marketing.
Each PO must establish, implement, and maintain a documented
marketing plan with measurable enrollment objectives and a system for
tracking its effectiveness.
We received numerous comments regarding the marketing section.
Comment: Three commenters believed that to ensure that all PACE
participants are fully informed of the services they will receive, the
PO's marketing materials should specify not only the covered benefits
and services, but also the benefits and services excluded from the
program both before and at enrollment, with one commenter providing
proposed regulatory language.
Response: We disagree with the commenter because of the dynamic
nature of PACE, its reliance on the IDT's determination of a specific
participant's need to determine the covered and excluded services and
its interaction with the participant. We do not believe identifying
excluded services appropriately expresses the flexibility of services
provided by the PACE model.
Comment: Several commenters requested clarification of the process
for review of marketing materials, with some commenters addressing the
State's role in the review of marketing materials. One commenter
questioned the intent regarding SAA approval of marketing materials
noting that as the initial program application must be submitted with
SAA approval, marketing materials would have been approved by the SAA
before CMS review.
Another commenter suggested that CMS delegate the approval of any
revised or updated educational and marketing materials to the SAAs in
order to prevent unnecessary delay in approvals and to avoid
discouraging POs from revising their materials.
Response: We believe the process for review is fairly noted in the
regulations but remind the public that as a partner in the three-way
program agreement, the SAA has the right to review and approve all
educational and marketing materials the PO intends to distribute.
[[Page 71279]]
Accordingly, all materials must go through the SAA for approval before
the SAA forwarding the materials to CMS. This review of marketing and
educational materials by CMS is to ensure that marketing materials meet
CMS requirements.
Although a PO's initial educational and marketing materials are
approved by CMS and the SAA during the application process, revised and
updated materials must be approved to ensure that no erroneous
information is disseminated. The requirement to have educational and
marketing materials reviewed is consistent with MA requirements.
Comment: This commenter suggested the regulations differentiate
between educational and marketing components of the PACE program, as
the desired outcomes of marketing activities are fundamentally
different from those of educational activities and materials.
Response: We view marketing materials as those materials used to
promote the PACE program before an individual enrolls in PACE.
Educational materials, on the other hand, are those materials provided
to PACE participants and family or their authorized representatives,
that provide information about the PACE program. The regulation
addresses review of the marketing materials as it is essential that
accurate and complete information be disseminated to potential PACE
participants. We believe that the educational component of PACE is
covered by annual notices, newsletters, and other materials presented
to participants, and their families or authorized representatives,
after they have enrolled in PACE. We believe the differentiation
between marketing and educational materials is an operational issue and
not appropriate for regulation.
Comment: A commenter indicated that marketing plans should be a
submission requirement in support of program oversight and monitoring.
Response: We agree with the commenter, and the regulation reflects
this requirement. The PO is required to establish, implement, and
maintain a documented marketing plan with measurable enrollment
objectives and a system for tracking effectiveness. Marketing plans are
submitted by the PO and reviewed by the SAA and CMS as part of the
provider application and when there is a significant revision to the
marketing plan. These materials are also reviewed during onsite
monitoring visits.
Comment: A commenter indicated that PACE marketing requirements
should be the same as the Medicare and Medicaid managed care
requirements, particularly the prohibited practices. The regulation
prohibits door-to-door solicitation but does not mention other forms of
unsolicited marketing such as telephone calls, e-mails, or targeted
mailings.
Response: The commenter is correct. The only prohibited marketing
practice included in the 1999 interim final rule was unsolicited door-
to-door marketing. We are not aware of marketing abuses by POs. We
believe that any change in marketing policy should be presented in a
proposed rule and allow for public comment. We will continue to monitor
marketing practices by POs and will propose additional safeguards as
appropriate.
Comment: A commenter recommended that the information supplied to
prospective participants should include a review of the responsibility
to share in the cost of services by way of post-eligibility treatment
of income, which is not expressly included in the rule.
Response: We agree that participants should be made aware that the
share of cost requirements continues to apply after PACE enrollment;
however, this requirement is not a PACE eligibility requirement. We
would expect that the participant be informed at the time of his or her
enrollment that their Medicaid eligibility requirements continue to
apply as required in Sec. 460.152(a)(1).
Comment: Since the regulations state that approval of an entity's
provider application includes approval of marketing materials, one
commenter asked whether the application process would permit use of the
marketing materials in attracting enrollees.
Response: A prospective PO is not permitted to market PACE services
until they have an approved application. Prospective applicants are
informed in writing when their application has been approved. In this
way, marketing activities may begin before the effective date of the
program agreement.
Comment: One commenter indicated that the marketing materials must
state that enrollees may be fully liable for unauthorized or out-of-
plan services, and asked what would be the financial responsibility of
a Medicaid recipient in this situation.
Response: The 1999 interim final rule established in Sec.
460.82(d)(2) that all marketing materials must clearly state that PACE
participants may be fully and personally liable for unauthorized or
out-of-network services. Thus, a Medicaid recipient would be
financially responsible for any unauthorized out-of-network services.
Comment: One commenter asked what constitutes a principal language
of the community, whether there is a percentage threshold, and whether
we intended that the reference to principal languages of the community
applies to the community as a whole or the target population PACE
intends to enroll.
Another commenter urged CMS to consider providing programs serving
multilingual populations with some financial assistance to cover
translation expenses.
Response: The determination of the principal languages of a PO's
service area is a State determination. Therefore, we recommend that
interested parties contact their State for specific information.
In response to the request that we consider providing financial
assistance for translation services, we have no mechanism to provide
financial assistance for entities serving multilingual populations.
Comment: One commenter asked whether, like M+C organizations, the
prohibition against gifts and payments to induce enrollment does not
include items of nominal value.
Response: We have adopted the MA policy regarding nominal gifts. In
response to inquiries regarding nominal gifts, we consulted Sec.
422.80(e) of the MA rule. For further guidance related to promotional
activities, we reviewed Sec. 50.1 of the Medicare Managed Care Manual,
which was originally developed for M+C plans and is currently being
revised for MA plans.
Offering gifts to potential enrollees that 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.
Final rule actions:
The final rule will finalize Sec. 460.82 as published in the 1999
interim final rule.
Subpart F--PACE Services
The purpose of subpart F is to establish the service requirements
for POs. In this subpart we specify the limitations and conditions
relating to Medicare and Medicaid benefits. We stipulate that
participants must receive all services from the PO, the required
services that must be provided by the PO and those that may be
excluded, emergency services, and the requirements for delivery of
required services at the PACE center and other settings. In addition,
we establish the requirements for composition of the IDT and its
responsibilities, and
[[Page 71280]]
requirements for participant assessments and the plan of care.
The scope of this subpart led to a large number of comments related
to the IDT, required services and their delivery. Included among the
comments were requests for clarification, re-evaluation of various
service related policies, and proposed changes to regulatory language.
Section 460.90 PACE Benefits Under Medicare and Medicaid
Under sections 1894(a)(2)(B) and (b)(1) and 1934(a)(2)(B) and
(b)(1) of the Act, we established Sec. 460.90 to specify that Medicare
and Medicaid benefit limitations and conditions relating to amount,
duration, scope of services, deductibles, copayments, coinsurance, or
other cost sharing that are generally applicable under the Medicare and
Medicaid programs do not apply to PACE benefits. In addition, we
specified that, in accordance with sections 1894(a)(1)(B)(i) and
1934(a)(1)(A) of the Act, the PACE participant shall receive Medicare
and Medicaid benefits solely through the PO.
Comment: We received one comment requesting clarification that the
amount, duration, and scope of services are not subject to the limits
of traditional Medicare and Medicaid services but also are not required
to exceed those amounts unless the IDT determines it to be necessary
and appropriate.
Response: The limits on amount, duration, and scope of services
that apply to either the traditional Medicare or Medicaid benefit
packages do not apply to PACE. The amount, duration or scope of
services provided to PACE participants are participant-specific;
therefore the amount, duration, or scope of services for each
participant are indicated in his or her plan of care based on the IDT
assessment. If an assessment indicates need for a particular service,
the PO must provide the service without regard to whether the service
would otherwise be covered for a Medicare beneficiary or a Medicaid
recipient not enrolled in a PO.
Final rule actions:
This final rule will finalize Sec. 460.90 as published in the 1999
interim final rule.
Section 460.92 Required Services
Based on the provisions of sections 1894(b)(1)(A) and 1934(b)(1)(A)
of the Act, we require in Sec. 460.92 that each PACE benefit package
include for all participants, regardless of payment source, all
Medicare services and all Medicaid covered services as specified in the
State plan, a variety of services specified in the Protocol, and other
services determined necessary by the IDT to meet the participant's
needs (for example, respite care). Based on the Protocol, we included
the following required services in Sec. 460.92 of the 1999 interim
final rule:
(a) All Medicaid-covered services, as specified in the State's
approved Medicaid plan.
(b) Multidisciplinary assessment and treatment planning.
(c) Primary care, including physician and nursing services.
(d) Social work services.
(e) Restorative therapies, including physical therapy, occupational
therapy, and speech-language pathology services.
(f) Personal care and supportive services.
(g) Nutritional counseling.
(h) Recreational therapy.
(i) Transportation.
(j) Meals.
(k) Medical specialty services including, but not limited to the
following:
(1) Anesthesiology.
(2) Audiology.
(3) Cardiology.
(4) Dentistry.
(5) Dermatology.
(6) Gastroenterology.
(7) Gynecology.
(8) Internal medicine.
(9) Nephrology.
(10) Neurosurgery.
(11) Oncology.
(12) Ophthalmology.
(13) Oral surgery.
(14) Orthopedic surgery.
(15) Otorhinolaryngology.
(16) Plastic surgery.
(17) Pharmacy consulting services.
(18) Podiatry.
(19) Psychiatry.
(20) Pulmonary disease.
(21) Radiology.
(22) Rheumatology.
(23) General surgery.
(24) Thoracic and vascular surgery.
(25) Urology.
(l) Laboratory tests, x-rays and other diagnostic procedures
(m) Drugs and biologicals.
(n) Prosthetics, orthotics, durable medical equipment, corrective
vision devices, such as eyeglasses and lenses, hearing aids, dentures,
and repair and maintenance of these items.
(o) Acute inpatient care, including the following:
(1) Ambulance.
(2) Emergency room care and treatment room services.
(3) Semi-private room and board.
(4) General medical and nursing services.
(5) Medical surgical/intensive care/coronary care unit.
(6) Laboratory tests, x-rays, and other diagnostic procedures.
(7) Drugs and biologicals.
(8) Blood and blood derivatives.
(9) Surgical care, including the use of anesthesia.
(10) Use of oxygen.
(11) Physical, occupational, respiratory therapies, and speech-
language pathology services.
(12) Social services.
(p) Nursing facility care.
(1) Semi-private room and board.
(2) Physician and skilled nursing services.
(3) Custodial care.
(4) Personal care and assistance.
(5) Drugs and biologicals.
(6) Physical, occupational, recreational therapies, and speech-
language pathology, if necessary.
(7) Social services.
(8) Medical supplies and appliances.
(q) Other services determined necessary by the IDT to improve and
maintain the participant's overall health status.
Comment: We received several comments related to the list of
required services. One commenter stated that the list of services is
extensive and considerably longer than the list for nursing facilities,
presenting a dilemma to States to establish the cost effectiveness of
PACE compared to nursing facility cost.
Another commenter requested we re-evaluate the required services
and ensure they are in fact the minimum requirements necessary to
protect the health, safety, welfare, and rights of consumers in the
PACE program.
Response: In accordance with sections 1894(b)(1)(A) and
1934(b)(1)(A) of the Act, the scope of benefits for PACE is all items
and services covered under title XVIII and all items and services
covered under title XIX without regard to an individual participant's
source of payment and without any limitation or condition as to amount,
duration, or scope and without application of deductibles, copayments,
coinsurance, or other cost sharing that would otherwise apply. In
addition, the PACE scope of benefits includes all additional items and
services specified in regulations, based upon those required under the
Protocol. Based on this authority, we established Sec. 460.92 in an
attempt to list the items and services covered under titles XVIII and
XIX of the Act and the Protocol, to clarify that the scope of benefits
under title XIX is the services specified in the State's approved
Medicaid plan, and to clarify that the scope of benefits under PACE
includes any other item or service determined necessary by the IDT to
improve and maintain the participant's overall health status.
[[Page 71281]]
We have examined our approach to setting forth required PACE
services and have determined that it is not possible to provide a
complete list of all inpatient, outpatient, physician specialty, care
planning, and social support services that must be furnished to
participants if ordered by the IDT. As the scope of benefits under PACE
is so broad, we are revising this section to summarize Medicare and
Medicaid covered items and services and to highlight the services that
are unique to the PACE model, instead of the current listing of
services required. Under this final rule, the required services under
PACE are all Medicare-covered items and services (including outpatient
prescription drug coverage), all Medicaid-covered items and services
identified in the State Medicaid plan, and other services determined
necessary by the IDT to improve and maintain the participants' overall
health status.
In response to the commenter's concern that the PACE benefit
package is broader than the services furnished in nursing facilities,
which complicates cost comparison, we note that currently most States
establish capitation rates based on a blend of the cost of nursing home
and community-based care for the frail elderly.
Comment: We received several comments related to the respiratory
therapy and the respiratory therapist (RT). Several commenters
recommended that the IDT be expanded to include RTs and that
respiratory therapy be added to the list of required services provided
not just in an acute care setting but also in nursing facilities and in
community settings. We were also asked to clarify our expectations for
coverage of respiratory therapy in these additional settings.
Response: The IDT is responsible for determining whether additional
disciplines are required to assess specific health concerns. If a
participant requires the services of specialists, whether or not the
specialist is on the IDT, then the services become required for that
participant. Unlike traditional Medicare and Medicaid, the site of
service is not an issue in PACE. The participant may receive services
wherever the IDT determines appropriate. Therefore, respiratory therapy
services may or may not be furnished in an inpatient setting, based on
the particular participant's needs. We believe the regulation as
revised will provide the flexibility needed for providing Recreational
Therapy (RT) in a PO if needed. Upon review, we believe the RT is a
valuable adjunct position but not an essential position for every IDT.
Therefore, we are not requiring the addition of this discipline to the
IDT at this time.
Comment: One commenter asked that we clarify the description of the
benefit package as ``all State plan services'' because this
characterization includes services not applicable to and not expected
to be accessed by the PACE population, as well as being mutually
exclusive services.
Response: In accordance with section 1934(b) of the Act, PACE is
required to provide all items and services covered under title XIX. The
services that are actually provided are those determined by the IDT to
be required for a particular PACE participant. For example, neonatal
intensive care unit services will probably not be needed by a PACE
participant; however, these services are required services under
Medicaid and must be furnished by the PO if the IDT were to determine
they are necessary for a particular PACE participant.
Comment: We were also asked to clarify our expectations regarding
mental health services, other than psychiatric services, for alcohol
and substance abuse.
Response: We expect participants to be assessed, diagnosed, and
treated for all types of health issues or conditions, including mental
health issues or substance abuse.
Comment: Two commenters objected to POs being responsible for
providing three meals per day, recommending we either omit meals from
the benefit package or, alternatively, clarify that POs are required to
provide meals on a limited basis.
Response: The intent of this rule is to ensure all PACE
participants' nutritional needs are met. PACE is responsible for a
participant's health and safety including his or her nutritional needs
24 hours a day/7 days a week. That responsibility includes providing
nourishing, palatable, well-balanced meals that meet the daily
nutritional requirements and the special dietary needs of each
participant. The IDT must assess the participant's needs as well as his
or her access to adequate nutrition. The participant's nutritional
requirements and dietary needs should be included in the participant's
plan of care, whether it is providing tube feedings, arranging for
Meals on Wheels, sending meals home with the participant after his or
her visit to the PACE center or documenting that appropriate meals are
provided by the family/caregiver.
Comment: One commenter recommended that durable medical equipment
(DME) requirements should not be unnecessarily restrictive as
technology is continually changing and as more options become
available, these options should not be excluded for PACE participants.
Therefore, we should relax the regulatory requirement by adding ``other
assistive devices'' and ``magnification devices'' to Sec. 460.92(n).
Response: We do not believe there needs to be a change in the
regulatory language as the PO is required to provide anything the IDT
determines necessary to assist the participant to remain living safely
in the community. When determined necessary by the IDT, POs must
provide participants with assistive devices that may not be provided
under traditional Medicare.
In order to clarify the services provided by the PACE program and
to emphasize what makes a program uniquely PACE, in this final rule we
are revising Sec. 460.92 by removing the enumerated list of required
services and replacing the list with a requirement that the PACE
program must provide all Medicare services, all Medicaid-covered
services specified in the State's approved Medicaid plan, and other
services determined necessary by the IDT to improve and maintain the
participant's overall health status.
Final rule actions:
In this final rule, we are revising Sec. 460.92 by replacing the
current list of required services with the following:
(a) All Medicare-covered items and services;
(b) All Medicaid-covered items and services, specified in the
State's approved Medicaid plan;
(c) Other services determined necessary by the IDT to improve and
maintain the participant's overall health status.
Section 460.94 Required Services for Medicare Participants
In accordance with paragraph (b)(1)(A)(i) of sections 1894 and 1934
of the Act, we specified in the 1999 interim final rule that the PACE
benefit package for Medicare participants must include, in addition to
the services required by Sec. 460.92, the scope of hospital insurance
benefits described in 42 CFR part 409 and the scope of supplemental
medical insurance benefits described in 42 CFR part 410.
We also specified the following requirements of title XVIII of the
Act (and regulations relating to such requirements) that are waived and
do not apply to services under the PACE program:
The provisions of subpart F of part 409 of 42 CFR that
limit coverage of institutional services;
The provisions of subparts G and H of 42 CFR part 409 and
parts 412
[[Page 71282]]
through 414 that relate to rules for payment for benefits;
The provisions of subparts D and E of 42 CFR part 409 that
limit coverage of extended care services or home health services;
The provisions of subpart D of 42 CFR part 409 that impose
a 3-day prior hospitalization requirement for coverage of extended care
services; and
The provisions of 42 CFR 411.15(g) and (k) that may
prevent payment for PACE program services to individuals enrolled in
the PACE program.
Comment: We were asked to clarify whether the reference in Sec.
460.94(b)(5) to ``payment for PACE program services to PACE
participants'' means payment ``on behalf of'' participants. If not,
commenters asked whether the regulatory language was meant to permit
PACE centers to implement direct payment/cash benefits to enable
consumers to hire personal care attendants directly. The commenters
stated that this would be a positive innovation in the PACE model.
Response: Section 411.15 specifies items and services excluded from
traditional Medicare. Section 411.15(g) pertains to requirements
related to custodial care, and Sec. 411.15(k) pertains to requirements
related to services that are not reasonable and necessary. Section
460.94 waives Medicare exclusion of these services for POs. Therefore,
it allows payment for PACE services that are provided to PACE
participants, including custodial services and services that would be
considered not reasonable and necessary under traditional Medicare when
furnished by a PO to a participant. This section in no way implies that
the PO can implement direct payment or cash benefits to be paid to PACE
participants. We are amending Sec. 460.94(b)(5) to waive those
specified sections that may prevent payments for PACE program services
``that are provided to'' PACE participants to clarify this issue.
Final rule actions:
In this final rule, we are amending Sec. 460.94(b)(5) to clarify
that payment is for PACE program services ``that are provided to'' PACE
participants.
Section 460.96 Excluded Services
In this section, we provide a list of excluded services based on
Part IV, section A.6 of the Protocol. The services that are excluded
from coverage under the PACE program are as follows:
Any service that is not authorized by the IDT, even if it
is listed as a required service, unless it is an emergency service.
For services in inpatient facilities, private room and
private duty nursing services, unless medically necessary and non-
medical items for personal convenience such as telephone, radio or
television rental, unless specifically authorized by the IDT as part of
a participant's plan of care.
Cosmetic surgery does not include surgery required for
improved functioning of a malformed part of the body resulting from an
accidental injury or for reconstruction following mastectomy.
Experimental medical, surgical, or other health
procedures.
Services furnished outside the United States, except as
may be permitted in accordance with 42 CFR 424.122 and 424.124 or as
may be permitted under the State's approved Medicaid Plan. While the
Protocol did not recognize any exceptions, the required inclusion of
Medicare and Medicaid covered services results in certain limited
exceptions being possible. For example, a State that borders another
country might include some Medicaid coverage across the border, and
Medicare covers some emergency hospital, ambulance, and physician
services outside the United States. (As defined in 42 CFR 400.200, the
United States includes the Commonwealth of Puerto Rico, the Virgin
Islands, Guam, American Samoa, and the Northern Mariana Islands.)
In the 1999 interim final rule, there was a technical inconsistency
between the Sec. 460.96(e) preamble language and regulatory language
regarding services furnished outside the United States. In the
preamble, we referenced Sec. 424.122 and Sec. 424.124; in the
regulatory language, we referenced Sec. 424.122 through Sec. 424.124.
To rectify this technical inconsistency, we are revising the regulatory
language in Sec. 460.96(e)(1) to conform the regulatory language to
the preamble language. The regulatory language in Sec. 460.96 will now
read: (e) Services furnished outside of the United States, except as
follows: (1) In accordance with Sec. 424.122 and Sec. 424.124 of this
chapter.
Comment: Two commenters requested clarification regarding excluded
services. One commenter questioned whether the PACE center is
prohibited from covering services such as a private room, experimental
medical, surgical, or other health procedures. The commenter questioned
why under a capitated payment, a PO would be prohibited from covering
procedures they deemed beneficial if they have the resources to do so.
The second commenter stated that he believed that some Medicaid
programs cover a procedure deemed experimental and CMS may choose to
cover such a procedure under Medicare. Thus, the regulation should
clarify that such a procedure is not prohibited but at the discretion
of the PACE program.
Response: In response to the comments relating to services that are
generally excluded services under the PACE program, the list of
services excluded from coverage under PACE is based on the Protocol.
Therefore, the Medicare and Medicaid capitation rates are not based on
these excluded services. As with all items and services provided by
PACE, it is the IDT and each participant's plan of care that establish
whether or not a service is covered as a required PACE service.
To further clarify, should the IDT determine that an experimental
surgery or procedures would be appropriate for a participant and
complications arise, the PO would remain at full risk and would not be
able to disenroll the participant for changes in health status
resulting from the experimental surgery or procedure.
Final rule actions:
In this final rule, we are making a technical correction by
revising Sec. 460.96(e)(1) by replacing the word ``through'' with the
word ``and'' so that paragraph (e) reads ``Services furnished outside
of the United States, except as follows: (1) In accordance with Sec.
424.122 and Sec. 424.124 of this chapter.''
Section 460.98 Service Delivery
We require in Sec. 460.98 that the PO must establish and implement
a written plan for providing care to each individual participant that
meets that individual's needs across all care settings on a 24-hour
basis, each day of the year. The PO must furnish comprehensive medical,
health, and social services that integrate acute and long-term care. At
a minimum, these services must be furnished in the PACE center, the
participant's home, and inpatient facilities. The PO must not
discriminate against any participant based on race, ethnicity, national
origin, religion, sex, age, mental or physical disability, or source of
payment.
The requirements in this section implement provisions in Part IV,
section B of the Protocol and ensure the availability of and access to
services as a PO grows. The following requirements are based on the
Protocol:
At least the following services must be furnished at every
PACE center: primary care (including physician and nursing services);
social services; restorative therapies (including physical and
occupational therapy); personal care and supportive services;
nutritional
[[Page 71283]]
counseling; recreational therapy; and meals.
The PO must operate at least one PACE center either in or
contiguous to its designated service area, with sufficient capacity for
routine attendance by its participants.
The PO must ensure accessible and adequate services to
meet the needs of all its participants. When necessary, the
organization must increase the number of PACE centers, staff, and other
PACE services.
The frequency of a participant's attendance at the PACE
center is determined by the IDT based on the needs and desires of each
participant.
Finally, if the PO operates more than one PACE center, each PACE
center must offer the full range of services and have sufficient staff
to meet the needs of participants.
Comment: We received numerous comments relating to the minimum
range of services required to be furnished at the PACE center. One
commenter recommended we delete the requirement that each PACE center
offer the full range of services, if the organization operates more
than one PACE center in a defined service area, as long as all required
services are readily available to all participants.
Two commenters believe the focal point of PACE service delivery is
the IDT rather than the PACE center and requested that we explicitly
recognize the provision of services at alternative sites. One commenter
indicated that this approach would avoid potentially adverse situations
in which all alternative delivery sites are subject to PACE center
regulatory requirements and survey criteria, in addition to any State
certification or licensure requirements applicable to such facilities.
One of the commenters proposed that services be allowed in alternative
locations provided they meet applicable State licensure and
certification requirements.
One commenter emphasized that there is a critical distinction that
should be made between a participant being assigned to a team
``operating from'' a PACE center and PACE center attendance. As
published in the rule, Sec. 460.98(e) states that ``the frequency of a
participant's attendance at a PACE center is determined by the IDT,
based on the needs and preferences of each participant.''
Commenters indicated the regulation should afford flexibility to
enable programs to offer services either on or off site in order to
best meet the needs and preferences of participants and maximize
efficient use of organizational resources.
Another commenter suggested that satellite PACE centers that
furnish a core set of services (but not full range of services) and are
within a reasonable distance of a full-service PACE center should be
allowed.
Response: We disagree with these commenters. We believe that
omitting the requirement that each PACE center provide the full range
of services would fragment the care the PACE program was established to
coordinate.
In addition, we believe that the PO has the flexibility to provide
services in settings other than the PACE center. However, every
participant must have a PACE center home that is capable of furnishing
all PACE required services. For POs that are sufficiently large to
require multiple PACE centers, each center would need to have a
sufficient number of IDTs to provide the full range of services to meet
the needs of all participants assigned to that PACE center.
We believe the success of the PACE delivery model is due to the
combination of the IDT assessment and care planning and the PACE
center. Independent of each other, neither would produce the remarkable
participant care successes they do together. The PACE center 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,
they provide 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. We also believe the attendance at the center is
an important aspect of the PACE model, which helps to differentiate it
from home health care or institutional care. Therefore, we will
continue to require that the full range of PACE services be offered at
the PACE center and will encourage development of PACE centers in rural
and Tribal areas, wherever possible.
We allow alternative care settings (ACS) where a limited number of
services may be provided. Should participants choose to attend an ACS
to receive certain services, they would attend the PACE center for the
services not offered at the ACS. We do not believe that an ACS should
replace the PACE center. We believe that every participant must be
assigned to and have the option to receive PACE services at a PACE
center.
Comment: Another commenter endorsed flexibility in staffing for POs
that operate more than one PACE center.
Response: Each PACE center must have at least one complete IDT and
enough support staff to ensure all participants receive the services
and attention they require. We believe the flexibility the commenter
requested was provided in the 2002 interim final rule, which permits
POs to contract for IDT staff and as well as for PACE center services.
Comment: Another commenter added that flexibility would increase
access to PACE services in rural areas and in the development of
specialized POs, that is, programs designed and staffed for treatment
of the mentally ill or Alzheimer's patients.
Response: We believe that every PACE center must provide for every
participant that meets the eligibility requirements and wishes to
enroll in PACE. We are aware that some POs have specialized staff and
accommodations specifically for Alzheimer's/Dementia patients. As the
regulation reads currently, a PO choosing to limit enrollment to a
targeted population would be viewed as discriminatory. We are not
inclined to permit POs to limit enrollment to certain target
populations at this time. Should we consider such a change, we would
include it in future rulemaking and permit the public to comment.
Comment: Two commenters requested we broaden the list of categories
under which the PO cannot discriminate to include sexual orientation.
Response: In response to this request, we are amending the language
of Sec. 460.98(b)(3) to include sexual orientation.
Comment: We also received a request for an explanation of the
procedures a PO needs to follow in order to establish additional PACE
centers.
Response: We have provided a number of scenarios to explain our
policy regarding expansions on our CMS PACE home page at http://www.cms.hhs.gov/pace/.
A separate application for the sole purpose of
expansion is also provided on the CMS PACE homepage. This expansion
application is abbreviated to take into account only processes or
practices that would be different due to the expansion.
Final rule actions:
In this final rule, we are amending Sec. 460.98, paragraph (b)(3),
to add sexual orientation.
Section 460.100 Emergency Care
We note that as sections 1894 and 1934 of the Act do not contain
specific requirements regarding emergency care, in the 1999 interim
final rule we relied on the Protocol and regulations governing
emergency care under Medicare and Medicaid managed care to develop the
requirements for emergency
[[Page 71284]]
care under PACE. We expanded on and clarified the provisions in Part
IV, section A of the Protocol to ensure access to necessary services
and to adopt a beneficiary-centered approach.
Section 460.100 requires a PO to establish and maintain a written
plan for handling emergency health care needs. The organization must
ensure that the participants and their caregiver know when and how to
access emergency services and ensure that CMS, the State, and PACE
participants are held harmless for emergency services.
As we explained in the 1999 interim final rule, emergency care is
appropriate when services are needed immediately because of an injury
or sudden illness and the time required to reach the PO or a network
provider would cause the risk of permanent damage to the participant's
health. Thus, emergency care services include inpatient and outpatient
services, furnished by a qualified emergency services provider (other
than the PO or one of its contract providers) either in or out of the
PO's service area, that are needed to evaluate or stabilize an
emergency medical condition.
An emergency medical condition means a condition manifesting itself
by acute symptoms of sufficient severity (including severe pain) such
that a prudent layperson, with an average knowledge of health and
medicine, could reasonably expect the absence of immediate medical
attention to result in: Serious jeopardy to the health of the
participant; serious impairment to bodily functions; or serious
dysfunction of any bodily organ or part.
Emergency services that fall within this description do not require
prior authorization by the PO. We believe that relying on the prudent
layperson standard in establishing a participant's need for emergency
services is more clear than the definition of emergency care in the
Protocol. We adopted the prudent layperson standard from the Consumer's
Bill of Rights and Responsibilities (CBRR) (discussed in the section on
participant rights). The same standard is used in the M+C (now MA)
definition of emergency medical condition. This standard encompasses a
slightly broader range of circumstances than does the Protocol
language, by including some situations that could fit under the
Protocol description of urgent care or urgently needed services. We
think this clarification is helpful because the Protocol wording does
not clearly distinguish between emergency and urgent care.
Services a participant may need while temporarily absent from the
PO's service area that are not emergency services but cannot be delayed
until the participant returns would need prior authorization. The fact
that these services may be urgently needed means that the PO would be
expected to authorize a participant to obtain them from a non-contract
provider outside of the service area, but it does not exempt them from
the requirement for prior authorization. This approach differs from
that applied to MA organizations, where prior authorization for
urgently needed services is not required. We believe that the
differences in the population served by POs warrant the different
treatment of urgent, though not emergency, care needs. Due to the
relative frailty, more limited mobility, and more complex health status
of PACE participants, we believe the need to maintain the coordination
of care by the IDT justifies contact with and authorization by the PO
before receipt of non-emergency care outside the PACE network.
The emergency services plan must also provide for the availability
of appropriate on-call providers. We expanded this requirement from the
Protocol to provide a safety net for unanticipated health incidents, so
participants do not encounter difficulty in obtaining care when they
are away from the PACE center, when they are away from the PO's service
area and require services that cannot be delayed until they return, or
when they require post-stabilization care services following emergency
services. An on-call provider must be available 24 hours per day to
address any participant questions about accessing emergency services
and respond to requests for authorization of urgently needed out-of-
network services or post-stabilization care services following
emergency services.
We believe that POs must be responsive to all participant care
needs, including the need for urgently needed or post-stabilization
services. In order to ensure that unforeseen circumstances do not
result in delays in needed care, we clarified that the PO must cover
urgently needed out-of-network or post-stabilization care services if
it does not respond to a request for approval within 1 hour after being
contacted or cannot be contacted for approval.
Comment: We received several comments regarding emergency care. One
commenter requested clarification about when the PO would not be
responsible for the cost of emergency services, and asked whether the
PO would always be obliged to provide for emergency care if the prudent
layperson test is met.
Response: The PO is obligated to pay for all emergency care if the
prudent layperson standard as specified in Sec. 460.100(c) is met and
the participant believes he or she is in a critical health emergency
or, in other words, if the participant fears for his or her life or
well-being.
Comment: One commenter recommended that the requirement that POs
explain policies regarding emergency care be modified to include a
clarification that no prior approval is required for emergency
services.
Response: We agree with this commenter and are modifying paragraph
(d) in this final rule to require the PO to explain that no prior
authorization is required for emergency care.
Comment: One commenter requested a definition of the term
``caregiver'' in our requirement at Sec. 460.100(d) that the PO must
explain policies regarding emergency care.
Response: We believe that the nature of PACE and the living
arrangements experienced by PACE participants covers a wide range of
diverse circumstances making a definition of ``caregiver''
inappropriate. A PACE participant could be living alone, with family
members, in a residential facility or be in another type of living
arrangement. They could have a caregiver or many different caregivers.
The caregiver could be a family member, attendant, friend, neighbor,
member of a church or other organization, or anyone who attending to
participant's needs and which constitutes a caregiving relationship.
Therefore, for purposes of PACE, we consider a caregiver anyone who
attends to the participant's needs and we use the terms ``family
member'' and ``caregiver'' interchangeably.
Comment: One commenter asked that we clarify if on-call providers
can be accessed via an answering service, beeper, or other device and
if the on-call provider must be a member of the IDT.
Response: There is no prohibition on providers using an answering
service, beeper or other device, but we expect that on-call providers
respond to all participant calls as soon as possible and at a minimum
within the 1 hour allotted for response to calls for prior
authorization. There is no requirement that the on-call provider must
be an IDT member.
Comment: Three commenters requested we define urgently needed care,
and distinguish between emergency, urgently needed care, and post-
stabilization services.
[[Page 71285]]
Response: In response to these requests, we are establishing the
following definitions in this final rule:
As defined in the 1999 interim final rule, an Emergency Medical
Condition is a condition manifesting itself by acute symptoms of
sufficient severity (including severe pain) such that a prudent
layperson, who possess an average knowledge of health and medicine,
could reasonably expect the absence of immediate medical attention to
result in placing the health of the individual in serious jeopardy,
serious impairment to bodily functions, or serious dysfunction of any
bodily organ or part.
As also defined in the 1999 interim final rule, Emergency care is
appropriate when services are needed immediately because of injury or
sudden illness and the time required to reach the PO or one of its
contact providers, would cause risk of permanent damage to the
participants health. Emergency services include inpatient and
outpatient services that are furnished by a qualified emergency
services provider, other than the PO or one of its contract providers,
either in or out of the PO's service area and are needed to evaluate or
stabilize an emergency medical condition. In addition, in accordance
with Sec. 460.112(d), we are clarifying in this final rule that we are
amending paragraph (d) of this section to require POs to explain to
PACE participants that emergency care services that are provided for
medical conditions that fall within this description must be covered by
the PO and do not require prior approval.
Urgent care means the care provided to a PACE participant who is
out of the PACE services area, and who believes their illness or injury
is too severe to postpone treatment until they return to the service
area, but their life or functioning is not in severe jeopardy.
We note that participants are expected to seek prior approval from
the PO in order to be covered for urgent care.
Post-stabilization care means services provided subsequent to an
emergency that a treating physician views as medically necessary after
an emergency medical condition has been stabilized. They are not
emergency services, which POs are obligated to cover. Rather, they are
non-emergency services that the PO should approve before they are
provided outside of the service area.
Prior approval of these services is intended to ensure efficient
and timely coordination of appropriate post emergency care by the IDT.
To further clarify, an example of urgent care might be a severe
cough without other symptoms. The participant does not believe his or
her life is in jeopardy, so he or she must call the PO. The PO
physician advises the participant not to go to the ER, take a certain
over-the-counter medication, and see the physician when the participant
returns tomorrow.
While post-stabilization care services are the follow-up care
required after an emergency condition that has stabilized, also while
the participant is outside the PO service area. For example, the
participant is hospitalized due to bacterial pneumonia. It was treated
and resolved enough for discharge but some residual symptoms remain.
The treating physician knows the participant will not be returning home
for 2 weeks, which he believes is too long a period of time before
having a follow-up x-ray ordered by her physician. Therefore, the
treating physician must contact the PO for approval to order a follow-
up x-ray. The x-ray is not emergency care but is necessary and
customary to ensure the improving condition of the lungs.
Comment: One commenter requested that we lengthen the time the PO
may take to respond to a request for approval of non-emergent care
services from 1 hour to 24 hours.
Response: We believe that the PO's responses to urgent and post-
stabilization care services requests need to be completed as
expeditiously as possible in order to prevent any misunderstanding
between the PO, the participant, and the non-network physician. We seek
to avoid a situation that might result in failure to provide essential
care or result in providing non-covered services because of the length
of the PO's response time. Therefore, we are retaining the 1-hour
response time for urgent care and post-stabilization care requests.
Final rule actions:
In this final rule, we are:
Adding language to paragraph (d) to require the PO to
explain to the participant that no prior authorization is required for
emergency care; and
Revising Sec. 460.100 to include definitions for urgent
and post-stabilization care.
Section 460.102 Interdisciplinary Team
This section is based on provisions in Part IV, section B of the
Protocol. In the 1999 interim final rule, we included a requirement
that the PO must establish an IDT at each PACE center to
comprehensively assess and meet the individual needs of each
participant. In Sec. 460.102(a)(1), we require that the PO assign each
participant to an IDT based at the PACE center the participant attends.
As we explained in the 1999 interim final rule, we believe that a
well-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. Members of the IDT should be knowledgeable about
the overall needs of the participants, not just the needs that 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.
Based on the Protocol, in paragraph (b) we require that the IDT be
composed of at least the following members:
a. Primary care physician (PCP)--We considered expanding this to
include nurse practitioners but decided to retain the requirement in
the Protocol. While it would be acceptable for a PO to include a nurse
practitioner on the IDT, we believe that this should be in addition to
rather than instead of the PCP, at this time. This approach is
consistent with other Medicare regulations. We believe such a change
should be included in a proposed rule in order to allow for public
comment on this issue. In the meantime, we are continuing to assess the
appropriateness of allowing nurse practitioners to assume the role of
the PCP consistent with State licensure for nurse practitioners.
b. Registered nurse (RN)--The Protocol requires the inclusion of a
``nurse.'' In paragraph (b)(2), we specified that this team member be
an RN. The nurse represented on the IDT must exhibit leadership and
management skills that are more consistent with the training received
by RNs, as opposed to licensed practical nurses. In addition, we
believe that an RN would be better able to determine and respond to the
health care needs of the frail population, particularly for home care
services.
c. Social worker;
d. Physical therapist (PT);
e. Occupational therapist (OT);
f. Recreational therapist or Activity Coordinator;
g. Dietitian;
h. PACE center manager--We changed the Protocol terminology from
``PACE Center Supervisor'' to ``PACE Center Manager.'' The PACE center
manager is responsible for overall operation of the PACE center and
ensuring service delivery. The individual who holds this position
should be a good facilitator and should possess good communication
skills. In many POs, the PACE center manager
[[Page 71286]]
leads IDT meetings. We are permitting the PO and the IDT the
flexibility to decide who should lead the team and facilitate the
discussions.
i. Home care coordinator--Since PACE services may be furnished in
the home, the coordination of in-home services with PACE center and
primary care services is critical to effective service delivery. This
coordination is especially important if the PO has contractors
providing the home care services. The PO must designate a home care
coordinator to supervise and coordinate home care services, whether
these services are furnished by a PACE employee or through a
contractor. We changed the Protocol's term ``home care liaison'' to
``home care coordinator,'' because ``home care liaison'' has another
meaning in Medicare, and we wanted to avoid confusion.
j. Personal care attendants (PCAs) or their representatives--We
changed the Protocol term ``health care worker/aide'' to ``personal
care attendant,'' as we believe this term more accurately describes
this position. We believe that ``health care worker'' is too general
and could apply to other members of the team.
k. Drivers or their representatives--This requirement remains
unchanged from the Protocol.
Due to the age of most PACE participants, a geriatrician could be a
valuable member of the IDT. As one option, the PCP could be a
geriatrician. However, physicians who specialize in geriatrics are
relatively rare, and availability might be a serious problem. We have
not required the involvement of a geriatrician but in the 1999 interim
final rule, we invited comments about whether such a requirement would
be desirable and, if so, whether the geriatrician should be employed by
the PO and should primarily serve PACE participants.
Consistent with the Protocol, we require in paragraph (c) that
primary medical care for all participants be furnished by the PCP(s).
The PCP must serve as the gatekeeper to the participant's use of
medical specialists and inpatient care, and he or she must be an
integral member of the IDT. Ultimate responsibility for management of
medical situations must rest with the PCP.
The IDT is responsible for the initial assessment, periodic
reassessments, the plan of care, and coordinating 24-hour care
delivery. A critical element of the success of the IDT is the degree to
which team members share information and communicate with one another.
The Protocol requires the physician to keep the IDT informed of the
medical condition of each participant and to remain alert to pertinent
input from other team members. We believe this should be the
responsibility of each member of the team rather than just the
physician, as it is critical to timely intervention to address
potential problems. To reflect this position, we require in paragraph
(d) that each member of the team must regularly inform the IDT of the
medical, functional, and psychosocial condition of each participant and
remain alert to pertinent input from other team members, participants,
and caregivers. This communication can take place through formal
measures such as team meetings and written documentation in
participants' medical records, but should not be limited to formal
mechanisms. Informal communication between team members (for example,
CARDEX systems, informal updates during shift changes) should be
encouraged as well. It is critical that personal care attendants be
involved in the communication process. As they often have the first
contact with the participant, it is important that they regularly share
information, for example, on the participant's mood, activities, and
daily habits. In the 1999 interim final rule, we required that each
team member must document all changes in the participant's condition in
the participant's medical record.
In paragraph (d)(3), we require that members of the IDT must serve
primarily PACE participants, unless a waiver is granted. After
considering this issue, we concluded that in order to effectively serve
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. 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. We recognize that team members
may have other clients, but this must not interfere with the provision
of services for PACE participants.
In paragraph (g), we included conditions for waiver of the
employment requirement for IDT members. CMS and the SAA were authorized
to grant a waiver of this requirement if they determined that--
There are not enough individuals available in the PO's
service area who meet the PACE requirement or State licensing laws make
it inappropriate for organizations to employ physicians; and
The proposed alternative does not adversely affect the
availability of care or the quality of care that is provided to
participants.
In response to public comment on the 1999 interim final rule, and
to implement section 903 of BIPA, we made the following changes in
Sec. 460.102 in the 2002 interim final rule.
We amended paragraph (d)(2)(iii) to clarify that IDT members must
document changes in a participant's condition in the participant's
medical record consistent with the documentation policies established
by the medical director of the PO. This ensures that only designated
team members have access to patient records.
Also, in consideration of the expanded contracting opportunities in
the 2002 interim final rule, we removed paragraph (f) that required
members of the PACE IDT to be employed by the PO. Finally, we removed
paragraph (g) that allowed CMS and the SAA to waive the employment
requirement for the PCP and the requirement that the IDT serve
primarily PACE participants. Since the PO may contract for PCPs in
accordance with the requirements specified in Sec. 460.70 (described
in the section I.B.3.b. of this preamble) and other waivers are
governed by Sec. 460.26 (described in section I.B.f. of this
preamble), these specific waiver provisions are no longer necessary. We
amended paragraph (d)(3) by removing the cross reference to paragraph
(g).
Comment: There were numerous recommendations on variations of IDT
composition, the roles of the IDT members, services the IDT members
provide and the locations where the IDT members may provide services.
One commenter recommended we grant greater flexibility by specifying in
the regulation the teams ``operate from'' the PACE center, regardless
of where the services are furnished. This commenter also recommended we
omit the requirement relating to physical location of the IDT.
Commenters also recommended that we provide greater flexibility in
composition of the IDT including when POs operate multiple PACE
centers.
One commenter recommended we omit the positions of dietitian, PACE
center manager, home care coordinator, PCA, and driver from mandatory
membership on the IDT and add a requirement that the core team
coordinate and supervise services provided by other staff.
Response: There are other delivery models with an interdisciplinary
team approach but none revolve around a PACE center. We believe the
cohesive interaction between the IDT and the PACE center is one of the
elements that makes PACE not only different but also successful.
[[Page 71287]]
The 2002 interim final rule expanded the flexibility available to
POs by permitting contracting of individual IDT members or contracting
for the entire PACE center and services. One of the essential elements
of the IDT is the consistency with which services are provided to
participants. Each PACE center is required to have at least one IDT or
more if necessary to ensure that each participant is assigned to an IDT
at the PACE center the participant attends. As a result, we are not
inclined to delink the physical location of the IDT service to the PACE
center.
After reviewing the recommendations made by commenters for members
of the IDT, we continue to believe that the required membership of the
IDT specified in paragraph (b) has been an essential element in the
PACE program's proven success in managing the complex health conditions
of the frail elderly. Nutritional status has an immense impact on
health especially on the frail and the elderly; thus, we believe a
dietitian is an essential member of the IDT. The home care coordinator
is another position that has a vital impact on the health and safety of
participants while they are living at home in the community. The PCAs
often have the first and closest interaction of the day with the
participants and the driver has contact with the participants both in
the early morning and in their home environment. Input from these IDT
members or their representatives can be instrumental in the detection
of the first signs of impending illness or environmental issues.
Therefore, we are retaining the required membership composition of the
IDT as published in the 1999 interim final rule in Sec. 460.102(b).
Comment: We received one comment regarding the 2002 interim final
rule modifications to the IDT. This commenter requested we retain
paragraph (f), which was deleted from the 2002 interim final rule. The
commenter also suggested that paragraph (g) be replaced with language
the commenter proposed related to contracted PCPs.
Response: The changes to the 2002 interim final rule were made in
response to numerous comments requesting flexibility to contract for
all members of the IDT. As we stated in the preamble to the 2002
interim final rule, we removed paragraph (f)(requiring members of the
IDT to be employed by the PO) and paragraph (g)(allowing waiver of
specified requirements) in consideration of the expanded contracting
opportunities that were added in the 2002 interim final rule. As the PO
may contract for PCPs in accordance with the requirements specified in
Sec. 460.70 and other waivers are governed by Sec. 460.26, we
determined that this provision was no longer needed.
The commenter's proposed language would have permitted contracting
of services for most IDT positions, but dictated when and where
services could be provided. We continue to believe that the amendments
made in the 2002 rule provide the flexibility requested in comments we
received on the 1999 interim final rule. Therefore, we are retaining
the changes implemented in the 2002 interim final rule.
Comment: One commenter recommended the IDT include the
participant's personal representative.
Response: The intent of Sec. 460.102 was to establish the staff
responsibilities for the disciplines that constitute the IDT team of
care providers. Although the participant (or his or her representative)
is not specifically identified as a member of the IDT under Sec.
460.102, Sec. 460.106(e) requires the team to develop, review, and
reevaluate the plan of care in collaboration with the participant or
caregiver, or both to ensure there is agreement with the plan of care
and the participant's concerns are addressed. Although the participant
or his or her representative contributes to the decision-making
process, we do not believe that it is appropriate to include the
participant or their representative as an IDT member.
The following are comments and recommendations related to specific
IDT members.
Comment: In response to our request for comments related to
requiring that the PO employ a geriatrician on the IDT, a number of
commenters indicated that it is desirable but not feasible to require
POs to employ a geriatrician at each PACE center.
Response: We agree with these commenters and are not requiring a
geriatrician on each IDT.
Comment: One commenter requested we delete the requirement that
PCPs must serve primarily PACE participants.
Response: We are retaining the ``primarily serve'' requirement for
all IDT members because this requirement was established to ensure the
participants receive the unique benefits offered by the PACE program
model.
Comment: A very large number of comments were related to physician
adjunct positions, specifically nurse practitioners (NPs) and physician
assistants (PAs). One commenter recommended that we include NPs and PAs
in IDT requirements because the role of the NP to include primary care
and team leadership under a collaborative agreement with an actively
involved and fully accessible physician.
Another commenter requested we permit more flexibility in the
delivery of primary care through the acknowledgement of the role of NPs
and PAs and modify both regulatory sections by adding the phrase ``or a
nurse practitioner/physician assistant working in collaboration with a
PCP, as reasonable, appropriate, and allowable under State law and
regulation.''
Response: In accordance with the PACE Protocol, the regulation
requires participation of a physician. Physician is defined in the
Medicare program to mean a doctor of medicine or osteopathy as
recognized in section 1101(a)(7) of the Act. As a result, there must a
PCP on the IDT. The regulation does not prevent the participation on
the IDT of NPs or PAs acting in collaboration with the physician and
within their scope of practice. However, NPs and PAs may participate on
the IDT in addition to the PCP, but may not replace the PCP.
We acknowledge the dedicated service and quality care provided by
NPs and PAs to PACE participants, but we do not believe that addition
of a specific role description for NPs or PAs in the regulatory
language in Sec. 460.102 would provide any additional flexibility to
the POs in establishing their IDTs.
Comment: We received three comments related to the requirement for
an RN on the IDT. One commenter supported the regulation requiring an
RN as opposed to a nurse on the IDT. Another commenter supported
flexibility depending on the composition of the team. Another commenter
requested the roles of the NP and the clinical nurse specialist (CNS)
be consistent with established CMS rules and regulations.
Response: We believe the term ``registered nurse'' is a more clear
and definitive title than ``nurse'' and have therefore specified that
the IDT must include a registered nurse. We believe that the IDT
membership should include an RN, but that does not imply that the PO
cannot utilize licensed practical nurses, NPs, or CNSs in other direct
care positions acting in collaboration with the physician and within
their scope of practice. This approach is consistent with established
CMS rules and regulations.
Comment: Several commenters requested that the requirements for the
social worker be consistent with those contained in the nursing home
regulations with the additional requirement that each PO employ or
[[Page 71288]]
contract with at least one Master's level social worker (MSW).
One commenter recommended an alternative to a Master's degree in
social work. They recommended that social workers hold a Baccalaureate
degree in social work or in a human services field and 1 year of
supervised social work experience in a health setting working directly
with individuals.
Response: We agree with the commenter and note that a Baccalaureate
degree in social work does not include the training in social
counseling that is required for a Master's in social worker. Therefore,
to clarify the position and responsibilities of the social worker on
the IDT, we are amending Sec. 460.102(b)(3) to require a MSW be part
of the IDT, rather than a ``social worker.'' In the 1999 interim final
rule, Sec. 460.64(c)(2) listed the personnel qualification for a
social worker, which included having a Master's degree in social work
from an accredited school of social work. In this final rule, we have
removed Sec. 460.64(c)(2). We are requiring a MSW on each IDT to
establish the social work plan of care and to provide counseling
services. The MSW may participate on several teams, perform
assessments, reassessments, care planning, and counseling consistent
with their education and training. For consistency we are also
reviewing Sec. 460.104(a)(2)(iii) and Sec. 460.104(c)(1)(iii), to
refer to a Master's-level social worker to perform assessments and
reassessments.
Therefore, in Sec. 460.64, we are deleting the specific
educational and experience qualifications for social workers as all
States require licensure, certification, or registration of social
workers as well as qualifications for MSWs. The PO may contract with
other MSWs to augment their staffing levels to ensure all participants
receive the counseling services provided by MSWs. The PO may employ or
contract with Baccalaureate social workers to provide services within
their scope of practice.
Comment: A commenter requested that we clarify the terms ``Personal
care attendant or his or her representative'' and ``Driver or his or
her representative'' in relation to composition of the IDT.
Response: We expect the driver and PCA to be members of the team
but understand that a representative may attend morning meetings. Most
POs conduct morning IDT meetings during the time when PCAs are actively
engaged in morning caring at the PACE center or participants'
residences and drivers are engaged in the transporting participants to
the PACE center. Therefore, neither the PCA nor the driver are
available to attend these IDT meetings. However, we believe these staff
are often in a position to provide important details about the
participants' physical and emotional condition and changes in their
home environment. Information from these IDT members can be relayed
through a representative, such as the PACE center manager, home care
coordinator, transportation coordinator, RN, social worker, a
supervisor, designated colleague, or other IDT member. Therefore, we
included representatives of PCAs and drivers in Sec. 460.102(b).
Comment: We received several requests to modify the rule to include
the following positions on the IDT: qualified occupational therapy
assistants (OTAs), Licensed Practical Nurses (LPNs), certified
occupational therapy assistants (COTAs), and Baccalaureate-level social
workers (BSWs).
Response: We believe LPNs, OTAs COTAs, and BSWs, provide dedicated
quality care to PACE participants and are essential to the operation of
POs. However, as we noted above, our current regulations provide ample
opportunity for the POs to involve personnel with these educational
qualifications in providing the best possible PACE services, without
necessarily including them as part of the IDT. We do not think revising
our regulation is necessary.
Comment: One commenter recommended that we include an RT on the
IDT, stating the statute provides flexibility for the PO to include
additional services.
Response: Composition of the IDT was based on the Protocol, which
did not include respiratory therapy. However, our regulations do not
prevent the inclusion of these professionals. The extent to which POs
routinely include respiratory therapists on their IDT will be based on
their participants' medical conditions. The IDT is required to involve
any discipline necessary to treat the participant's individual needs,
which includes assessment, collaboration during the development of the
plan of care, and providing treatment.
Final rule actions:
In this final rule we are changing the term ``social worker'' to
``Master's-level social worker'' consistent with our changes to Sec.
460.64.
Section 460.104 Participant Assessment
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 in order
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.
The assessment process begins before enrollment, as set forth in
Sec. 460.152, when the PO evaluates whether a potential participant
can be cared for appropriately in the program. Often, POs present a
proposed plan of care to the potential participant as part of the
enrollment process. The initial comprehensive assessment must be
completed promptly following enrollment, but individual team members'
in-person assessment of the participant should be scheduled at
appropriate intervals based on the participant's level of health.
Because the initial assessments are thorough, this will ensure that the
participant is not overwhelmed with several team members conducting
assessments at one time. However, the initial comprehensive assessment
must be completed quickly so that the plan of care can be completed and
implemented without delay. This often is accomplished by the effective
date of enrollment and should never be delayed more than a few days
beyond that date. With the team concept, the goal is to obtain input
from each discipline, as well as from the participant, through
comprehensive assessment that identifies the services necessary to
address the participant's needs and care preferences.
Section 460.104(a) requires that as part of the initial
comprehensive assessment, each of the following members of the IDT must
individually evaluate the participant in person and develop a
discipline-specific assessment of the participant's health and social
status:
Primary care physician;
Registered nurse;
Social worker;
Physical therapist or occupational therapist, or both;
Recreational therapist or activity coordinator;
Dietitian; and
Home care coordinator.
We believe the specified IDT members represent the core disciplines
needed to determine the specific treatment and psychosocial development
needs of the participants. At the recommendation of individual team
members, other professional disciplines (for example, speech-language
pathologists, dentists, or audiologists) may participate in the initial
comprehensive assessment if the participant's needs warrant their
inclusion.
[[Page 71289]]
In the 1999 interim final rule, we stated that we were in the
preliminary stages of developing a standardized core assessment
instrument, the COCOA-B, to be used by POs for outcome-based continuous
quality improvement. Until such time as this instrument was completed,
we specified in Sec. 460.104(a)(4) that the participant's assessment
must include, at a minimum, the following information:
Physical and cognitive function and ability;
Medication use;
Participant and caregiver preferences for treatment;
Socialization and availability of family support;
Current health status and treatment needs;
Nutritional status;
Home environment, including home access and egress;
Participant behavior;
Psychosocial status;
Medical and dental status; and
Participant language.
We believed that this information would provide a basic framework
from which a comprehensive plan of care could be developed, would be
appropriate for every participant, and would ensure that the plan of
care focused on the participant's medical, psychosocial, and functional
needs. However, this list represented the minimum information to be
included in the comprehensive assessment, and the PO was encouraged to
include other assessment items as necessary.
Although a core assessment instrument has been developed, since the
publication of the 1999 interim final rule, our experience with the
PACE program has led us to having some misgivings about its long term
application. Given the need for flexibility for POs, we are concerned
that specifically mandated measures may compromise the discretion of
POs to use other assessment tools that may be more appropriate for
their settings.
Therefore, we are not inclined to replace the information
requirements contained in Sec. 460.104(a)(4) with a specific
standardized core assessment instrument. In time, we expect that POs
will become more familiar with using the quality assessment and
performance indicators that are contained in Sec. 460.134
(physiological well being, functional status, cognitive ability,
social/behavioral functioning, and quality of life) as a framework for
participant assessments. At this time, we are finalizing the
information listed in Sec. 460.104(a)(4) as the required information
POs must obtain as part of a comprehensive assessment.
The Protocol requires that the discipline-specific plans be
consolidated into a single plan of care for the participant. The
development of the plan of care must occur through discussion and
consensus of the entire IDT. We established this requirement in Sec.
460.104(b) by stating that the discussion must take place during team
meetings, in order to facilitate group discussion of the plan of care
and ensure that all members of the team are actively involved in the
decision-making process, and that the plan of care must be completed
promptly.
In developing the plan of care, the PACE IDT is also required by
Sec. 460.104(b) to inform female participants that they are entitled
to choose a women's health specialist from the network of PACE
providers. We have included this requirement to ensure compliance with
the Consumer's Bill of Rights and Responsibilities (CBRR), as explained
in detail in the preamble of the 1999 interim final rule.
Reassessments are necessary to provide information to adjust
participants' plans of care. Periodic reassessments ensure the
continued accuracy and effectiveness of the participant's plan of care.
Consistent with the Protocol, we require in paragraph (c) that the
following members of the IDT conduct an in-person reassessment on at
least a semi-annual basis:
Primary care physician;
Registered nurse;
Social worker;
Recreational therapist or activity coordinator; and
Other team members actively involved in the development or
implementation of the participant's plan of care, for example, home
care coordinator, physical therapist, occupational therapist, or
dietitian.
The primary care physician, registered nurse, social worker, and
recreational therapist/activity coordinator are required to perform
assessments at least semiannually as they are the most critical in
terms of defining outcomes of care. Other team members actively
involved in the participant's plan of care must also reassess
semiannually, as they have an impact on the care the participant is
receiving. However, if the participant is not receiving certain
services (such as home care, physical therapy, occupational therapy,
dietitian services), these members of the team would not be required to
conduct a semi-annual assessment for that participant.
Consistent with the Protocol, we require the following members of
the IDT to conduct an in-person reassessment on at least an annual
basis:
Physical therapist and/or occupational therapist;
Dietitian; and
Home care coordinator.
It is important for the IDT to monitor and respond to any changes
in a participant's condition or family situation or any concerns raised
by the participant or his or her designated representative. The
Protocol requires that the participant be reassessed by the team or by
selected members of the team to develop a new plan of care when the
health status or psychosocial situation of a participant changes. We
believe that all members of the IDT that are required to perform the
initial comprehensive assessment should reassess the participant
because if fewer members participate in this reassessment, a critical
component of a participant's care might be overlooked.
In addition, paragraph (c)(3) requires that if a participant's
health or psychosocial status has changed or if a participant (or his
or her designated representative) believes that a particular service
needs to be initiated, continued, or eliminated, the appropriate IDT
members must reassess the participant. The purpose of this reassessment
is to evaluate whether it is necessary to increase, continue, reduce,
or terminate particular services and whether a different course of
treatment is needed. A complete reassessment should ensure that the
participant is receiving a continuing program of care that meets his or
her current needs. Requiring a reassessment based on the concerns of
the participant emphasizes the active role the participant plays in the
assessment process and development of his or her plan of care. The
participant's adherence to the plan is critical to the successful
delivery of services. Therefore, permitting the participant (or
designated representative) to trigger a reassessment gives participants
the opportunity to express any dissatisfaction with the manner in which
care or services are furnished.
We believe the requirements in Sec. 460.104(c)(3) are appropriate,
but in this final rule, we wish to clarify that not all changes in
health or psychosocial status require reassessment by the entire IDT.
We are allowing the PO the flexibility to determine the appropriate
staff to reassess changes that are not significant. We continue to
believe that significant changes in health or psychosocial status
require the in-person reassessment by the IDT members identified in
Sec. 460.104(a)(2).
[[Page 71290]]
Section 460.104(c)(3) also requires the PO to have explicit
procedures for timely resolution of requests from participants (or
their authorized representatives) to initiate, continue, or terminate a
particular service. Unless an extension is granted, the IDT must notify
the participant (or designated representative) of its decision to
approve or deny the request as expeditiously as the participant's
condition requires, but no later than 72 hours after the IDT receives
the request. We considered establishing both a standard process and an
expedited process for responding to participant requests; however,
because of the frailty of this population, we concluded that every
request is urgent and requires a quick response. We want to ensure that
a participant's health is not adversely affected due to a delay in
reassessing the participant's condition. The goal of the program is to
maximize the participant's functioning, and a quick response is meant
to ensure that all factors are evaluated, all necessary services are
being furnished, and participant health is not compromised. A timely
notification also allows participants adequate time to consider appeal
rights, if necessary, without compromising their health.
The IDT may extend the 72-hour timeframe by no more than 5
additional days if the participant or designated representative
requests the extension, or if the team documents its need for
additional information and how the delay is in the interest of the
participant. An extension may be warranted because not all of the
appropriate members of the IDT may always be able to meet with the
participant, conduct a discipline-specific reassessment, discuss the
results of the reassessment with the entire IDT, and develop a response
to the request within 72 hours. The PO retains the flexibility to
determine the most appropriate manner in which to provide notification
to the participant (or designated representative).
If, based on the reassessment, the IDT decides to deny the
participant's request, the denial must be explained to the participant
(or designated representative) orally and in writing. The PO must
provide the specific reasons for the denial in understandable language.
If the participant (or designated representative) is dissatisfied
with the outcome of the reassessment, the participant may appeal the
decision in accordance with. Sec. 460.122. Specifically, the PO must:
(1) Inform the participant or designated representative of his or her
right to appeal the decision; (2) describe both the standard and
expedited appeals processes, including the right to and conditions for
obtaining an expedited appeal of a denial of services; and (3) describe
the right to and conditions for continuation of contested services
through the period of the appeal.
If the IDT fails to provide the participant with timely notice of
the resolution of the request for reassessment or does not furnish the
services required by the revised plan of care, this failure constitutes
an adverse decision, and the participant's request must be
automatically processed as an appeal by the PO in accordance with Sec.
460.122.
Team members who reassess a participant must reevaluate the plan of
care. Any changes in the plan of care must be discussed and approved by
the IDT and the participant (or designated representative). The plan of
care reflects the team's and participant's goals for the participant's
care. Obtaining the participant's approval of the proposed plan of care
is important to the successful delivery of services and the
participant's adherence to the plan.
In addition, we also require that any services included in the
revised plan of care as a result of a reassessment must be furnished to
the participant as expeditiously as the participant's health condition
requires. It is critical that care not be delayed and that the
participant receive comprehensive care that maintains his or her
functional status. Because we recognize that some changes in the
participant's plan of care (for example, installing a wheelchair ramp
at the participant's home) may require more time to accomplish, we
chose not to specify a timeframe for delivering services. However, we
solicited comments on the necessity of requiring a specific timeframe.
Whenever a participant assessment or reassessment occurs, the
information must be documented in the participant's medical record.
Comment: Two commenters requested confirmation that the
requirements for the initial comprehensive assessment in Sec.
460.104(a) were not intended to govern the practice of assessment
before enrollment or to prescribe which IDT members must conduct
assessments before enrollment for purposes of determining whether the
individual's needs can safely be met through the PACE program. One
commenter requested clarification that the regulation requires that a
complete assessment by the full team take place after enrollment. This
commenter also asked which members of the team must have conducted
assessments before enrollment.
Response: The assessment process begins before enrollment when the
PO evaluates a potential participant to determine if they can be cared
for appropriately in the community by the PACE program. We do not
dictate the disciplines that must perform this assessment; we leave
that to the discretion of the PO. The remainder of the initial
comprehensive assessment can be performed before the enrollment
agreement is signed or the PO can decide to wait until after the
enrollment agreement is signed. The only requirement is that the
assessment be completed as soon as possible after enrollment so the
plan of care can be implemented after the effective date of enrollment
with as little delay as possible.
As specified in Sec. 460.104(a)(2), the initial comprehensive
assessment must be performed by the following disciplines:
Primary care physician.
Registered nurse.
Social worker.
Physical therapist.
Occupational therapist.
Recreational therapist or activity coordinator.
Dietitian.
Home care coordinator, and any other professional
discipline the IDT recommends be included in the comprehensive
assessment process.
We believe these requirements reflect the current intake,
assessment, and enrollment practices of POs. In the discussion
regarding 460.102, we clarified that a MSW is a required discipline on
the IDT. In order to be consistent with 460.102, we are amending
460.104(a)(2)(iii) and 460.104(c)(1)(iii) to clarify that a MSW
performs assessments and reassessments.
Comment: One commenter supported the assessment and reassessment
requirements but proposed a modification to Sec. 460.104(a)(2)(i) and
Sec. 460.104(c)(1)(i) by adding ``or a nurse practitioner/physician
assistant working in collaboration with a PACE PCP, as reasonable,
appropriate, and allowable under State law and regulation.''
Response: We believe that the physician should perform the initial
comprehensive assessment and semiannual reassessments, because these
assessments are the foundation of the participant's plan of care. The
NP role is an adjunct position, supportive of the physician when
conducted within the NP's scope of practice and as allowable under
State law. Therefore,
[[Page 71291]]
we are not modifying the regulatory language.
Comment: One commenter requested the requirements in Sec.
460.104(a)(2)(iv) and Sec. 460.104(c)(2)(i) which state, ``Physical
therapist or occupational therapist or both,'' be changed to designate
these disciplines into separate sections. The commenter pointed out
that these disciplines are not interchangeable and both OTs and PTs
should be required to participate in the initial comprehensive
assessment and annual re-assessment.
Response: After reviewing the comments, we agree that PTs and OTs
both needed to participate in the initial assessment and annual
reassessments. Therefore, we are revising Sec. 460.104(a)(2)(iv) and
Sec. 460.104(c)(2)(i) to require a PT and an OT to perform initial
comprehensive assessments and the annual reassessments.
Comment: Two commenters requested clarification on the delivery of
gynecological (GYN) services. One commenter asked whether the PO could
limit GYN services to providers in their network and, if so, whether
there was an assumption that the PO must have more than one GYN
specialist under contract.
The other commenter requested clarification of which health
professionals would meet our definition of ``qualified specialist for
women's health services.'' They questioned whether PCPs would be
acceptable due to the time commitment required by the geriatric and
cognitive deficits of many participants. The commenter questioned
whether adequate GYN services would be available to PACE participants
with contracted specialists and recommended the elimination of the
regulatory requirement.
Response: We first want to clarify that the PO must provide access
to all specialties within its network and participants are required to
receive all services through the PO. The CBRR guarantees participants
the choice of providers as well as the right of female participants to
choose a qualified specialist in woman's health. Therefore, we expect
that when possible the PO will contract with more than one provider of
gynecological services.
In response to whether the PCP is a qualified specialist for
women's health services, a PCP is qualified to perform primary care
including basic GYN services, but the PCP is not a ``qualified
specialist for women's health services.'' Although female participants
may choose their PCP for basic GYN services, if a participant requests
a GYN specialist or the participant requires more complex GYN services,
the participant must be provided a GYN specialist and, when possible,
be provided a choice of GYN specialists.
Accordingly, we are retaining the requirement to provide
participants a choice to use a woman's health specialist, consistent
with the CBRR protections we adopted in the 1999 interim final rule.
Comment: The majority of commenters on this section disagreed with
the regulatory language related to how to accomplish, when to perform,
and who must conduct the periodic reassessments required by Sec.
460.104(c). Recommendations ranged from deleting various requirements
to requests to provide POs the flexibility over the timing and scope of
reassessments. Commenters also provided proposed language changes,
including some that are consistent with the Protocol.
Several commenters requested clarification of whether all team
members must perform reassessments or whether only relevant team
members may perform reassessments.
Response: In response to the numerous comments related to the
reassessment requirements, we want to confirm that we believe that the
disciplines designated in the 1999 interim final rule at Sec.
460.104(c) are the minimum disciplines required to perform
reassessments. We also expect that, should the results of the
reassessments raise further issues related to other disciplines,
reassessments by additional disciplines must be conducted and included
in the development of the comprehensive plan of care.
In contrast, the initial comprehensive assessment must be conducted
by those disciplines listed in Sec. 460.104(a)(2), and any other
professional disciplines recommended by the IDT. The results of the
discipline specific assessments must be consolidated into a single
comprehensive plan of care.
Again as specified in our regulation, periodic reassessments must
be conducted as follows;
At least semi-annually, and more frequently if the
participant's condition dictates, by the PCP, RN, MSW, recreational
therapist or activity coordinator, and other appropriate members of the
IDT that are actively engaged in the development or implementation of
the participant's plan of care.
At least annually the PT, OT, dietitian, and home care
coordinator must conduct in-person reassessments.
Comment: Numerous commenters remarked on the provision requiring
reassessment based on change in participant status or at the request of
the participant or his or her designated representative. Several
commenters suggested the reassessments initiated by the PO based on
changes in health status be differentiated from those requested by the
participant.
Many commenters suggested that the requirement that a formal
reassessment be conducted based on a change in participant health
status be limited to a ``significant change.'' These commenters also
suggested including a definition more consistent with the definition
contained in nursing home regulations where ``a ``significant change''
means ``a major decline or improvement in the participant's status that
will not normally resolve itself without further intervention by staff
or by implementing standard disease related clinical interventions,
that has an impact on more than one area of the participant's health
status, and requires an IDT review or revision of the care plan or
both.'' Another commenter recommended that we provide POs the same
discretion as the nursing home regulations afford nursing homes, to
determine whether and to what extent a reassessment or a change in the
plan of care, or both, are necessary. Other commenters recommended that
if a non-significant change occurs, the reassessment may be conducted
by the discipline impacted.
One commenter recommended that this requirement be eliminated,
particularly when there is agreement between the IDT and the
participant or his or her designated representative.
One commenter suggested that we require the PO to have a defined
process for responding to participant requests, which includes
assigning appropriate team members to the reassessment.
Response: Due to the fragility of the PACE population, we do not
believe it would be prudent to restrict the requirement at Sec.
460.104(c)(3) by limiting reassessments to significant changes in
participant health status. The philosophy of PACE requires the staff to
be cognizant of any and all changes in participant health status so
that they can take a proactive approach to the care of this frail and
vulnerable population and prevent development of a major problem. We
believe the suggested changes would compromise the integrity of the
PACE philosophy.
Moreover, individuals that do not participate in the PACE program
and reside in a NF will generally be less independent and mobile. In
addition, as they reside in a more restricted environment under
constant observation by staff, residents of NFs need less formally
defined IDT reassessment requirements. These individuals do not require
evaluation of home health or
[[Page 71292]]
transportation issues and generally receive more limited PT and OT
services than community dwelling PACE participants. For these reasons,
we believe that the requests for consistency with NF requirements is
inappropriate.
PACE is based on the collaborative relationship between the
participant and the PO. We believe it is in the best interest of both
the participant and the PO to conduct a reassessment when there is a
request for a specific service regardless of whether or not the
participant and the PO agree. The reassessment might uncover other
issues not previously detected.
In response to comments, we are revising Sec. 460.104(c)(3) by
renaming paragraph (c)(3) as paragraph (d) Unscheduled reassessments.
We are separating the requirements for reassessments based on a change
in participant status in paragraph (d)(1) from those performed at the
request of the participant or designated representative in paragraph
(d)(2). We are amending the requirements to require the IDT members
listed in paragraph (a)(2) to perform in-person reassessments for
change in participant status while permitting the IDT the flexibility
to determine the appropriate IDT members when the assessment is
performed at the request of a participant or his or her representative.
Comment: There was strong disagreement by one commenter regarding
the PO's responsibility to inform participants about the appeal process
if they are dissatisfied with a determination. The commenter stated the
PO should provide appeal information with all written denials,
reductions, and terminations of services or changes in the plan of
care.
Response: The requirement for written notification of the PO's
appeal process is discussed in Sec. 460.122 under Subpart G,
Participant rights. This section states, among other things, that
participants are provided with written materials on the appeal process
upon enrollment and annually thereafter and whenever there is a denial
of a request for services. Denial of services includes denial,
continuation, or termination of a requested service. The provisions for
reassessment at the request of a participant was intended to serve as
the first stage of the appeals process.
Comment: In the 1999 interim final rule, we solicited comments on
whether to impose a timeframe under which POs must initiate changes in
services after a revision to a participant's plan of care. Comments
varied and included the following, while some commenters agreed with
the existing requirement that services be furnished to the participant
as expeditiously as the participant's health condition requires; others
indicated that the timeframe should be left to the discretion of the
PO. Those commenters stated that specifying a timeframe for service
delivery merely adds a layer of regulation and oversight that in all
likelihood will not be necessary. Of the comments supporting a specific
timeframe, some commenters urged us to set a maximum timeframe of no
more than 5 days for initiating service delivery following an approved
change in the plan of care plan and permit the timeframe to be waived
in specific situations. Other commenters recommended that any
individualized timeframes be specified in the participant's plan of
care.
Response: In response to the varied and different comments received
in response to our solicitation for comment on timeframes for
delivering services, we believe further consideration of this issue is
needed before adopting a specific timeframe. Accordingly, we are
retaining the requirement as published in the 1999 interim final rule
which requires the PO to implement changes in a participant's plan of
care expeditiously as the participant's health condition requires.
Final rule actions:
In this final rule, we are:
Amending Sec. 460.104(a)(2)(iv) and Sec.
460.104(c)(2)(i) to require that both the PT and OT perform the initial
comprehensive assessment and annual reassessments.
Amending Sec. 460.104(a)(2)(iii) and 460.104(c)(1)(iii)
changing social worker to Master's-level social worker.
Redesignating paragraph (c)(3) as paragraph (d) titled
``Unscheduled reassessments'' to permit the IDT the discretion to
determine the disciplines necessary to perform reassessments that are
requested by a participant or his or her representative.
Section 460.106 Plan of Care
Based on Part IV, section B of the Protocol, we developed
requirements for the participant's plan of care. In Sec. 460.106(a),
we require that the IDT promptly develop a comprehensive plan of care
that specifies all care needed to meet the participant's medical,
physical, emotional, and social needs, as identified in the initial
comprehensive assessment. As required by paragraph (b), the plan of
care must identify measurable outcomes to be achieved and must be
developed in collaboration with the participant and his or her
caregiver. The specified outcomes need not be discipline-specific.
Instead, these are team goals for the participant's care. Involving the
participant in the plan of care is important to the successful delivery
of services and the participant's adherence to the plan.
In paragraph (c), we require the team to implement, coordinate, and
monitor the plan of care by providing services directly and by
supervising the delivery of services furnished by contract providers.
The participant's health and psychosocial status, as well as the
effectiveness of the plan of care, must be monitored continuously
throughout the provision of services, informal observation, input from
participants and caregivers, and communications among members of the
IDT and other providers.
In paragraph (d), we require that, on at least a semiannual basis,
the IDT must reevaluate the participant's plan of care, including the
defined outcomes, and make changes as necessary.
Semiannual review of the participant's plan of care ensures that
the needs of the participant are being met. It allows the team to
determine whether the participant's level of health has changed enough
to warrant a change in the level of services or even the setting in
which care is provided.
In paragraph (e), we require that participant plans of care be
developed, reviewed, and reevaluated in collaboration with the
participants or caregivers. The purpose of participant/caregiver
involvement is to assure that they approve of the care plan and that
participant concerns are addressed. We give POs the flexibility to
determine how often care plans should be reviewed with the participant.
In paragraph (f), we require that the participant's plan of care
and any changes in the plan must be documented in the participant's
medical record.
Comment: We received several comments related to participant
involvement in their plan of care. One commenter stated that the
participant should always be included in the development of the plan of
care to the extent possible and desired, but that use of the term
``or'' in ``participant or caregiver'' suggests that the team may elect
not to involve the participant in the development of his or her plan of
care.
Another commenter suggested we include a provision to provide for a
more negotiated plan of care process incorporating discussion with the
participant as part of the process.
Two respondents suggested that the participant and/or his or her
representative be given the opportunity to review the plan of care at
the time of the official review (semiannually), when
[[Page 71293]]
the plan requires significant revision and upon a request of the
participant.
Response: It is our expectation that the IDT will include the
participant in the plan of care development when possible and include
the participant's representative when it is not appropriate to include
the participant or at the instruction of the participant.
We believe that the current requirements in Sec. 460.106 provide
sufficiently for the inclusion of the participant, or the participant's
representative, in the plan of care development.
Comment: One commenter requested we provide some samples of what
CMS considers measurable outcomes that could be included in the plan of
care.
Response: Some examples of measurable outcome measures that would
be specific to an individual plan of care include the following:
Participant will receive yearly flu shot.
Participant will gain and maintain 1 pound each 2 week
period until weight achieves 100 pounds.
Participant will be instructed in blood sugar testing.
Within 1 week, the participant will able to explain and demonstrate the
use of the glucometer and recording of the results.
Final rule actions:
This final rule will finalize Sec. 460.106 as published in the
1999 interim final rule.
Subpart G--Participant Rights
The purpose of subpart G is to establish requirements for patient
rights and protections that POs must include in their program
agreements and provide to PACE participants.
In accordance with sections 1894(b)(2)(B) and 1934(b)(2)(B) of the
Act, the PACE program agreement requires the PO to have in effect,
``written safeguards of the rights of enrolled participants (including
a patient bill of rights and procedures for grievances and appeals) in
accordance with regulations and with other requirements of this title
and Federal and State law that are designed for the protection of
patients.'' In addition, sections 1894(f)(3) and 1934(f)(3) of the Act
allow CMS the discretion to apply the requirements of Part C of title
XVIII and sections 1903(m) of the Act and 1932 of the Act relating to
the protection of beneficiaries and program integrity as would apply to
M+C (now MA) organizations under Part C and to Medicaid managed care
organizations under prepaid capitation agreements under section 1903(m)
of the Act. Moreover, sections 1894(f)(2) and 1934(f)(2) of the Act
require us to incorporate the requirements in the Protocol which
includes a patient bill of rights.
In addition, we made every effort to assure that the rights and
protections established in the PACE program agreement are in
substantial compliance with the Presidential Advisory Commission's (The
Commission) Consumer Bill of Rights and Responsibilities (CBRR), which
appeared as an addendum to The Commission's Final Report to the
President, entitled ``Quality First: Better Health Care for All
Americans'' (March 1998). The President issued an Executive Memorandum
to the Secretary of the Department of Health and Human Services dated
February 20, 1998, which required that, by December 31, 1999, Medicare
and Medicaid health care programs be brought into substantial
compliance with the CBRR. The PACE program is included within that
framework.
As we explained in the 1999 interim final rule, in considering how
to apply these patient protections, the statute requires that we take
into account the differences between the populations served and
benefits provided under PACE, MA, and Medicaid managed care. We believe
that the PACE program is unique in its approach to meeting the needs of
the frail elderly. Unlike most managed care organizations which are
responsible for meeting health care needs alone, the PACE program is an
integrated partnership between the individual, the community, and the
PO, which is dedicated to providing all-inclusive care to meet all
medical and social needs to enable the participant to remain in the
community.
We believe it is important to establish participant rights that
reflect the differences in the PACE delivery approach from that of
other managed care systems. For example, since PACE participants
receive services most days of the week, either at the PACE center or
through home visits, POs are able to monitor changes in a participant's
medical condition and social service needs on a daily basis. When PACE
participants are referred to contracted specialists, in most cases, the
PO makes the appointment, provides transportation, and often provides
an aide or other staff member to accompany the participant. While
managed care organizations may provide this level of care management to
some enrollees, POs do so routinely for their entire participant
census. Also, while managed care organizations furnish a selected array
of medical services, they do not furnish all-inclusive care, including
social and recreational services intended to enhance participants'
quality of life.
To reiterate the philosophy set forth in the Protocol, the PO
furnishes comprehensive services designed to: (1) Enhance the quality
of life and autonomy for frail, older adults; (2) maximize dignity and
respect of older adults; (3) enable frail, older adults to live in
their homes and in the community as long as medically and socially
feasible; and (4) preserve and support the older adult's family unit.
The bill of rights for PACE participants must complement and maintain
this philosophy. In the 1999 interim final rule, we relied on the
Protocol and incorporated the basic rights that it identifies. However,
we were also guided by the M+C regulations in effect at that time and
by the CBRR.
The statute also directs us to consider State law. We interpreted
this to mean that a PO's participant bill of rights may include
additional rights and protections as required by State or local laws
and regulations or ethical considerations of particular concern, but
only if these additions or modifications provide stronger rights and
protections than those established in the 1999 interim final rule.
Consistent with the Protocol and the CBRR, we included a provision
allowing participants to choose to be represented by family members,
caregivers, or other representatives. We intend that a participant may
designate a representative to exercise any or all of the rights to
which the participant is entitled.
In addition, we require, as did the Protocol, the PO to provide
encouragement and assistance to participants in understanding and
exercising their rights and in recommending changes in PACE policies
and services.
In the discussion on consultations with the State Administration on
Aging in section I.B.2.c. of this final rule, we referred to the State
Long Term Care Ombudsman Programs. These State programs promote and
monitor the quality of care in nursing homes, including identifying and
resolving complaints, making regular visits to nursing homes, and
generally, improving the quality of care and quality of life of nursing
home residents. The role of the ombudsman is to engage in a variety of
activities designed to encompass both active advocacy and
representation of residents' interests. In the 1999 interim final rule,
we specifically requested public comment on whether the ombudsman
program could play a role in consumer assistance to potential PACE
participants, as well
[[Page 71294]]
as to those who have disenrolled and need assistance in organizing
their care. With regard to PACE participants, we were also interested
in receiving public input as to whether an ombudsman could provide one-
on-one consumer assistance to PACE participants and their caregivers to
exercise their rights and work effectively with the IDT.
We received a very large number of comments related to participant
rights.
Comment: We received 10 comments responding to our request for
input regarding whether to require the use of the State Ombudsman
Programs as advocates for PACE participants, prospective participants,
and disenrolled PACE participants, and to monitor the quality of care
provided to PACE participants. The comments related to this request
varied. Some commenters recommended that the State Ombudsman Program be
extended to cover PACE participants as a natural and appropriate
expansion of the ombudsman program. However, the majority of commenters
recommended leaving the option to State discretion rather than
mandating it in regulation. The primary concern was the limited
resources available to State's ombudsman programs. Commenters
recommended that should the ombudsman role be expanded to include PACE,
CMS should provide the appropriate funding. Other commenters indicated
concerns related to funding for training and funding for pilot programs
to test the efficacy of the ombudsman program in relation to PACE.
Response: We agree with the majority of commenters who recommended
that CMS not mandate the use of the State Ombudsman Program for PACE.
We acknowledge the limited resources available to the ombudsman program
and agree that utilization of these resources is best left to the
States' discretion. Additionally, our experience with the program to
date indicates that the PACE grievance and appeal processes are working
effectively to resolve participant concerns. We, therefore, are not
revising our regulations at subpart G to mandate the use of the State
Ombudsman Program for PACE.
Section 460.110 Bill of Rights
In Sec. 460.110, we require a PO to have a written participant
bill of rights that is designed to protect and promote the rights of
each participant. The organization is required to inform participants
upon enrollment, in writing, of their rights and responsibilities, and
all rules and regulations governing participation in PACE. In addition,
the organization must protect participants' rights and provide for the
exercise of those rights.
Comment: Numerous commenters supported the requirement for a
written participant bill of rights, and rights published in the 1999
interim final rule.
Response: We appreciate the commenters' support of the participant
bill of rights, as we believe in the importance of participant rights
and the protection they provide participants.
Final rule actions:
This final rule will finalize Sec. 460.110 as published in the
1999 interim final rule.
Section 460.112 Specific Rights to Which a Participant Is Entitled
Section 460.112(a) Respect and Nondiscrimination
Right 1--
Each participant has the right to considerate, respectful care from
all PACE employees and contractors at all times and under all
circumstances. Each participant has the right not to be discriminated
against in the delivery of required PACE services based on race,
ethnicity, national origin, religion, sex, age, mental or physical
disability, or source of payment.
The individual's right to respect and nondiscrimination is embedded
in the basic philosophy of the PACE program. In keeping with the PACE
model, we recognize the participant's right to receive comprehensive
care in a safe and clean environment and in an accessible manner. The
Protocol states that a PACE participant must receive treatment and
rehabilitative services. We expanded this requirement to state that the
participant has a right to receive comprehensive health care.
The Protocol stipulates that the participant has the right to have
dignity, privacy, and humane care. We require the PO to treat the
participant with dignity and respect, to afford the participant privacy
and confidentiality in all aspects of care, and to provide humane care.
The PO must assure that a participant's dignity and privacy are
respected not only in its own facilities but also in affiliated or
contract providers. Staff should be instructed that any discussions
with participants regarding treatment, the participant care plan, and
medical conditions should be held in private and kept confidential.
While recognizing the participant's right to privacy and
confidentiality, we do not advocate physical barriers because
participants should be in the view of the staff at all times to ensure
safety. However, in situations where there is participant body exposure
during treatment, the staff should be instructed to provide temporary
screens or curtains.
We adopted from the Protocol the right to be free from harm,
including physical or mental abuse, neglect, corporal punishment,
involuntary seclusion, excessive medication, and any physical or
chemical restraints imposed for purposes of discipline or convenience
and not required to treat the participant's medical symptoms. The use
of restraints must be based on the assessed needs of the patient, be
monitored and reassessed appropriately, and be ordered for a defined
and limited period of time. The least restrictive and most effective
method available must be utilized and it must conform to the patient's
plan of care. Restraints may only be used as a last resort and must be
removed or ended at the earliest possible time. We do not believe that
restraints of any kind should ever be used as a preferred approach to
care and we expect PACE organizations to ensure that their programs are
``restraint free'' to the greatest extent possible. Specific
requirements regarding the use of restraint are established in Sec.
460.114.
We adopted the rights established in the Protocol to encourage and
assist the participant to exercise his or her rights, including the
Medicare and Medicaid appeals processes as well as civil and legal
rights. Participants are encouraged and assisted in recommending
changes to PO policies and services. We also maintained the right to
have reasonable access to a telephone. However, we altered the right
established in the Protocol not to be required to perform services for
the organization unless the services are included for therapeutic
purposes in the plan of care. As we explained in the 1999 interim final
rule, we do not believe that a therapeutic program should be tied to
performing services for the PO.
The CBRR specifies that organizations should not discriminate on
the basis of race, ethnicity, national origin, religion, sex, age,
mental or physical disability, or source of payment. POs are required
to comply with all Federal, State, and local laws, including
discrimination statutes with regard to marketing, enrollment, and
provision of services. However, we recognize that, with regard to
health status considerations, POs are required as part of the intake
process to assess whether a potential participant is appropriate for
PACE, that is, meets the State's nursing facility eligibility standard
and can be safely cared for in the community. Meeting required
certification standards within the PACE context is not deemed a
violation of antidiscrimination laws. However, in
[[Page 71295]]
order to ensure that the qualification decision is free from other,
illegal forms of discrimination, we require POs to retain information
on individuals who are assessed but, for whatever reason, are not
enrolled.
Comment: One commenter requested that we broaden the list of
demographic categories under which the PO cannot discriminate against a
PACE participant to specifically include sexual orientation.
Response: We agree with the commenter that the list of demographic
categories under which the PO cannot discriminate against a PACE
participant should be broadened to specifically include sexual
orientation. As discussed in Sec. 460.98(b)(3), we do not believe
anyone should be denied enrollment in PACE because of discrimination of
any kind. Therefore, in this final rule we are amending the
antidiscrimination requirement in Sec. 460.112(a) to include sexual
orientation.
Comment: Several commenters asked to what extent the PO is
responsible for meeting the following assurances for an enrollee at
home:
Receiving health care in a safe and clean environment and
in an accessible manner; and
To be afforded privacy; to be free from harm, including
physical or mental abuse, neglect, punishment, involuntary seclusion,
excessive medication, and any physical or chemical restraints imposed
for purposes of discipline or convenience and not required to treat the
participant's medical symptoms.
Response: In accordance with section 1894(f)(2)(B)(v) of the Act,
we may not grant a waiver of the requirement that the PO is at full
financial risk and is responsible for the health and safety of the
enrolled participants. In accordance with Sec. 460.180(b), the monthly
capitation amount is payment in full regardless of a change in health
status, and a PO must not seek additional payment except for the
limited exceptions specified in Sec. 460.180(b)(7). We expect that
locations which furnish medical care to maintain a standard of
cleanliness and safety (for example, no bodily fluids on the floors, no
broken plumbing, no exposed wires or broken windows). This requirement
was specifically aimed at the facilities providing PACE services.
However, should the IDT determine and include in the participant's plan
of care that assistance is required in the home, then home care would
become a required service, subject to the safety and cleanliness
requirements of Sec. 460.112. With regard to privacy, consistent with
standards of practice, we expect that PO staff and contractors to
furnish services in the home in a manner that respects the
participant's privacy.
The requirement to be free from harm relates primarily to the
behavior of and treatment by the PACE staff and contractors to the
participant. However, if PACE staff or contractors identify that the
participant is being abused or harmed by a family member or other
caregiver, they are obligated to report this abuse to the appropriate
authorities, and if acceptable to the participant, may assist the
participant in acquiring new living accommodations, or otherwise
resolving the abusive situation.
Comment: Another commenter asked if the right to reasonable access
to a telephone means the PO is financially responsible for a
participant's personal telephone bills.
Response: This requirement was not intended to make the PO
financially responsible for the participant's personal telephone bill.
Should the IDT determine a telephone is necessary for the health and
safety of a participant and includes it in the participant's plan of
care, then a telephone would become a required service and the PO would
be financially responsible. In this situation, we recommend the PO
investigate special telephone plans available in its area that provide
only emergency service for those individuals with medical conditions
that require the person to have telephone access. In addition,
participants should have reasonable access to a telephone at the PACE
center that can be used for local calls.
Section 460.112(b) Information Disclosure
Right 2--
Each PACE participant has the right to receive accurate, easily
understood information and to receive assistance in making informed
health care decisions.
As we explained in the 1999 interim final rule, in order for
consumers to make rational decisions, they need accurate, reliable
information that will allow them to comprehensively assess differences
in their health care options, including information critical to their
initial decision to enroll in PACE and whether to remain in PACE. The
CBRR provides for comprehensive information to be provided to consumers
in three basic categories: health plan information; health professional
information; and health care facilities. Topics addressed include
benefits, cost-sharing, dispute resolution, consumer satisfaction and
plan performance information, network characteristics, care management
information, corporate organization, etc. The CBRR indicates that
certain information should be provided routinely with the remaining
information available upon request.
Information that is provided to potential enrollees is addressed in
more detail in the sections on marketing (Sec. 460.82) and enrollment
(Sec. 460.154). With regard to participant rights, we linked the right
to information disclosure to the information that is included in the
enrollment agreement. The PO must explain the enrollment agreement in a
manner that the participant is capable of understanding in order to
ensure that all participants fully comprehend their rights and
responsibilities from the beginning of their relationship with the PO.
Among the items in the enrollment agreement are an acknowledgment
that the participant understands that the PO is the participant's sole
service provider; a description of PACE services available and how
services are obtained from the PO; the procedures for obtaining
emergency and urgently needed out-of-network services; information on
the grievance and appeals processes; conditions for disenrollment;
description of participant premiums, if any, and procedures for payment
of premiums.
The enrollment agreement also indicates that the PACE organization
has a program agreement with CMS and the SAA that is subject to renewal
on a periodic basis. In order to provide participants with information
on the status of their organization's program agreement, in paragraph
(b)(3), PACE participants have the right to examine the results of the
most recent review of the PO conducted by CMS and the SAA and any
corrective action plan in effect.
Comment: Several commenters requested that we eliminate the
requirement for disclosure of all PACE services available, including
all services delivered by providers under contract.
Response: The 2002 interim final rule provides flexibility by
allowing POs to contract for all IDT members and all required PACE
services. Therefore, we believe it is even more important for POs to
disclose to participants which services are furnished by PACE staff and
which are provided under contract with another individual or entity.
Knowing who will be furnishing services is an essential component of
the participant's right to make informed choices. Therefore, we are not
adopting the commenter's suggestion to eliminate this requirement.
We have learned that there is confusion over the meaning of Sec.
460.112(b)(1)(iii). That provision requires POs to notify participants
when there is a change in services. Our
[[Page 71296]]
intention was that participants be provided information regarding a
PO's contracted providers at the time a participant's needs change and
a referral to a contracted provider may be necessary. This allows the
participant to make an informed choice and to be able to choose from
the list of the organization's contracted providers, if multiple
contractors are available, and be provided the information to make an
informed choice. To clarify this point, we are revising Sec.
460.112(b)(1)(iii) to require disclosure of all PO services and
services delivered by contracted providers at the time a participant's
needs necessitate the disclosure and delivery of such information in
order to allow the participant to make an informed choice.
Section 460.112(c) Choice of Providers
Right 3--
Each participant has the right to a choice of health care providers
within the PO's network which must be sufficient to ensure access to
appropriate high-quality health care. Specifically, each participant
has the right:
(1) To choose his or her primary care physician (PCP) and
specialists within the PACE network.
(2) To request that a qualified specialist for women's health
services provide routine or preventive women's health services.
(3) To disenroll from the program at any time.
The right to access specialists must be seen in the context of the
PACE model. Active involvement by participants in their care planning
in conjunction with an IDT approach to care management and service
delivery are fundamental aspects of the PACE model of care. In fact,
although sections 1894(f)(2)(B) and 1934(f)(2)(B) of the Act provide
for waiver of certain provisions of the Protocol, the use of an IDT
approach may not be waived.
As we explained in the 1999 interim final rule, development of a
participant's plan of care begins with a comprehensive assessment.
Participant preferences for care are identified components of the
assessment. Moreover, the team is required to develop, review, and
reevaluate the plan of care in collaboration with the participant in
order to ensure there is agreement with the plan of care and that
participant's concerns are addressed. These provisions complement the
participant's rights to participate in treatment decisions, to be fully
informed of his or her functional status by the IDT, to participate in
the development and implementation of the plan of care, and to make
health care decisions, including the right to refuse treatment and to
be informed of the consequences of such decisions.
It is in this context that the determination with regard to the
need for specialty care is made by the IDT and the participant. If
there is disagreement, then the participant has the right to engage the
dispute resolution process. The IDT is expected to give ample
consideration to a participant's request to see a specialist and to
objectively determine whether such visits are necessary to meet the
needs described in the plan of care.
We believe that access to qualified specialists for women's health
services is extremely important. Therefore, we identified such a
request as one of the participant preferences that must be considered
in developing the plan of care.
In addition, the CBRR asserts that consumers with complex or
serious medical conditions who require frequent specialty care should
have direct access to a qualified specialist of their choice within a
plan's network of providers. Authorizations, when required, should be
for an adequate number of direct access visits under an approved
treatment plan. We believe that central to the PACE model is the
organization's interest in ensuring that participants obtain the care
they need, including specialty care, in the easiest and most efficient
manner possible. A participant who needs a course of therapy with a
specialist will have that need reflected in his or her plan of care and
would receive that care for the duration and number of visits specified
in the plan. In light of the requirements elsewhere in this rule
concerning the development and management of the plan of care, we
believe it would be redundant to include an explicit requirement that
would mirror this CBRR provision, and have, therefore, not included
such a requirement.
In addition, CBRR provides the right to transitional care for
patients who are undergoing an extensive course of treatment for a
chronic or disabling condition.
With regard to having a participant's choice of PCP and
specialists, the PO is required to maintain sufficient staff and
contractors to meet participant needs. Given the initial participant
census of POs, it is likely that choice will be limited. POs may start
out with one of each type of specialist and perhaps only one PCP.
Although the CBRR includes the right to choose among physicians in the
provider's network, it was aimed at managed care organizations with
thousands of enrollees and numerous providers. This is not always the
case with the PACE model. Potential participants must weigh the limited
network of POs with the benefits of a comprehensive, all-inclusive
delivery system when choosing to enroll. As we discuss in more detail
in the enrollment section, potential participants must be advised that
the PO is the participant's sole source provider and that although the
organization guarantees access to services, it does not guarantee
access to a specific provider.
Comment: We received numerous and varied comments on this
provision. One commenter pointed out that there is no requirement in
the regulation that POs must have more than one PCP or specialist. Two
commenters stated the bill of rights should clearly require disclosure
when a PO has only one PCP.
One commenter requests that CMS qualify Sec. 460.112(c)(1) as
follows: ``[T]o choose his or her primary care physician and
specialists from within the PACE network, as accessible and feasible *
* *''
Other commenters recommended that POs be required to contract with
several of the more frequently required specialists to provide choice
to participants.
Response: We expect POs to have contractual arrangements with PCPs
and specialists to meet the needs of their participants. CMS and the
SAA determine compliance with the requirement as part of the
application process and through ongoing monitoring to ensure that all
participants have access to specialist services to meet their needs.
We note that there are many geographic areas that have a limited
number of specialists available and providing a choice of specialists
may not be possible. In addition, many PACE programs begin operations
with a few participants and gradually gain participant census over
time. In these cases, it would be unnecessary for the PO to employ or
contract with more than one PCP or specialist in order to ensure
appropriate access to specialist services. For this reason, we are not
adopting the change in this final rule.
We believe that POs will have an adequate number of primary care
providers and commonly-needed specialists to care for their participant
population. The POs are financially responsible for all their
participants' health care needs. Delays in the provision of primary
care services or referrals for specialist services may have significant
impact on the PO's overall financial viability. Likewise, early
identification of emerging health care
[[Page 71297]]
problems has helped POs manage the risk associated with programs for
the frail elderly. Failure to furnish timely primary care services may
lead to more expensive care including the need for
institutionalization.
In order to ensure that participants and potential enrollees are
aware of the PO's network, Sec. 460.112(b) requires that POs disclose
all PO services and services furnished by contractors before
enrollment, at enrollment, and when a change in a participant's needs
necessitates the disclosure in order to allow the participant to make
an informed choice. The lists will provide information about the number
of PCPs and providers within each specialty and allow participants or
prospective enrollees to make an informed decision about enrollment or
continued enrollment in the PO.
Finally, we believe changing the regulatory language as the
commenter suggested could be read as allowing a participant to choose
from outside the PO's network if a PCP or specialist within the PO's
network was not considered ``accessible and feasible.'' We are unsure
what the commenter meant, but we do not agree that participants should
have access to non-network providers. Before enrollment, when
participants sign the enrollment agreement, they are informed that the
PACE program is their sole health care provider. In addition, each PACE
program has a network that is sufficient to ensure access to
appropriate high quality care. As a result, we do not believe it would
be necessary to allow access to non-network providers. This requirement
is intended to ensure all-inclusive and coordinated care. Therefore, we
are not amending the regulatory language.
Comment: Commenters also requested clarification as to a
participant's right to request services from a qualified specialist
whether or not the IDT has determined that specialist care is medically
necessary.
Response: It is a participant's right to request a service they
believe is necessary, which includes a request to see a specialist. If
the IDT disagrees that specialist services are necessary, the
participants may request a reassessment under Sec. 460.104(d) and
access the appeals process to ensure appropriate consideration is given
to their request for coverage of specialist services.
Comment: One commenter recommended that we eliminate the
requirement concerning women's health services and instead, allow an
appropriately trained PACE PCP to serve as a qualified specialist for
women's health services.
Response: As discussed in Sec. 460.104, in developing the plan of
care, female participants must be informed that they are entitled to
choose a specialist in women's health services from the PO's network of
providers.
Although we believe that a PCP trained in women's health care is
capable of providing adequate care, we included this right to be
consistent with the CBRR and Medicare managed care regulations. To
further clarify the importance of access to a woman's health care
specialist, we included these requests as one of the participant
preferences that must be considered in developing the plan of care
under Sec. 460.104(b). We recommend that POs contract with a
sufficient number of woman's health care specialists to respond to
participant requests.
Section 460.112(d) Access to Emergency Services
Right 4--
Each participant has the right to access emergency health care
services when and where the need arises without prior authorization by
the PACE IDT.
We establish a participant's right to emergency services without
prior authorization, and define emergency care, emergency medical
condition, urgently needed services and post-stabilization care
services in Sec. 460.100 as these terms relate to obtaining emergency
care.
Comment: One commenter requested that we define prior authorization
to mean any requirement or request imposed on the participant to call
or notify the PO before or during the emergency.
Response: We do not believe the term ``prior authorization'' needs
to be defined as it is a well understood concept as used in the health
care arena. In addition, while we generally agree with the commenter's
definition, we do not believe it is needed in this context. In
emergency situations, as described in Sec. 460.100, prior
authorization under any possible interpretation could delay a
participant from receiving life saving critical care. Therefore, we are
not revising the regulation as requested.
We note, however, that prior authorization is appropriate for
urgent care outside of the service area and for post stabilization care
services. The PO needs to educate its participants in the difference
between emergency care (where prior authorization is not required), and
urgent care (where prior authorization is appropriate). Participants
need to understand when to request prior authorization and when to
request urgent care. In addition, in accordance with Sec. 460.100(e),
participants must be informed that they are required to wait 1 hour
after requesting prior authorization for urgent care before pursuing
this care. POs need to understand their responsibility to respond to
these requests within one hour or the PO relinquishes its opportunity
for prior authorization for the services and will be responsible for
payment of the services obtained by the participant. Section 460.100,
as discussed above, further describes the concepts of urgent,
emergency, and post stabilization care.
Section 460.112(e) Participation in Treatment Decisions
Right 5--
Each participant has the right to fully participate in all
decisions related to his or her care. A participant who is unable to
fully participate in treatment decisions has the right to designate a
representative. Specifically, each participant has the right:
(1) To have all treatment options explained in a culturally
competent manner, and to make health care decisions, including the
right to refuse treatment, and be informed of the consequences of the
decisions.
(2) To have the PO explain advance directives and to establish
them, if the participant so desires, in accordance with Sec. 489.100
and Sec. 489.102 of this chapter.
(3) To be fully informed of his or her health and functional status
by the IDT.
(4) To participate in the development and implementation of the
plan of care.
(5) To request a reassessment by the IDT.
(6) To be given reasonable advance notice, in writing, of any
transfer to another treatment setting and the justification for the
transfer (due to medical reasons or for the participant's welfare or
that of other participants). The PO must document the justification in
the participant's medical record.
Active involvement by participants and their designated
representatives in care planning is fundamental to the PACE model of
care. As a result, we included the rights from the Protocol related to
participant involvement in the development and implementation of the
plan of care. We included the participant's right to be fully informed
by the IDT of his or her health and functional status. In support of
this right, the participant must have, upon written request, access to
all records pertaining to herself or himself. Moreover, the team must
provide care information in a manner that is responsive to the
culturally diverse
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populations whom they serve. The PO may need to develop strategies for
enhancing cultural competence in its staff such as increased use of
interpreters, incorporating in-house training programs, recruiting
culturally diverse staff or contractors, or establishing relationships
with organizations that provide technical assistance regarding cultural
aspects of health care.
The Protocol states that a participant has the right to refuse
treatment and be informed of the consequences of such refusal and that
PACE participants may establish advance directives and make health care
decisions. We restructured these two requirements in order to place
greater emphasis on the participant's right to make health care
decisions and to clarify that to refuse treatment is a type of health
care decision. We maintained the participant's right to make advance
directives, we clarified that within this right, the PO is required to
fully explain advance directives to participants (in accordance with
Sec. 489.100 and Sec. 489.102 of this chapter).
We maintained the requirement that POs provide reasonable advance
notice, in writing, of any transfer to another treatment setting. In
the 1999 interim final rule, we solicited comment on the necessity of
specifying a timeframe for participant notification. Given the frailty
of the PACE population, while some participants may require additional
time to prepare for a transition to another setting, others may be able
to transfer without delay.
In addition to these specific rights, there are other processes
embodied in the PACE model that promote participant involvement in care
planning and implementation. For example, the comprehensive assessment
that serves as the basis for the plan of care includes participant and
caregiver preferences for care. This input from participant and
caregivers is used by the IDT to monitor the effectiveness of the plan
of care. Finally, the team is specifically required to develop, review,
and reevaluate the plan of care in collaboration with the participant
or caregiver, to ensure that there is agreement with the plan of care
and that participant concerns are addressed.
In support of effective involvement in care planning and
communication between participants and providers, we note that the
statute provides a specific sanction if we determine that the PO
imposes a physician incentive plan that does not meet statutory
requirements (see Sec. 460.40(h)) or prohibits or otherwise restricts
a health care practitioner from discussing treatment options with the
participant or caregiver (see Sec. 460.40(g)).
Comment: In response to our request for comment relating to
specifying a timeframe for notification to participants of transfers to
other treatment settings, we received several comments which provided
general consensus that the regulation should not impose a timeframe on
notification for transfers. Most commenters supported permitting the PO
the flexibility to distinguish between the different types of
situations and to determine whether a written notification and/or
verbal advanced notice would be most appropriate based on emergency and
non-emergency situations.
One commenter suggested that the term ``reasonable'' is sufficient,
with the understanding that the timeframe must be justified by the
documentation in the medical record.
Another commenter stated the PACE program is designed around its
collaborative nature, but the ``right to be given reasonable advanced
notice in writing of transfer to another treatment setting with
justification'' sounded like a unilateral decision by the PO. The
commenter believes that transfer decisions should also be collaborative
and agreed upon by the participant.
Several other commenters supported advanced written notice for a
planned transfer, while some identified situations when immediate
transfers would preclude the appropriateness of an advanced written
notice (for example, a heart attack).
Another commenter recommended that CMS incorporate the requirement
of timely notice, by both written notice and verbal explanation, of at
least 30 days. This notification timeframe would permit participants to
file a grievance or appeal, as appropriate.
Response: We agree with the majority of the commenters who pointed
out the difference between planned and emergent transfers, and the need
for PO flexibility in determining an appropriate timeframe to notify
the participant based on the individual situation. We also note that
while generally a transfer may be collaborative depending on the
participant's need for the transfer, the PO may need to make the
decision and should be afforded the flexibility to do so without undue
time restrictions. We also expect full documentation for the transfer
to be reflected in the participant's medical record. Therefore, we are
maintaining the current language, requiring ``reasonable advanced
notice'' for transfers to any treatment setting. We urge POs to provide
as much advance notice as possible for non-emergent transfers.
Section 460.112(f) Confidentiality of Health Information
Right 6--
Each participant has the right to communicate with health care
providers in confidence and to have the confidentiality of his or her
individually identifiable health care and other information protected,
including information contained in an automated data bank (see Sec.
460.200). Each participant also has the right to review and copy his or
her own medical records and request amendments to those records.
Consistent with the CBRR and MA and Medicaid managed care
organization requirements, participants have the right to communicate
with any member of the IDT and contract providers in confidence and to
have the confidentiality of their individually identifiable health care
information protected.
In addition, the section on maintenance of records and reporting of
data specifically addresses confidentiality and the safeguarding of
health, financial, and other information (see Sec. 460.200). It
requires POs to establish written policies and implement procedures to
safeguard the privacy of participant information and ensure appropriate
use and release of participant information. POs are also required to
comply with the HHS privacy standards as required by the Health
Insurance Portability & Accountability Act (HIPAA) of 1996, Pub. L.
104-191, and its implementing regulations codified at 45 CFR parts 16
and 164.
Comment: We were asked to clarify that a participant's right to
communicate with health care providers in confidence and to have the
confidentiality of his or her individually identifiable health care
information protected does not preclude IDT members and other care
providers from sharing such information with each other.
Response: Members of the IDT and other care providers are permitted
to discuss a participant's confidential individually identifiable
health care information for treatment, payment, and health care
operations, provided that such use or disclosure is consistent with
other applicable requirements of the HIPAA Privacy Rule (45 CFR parts
160 and 164). Confidentiality requirements are intended to protect the
participant's health information from being disclosed to individuals
who are not involved with the participant's health care needs. This
requirement does not prevent members of the IDT, contracted
[[Page 71299]]
providers, and caregivers from discussing a participant's health
information, which may be essential in ensuring appropriate care.
Section 460.112(g) Complaints and Appeals
Right 7--
Each participant has the right to a fair and efficient process for
resolving differences with the PO, including a rigorous system for
internal review by the organization and an independent system of
external review. Specifically, each participant has the right:
(1) To be encouraged and assisted to voice complaints to PACE staff
and outside representatives of his or her choice, free of any
restraint, interference, coercion, discrimination, or reprisal by the
PACE staff.
(2) To appeal any treatment decision of the PO, its employees, or
contractors through the process described in Sec. 460.122.
We received no comment on this section. We note that comments
regarding grievance and appeals procedures are addressed in Sec.
460.120 through Sec. 460.124.
Final rule actions:
In this final rule, we are revising Sec. 460.112 by:
Expanding paragraph (a) to include sexual orientation; and
Revising paragraph (b)(1)(iii) to require the disclosure
of all PO services and services delivered by contracted providers at
the time a participant's needs necessitate the disclosure and delivery
of such information in order to allow the participant to make an
informed choice.
Section 460.114 Restraints
We revised the wording used in the Protocol regarding the use of
restraints in order to emphasize that the use of restraints must be
limited to those situations with adequate, appropriate clinical
justification. The PO must limit use of restraints to the least
restrictive and most effective method available. If the use of a
restraint is needed to ensure the participant's physical safety or the
safety of others, the use must be in accordance with certain
conditions. First, restraints may only be used for a defined and
limited period of time based on the assessed needs of the patient;
second, such use must be imposed using safe and appropriate restraining
techniques; third, such use may only be imposed when other less
restrictive measures have been found to be ineffective to protect the
participant or others from harm; and finally, such restraints must be
removed or ended at the earliest possible time. As noted above, the use
of restraints must be based on the assessed needs of the patient, and
be continually assessed, monitored, and reevaluated.
We do not believe that restraints of any kind should ever be used
as a preferred approach to care, and we expect POs to ensure that their
programs are ``restraint free'' to the greatest extent possible.
Specific requirements regarding the use of restraints are established
in Sec. 460.114.
We have re-examined our seclusion and restraint policy for all CMS-
covered providers and have begun amending our restraint and seclusion
policies. We call your attention to the discussion of the use of
seclusion and restraints in the CMS interim final rule concerning the
conditions of participation for hospitals (CMS-3018-IFC, published July
2, 1999, 64 FR 36070). In that regulation, we established explicit
standards for the use of seclusion and restraints both in medical/
surgical care and for behavior management (see Sec. 482.13(e) and
(f)). While the standards are not identical to those we included in
Sec. 460.114, they share the common principle that patients have the
right to be free from restraints of any form that are not medically or
psychiatrically necessary or are used as means of coercion, discipline,
convenience, or retaliation by staff. In the preamble to the interim
final rule for the hospital conditions of participation, we indicated
our intent to examine the applicability of the hospital restraint and
seclusion standards to other providers. In our 1999 PACE interim final
rule, we asked for comments about how best to extend the protections
established for hospital patients to participants in the PACE program.
We received no public comments on Sec. 460.114.
Final rule actions:
This final rule will finalize Sec. 460.114 as published in the
1999 interim final rule.
Section 460.116 Explanation of Rights
Section 460.116 requires the PO to have written policies and
implement procedures to ensure that the staff, the participant, and his
or her representative understand the participant's rights. The
regulations also require that, at the time of enrollment, staff review
participant rights with the participant and his or her representative,
if any, in a manner which he or she understands. The PO is expected to
assure that information is provided to the physically and mentally
disabled, that translator services are available as needed for non-
English speaking participants, and that interpreter services and other
accommodations (such as TTY connections) are made available to the
hearing-impaired.
We also incorporated the requirement that participant rights be
posted in a prominent place in the PACE center in English and any other
principal language of the community. This allows participants, PACE
center staff, and other concerned persons to review the participant
rights at any time. For those participants who speak or read in only a
``non-predominant'' language, the participants should have their rights
explained to them in a manner they understand.
Comment: We received three comments related to multilingual issues.
One commenter recommended that we specify that written information
should be in a language easy to understand by the participant and
should be given out at enrollment. Commenters also recommended that the
participant bill of rights be displayed in English and other principal
languages in the PO's service area. One commenter recommended that we
consider providing programs serving multilingual populations with
financial assistance to cover translation expenses.
Response: Our intent is that all marketing materials including the
enrollment agreement be provided in a language the participant is able
to understand. The regulation requires participant rights to be
provided in writing, in English, and in other principal languages of
the community, and to be explained in a manner the participant and his
or her representative understands. In addition, Sec. 460.116(c)
requires that the PO display the participant rights in a prominent
place in the PACE center. The State establishes the criteria POs use
for determining a principal language of the community. We do not
provide financial compensation for translation expenses, as we believe
this is a cost of doing business for all entities in geographic areas
where there are multilingual populations.
Final rule actions:
This final rule will finalize Sec. 460.116 as published in the
1999 interim final rule.
Section 460.118 Violation of Rights
Section 460.118 requires the PO to have and implement documented,
established procedures to respond to and rectify a violation of a
participant right. This requirement is intended to ensure that the PO
will address all violations of participant rights and not allow
problems to continue.
[[Page 71300]]
We received no public comments on Sec. 460.118.
Final rule actions:
This final rule will finalize Sec. 460.118 as published in the
1999 interim final rule.
Section 460.120 Grievance Process
In accordance with sections 1894(b)(2)(B) and (f)(3) and
1934(b)(2)(B) and (f)(3) of the Act, we have established requirements
at Sec. 460.120 through Sec. 460.124 requiring PACE organizations to
establish procedures for grievances and appeals. We have adapted these
requirements from Part II, section B of the Protocol. Rather than
follow the Protocol's interchangeable use of the terms ``complaint,''
``grievance,'' and ``appeal,'' we have distinguished between grievances
and appeals. Our intent was to delineate between (1) a participant's
grievance regarding dissatisfaction with service delivery or the
quality of a service furnished and (2) a participant's action with
respect to noncoverage of or nonpayment for a service. We believe that
such a distinction is needed to clearly establish both a process to
address a participant's dissatisfaction with service delivery or
quality of care furnished and a process to address the PACE
organization's refusal to furnish or pay for a particular service. The
grievance process and the appeals process are similar, since both are
based on the Protocol, with some minor differences due to the nature of
the complaint.
A grievance is defined as a complaint, either written or oral,
expressing dissatisfaction with service delivery or the quality of care
furnished.
The PO must have a formal written process to evaluate and resolve
grievances, whether medical or non-medical in nature, by PACE
participants, their family members, or representatives. Having a formal
written process to evaluate and resolve grievances is essential since
all personnel (employees and contractors) who have contact with
participants should be aware of and understand the basic procedures for
receiving and documenting grievances in order to initiate the
appropriate process for resolving participant concerns.
We retained the requirement from the Protocol that all participants
must be informed of the grievance process in writing. This information
must be provided to participants upon enrollment into the PACE program
and at least annually thereafter. We believe it is critical that
participants are fully and promptly informed of this process and
periodically reminded of their rights, so they may exercise these
rights from the beginning of their relationship with the PO.
The grievance process, at a minimum, must include procedures for:
(1) Filing a participant's grievance;
(2) Documenting the participant's grievance;
(3) Responding to and resolving the participant's grievance in a
timely manner; and
(4) Maintaining confidentiality of the participant's grievance.
The PO's internal procedures should assure that every grievance is
handled in a uniform manner and that there is communication among
different individuals who are responsible for reviewing or resolving
grievances. In addition, the PO must maintain appropriate
documentation, so the information can be utilized in the organization's
QAPI program. Requiring that grievances be responded to and resolved in
a timely manner provides a protection to the participants. This action
is intended to ensure that the PO addresses all participant concerns
and does not allow the problem in service delivery to be unresolved.
Finally, at all times, an organization must have procedures governing
confidentiality to protect against unauthorized or inadvertent
disclosure of information. Participant confidentiality is also intended
to prevent reprisal against the participant.
It is critical that the PO continue to provide care to the
participant during the grievance process because once enrolled, in
accordance with Sec. 460.154(p), participants must receive care solely
through the PO. Continuing care also encourages participants to
continue to voice concerns about service delivery without fear of
reprisal.
The PO must discuss and provide to the participant in writing the
steps, including timeframes for response, that will be taken to resolve
the participant's grievance both at the time of the participant's
enrollment and when a grievance is filed. This requirement assures the
participant that there will be resolution of the issue. In addition,
the organization acknowledges the participant's concern, tries to
address the problem, and makes any necessary adjustments in service
delivery. We recognize there will be occasions when a grievance may not
be resolved to the satisfaction of the participant, but believe the PO
should nonetheless set forth its best efforts. The PO must maintain,
aggregate, and analyze information on grievance proceedings. This
requirement is an integral part of fostering an environment of
continuous improvement, and complements the QAPI requirements. We
expect that once an organization has a quality improvement system in
place, participant grievances will be analyzed and evaluated as
grievances may be the first clue that a problem exists. By analyzing
the number and types of grievances, a PO will be able to develop
activities to monitor and improve the grievance resolution process, as
well as identify and make improvements or modifications in the care.
Comment: One commenter was concerned that the definition of
grievance found in Sec. 460.120 could lead to confusion as to whether
minor problems that present in day-to-day staff-participant contact
during the provision of services would be interpreted as grievances and
reported as such.
Response: The commenter has interpreted the requirement correctly.
A grievance could identify a minor problem where someone is
dissatisfied with the service provided. We would expect grievances to
occur in day-to-day interactions and we expect to see a number of
grievances simply because people have different opinions and
expectations. Therefore, we are more concerned when grievances over
such things as food or the choice of music are not recorded. We expect
these grievances to be tracked, evaluated, and included in the QAPI
process. For example, if there is a pattern of complaints about cold
food, the issue should be addressed and if every time a particular dish
is served many participants complain, then a change in the menu should
be considered.
Comment: Two commenters expressed concern with the requirement to
``continue to furnish all required services.'' One commenter requested
the regulatory language be revised to define ``required services,'' and
the other commenter requested modifying the requirements regarding the
PO's responsibility to continue to provide services during the
grievance process. Both commenters recommended that we clarify that the
PO must continue to furnish to participants all services required by
their current treatment plan. If a change in health status necessitates
a change in treatment plan, the PO must furnish to the participant all
services required by the revised treatment plan.
Response: It appears that commenters may have confused grievances
which related to quality of services with appeals that relate to
coverage of services. ``Required services'' are those services
indicated in the participant's plan of care. This requirement is a
participant protection intended to avoid potential reprisal. We
continue to
[[Page 71301]]
believe that it is appropriate for the PO to continue to provide all
required services in the plan of care during the grievance process.
Thus, we do not believe the clarification requested is necessary.
Comment: One commenter indicated the requirement did not specify a
timeframes for the resolution of a grievance. The regulations require
that the PO only has to provide written notice that includes the
timeframes for response. The commenter recommended that all grievances
be resolved within 30 days.
Response: Grievances cover a wide range of issues which may be
resolved in minutes or may take much longer to resolve. Therefore,
while we require the PO to have a written process to evaluate and
resolve medical and non-medical grievances, we have not established a
specific timeframe for resolution of grievances. The PO must
acknowledge receipt of the grievance in writing and provide to the
participant information as to the expected timeframe for response based
on the specific situation. We expect that POs will make every effort to
resolve grievances as expeditiously as possible accounting for the
complexity of the particular grievance filed. Accordingly, we have not
revised the regulation to set forth timeframes for resolutions.
Comment: One commenter asked whether we intended that service
delivery encompass administrative complaints, such as failure to
replace a lost handbook on a timely basis, failure to return phone
calls related to requests for information, or breaches of
confidentiality.
Response: We expect POs to acknowledge grievances in writing, to
record, and to resolve any issue about which a participant expresses
dissatisfaction (medical or non-medical), including administrative
complaints. These grievances should be reviewed, analyzed, and included
in the PO's QAPI plan.
Comment: One commenter recommended that PO actions on grievances be
subject to monitoring at any time.
Response: In accordance with Sec. 460.200, the PO must allow CMS
and the SAA access to its data and records. In addition, POs report
data for monitoring that includes grievance information. Thus, CMS and
the SAA have access to and routinely review grievance information.
Final rule actions:
This final rule will finalize Sec. 460.120 as published in the
1999 interim final rule.
Section 460.122 PO's Appeals Process
An appeal is defined as ``a participant's action taken with respect
to a noncoverage of, or nonpayment for a service.'' The PO must have a
formal written appeals process, with specified timeframes for response.
We included the requirement from the Protocol that all participants
must be informed of the appeals process in writing. This information
must be provided to participants upon enrollment into the PACE program,
at least annually thereafter, and whenever the IDT denies a request for
services or payment. The appeals process, at a minimum, must include
written procedures for:
(1) Timely preparation and processing of written denials of
coverage or payment in accordance with Sec. 460.104(c)(3);
(2) Filing a participant's appeal;
(3) Documenting the participant's appeal;
(4) Appointing an appropriately credentialed and impartial third
party who was not involved in the original decision and who does not
have a stake in the outcome of the appeal to review the participant's
appeal;
(5) Responding to and resolving the participant's appeals as
expeditiously as the participant's health condition requires, but no
later than 30 calendar days after the PO receives an appeal; and
(6) Maintaining confidentiality of participant appeals.
The appeals process is similar to the grievance process. However,
we included the requirement that an objective third party be appointed
to review all appeals. In this way, information is reviewed by an
individual or group that has no financial stake in the decision. This
helps to prevent bias in the decision. In addition, we specified that
the PO must respond to participant appeals within 30 calendar days of
receipt of an appeal and established a shorter timeframe for expedited
appeals. We did not include a provision for a 14-day extension of this
30-day timeframe (as allowed under the MA regulations at Sec.
422.590(a)) in recognition of the frailty of the PACE population. We
solicited comments on both the appropriateness of the 30-day timeframe
and on the necessity of requiring a specific timeframe.
In Sec. 460.122(d)(2), we adopted the Protocol requirement that
the PO must give the parties involved in the appeal a reasonable
opportunity to present evidence related to the dispute in person as
well as in writing.
It is critical that the PO continue to furnish care to the
participant during the appeal process because, in accordance with Sec.
460.154(p), participants must receive care solely through the PO. In
addition, we incorporated the Medicaid continuation of benefits
provision for all Medicaid participants. Under the Medicaid
continuation of benefits provision in Sec. 460.122(e)(1), the PO may
not terminate or reduce disputed services while an appeal is pending if
the Medicaid participant requests that they be continued, with the
understanding that the participant may be liable for the cost of those
services if the appeal is not resolved in his or her favor. It is
critical that all other care continue in order to maintain the
participant's functional status. The goal of the program is to furnish
comprehensive care to the participant and this cannot be accomplished
if there is a breakdown in the provision of services.
The PO must have an expedited appeals process for situations in
which the participant believes that if the service is not furnished,
his or her life, health, or ability to regain maximum function would be
seriously jeopardized. This process provides for prompt consideration
of requests for services if the participant's health might be adversely
affected if he or she had to wait for the standard appeals process to
resolve the issue. As noted above, the goal of the PACE program is to
maximize the participant's functioning, and the expedited appeals
process ensures that all factors are evaluated so that all necessary
services are being furnished and participant health is not compromised.
We included a provision at Sec. 460.122(f)(2) pertaining to the
expedited appeals process requirement that the PO must respond to the
appeal as expeditiously as the participant's health condition requires,
but no later than 72 hours after it receives the appeal. The 72-hour
timeframe may be extended by up to 14 calendar days if the participant
requests the extension or if the PO justifies to the SAA the need for
additional information and how the delay is in the interest of the
participant. The timeframes for responding to requests for expedited
appeals are consistent with the requirements for MA expedited appeals
in Sec. 422.590(d). The PO must take appropriate action to furnish the
disputed service as expeditiously as the health condition of the
participant requires if, on appeal, a determination is made in favor of
the participant. There may be situations in which the PO has made an
incorrect or inaccurate assessment of the participant's needs or
condition and has denied a service. In
[[Page 71302]]
these situations, it is critical that ongoing care not be delayed until
the appeal is resolved, and that the participant continue to receive
comprehensive care that maintains her or his functional status.
We maintained the Protocol requirement that all determinations that
are wholly or partially adverse to the participant must be forwarded to
CMS and the SAA. We require that the PO notify CMS, the SAA, and the
participant of its actions at the time the decision is made.
We solicited comment regarding the appropriateness of a 30-day
timeframe without extension, within which the PACE provider must
respond to a participants' appeal, and on the necessity of requiring a
specific timeframe for implementing the change in the participant's
plan of care resulting from resolution of the appeal.
Comment: Several commenters supported the timeframes as published.
One commenter supported the emphasis on participant rights, believed
appeals would be rare and thus supported the 30-day timeframe with a
shorter period for expedited appeals.
Several commenters suggested timeframes for the various components
of the appeal process. Three commenters supported the 30-day timeframe
in which the PO must respond to the participant's appeal. Two
commenters requested the regulation specify a timeframe in which the PO
must inform the participant of the determination on the appeal, while
another commenter suggested that the regulation specify that services
should be provided no later than 10 days after a favorable
determination or immediately in the case of the expedited appeal. One
commenter requested that we clarify the PO's right to implement its
determination in connection with its internal appeal process.
Response: We are retaining the timeframes as required in the 1999
interim final rule. The timeframes are consistent with MA requirements
in Sec. 422.568 through Sec. 422.570. As PACE utilizes the same
timeframes as the MA requirements, we believe it is important to
maintain this consistency.
Comment: One commenter stated that informing the participant of the
external appeal process when the PO's internal appeal process
determination is not wholly in the participant's favor was sufficient.
Other commenters requested the regulation provide more detail in the
denial notice provided to the participant when a request for services
is denied. The commenter recommended that the notice include a
description of the process used when a participant requests an item or
service, the reason for the denial, the right to submit additional
evidence, and information about the appeal process.
Response: Section 460.104(c)(3) requires an in-person reassessment
when the participant or his or her representative believes a
participant needs to initiate, eliminate, or continue a particular
service. In addition, in accordance with Sec. 460.122(b), the PO is
required to have processes for timely resolution of participant
requests and appeals and to provide written information on the appeals
process to participants on enrollment, annually thereafter, and any
time the IDT denies a request for services. We believe that the current
regulation provides adequate notification requirements for the appeals
process and additional changes at this time are not necessary.
Comment: We received comments requesting that we clarify what is
meant by ``appropriately credentialed'' and ``impartial third party,''
as provided in Sec. 460.122(c)(4). It was recommended that the
regulatory requirement be modified to specify that the appointment be
of an impartial third party credentialed in a field that is appropriate
for the service at issue. Commenters questioned whether a PO's
employees or contractors could serve in this capacity.
Response: An appropriately credentialed and impartial third party
is an individual who was not involved in the original action and who
does not have a stake in the outcome of the appeal. For example, this
individual may be an outside physician or practitioner in a related
field who will review the documentation related to the appeal.
To the extent that POs allow employees and contractors to review
the IDT denials, it is in the context of a review committee. An
employee or contractor may participate on these review committees so
long as they have no connection to the original denial decision and
their expertise is in the appropriate field. For example, it would not
be appropriate for a social worker to review an appeal related to a
physical therapy denial, or a gynecologist to review a denial of
services regarding coronary surgery.
We recommend that the PO ensure that the credentialed and impartial
third party reviewer make his or her determinations in a similar manner
to determinations made under section 1862(a)(1)(A) of the Act. The
determination is based on the participant's medical need and not on
other reasons such as the cost of the disputed care, who is paying the
third party reviewer's salary or fee, an individual's reputation, or
other factors.
Comment: Two commenters disagreed with the regulation requirement
in Sec. 460.122(h) that CMS and the SAA be informed of every adverse
determination and recommended that this requirement be deleted.
Response: We view the reporting of adverse determinations to CMS
and the SAA as a participant protection. Routine reporting will enable
us to track trends in coverage of services to participants and to
monitor the extent to which appeals are addressed in the PO's quality
improvement activities. It also alerts us to the potential for a
request for an external appeal.
Comment: Several comments were submitted regarding services
furnished during appeals. While one commenter recommended that we
delete the requirement, other commenters indicated we should extend the
protection to Medicare participants. One commenter pointed out that MA
providers must continue to provide disputed services during an appeal.
One commenter recommended that we require POs to continue to furnish to
the participant all other services required by his or her current
treatment plan. The commenter believes that in the event a change in
health status necessitates a change in the treatment plan, the PO must
furnish to the participant all services required by the revised
treatment plan. Another commenter indicated that without the continuity
of Medicare and Medicaid services, PACE participants would be subject
to discrimination based on payment source.
Response: We adopted the requirement that POs continue to furnish
disputed services during the appeal process to Medicaid-eligible
participants in order to be consistent with the Medicaid State fair
hearing (SFH) regulation at Sec. 431.230. We did not adopt a similar
requirement in the 1999 interim final rule for Medicare-eligible
participants because there is no corresponding requirement for
continuation of services during appeal in the Medicare Independent
Review Entity (IRE) review process. For this reason, we believe it is
appropriate to retain the 1999 interim final requirement at this time.
We note, it is critical however, that the PO continue to furnish the
non-disputed services to the participant during the appeal process,
because section 1894(a)(1)(B)(1) of the Act requires that participants
receive services solely through the PO and as explained in Sec.
460.98, the required services for a participant are those services
identified in their plan of care.
[[Page 71303]]
Comment: Commenters suggested that the appeals section apply to
reductions and terminations of services in addition to denials of
services.
Response: We agree with the commenters and have revised the
introductory text of Sec. 460.122 accordingly.
Comment: Commenters suggested that the expedited appeals process
described in Sec. 460.122(f) be revised. Currently, Sec. 460.122(f)
requires that POs have an expedited appeals process for situations in
which the participant believes that his or her life, health, or ability
to regain maximum function would be seriously jeopardized absent
provision of the service in dispute. The commenters suggested that an
expedited appeal process apply where a participant believes that his or
her life, health, or ability to regain or maintain maximum function
could be seriously jeopardized absent provision of the service in
question.
Response: We agree with the commenters and have revised Sec.
460.122(f) accordingly.
Final rule actions:
In this final rule, we are:
Amending the regulatory language of the introductory
paragraph of Sec. 460.122 to clarify that for purposes of this
section, a denial of services could include a denial, reduction, or
termination of services.
Revising Sec. 460.122(f)(1) to require that a PACE
organization must have an expedited appeals process for situations in
which the participant believes that his or her life, health, or ability
to regain or maintain maximum function could be seriously jeopardized,
absent provision of the service in dispute.
Section 460.124 Additional Appeal Rights Under Medicare or Medicaid
As we explained in the 1999 interim final rule, the PO must inform
participants in writing of their additional appeal rights under
Medicaid or Medicare, assist participants in choosing which appeal
process to pursue if both are applicable, and then forward the appeal
to the appropriate external entity. Participants who are dually
eligible for Medicare and Medicaid may utilize either the Medicare or
the Medicaid managed care appeal process. In those cases where
participants are covered only under one program (Medicare or Medicaid),
only the applicable appeals process would apply.
Comment: We received several comments related to the additional
appeal rights under Medicare and Medicaid. Several commenters indicated
that the preamble description in the 1999 interim final rule does not
reflect CMS's intent to allow dually eligible participants to access
only one appeal route, either Medicare or Medicaid. The language does
not clearly state that participants must choose one route of appeal and
that the route chosen is final.
Commenters indicated that the bifurcated external appeal process
was confusing, administratively burdensome, and ambiguous and that a
single appeals system should be developed. These commenters also stated
that the regulation should specify a timeframe for the completion of
the entire appeal process suggesting a 90-day timeframe which is
consistent with Medicaid requirements.
We also received comments recommending a single system of
grievance, appeals, and hearings, or adapting the essentials elements
of the Medicaid managed care regulations that were published in the
Federal Register on September 29, 1998 (63 FR 52022) to the PACE
program since most PACE participants are Medicaid eligible.
One commenter requested clarification on the relationship between
the PO's appeal process and the external Medicare/Medicaid processes.
Another commenter requested that we define ``appropriate external
entity for Medicare and Medicaid,'' and respond to the following
questions: First, how will the PO and participant know which appeal
route is appropriate, and second, how to handle disparate decisions
when a participant chooses both appeals routes.
One commenter pointed out that the reference in the regulations to
the Medicare appeals process was confusing. The commenter questioned
whether we intended that denials of Part A services be referred to the
Part A fiscal intermediary and denials of Part B services be referred
to the Part B carrier.
Lastly, other commenters indicated the reporting requirements were
burdensome as all adverse determinations are to be forwarded to both
CMS and the State without any guidelines or criteria to assess whether
such determinations were appropriately made.
Response: Review of the comments indicated that many of the
commenters misunderstood the PACE appeals process and in response to
the comments, we believe a reiteration of the process would address the
concerns raised. As noted previously, sections 1894(f)(3)(A) and
1934(f)(3)(A) of the Act, require that in applying certain additional
beneficiary protections, we should apply Medicare and Medicaid managed
care requirements while taking into consideration the differences
between the population served and benefits provided under this section
and under Medicare and Medicaid managed care programs. Because of this
requirement, we did not intend that the PACE external appeals process
involve the Medicare fee-for-service Part A intermediary or Part B
carrier appeals processes. Rather, we followed the Medicare managed
care process using the IRE contractor for the PACE external appeals
process.
The external appeals process provides participants with an
appropriate external review depending on their Medicare and Medicaid
status. Medicare beneficiaries have access to the Medicare external
appeals route through the IRE that contracts with CMS to resolve MA
appeals, while Medicaid eligible individuals have access to the SFH
process. PACE participants who are dually eligible for both Medicare
and Medicaid have the choice of either process, the Medicare IRE or the
Medicaid SFH process. Allowing dually eligible participants to choose
to pursue an appeal through either the Medicare's IRE or Medicaid's SFH
processes eliminates the possibility of conflicting determinations.
Therefore, all PACE participants have one route by which to exercise
their external appeal rights.
It is the PO's responsibility to assist the participants in
understanding which external route is appropriate for them based on the
participant's Medicare and Medicaid status. For dually eligible
participants, the PO must explain the external processes of each option
and assist them in initiating their choices. This is primarily a matter
of personal preference as both external appeals processes are equally
valid options.
Information on the Medicare IRE process is available online at
http://www.medicareappeal.com and information on the SFH process can be
obtained from the SAA. Should the participant need help with the
Medicare IRE process, then in accordance with Sec. 460.124, the PO
will provide that assistance. Although Medicare does not have an
external appeals process to permit challenges of disenrollment
determinations, all participants may use their State's external appeals
processes. As we noted in the discussion on Sec. 460.164 (Involuntary
disenrollment), the State must provide a process for Medicare-only
participants for an involuntary disenrollment appeal.
Comment: Commenters asked what would happen if the PO directs the
participant to the wrong entity and would the appeal rights of the
participant be lost if the correct filing is not made in the required
time. In
[[Page 71304]]
addition, one commenter stated that implementation of the 1999 interim
final rule regarding appeals would be problematic for them due to a
class-action litigation settlement agreement which applies a time limit
on initiating appeals through the State Medicaid appeals process.
Response: CMS staff has worked closely with the POs, the SAAs, and
the IRE staff responsible for PACE in order to ensure that appeals are
directed to the appropriate entity. However, if an appeal should be
misrouted, corrections can be accommodated.
As noted previously, dual eligible participants are allowed to
choose to use either the Medicare or Medicaid external appeal processes
and POs play a significant role in assisting participants in choosing
the appropriate external review entity and filing the appropriate
documentation. Where State law establishes a timeframe for initiating
an SFH, the PO must be sensitive to those time constraints in order to
ensure that the participant's rights to access the SFH is not negated
by a failure to meet the State timeframes.
Comment: Another commenter recommended that Medicare participants
be provided the same right as Medicare beneficiaries enrolled in an M+C
plan and be allowed to go directly to an Administrative Law Judge (ALJ)
hearing upon completing the internal appeals process, and not have to
go through carrier or fiscal intermediary review. Another commenter
indicated that the participant should not have to exhaust the internal
PACE appeal process before initiating the external appeal process.
Response: According to Sec. 422.600, beneficiaries are not
permitted to circumvent the appeals process with their MA organization.
Under Sec. 422.600, beneficiaries may only be heard before an ALJ
after reconsideration with their MA organization.
Comment: One commenter expressed concern that the regulation places
the responsibility entirely with the PO to advise dually-eligible
participants of the appropriate route of appeal without supplying
guidance as to which route would best benefit the participant in
different situations. This commenter believes it is essential that
guidelines be established to decrease the possibility of litigation
against the State or the PO and to prevent participants from accessing
a second appeal route by saying they were wrongfully advised in
selecting a particular route of appeal.
Response: We believe that both processes are valid options and we
do not agree that a wrong choice can be made. In addition, we note that
since the 1999 interim final rule was implemented, no IRE appeals and
only a few SFH appeals have been filed. We will continue to monitor
appeals under PACE and will propose changes in the appeals process if
warranted. We have worked extensively with POs to educate them on the
Medicare IRE process so that they are able to fully explain the system
to participants.
Final rule action:
This final rule will finalize Sec. 460.124 as published in the
1999 interim final rule.
Subpart H: Quality Assessment and Performance Improvement
Sections 1894(e)(3) and 1934(e)(3) 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. In
1999, we were considering putting into place a PACE participant
assessment tool, and outcome measures that would be clinically
meaningful to PACE participants and empirically valid for purposes of
quality monitoring and improvement. Thus, CMS took a leadership role in
developing outcome measures to be integrated into clinical and
administrative practices at PACE sites.
In the 1999 interim final rule, we adopted quality QAPI
requirements that are consistent with the provisions from part V of the
Protocol. As noted below and as discussed in that rule (64 FR 66259),
we added further requirements to prepare POs to participate in the
OBCQI system that was under development pursuant to a CMS contract with
the Center for Health Services and Policy Research (CHSPR) at the
University of Colorado.
At the time the 1999 interim final rule was published, CHSPR was
developing a core data set that was to provide the foundation for a
standardized OBCQI system for PACE programs. In developing the data set
for PACE, CHSPR examined existing CMS data instruments such as the
Minimum Data Set (MDS) (a part of the nursing home assessment
instrument), the Outcome Assessment Information Set (OASIS), (required
under the home health agency conditions of participation), DataPACE
(developed by On Lok, Inc., and used by the PACE demonstration
programs), and the Functional Independence Measure (FIM) (an assessment
data set used in rehabilitation hospitals), for data items that could
be pertinent for PACE quality improvement purposes.
Since the publication of the 1999 interim final rule, the health
care industry has moved beyond the problem-oriented, ``after-the-fact''
corrective approach of quality assurance to a proactive approach that
focuses on continuously addressing QAPI. Consequently, many health care
QAPI programs are patient-driven rather than process-driven. Given that
changes in health care delivery systems are rapid and continuous, many
providers requested flexibility to design QAPI programs that meet the
needs of their health care settings, rather than try to comply with a
``one-size-fits-all'' program. We agree that a QAPI program should
blend flexibility with appropriate accountability and in the past few
years, we have been striving to balance both in a patient-centered
approach. With an effective QAPI program, we believe that providers
will be able to determine how its performance has affected patient
experiences and outcomes. We expect a provider to focus on performance
outcomes and to prioritize areas needing improvement.
While we recognize the utility of the OBCQI core outcome and
comprehensive assessment data set(COCOA-B) system as a useful
assessment tool for PACE participants, we have misgivings about its
long-term application. Given the need for flexibility for PACE sites,
we are also concerned that specifically mandated measures may
compromise the discretion of POs to use other assessment tools that may
be more appropriate for their settings. We decided not to impose the
OBCQI requirements for POs. Therefore, POs should not expect to see the
publication of specific outcome measures as was implied in the 1999
interim final rule. We are not foreclosing the possibility of requiring
specific outcome measures in the future, but at this time we believe
PACE organizations and their participants will benefit from a wide
degree of flexibility in the QAPI approach we have chosen to present.
Section 460.130 General Rule
We require the PO to develop, implement, maintain, and evaluate an
effective data-driven QAPI program. It is important that the QAPI
program take into consideration the wide range of services furnished by
PACE. Additionally, the program should use data to identify and improve
areas of poor performance. The PO must take actions that result in
improvements in its performance in all types of care.
Comment: One commenter requested that we clarify whether the
requirement
[[Page 71305]]
to take action to improve the performance in ``all types of care''
means that the organization does not have flexibility to identify its
critical processes and to prioritize and select areas of concentration
in which to apply resources for improvement efforts.
Response: The requirement in Sec. 460.130(c) states that a PO must
take actions that result in improvements in its performance in all
types of care. Our expectation is that POs will operate a continuous
QAPI program that does not limit activity to only selected kinds of
services or types of patients. We expect POs to exercise as much
flexibility as is necessary in order to fully meet obligations to its
participants' care. As we do not require the use of a common quality
assessment tool or a set of specific outcome measures beyond the data
elements for monitoring included in the program agreement, POs have the
flexibility to develop the program that best meets their needs. The
desired outcome of the QAPI requirement is that data-driven quality
assessment serves as the engine that drives and prioritizes continuous
improvements for all the PO's services.
Final rule actions:
This final rule will finalize Sec. 460.130 as published in the
1999 interim final rule.
Section 460.132 QAPI Plan
The PO must have a written QAPI plan. Consistent with the Protocol,
we require POs to have their QAPI plan annually reviewed by the PACE
governing body and, if necessary, revised. Further, in this section we
establish that a written plan must, at a minimum, specify how the PO
proposes to (1) identify areas in which to improve or maintain the
delivery of services and patient care; (2) develop and implement plans
of action to improve or maintain quality of care; and (3) document and
disseminate the results of the QAPI activities to the PACE staff and
contractors.
We received a number of comments and questions regarding the QAPI
plan.
Comment: Several commenters requested information regarding CMS'
intention regarding prior approval and monitoring of the QAPI plan.
Response: POs are required to present their QAPI plan to their
governing body for annual approval. CMS and the SAA must approve the
QAPI plan prior to its inclusion in the program agreement and review
the plan during monitoring visits.
Comment: One commenter indicated that the regulations do not
establish an oversight responsibility for review of the plan by either
the Federal or State government.
Response: The program agreement contains a description of the QAPI
plan and CMS and the SAA review plan during monitoring visits.
Final rule actions:
This final rule will finalize Sec. 460.132 as published in the
1999 interim final rule.
Section 460.134 Minimum Requirements for Quality Assessment and
Performance Improvement Program
The requirements contained in Sec. 460.134 are consistent with the
Protocol, but provide more explicit information about the types of
outcomes that must be used to monitor quality. We provided the
following guidance regarding QAPI in the 1999 interim final rule. The
PO's QAPI program must include, but need not be limited to, the use of
objective measures to demonstrate improved performance with regard to
the following:
(1) Service utilization. PACE demonstration programs collected
utilization data such as hospitalizations and emergency room visits.
This information can be used to evaluate fiscal well-being, as well as
evaluate quality of care. It can also be used to target reviews of PACE
centers whose utilization data suggest, for example, that participants
may be receiving fewer services than necessary to achieve expected
outcomes. The purpose of including utilization data in the PO's QAPI
program is to help the PO ensure that participants receive the
appropriate level of care through their PACE center. Additionally,
using information regarding utilization of and reasons for emergency
care and hospital and nursing home admissions, the PO can identify
areas for improvement.
(2) Caregiver and participant satisfaction. Caregiver and
participant satisfaction with services is an important element of a
QAPI program. A PO must survey, on an ongoing basis, participants and
their caregivers to determine satisfaction with the services furnished
and the outcomes achieved. Given the large number of PACE participants
who are cognitively impaired and the critical role caregivers play in
keeping PACE participants in the community, it is important to survey
caregivers about their satisfaction with the program. We expect the PO
to use this information to identify opportunities to improve services
and caregiver and participant satisfaction. We do not intend, at this
point, to prescribe the specific tools for measuring participant and
family satisfaction. It is the responsibility of the PO to survey the
participants and family, but we are not specifying the survey tool they
must use. The PO will be expected to demonstrate its satisfaction
measurement system and how it is used as part of the overall internal
QAPI system.
(3) Outcome measures derived from participant assessment data.
These measures can be used to determine if individual and organization-
level measurable outcomes are achieved compared to a specified previous
time period. These measures should encompass the various areas needed
to monitor care for PACE participants, including physiologic,
functional, cognitive, mental health, social/behavioral, and quality of
life outcomes. For example, POs should focus their quality improvement
activities on outcomes such as stabilization in ability to bathe, from
a baseline period to each follow-up period; improvement in dyspnea from
admission into PACE to a follow-up period; improvement in
transportation services over a specific time period; and improvement in
caregiver stress from participant admission into PACE to a follow-up
time period.
(4) Effectiveness and safety of staff-provided and contracted
services, including the competency of clinical staff, promptness of
service delivery, and achievement of treatment goals and measurable
outcomes. For participants to experience the outcomes that the PACE
benefit is intended to achieve, staff must demonstrate skills and
competencies necessary to facilitate those desired outcomes. The PO is
expected to include data-based, criterion-referenced performance
measures of staff skills, to utilize these data to ensure that staff
maintain skills, and to provide training as new techniques and
technologies are introduced and as new staff are hired. Each PO will be
expected to demonstrate that it has a system of appropriate complexity
for keeping track of the skills and competencies of the staff and for
effectively identifying and addressing staff training needs. These data
should be an integral part of the PO's internal QAPI program that
provides continuous feedback on staff performance.
(5) Non-clinical areas. The types of outcomes in this area include
outcomes related to participants grievances, transportation services,
and meals. For example, if a PO finds a high rate of grievances not
resolved, the PO might target its activities to improve the grievance
process.
We expect POs to use the most current clinical practice guidelines
and
[[Page 71306]]
professional standards in the development of outcome measures
applicable to the care of PACE participants. Continuous improvement is
only possible through the identification and use of current
information, techniques, and practices. While we are not imposing any
specific standards of practice, this requirement establishes the
expectation that the PO will utilize the current clinical and
professional standards as a routine part of its daily operations.
In addition, we included a requirement that the PO must meet
minimum levels of performance on standardized quality measures that
will be established by CMS and the SAA and which are specified in the
PACE program agreement. For example, we require all POs to achieve at
least 80 percent flu immunization rate for their PACE participants. If
a PO fails substantially to meet these specified requirements, the
continuation of the PACE program agreement may be conditional on the
execution of a CAP, or alternatively, some or all further payments for
PACE program services may be withheld until the deficiencies have been
corrected. We are not establishing minimum performance standards in
this regulation. Rather, we will establish minimum performance
standards in the program agreement based on analysis of available data
sets that are applicable to PACE participants.
We also added a requirement that the PO take actions to ensure the
accuracy and completeness of all data used for outcome monitoring. A
data-driven QAPI program must be based on accurate data. The
regulations require that POs set up mechanisms to check for the
accuracy, timely collection, and completeness of all data.
Comment: One commenter described the efforts of the Performance
Measure Workgroup lead by the NPA in 1999, which reviewed draft
performance measures previously developed as a part of the NPA
accreditation project. The final core set of 15 measures were accepted
by the POs and States as measures valuable to track. This commenter
recommended that CMS adopt these 15 measures or allow the States to
negotiate quality measures with POs and CMS as part of the PACE program
agreement.
Response: We believe that the decision to use outcome measures in
addition to the five noted in Sec. 460.134 is one that that a PO is in
the best position to make. If a PO believes that tracking a specific
outcome measure will benefit its participants and improve the level of
service or the delivery of service, we would expect the organization to
identify and collect information that will support its use.
Comment: One commenter asked when it will be known how the quality
data, referred to in the 1999 interim final rule, will be collected by
CMS and what the specific quality measures will be. The commenter also
questioned how POs can be expected to comply with the PACE regulation
prior to implementation of the OBCQI program minimum requirements for
QAPI program.
Response: In 2001, we established requirements for submission of
Data Elements for Monitoring, which is included in the PACE program
agreement under Appendix L. The program agreement can be located at
http://www.cms.hhs.gov/PACE. As discussed in more detail in Subpart L
of this final rule, POs are required to submit the Data Elements for
Monitoring quarterly via the Health Plan Management System (HPMS). POs
are expected to collect, analyze, and track data from the five outcomes
measures required in Sec. 460.134, the Data Elements for Monitoring,
and any other outcome measure where an identified improved performance
will benefit their participants.
Comment: A commenter questioned whether levels of performance will
vary by program based on such factors as the program's age, its
enrollees' characteristics, its specific service model, and unique
characteristics of the service area.
Response: As in other types of health care facilities, the
participant population in PACE sites varies. These differences should
not affect the QAPI process but may determine what performance
indicators (that is, adverse patient events, satisfaction, wound
healing, etc.) a PO uses to identify areas requiring continuous quality
assessment and performance improvement.
Comment: One commenter supported CMS's plan, as explained in the
1999 interim final rule (64 FR 66259), not to impose standardized data
collection requirements by implementing OBCQI, pending the outcome of
work by CHSPR. The commenter also supports CMS continuing to work with
States to collect data to be used in the development and implementation
of outcome measures that would allow comparison between varied types of
programs serving individuals with like needs as well as with cross-site
comparison. Other commenters indicated that the application of numerous
other data collection instruments such as those noted in the Preamble
of the interim final rule, that is, the MDS, OASIS, DataPACE, etc.,
could divert resources from providing services to PACE enrollees.
Another commenter expressed concern that POs will be unduly
subjected to data reporting and quality assessment requirements
exceeding those imposed on other Medicare provider types. The commenter
indicated it would be better to condense the data collection
responsibilities of the PACE provider and establish a core set of
minimum data and reporting requirements.
Response: We are concerned that specifically mandated measures such
as the OBCQI may compromise the discretion of POs to use other
assessment tools that may be more appropriate for their settings. At
this time, CMS does not have any plans to establish a minimum data set
for PACE. As stated in previous responses, we are not requiring POs to
comply with the OBCQI system in this final rule. However, we believe
some structure for quality-related data collection and reporting is
necessary. We expect POs to exercise flexibility in determining the
most appropriate methods and instruments for their participant
caseloads. Those POs that have experience with data sets should be able
to manage the data needs of their QAPI program.
We recognize that in some States, POs are already subject to OASIS
reporting requirements because they are licensed as home health
agencies and must comply with OASIS requirements. It was not our intent
to subject POs to more reporting requirements than other providers.
However, as more States develop specific licensure requirements for
PACE, this reporting burden will be greatly reduced. We also recognize
that some POs have experience in utilizing the draft performance
measures developed by the NPA Performance Measure Workgroup. Although
we are not requiring that POs use the OBCQI nor submit the COCOA-B data
at this time, for POs still searching for guidelines to develop or
improve their assessment tools or quality enhancement, the COCOA-B is
available at http://www.cms.hhs.gov/QualityInitiativesGenInfo.
The commenters may have misunderstood the preamble discussion of
QAPI in the 1999 interim final rule. We stated that the CHSPR was
examining existing CMS data instruments such as MDS, OASIS, DataPACE
and FIM for data items, which may be pertinent for PACE. We did not
intend to imply that POs would have to comply with these other CMS data
sets. However, States have differing requirements for PACE licensure
and
[[Page 71307]]
with licensure and if the State requires a PO to be licensed as several
provider types the PO would be responsible for the reporting
requirements of each of the licensed provider types.
Comment: One commenter requested information about CMS's plan for
working with States to establish outcome measures and minimum levels of
performance.
Response: At this time, we have no specific plans to establish
additional outcome measures or minimum levels of performance beyond the
data elements for monitoring which were established in 2001 and are
included in the program agreement as Appendix L. State licensure
requirements are based on the State's designation of PACE as a
particular provider type. The State designation determines the State
and Federal requirements, which may include outcome measures or minimum
levels of performance.
We believe that State licensure requirements together with QAPI
program requirements and our reporting requirements related to the data
elements for monitoring are sufficient to ensure quality care for PACE
participants without being excessively burdensome for the POS. In 2001,
we established the Data Elements for Monitoring. POs are required to
submit quarterly data on each of the following 9 elements:
1. Routine Immunization
2. Grievance and Appeals
3. Enrollments
4. Disenrollments
5. Prospective Enrollees
6. Readmissions
7. Emergency (unscheduled) Care
8. Unusual Incidents for Participants and the PACE site (to include
staff if participant was involved)
9. Deaths
Final rule actions:
This final rule will finalize Sec. 460.134 as published in the
1999 interim final rule.
Section 460.136 Internal QAPI Activities
In Sec. 460.136, we require that the PO must use a set of outcome
measures to identify areas of good or problematic performance and must
take actions targeted at reinforcing or improving care based on these
outcome measures.
The PO also must incorporate any actions that result in performance
improvement into its standards of practice for the delivery of care. A
method of periodically tracking performance to assure that any
improvements are sustained over time must also be incorporated in the
program. The PO must use its own experience from its performance
improvement program to change care behaviors and to ensure that these
behaviors are sustained.
We require the PO to set priorities for performance improvement,
considering the prevalence and severity of identified problems and
giving priority to improvement activities that affect clinical
outcomes. However, any identified problems that directly or potentially
threaten the health and safety of participants must be corrected
immediately. Prioritizing areas of improvement is essential to ensure
consistency in the quality of care furnished over time. Conditions that
may threaten the health and safety of participants must be immediately
and directly addressed when they are identified.
Similar to the Protocol, we require the PO to designate an
individual to coordinate and oversee implementation of QAPI activities.
The purpose of this requirement is to ensure that the PO designates
responsibility for a QAPI plan and the various activities resulting
from this plan. Also, this individual is responsible for ensuring that
all team members, PACE staff, and contract providers are aware of the
various quality QAPI activities.
We require that the PO ensure that all team members, PACE staff,
and contract providers are involved in the development and
implementation of the QAPI activities and are aware of the results of
these activities. The process of service delivery in PACE requires the
team to identify participant problems, determine appropriate treatment
objectives, select interventions and evaluate outcomes of care on an
individual participant basis. The IDT is in a unique position to
provide PACE management with structured feedback on the performance of
the PACE program and suggest ways in which performance can be improved.
Thus, we expect the PO to make full use of the IDT and other staff in
contributing to its internal quality improvement program.
Finally, consistent with the Protocol, we require the PO to
encourage PACE participants and caregivers to be involved in QAPI
activities, including providing information about their satisfaction
with services. One of the best sources of information about the
strengths and weaknesses of a program is from the users of the program.
In this case, it is important for PACE programs to get feedback from
both PACE participants and caregivers to help identify areas that need
improvement.
Comment: Many commenters expressed support for the use of an OBCQI
system.
Response: We thank the commenters for their support although we are
not requiring POs to comply with a specific OBCQI system at this time.
Comment: A commenter pointed out that the QAPI coordinator has a
similar function similar to the medical director with regard to
quality. The commenter asked if one person could hold both positions.
Response: The medical director has responsibility for patient
outcomes and for the organization's QAPI program. It is the PO's choice
to determine that the medical director will serve as the QAPI
coordinator. The coordinator's function is to coordinate and oversee
the implementation of quality assessment and performance improvement
activities. We envisioned the QAPI coordinator as an individual other
than the medical director. The QAPI coordinator would be responsible
for day-to-day quality issues, collecting data, analyzing data,
detecting trends, coordinating IDT involvement in QAPI activities, and
compiling comments related to participant/caregiver satisfaction and
concerns.
Final rule actions:
This final rule will finalize Sec. 460.136 as published in the
1999 interim final rule.
Section 460.138 Committees With Community Input
Consistent with the Protocol, we require that the PO develop a
committee(s) with community input to (1) evaluate data collected
pertaining to quality outcome measures, (2) address the implementation
of and results from the QAPI plan, and (3) provide input related to
ethical decision-making including end-of-life issues and implementation
of the Patient Self-Determination Act. Through this committee, the PO
will be able to receive guidance regarding its QAPI program and the
ethical issues faced by POs.
Comment: One commenter disagreed with the requirement, stating that
it does not seem reasonable or necessary, for a small PO to be required
to involve community members in one or more committees to evaluate data
from the quality outcomes measures and to address implementation of the
organization's QAPI plan. The commenter indicated that it should be
sufficient for the SAA and CMS to evaluate the QAPI data and plan
implementation on behalf of the enrollees and community.
Response: The requirement for a PO to establish committee(s) with
community input was adopted from the Protocol. Section 1894(f) of the
Act
[[Page 71308]]
requires that the Secretary ``* * * incorporate the requirements
applied to PACE demonstration waiver programs under the PACE
protocol.'' The use of community input is contained in that protocol.
Our intention is to provide a participant protection through community
involvement in the oversight of participant satisfaction and QAPI
activities.
Final rule actions:
This final rule will finalize Sec. 460.138 as published in the
1999 interim final rule.
Section 460.140 Additional Quality Assessment Activities
We require that POs participate in periodic, external quality
improvement reporting requirements as may be specified by the CMS or
the SAA. Examples of participation in an activity include the reporting
of data items for outcome measurement purposes, participation in the
survey process, and participation in a CMS-directed national quality
improvement project.
Comment: One commenter asked when CMS would provide the ``external
quality assessment and reporting requirements.''
Response: The only quality assessment reporting that we currently
require is the Data Elements for Monitoring.
Final rule actions:
This final rule will finalize Sec. 460.140 as published in the
1999 interim final rule.
Subpart I: Participant Enrollment and Disenrollment
The purpose of subpart I is to establish the requirements for
enrollment and disenrollment of a PACE participant. We received a large
number of comments related to enrollment and disenrollment in PACE.
Section 460.150 Eligibility To Enroll in a PACE Program
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.
Sections 1894(c)(2) and 1934(c)(2) of the Act provide that a PACE
program eligible individual must have a health status comparable to the
health status of individuals who participated in the PACE demonstration
programs. Further, sections 1894(c)(2) and 1934(c)(2) of the Act
specify that this determination will be based upon information on
health status related indicators (such as medical diagnoses and
measures of activities of daily living, instrumental activities of
daily living, and cognitive impairment) that are part of the
information collected by POs on potential PACE program eligible
individuals. This provision was intended to ensure that POs continue to
serve patients who are as frail as those served under the PACE
demonstration program and will prevent POs from selecting enrollees who
need less care and whose care is less costly.
As we explained in the 1999 interim final rule, we examined data
extracted from the PACE Fact Book (Second Edition, 1996, prepared by On
Lok, Inc., 1333 Bush Street, San Francisco, California, 94109) which
provides a portrait of participants in the eleven fully-capitated
demonstration programs as of December 31, 1995. Activities of daily
living (ADLs) are personal care tasks (bathing, dressing, toileting,
transferring, and eating) that a person must be able to perform to be
considered independent. A person is considered to have an ADL
dependency and a score of ``1'' is assigned, for each of those 5 tasks
for which some or full assistance is needed to perform the task. A
similar scale measured dependencies in eight instrumental activities of
daily living (IADLs), which include meal preparation, shopping,
housework, laundry, heavy chores, money management, taking medications,
and transportation. The 2710 participants in these 11 sites at the end
of 1995 had an average of 2.8 ADL dependencies (varying by site from
2.3 to 3.8) and an average of 7.5 IADL dependencies (varying from 6.9
to 7.9 by site). Additionally, these participants had an average of 7.9
medical conditions (varying from 4.9 to 11.0 by site) and an average
number of 4.5 errors or unanswered questions (varying from 2.0 to 6.4)
on the Short Portable Mental Status Questionnaire used to evaluate
mental functioning.
The PACE Fact Book acknowledges the difficulty of maintaining a
valid and consistent data set in a multisite project with sites
scattered across the country. However, there are many reasons why the
data would be expected to show differences across sites. Although the
targeted population for all PACE demonstration programs consisted of
individuals who met the NF level of care, the specific criteria used to
determine if an individual needs this level of care varies by State.
Actual implementation of the PACE program also differs in other ways
across sites to reflect the particular community in which the site is
located. Furthermore, marketing efforts vary, as do the maturity of the
site and particular staffing arrangements. We are convinced that any
means of determining whether individuals have a health status
comparable to that of participants in the PACE demonstration programs
must take into account variances among sites and differences across
patients within a site. Therefore, we concluded that we could not
develop a tool that would more adequately determine health status
comparable to individuals in the PACE demonstration programs than the
current criteria used by States to determine if an individual needs a
NF level of care.
In determining how best to implement this requirement, we also
considered other safeguards against selective enrollment. Sections
1894(c)(3) and 1934(c)(3) of the Act include a requirement that
participants be recertified annually as requiring a NF level of care.
Under the demonstration program, there was a one-time certification of
a participant's meeting the NF level of care. Thus, under the
demonstration program, POs could continue to serve individuals who had
a short-term need for a NF level of care but whose condition had shown
significant improvement. The law's annual recertification requirement
ensures that participants will continue to need a NF level of care.
Additionally, we included a requirement that POs must notify CMS
and the SAA of enrollment denials. CMS and the SAA can analyze this
information to detect selective enrollment.
After weighing both the need to maintain State and organization
flexibility to develop programs suitable to the communities in which
the POs operate and the implementation of other safeguards against
selective enrollment, we believe having a health status comparable to
the PACE demonstration programs is inherently equivalent to needing a
NF level of care. We are satisfied that applying the NF level of care
requirement in conjunction with the other safeguards discussed will
minimize selective enrollment while preserving program flexibility;
however, we invited comments with regard to other ways to implement
this provision.
Additionally, the statute requires that an individual meet any
other eligibility conditions imposed under the PACE program agreement.
We are aware that under the demonstration program, some PACE sites
instituted some other eligibility conditions. For example, some set
their minimum age limits higher than 55. However, we do not believe the
intent of section 1894(a)(5)(D) of the Act was to allow for
modification of the requirements of section 1894(a)(5)(A-C) of the Act,
including the age criteria of 55 or older.
[[Page 71309]]
Thus, POs may not turn away any otherwise eligible individual who is at
least age 55.
In the 1999 interim final rule, we cautioned organizations that
these site-specific eligibility requirements are not intended to allow
programs to discriminate against individuals with problems such as
cognitive deficits, disruptive behavior, or substance abuse. Any site-
specific eligibility criteria must be specified in the program
agreement. We will not approve criteria that would serve as a way to
selectively enroll individuals whose care is anticipated to be less
costly or who are thought have easier care needs.
The eligibility requirement specified in Sec. 460.150(c)
incorporated the Protocol provision that at the point of enrollment, an
individual's condition must be such that his or her health or safety
would not be jeopardized by living in a community setting. We recognize
that enrollment in the PACE program is not appropriate for everyone who
meets the basic eligibility criteria. Determining whether or not 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. As specified in Sec.
460.152(a)(4), this assessment is done by the PO based upon criteria
developed by the SAA and specified in the program agreement.
We indicated in the statutory provisions in sections 1894(i) and
1934(j) of the Act that PACE program eligibility is not contingent upon
an individual's eligibility for Medicare or Medicaid.
Comment: Two commenters disagreed with the regulatory requirement
permitting enrollment of individuals 55 years of age or older. One
commenter requested allowing the age limitation be established at the
State's discretion. The other commenter requested more restrictive age
targeting criteria which would be consistent with pre-PACE and PACE
demonstration programs. This commenter would limit eligibility to those
age 65 years old and older.
Response: The age requirement is consistent with sections
1894(a)(5)(A) and 1934(a)(5)(A) of the Act, which defines a PACE
program eligible individual as ``55 years of age or older.''
Comments: There were numerous requests for clarification of the
State responsibility related to PACE eligibility determinations.
Commenters asked who determines NF level of care for PACE applicants
who are not Medicaid-eligible.
Response: The SAA is responsible for determining the NF level of
care for all PACE applicants, regardless of Medicaid status.
Comment: Four commenters concurred with our interpretation of
health status comparable to individuals enrolled in the PACE
demonstration programs. One commenter asked about the meaning of the NF
certification requirement and if States have the ability to set
criteria that would limit enrollment to persons who are more costly or
more difficult to care for than persons who meet the State's minimum
threshold level for NF level of care.
Response: Section 460.150(b) requires that an individual must meet
3 basic eligibility requirements in order to enroll in PACE. These are:
(1) Be 55 years old or older, (2) be determined by the SAA to need the
level of care required under the State Medicaid plan for coverage of NF
services (that is, the individual's health status is comparable to the
health status of individuals who participated in the PACE demonstration
programs), and (3) reside in the PO's service area.
If a State establishes that its minimum threshold to qualify for a
NF level of care would permit the enrollment of less frail individuals
than those who participated in PACE demonstration programs (on a
nationwide or State basis), we will approve the use of a more stringent
or higher level of care requirement in order to ensure that the PACE
permanent providers continue to serve a population that is comparable
to those served under the PACE demonstration programs.
Comment: Several commenters requested clarification on the
requirement that individuals with neither Medicare nor Medicaid may
enroll in PACE. Commenters asked if this requirement was intended to
mandate that States provide PACE as a private pay benefit or whether
this would be an option. Commenters noted that establishing PACE as a
private pay benefit may subject POs to State insurance laws.
Another concern was that the regulation addressed all combinations
for premiums except for individuals with neither Medicare nor Medicaid.
One commenter requested clarification of premium amounts for non-
Medicare and non-Medicaid participants.
Response: Based on sections 1894(i) and 1934(j) of the Act, we
believe the Congress intended to permit individuals with Medicare Part
A, Medicare Part B, Medicaid, any combination of the above, or none of
the above mentioned benefits to participate in PACE. Therefore, Sec.
460.150(d) indicates that a potential participant is not required to be
Medicare enrolled or Medicaid eligible. The statute does not specify
the premium that may be charged to non-Medicare and non-Medicaid
participants. However, in response to inquiring POs, we have indicated
they could charge the non-Medicare and non-Medicaid participants the
combined Medicare and Medicaid capitation rates as their premium.
Comment: A commenter asked if an individual who met all enrollment
criteria, except the ability to live safely in a community setting
could be denied enrollment. The commenter asked whether this would be
the only condition under which a willing individual could be denied
enrollment.
Response: Consistent with the Protocol, the only permitted reason
for a denial of enrollment is when a participant's health or safety
would be jeopardized by living in a community setting. The criteria
used to determine if an individual's health or safety would be
jeopardized by living in a community setting are often developed by the
SAA and must be included in the PACE program agreement in accordance
with sections 1894(c) and 1934(c) of the Act. PACE staff must assess
the potential participant to establish that the participant can be
cared for appropriately in a community setting and that he or she meets
all requirements for PACE eligibility specified in this part. The SAA
is responsible for oversight of this process and has ultimate
responsibility for the determination. If a PO denies enrollment because
based on their assessment, that is, they do not believe the individual
can be safely maintained in the community, the PO must notify CMS and
the SAA.
Comment: When determining whether an individual can be maintained
safely in the community, one commenter asked if we intended to include
all possible community settings or merely the one in which the
individual resides at the time of application.
Response: The intent of the requirement is that POs consider the
individual's residence at the time of application. However, if the
individual cannot be maintained safely in their current residence but
the PO believes they could live safely in another community setting,
the option of moving should be presented to the individual before
enrollment is denied.
Comment: Several commenters recommended regulatory revisions that:
(1) Provide the SAA flexibility to ensure that selective enrollment is
avoided; (2) permit denial of enrollment to those with End-Stage Renal
Disease (ESRD) (alternatively, CMS should reconsider a proposed change
in financing for
[[Page 71310]]
enrollees with ESRD); and (3) specifically exclude conditions
prohibited elsewhere in the regulation from being approved as an
additional program specific eligibility requirement. Commenters noted
that specific mention of important protections against discriminatory
exclusion would be beneficial. Lastly, commenters requested that we
provide an example of an optional eligibility criterion.
Response: The regulations include several provisions intended to
prevent selective enrollment. First, participants must have a health
status comparable to the health status of individuals who participated
in the PACE demonstration program. This is incorporated into the
requirement that eligible individuals must meet the State's NF level of
care requirements. If a State establishes that its minimum threshold to
qualify for a NF level of care would permit the enrollment of less
frail individuals than those who participated in the PACE demonstration
program (on a nationwide or State basis), the State may request the use
of a more stringent or higher level of care requirements in order to
ensure that the POs continue to serve a population that is comparable
to that served under the PACE demonstration. Other safeguards include a
requirement that participants be recertified annually as requiring a NF
level of care as well as a requirement that POs must notify both CMS
and the SAA of enrollment denials.
It is the SAA's responsibility to establish the criteria used by
the PO in assessing an individual's ability to live safely in the
community. These criteria are included in the program agreement. The
PO's assessment is used by the SAA in their final enrollment/denial
determination. Although we believe that the States will be open to PO
assessments regarding a participant's ability to live safely in the
community, the decision to permit a denial of enrollment is ultimately
delegated to the State. If the PO determines that the individual must
be denied enrollment, the PO must inform CMS and the SAA. In addition,
the PO is required to inform the individual in writing of the reason
for the denial.
We understand individuals with ESRD are among the most frail and
complex persons to care for and in the past POs have had reservations
about enrolling this population due to additional cost of their care.
However, we believe that PACE is a care delivery model well-suited to
meeting the needs of this population. Thus, we do not believe that it
is appropriate for POs to deny enrollment to individuals solely based
on ESRD status.
In January 2005, we implemented a risk-adjusted capitation model
exclusively for ESRD. The ESRD CMS-HCC model accounts for the
additional costs of providing ESRD patients with the costly and highly
specialized care needed. This model is exclusively for ESRD patients
and has three categories of ESRD acuity: those that are on dialysis,
those that have had kidney or kidney and pancreas transplant(s), and
those that have had kidney grafts.
We agree with the commenter's suggestion that any condition that is
specifically excluded in statute or regulation not be included in a
program agreement as an additional program specific eligibility
condition. As all additional program specific eligibility conditions
must be approved by CMS and the SAA, we do not believe that additional
regulatory language is needed.
Although we have not yet approved any site-specific eligibility
requirements, we anticipate that the most likely proposal would be to
develop a disease or condition-specific program, such as programs for
participants with Alzheimer's disease. Site-specific requirements may
not modify the three basic eligibility requirements and may not serve
as a way to selectively enroll participants. We will consider other
proposals on a case-by-case basis.
Comment: Several commenters asked which IDT members are required to
assess the participant to determine the participant's ability to live
safely in the community. Another commenter requested that the PO's
ability to safely transport a participant be considered in the
determination of whether a participant could live safely in the
community.
Response: We did not specify particular IDT members that must
assess the participant's ability to live safely in the community
because we believe that the PO is in the best position to assign this
responsibility. It is our expectation that individuals' health
condition and their social support system will be considered in their
assessment. In addition, as transportation is a major activity, whether
to the PACE center, or to off-site providers, we expect this assessment
to include the PO's ability to transport individuals safely.
Comment: One commenter requested that for POs located in areas
where there are a disproportionate number of Medicaid-only elderly,
they be permitted a waiver or modification of the mandate to enroll all
individuals meeting the eligibility requirements. The commenter
indicated that a PO in this situation will have a serious financial
burden from the substantial loss of revenues related to the prohibition
from collecting the Medicare capitation amount from these participants.
Response: With implementation of the Part D benefit, all States
will have to develop Medicaid rates that vary depending on whether the
participant is dually eligible (Medicare and Medicaid eligible) or is a
Medicaid-only individual. The costs utilized as the basis for the
calculation of the Medicaid rate will vary for these two comparable
populations due to service utilization and will result in a higher rate
for the Medicaid-only population. Therefore, the Medicaid capitation
payment is adjusted to account for the difference in costs between the
dually-eligible individual and the Medicaid-only individual. We
recognize that an organization may receive more for a dually-eligible
participant, due to the receipt of both Medicare and Medicaid
capitation payments rather than only the Medicaid capitation for a
Medicaid-only participant. However, we believe the Medicaid capitation
payments are adequately adjusted to account for the difference in
costs, and we are not inclined to grant a waiver of the requirement to
enroll the Medicaid-only population.
Final rule actions:
This final rule will finalize Sec. 460.150 as published in the
1999 interim final rule.
Section 460.152 Enrollment Process
We established Sec. 460.152 to specify the PO's responsibility
during the intake process and actions required in the event a potential
PACE participant is denied enrollment because his or her health and
safety would be jeopardized by living in a community setting.
Although we recognize that the intake process must be flexible to
meet the needs of POs and potential PACE enrollees, in the 1999 interim
final rule, we specified certain steps that must, at a minimum, be
included in the process. These are not intended to be sequential steps
and may in fact occur concurrently. Potential participants need
reliable, accurate information on the PACE delivery system in order to
make a rational decision whether to enroll. There is both a legal and
an ethical obligation to inform potential participants about how the PO
controls and affects the delivery of health care and other services,
albeit in full partnership with the participant.
The following discussion describes the information that is made
available to the potential participant routinely and upon request. One-
on-one assistance is
[[Page 71311]]
provided throughout the intake process. In all situations, the
information is provided in a culturally competent manner, including
providing information in a language understood by the participant.
The most basic disclosure is that all health care services must be
received through the PO. Once that disclosure is made and understood by
the potential participant, other key disclosures related to what is
included within and what is excluded from the PACE program, what costs
would be borne by the participant, how to access emergency services,
and how the grievance and appeals processes work. Additional
information that should be disclosed upon request includes the process
that the PO uses to decide that drugs, devices, and procedures are
experimental and whether the PO uses a drug formulary.
The uniqueness of the PACE model depends upon the partnership
formed between the participant and the IDT. Therefore, a potential
participant should also be made aware of how the team works, who is on
it, and what choices exist for participant selection of a primary care
physician. The participant must also know how the organization provides
access to services not provided directly by the IDT. These services may
include contractors who furnish specialty services, health care
facilities such as hospitals and nursing homes, and providers of home
health care. Also, participants may request information regarding
whether there are financial incentives to PO staff and contractors that
may impact care. Finally, upon request, the following information must
be disclosed: Information regarding board certification and other
credentialing requirements; clinical protocols; medical practice
guidelines, consumer satisfaction survey results; or the results of the
organization's most recent Federal or State review.
With regard to specific intake tasks, we did not include the
Protocol requirement for a complete assessment by the IDT prior to the
denial of enrollment based on health and safety issues. We believe that
such a determination can generally be made without a complete IDT
assessment. In establishing enrollment requirements, our intent was to
clarify, not change, the enrollment process as described in the
Protocol.
If a prospective participant is denied enrollment because his or
her health or safety would be jeopardized by living in the community,
we require the PO to inform CMS and the SAA as well as make the
documentation available for review; notify the individual in writing of
the reason for the denial; as appropriate, refer the individual to
alternative services; and retain supporting documentation of the reason
for the determination.
We received the following comments related to the PACE enrollment
process.
Comment: Commenters asked if the State review was limited to
certifying a potential participant's eligibility for NF level of care.
Commenters also asked if the State was prohibited from reviewing other
eligibility criteria such as the ability for the potential participant
to be maintained safely in the home.
Response: In addition to certifying NF level of care, States are
responsible for establishing the criteria used for the PO assessment to
determine if an individual's health and safety would be jeopardized by
living in a community setting. States are also responsible for
oversight of the PO's intake process.
Comment: A commenter asked if Federal financial participation (FFP)
is available to States for administrative costs related to the State
performing preadmission screening for NF level of care determinations
for participants, particularly if they are not Medicaid eligible.
Response: FFP is provided to States for all administrative costs
for administering the PACE program. Because the State NF level of care
determination is a statutory eligibility requirement for the PACE
program, the State may claim FFP for this administrative function
regardless of whether the participant is ultimately determined eligible
for Medicaid or Medicare.
Comment: Commenters requested we identify which members of the IDT
must conduct assessments prior to enrollment.
Response: We have not specified which IDT members must conduct
assessments prior to enrollment. We believe the PO is best able to
identify staff qualified to perform the assessment to determine whether
the participant can live safely in the community and provide a
preliminary explanation of the services that an individual would
receive from the program. An initial comprehensive assessment as
described in Sec. 460.104 must be completed by all members of the IDT
promptly following enrollment.
Comment: We received several comments related to denials of
enrollment that we believe indicate some confusion regarding the
differences between ``withdrawal'' by a participant, ``screen-out'' by
the PO when the prospective enrollee does not meet eligibility
requirements, and ``denial of enrollment''.
Response: We wish to clarify the difference between ``withdrawal,''
``screen-out,'' and ``denial of enrollment.''
When a prospective enrollee begins the intake process, the PO must
determine whether or not the prospective enrollee meets the three basic
eligibility criteria:
(1) Age 55 or older,
(2) Lives in the service area of the PO, and,
(3) Requires the State's NF level of care.
If the potential enrollee does not meet any of these three
basic eligibility criteria, we consider the result to be a ``screen-
out'' by the PO.
If the prospective enrollee meets the three basic
eligibility criteria but decides not to enroll in the PACE program, we
consider the enrollee's action to be a ``withdrawal.''
If the potential enrollee meets the three basic
eligibility criteria, they are then assessed to ensure they can safely
live in the community and be provided a preliminary explanation of
services that would be provided. If the enrollee then chooses not to
enroll, it is still considered a ``withdrawal.'' Neither screen-outs
nor withdrawals are required to be reported to CMS or the SAA by our
regulations.
A ``denial of enrollment'' may occur when the person is
determined to be unable to live in the community without jeopardizing
his or her health and safety. The PO must report this denial of
enrollment to CMS and the SAA and provide the individual with a written
explanation of the denial of enrollment. Consistent with the Protocol,
the only permitted reason for a denial of enrollment is that living in
a community setting would jeopardize an individual's health and safety.
Comment: Commenters asked about the purpose of notifying CMS and
the State of each denial of enrollment, and how this notification was
to occur. We were also asked if the intent of reporting a denial of
enrollment is to communicate the presence of an ``at risk'' individual
living in the community, for which the State already has established
reporting requirements and protocols for addressing such situations.
Commenters also asked if potential participants could appeal denials of
enrollment.
Response: The purpose for notifying CMS and the SAA of each
enrollment denial is to prevent selective enrollment by the PO. We
believe this reporting is another participant protection preventing the
practice of enrolling those individuals with less expensive care needs
or implementing
[[Page 71312]]
discriminatory practices. The CMS requirement is fulfilled through the
quarterly HPMS reporting. The SAA is responsible for the oversight of
the denial process and may specify additional reporting requirements.
Denials of enrollment are may be appealed by potential participants
through the State fair hearing process, and this process is applicable
for all enrollment denials, regardless of the participant's Medicare
and Medicaid status.
Comment: Two commenters recommended that we modify requirements to
explicitly permit qualified M+C (now MA) enrollees to disenroll from MA
at any point in the year for the purpose of enrolling in PACE.
Response: Medicare has an operational process called the Special
Election Period (SEP) which allows Medicare managed care enrollees to
disenroll from MA plans at any time in order to enroll in PACE. The SEP
for PACE is in the Medicare Managed Manual, section 30.4.4., and can be
located on the CMS Web site at http://www.cms.hhs.gov/manuals/downloads/mc86c02.pdf.
Moreover, after disenrolling from PACE, under
the SEP, individuals are allowed two months to enroll in an MA plan or
revert to the original Medicare program. As SEPs are an operational
practice of the MA program, we do not believe it is appropriate to
include SEP provisions in PACE regulations.
Comment: One commenter recommended that the regulation be revised
to require POs to explain to potential enrollees which services or
benefits are excluded and how the PACE service delivery model differs
from the other service alternatives.
Response: The intake process is an extensive and interactive
activity between the PO, the participant and their family or caregiver.
During these encounters the PO staff explains PACE, what it encompasses
and the differences between PACE and other service delivery
alternatives including what services generally are not covered. The
PACE benefit includes all Medicare services, all Medicaid services, and
services the IDT determines is necessary for a particular participant.
Therefore, we believe regulatory language requiring POs to provide
information on excluded services would be inappropriate because PACE
services are participant-specific and excluded services for one
participant may become required services for another participant.
Comment: One commenter recommended that the information supplied to
prospective participants include a review of post-eligibility treatment
of income, which was not expressly included in the 1999 interim final
rule.
Response: Although not specified in this section of the regulation,
we require that information regarding post-eligibility treatment of
income is included in the enrollment agreement (see Sec. 460.154(g).
However, we agree with the commenter and as an additional
participant protection, we are adding a requirement to Sec. 460.152(a)
that POs review post-eligibility treatment of income with prospective
enrollees.
Comment: Commenters asked if the State could delegate review of
denials of enrollment and review of proposed involuntary disenrollments
to local departments of social services.
Response: The PO must provide written notification to individuals
denied enrollment. We note that a denial occurs when an individual
meets the basic eligibility criteria of age, living in the service area
and requiring NF level of care but is determined to be unable to live
safely in the community. The SAA is ultimately responsible for
oversight of this process and for prior review of involuntary
disenrollments. While the SAA can delegate these activities, the SAA
must maintain adequate and appropriate oversight and review of any
delegated activities/responsibilities.
Final rule actions:
In this final rule, we are adding a requirement that POs review
post-eligibility treatment of income with prospective enrollees.
Section 460.154 Enrollment Agreement
While the program agreement contains the specific enrollment and
disenrollment procedures to be followed by the PO, in Sec. 460.154, we
specify general requirements, which must be met by all POs. Although
the statute is silent as to any general enrollment requirements, it
requires that the regulations should incorporate, to the extent
possible, the requirements applied to the PACE demonstration programs
under the Protocol. Thus, we adopted the Protocol enrollment and
disenrollment provisions with the exceptions noted below.
We removed the reference to the Member Handbook because we found
the distinction between the Member Handbook and the enrollment
agreement to be confusing. We define the minimum information that must
be included in the enrollment agreement to incorporate those materials
that would generally be expected to be included in a Member Handbook.
Although some POs may use a cover sheet to obtain the participant's
signature and a ``handbook'' to provide the required information, the
cover sheet alone does not constitute the enrollment agreement and must
be accompanied by the additional minimum information specified when
provided to the participant.
In the 1999 interim final rule, we emphasized that an individual
who accepts PACE as his or her sole source of services could not then
make an election of hospice care under section 1812(d) of the Act and
42 CFR 418.24 or section 1905(o)(2) of the Act. However, hospice-type
services are available from the PO as the PACE model of care is
designed to furnish a continuum of services which meet health care
needs. We included a requirement that the enrollment agreement include
notification that Medicaid recipients and individuals dually-eligible
for Medicare and Medicaid enrolled in PACE are not liable for any
premiums, but they may be held liable for any applicable spenddown
liability under 42 CFR 435.121 and 435.831 and any amounts due under
the post-eligibility treatment of income process under Sec. 460.184.
We also included a requirement for the enrollment agreement to
include information on the consequences of subsequent enrollment in
other o