[Code of Federal Regulations]
[Title 42, Volume 3]
[Revised as of October 1, 2002]
From the U.S. Government Printing Office via GPO Access
[CITE: 42CFR460.68]

[Page 415-416]
 
                         TITLE 42--PUBLIC HEALTH
 
  CHAPTER IV--CENTERS FOR MEDICARE & MEDICAID SERVICES, DEPARTMENT OF 
                 HEALTH AND HUMAN SERVICES--(Continued)
 
PART 460--PROGRAMS OF ALL-INCLUSIVE CARE FOR THE ELDERLY (PACE)--Table of Contents
 
               Subpart E--PACE Administrative Requirements
 
Sec. 460.68  Program integrity.

    (a) Persons with criminal convictions. A PACE organization must not 
employ individuals or contract with organizations or individuals--
    (1) Who have been excluded from participation in the Medicare or 
Medicaid programs;
    (2) Who have been convicted of criminal offenses related to their 
involvement in Medicaid, Medicare, other health insurance or health care 
programs, or social service programs under title XX of the Act; or
    (3) In any capacity where an individual's contact with participants 
would pose a potential risk because the individual has been convicted of 
physical, sexual, drug, or alcohol abuse.

[[Page 416]]

    (b) Direct or indirect interest in contracts. Except as provided in 
paragraph (c) of this section, no member of the PACE organization's 
governing body or any immediate family member may have a direct or 
indirect interest in any contract that supplies any administrative or 
care-related service or materials to the PACE organization.
    (c) Waiver. (1) CMS and the State administering agency may waive the 
requirement in paragraph (b) of this section for PACE organizations in 
the following communities:
    (i) Rural.
    (ii) Tribal.
    (iii) Urban Indian.
    (2) If an applicant seeking approval as a PACE organization believes 
a waiver under this paragraph is warranted, it must include a request 
for the waiver in its application that meets the following requirements:
    (i) Identifies the rural, tribal, or urban Indian community.
    (ii) Establishes recusal restrictions for each member of the PACE 
organization governing body or immediate family member to which the 
exception would apply.
    (iii) Establishes a process to record recusal actions on a case-by-
case basis.
    (iv) Establishes a process to make available to the public the 
general recusal restrictions and record of actions.
    (3) CMS and the State administering agency may grant a waiver if 
they determine the following:
    (i) There is insufficient availability in the PACE organization's 
service area of individuals who could meet the requirement.
    (ii) The proposed alternative does not adversely affect the 
availability of care or the quality of care that is provided to 
participants.
    (d) Disclosure requirements. A PACE organization must have a formal 
process in place to gather information related to paragraphs (a) and (b) 
of this section and must be able to respond in writing to a request for 
information from CMS within a reasonable amount of time.

    Effective Date Note: At 67 FR 61505, Oct. 1, 2002, Sec. 460.68 was 
amended by revising paragraph (b), and paragraph (c) was removed and 
reserved, effective Oct. 31, 2002. For the convenience of the user, the 
revised text is set forth as follows:

Sec. 460.68  Program integrity.

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    (b) Direct or indirect interest in contracts. No member of the PACE 
organization's governing body or any immediate family member may have a 
direct or indirect interest in any contract that supplies any 
administrative or care-related service or materials to the PACE 
organization.

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