CMS continues to move PACE Organizations into alignment with Medicare Advantage plans, and use of past performance to inform request for new or expanded PACE programs is no exception. While negative performance points are a way to level the playing field for issues of non-compliance across plans, there is an additional implication for parent organizations that requires attention.
CMS is proposing to amend the PACE regulation at § 460.18 (CMS evaluation of applications) to incorporate an evaluation of past performance into the review of applications submitted by PACE organizations that seek to offer a PACE program or expand an approved program by adding a geographic service area and/or PACE center site(s). This part of the proposed rule models 42 CFR Parts 422 and 423 for MA plans. CMS is proposing to start the cycle for PACE past performance review in March 2024, which correlates to the PACE Organization quarterly application cycle.
In addition, CMS proposes to specify at new § 460.19(c) the types of compliance actions CMS currently
Issues, which also align closely with Medicare Advantage Plans, including Notices of Non-Compliance (NONC), Warning Letters (WL), and Corrective Action Plans (CAPs), in ascending order. Past performance points are assigned to each type of action- 1 point for NONC, 3 points for WL, and 6 points for each CAP. These points will be used by CMS to determine application approval status for PACE Organizations. Noteworthy is a proposed provision that if an initial applicant is a legal entity under a parent organization that has a PACE program agreement, or if there are other organizations under the same parent that have a PACE program agreement, and the parent’s PACE application or the other related organizations’ PACE applications could be denied based on any of the factors proposed in § 460.18(c)(1)(i), CMS could also deny the new entity’s application based on the past performance of other members of its corporate family.
PACE Organization expansion by a parent organization may be negatively impacted by these new provisions if any site is deemed “nonperforming” by CMS. CMS did propose one exception to allow a PACE organization that acquires an organization that would have an application denied based on any of the factors in § 460.18(c)(i) a 24 month “grace” period that would extend only to the acquiring parent organization. According to CMS, this means that the acquiring organization would still be able to enter into new agreements or expand its programs under other agreements for which there are no performance issues for 24 months following the acquisition. Parent organizations need to pay close attention to this exemption and its application toward successful future PACE expansion.
BluePeak can help!
BluePeak consultants can assess PACE Organizations for compliance with regulations through operational assessments or mock audits.