Alliance Health PACE Coverage Policy Update

Eligibility and Enrollment

Covered when ALL of the following are met

PACE enrollment criteria: Participant must be enrolled in NC Medicaid and meet 42 CFR §460.150 eligibility to enroll in a PACE program; must meet financial eligibility for Long-Term Care Medicaid/PACE established by NC Medicaid; must be certified eligible for nursing facility level of care.

Derived from 1.0 description and Subsections 2.1.1–2.1.3

General medical necessity criteria

Medicaid covers PACE-related procedures, products, or services when medically necessary and ALL of the following are met:

General medical necessity: The procedure, product, or service is individualized, specific, and consistent with symptoms or confirmed diagnosis and not in excess of the beneficiary's needs

Conservative treatment: The procedure, product, or service can be safely furnished and no equally effective and more conservative or less costly treatment is available statewide

Not for convenience: The procedure, product, or service is furnished in a manner not primarily intended for the convenience of the beneficiary, the beneficiary's caretaker, or the provider

Medicaid additional criteria for PACE coverage

Medicaid additionally covers PACE services when ALL of the following are met:

Plan of care documentation: Service is documented in the person-centered plan of care

See Subsection 5.7

Medicaid LOC requirement: Individual meets Medicaid's requirements for nursing facility level of care as determined by Medicaid's level of care screening tool

Refer to Subsection 5.5

PACE assessment confirmation: The level of care determination is confirmed by an initial comprehensive assessment conducted by the PACE organization

See Subsection 5.6

Other requirements: Participant meets the requirements indicated in Subsection 2.0 (including applicable enrollment and financial eligibility)

Continuation of Service in Absence of Criteria

Continuation of service exception:

Temporary continuation: A participant may be deemed eligible after enrollment if, following enrollment, the participant no longer meets nursing facility level of care criteria but the State determines that absence of PACE services would result in deterioration causing the individual to again qualify for PACE within six months following disenrollment.6 months

State determination required

Enrollment, assessment, plan of care, and safety criteria

Covered when ALL of the following are met

Enrollment eligibility and assessments: Applicant must be certified by Medicaid as meeting the State's nursing facility level of care prior to enrollment; the PACE interdisciplinary team must conduct an initial in-person comprehensive assessment including the disciplines listed in 42 CFR 460.104; within 30 days of enrollment the IDT must consolidate discipline-specific assessments into a single plan of care.30 days

Initial assessment and consolidation timing per Subsections 5.6.1 and 5.6.2

Plan of care content and timing: Plan of care must specify medical, physical, emotional, and social needs; identify measurable outcomes; specify interventions and evaluation methods; be implemented and coordinated by the IDT; be documented in the participant's medical record; include the beneficiary's signature; and be submitted to the SAA within 45 days of enrollment.45 days

See Subsections 5.6.2.1 and 5.7

Involuntary disenrollment criteria

Involuntary disenrollment may occur when ANY of the following are met and after required process

Failure to pay: Participant fails to pay premiums or make satisfactory arrangements for premiums, Medicaid spend-down liability, or amounts due under post-eligibility treatment of income after a 30-day grace period.30-day grace period

See Subsection 5.4.2(a–b)

Behavioral/noncompliance: Participant engages in documented disruptive or threatening behavior that jeopardizes health or safety of self or others, or consistently refuses to comply with the plan of care if possessing decision-making capacity; includes caregiver disruptive behavior that jeopardizes safety.

See Subsection 5.4.2(c–d)

Relocation or loss of eligibility: Participant moves out of the service area or is out of the service area for more than 30 consecutive days without PACE concurrence, or is determined to no longer meet State Medicaid nursing facility level of care requirements.

Emergency care coverage

Emergency care coverage stance

Emergency access: Participants have the right to access the closest qualified provider including emergency departments and 911; no prior authorization is required for emergency care in or out of the PACE service area.

See Subsections 5.10.1 and 5.10.3

Post-stabilization out-of-area care: Prior authorization by the PACE organization is required for urgent care and follow-up care provided outside the PACE service area to stabilize an out-of-area emergency medical condition.

See Subsection 5.10.4

Service Delivery and Organizational Criteria

Covered services and organizational requirements when PACE operates within federal and state rules

PACE center operation and services: The PACE organization must operate at least one PACE center in or contiguous to its service area with sufficient capacity; each center must provide primary care, social services, restorative therapies (including PT/OT), personal care and supportive services, nutritional counseling, recreational therapy, and meals.

See 42 CFR 460.98 and Subsection 7.3.2

Interdisciplinary team composition: An interdisciplinary team (IDT) must be established and include at minimum the listed roles (PCP, RN, master's-level social worker, PT, OT, recreational therapist/activity coordinator, dietitian, center manager, home care coordinator, personal care attendant/rep, driver/rep); one individual may fill two roles if state licensure and qualifications permit.

See 42 CFR 460.102 and Subsection 7.3.3

Compliance with federal PACE regulations: The PACE program shall comply at all times with 42 CFR Part 460 and applicable state statutes and administrative rules.

See Subsection 6.1

Emergency Care Coverage

Emergency and out-of-area care rules

Out-of-area emergency care: Emergency care covered by the PACE organization while the participant is out of the service area does not require prior authorization; evaluation of the participant's decision to use emergency services is based on the prudent layperson standard.

See Subsections 5.10.3 and 5.10.5

Out-of-area follow-up care: Urgent care and care to stabilize an emergency medical condition provided outside the service area require prior authorization by the PACE organization.

See Subsection 5.10.4

Payment Eligibility for Medicaid and Dually Eligible Beneficiaries

Coverage/payment conditions for capitated payments

Capitation payment eligibility: Organization approved by the State Administering Agency (SAA); organization approved by CMS; and a properly executed three-way agreement between CMS, the SAA, and the PACE organization are required for the program to receive monthly capitated payments from Medicaid (and to serve dually eligible beneficiaries).all three required

Based on 42 CFR 460.180 and 42 CFR 460.182

Enrollment and Payment Coverage Criteria

Covered when ALL of the following are met:

Organizational approvals: The PACE organization must be approved by the State Administering Agency (SAA) and by CMS and have a properly executed three-way agreement between CMS, the SAA, and the PACE organization.

Citations: 42 CFR 460.180 and 42 CFR 460.182

Enrollment agreement executed: The prospective enrollee or legal representative must sign the PACE enrollment agreement acknowledging the sole-provider requirement, consent to information exchange, any applicable premium/spenddown obligations, and other required enrollment conditions; the effective date is the first day of the calendar month following receipt of the signed agreement by the PACE organization.first day of following month

See Attachment B and Subsection 5.2.1

Submission of enrollment transaction: The PACE organization must submit a timely and accurate enrollment transaction to CMS systems to complete enrollment.

The Early and Periodic Screening, Diagnostic, and Treatment (EPSDT) benefit does not apply to the Program of All‑Inclusive Care for the Elderly (PACE). If a service requires prior approval, that requirement still applies for beneficiaries under age 21 even though EPSDT is not applicable to PACE.

Medicaid will not cover a service under this PACE policy when any of the following apply: the beneficiary does not meet the eligibility requirements in Section 2.0; the beneficiary does not meet the criteria in Section 3.0; the procedure, product, or service duplicates another provider's procedure, product, or service; or the procedure, product, or service is experimental, investigational, or part of a clinical trial.

Medicaid shall not pay a monthly capitation fee to the PACE organization when the participant fails to meet the criteria in Subsection 3.2. Medicaid also shall not cover the monthly capitation fee for participants who are concurrently receiving optional benefits under a 1915(c) Home and Community‑Based Services waiver or who are receiving Hospice benefits.

A PACE organization may not involuntarily disenroll a participant solely for noncompliant behavior that is related to an existing mental or physical condition unless that behavior is judged to be placing the participant's health or safety, or the health or safety of others, at risk. Involuntary disenrollment may proceed for reasons including relocation outside the service area without concurrence, loss of nursing facility level‑of‑care eligibility, or program termination, but disenrollment on the basis of noncompliance requires documentation that the behavior jeopardizes health or safety.

When reviewing use of emergency services, evaluations must be made using the prudent layperson standard; PACE organizations may not apply a higher threshold to judge a participant’s decision to seek emergency care. Participants retain the right to emergency access, including use of the nearest qualified provider and 911 services, without prior authorization whether in or out of the PACE service area.

The PACE organization does not submit claims to Medicare or Medicaid for any service furnished to PACE enrollees, whether provided inside or outside the PACE service area.

A Medicare beneficiary may not complete PACE enrollment or disenrollment at a Social Security office. Enrollment in PACE results in disenrollment from any other Medicare or Medicaid prepayment plan or optional benefit; the enrollment agreement must notify the applicant of these consequences.

Services are not covered when they fail to meet the policy's eligibility or medical necessity requirements, duplicate another provider's service, or are experimental, investigational, or part of a clinical trial. Additionally, Medicaid will not pay the monthly capitation fee when the participant does not meet Subsection 3.2 criteria or is receiving certain optional waiver or Hospice benefits. The PACE organization also may not submit claims to Medicare or Medicaid for services provided to PACE participants.

Provider Responsibilities, Prior Authorization, and Operational Requirements

Denial Risk

Provider approval and capitation payment eligibility

To receive monthly capitated payments from Medicaid (including for dually eligible beneficiaries), the PACE organization must be approved by the State Administering Agency (SAA) and by CMS, and the three‑way agreement among CMS, the SAA, and the PACE organization must be properly executed. Without SAA and CMS approval and a properly executed three‑way agreement, the organization is ineligible to receive monthly capitation payments.

Organization approval by SAA required
Organization approval by CMS required
Properly executed three‑way agreement required

Prior Authorization

Verify Medicaid eligibility at each encounter

The provider must verify each Medicaid beneficiary's eligibility each time a service is rendered. Failure to verify eligibility may result in denial of payment or other adverse actions.

Verify Medicaid eligibility at each service encounter
Check for service restrictions tied to beneficiary eligibility category

Prior Authorization

No prior authorization for emergency care

Emergency care (in or out of the PACE service area) does not require prior authorization. The PACE organization must have written emergency procedures and ensure participants and caregivers know how to access emergency services when not at the PACE Center.

No prior authorization required for emergency care while participant is out of service area
PACE must maintain written emergency care plan and participant instructions

Prior Authorization

Prior authorization for out-of-area follow‑up care

Medicaid will require prior authorization by the PACE organization for urgent follow‑up care and other services provided outside the PACE service area to stabilize an emergency medical condition once the participant is stable.

Prior authorization required for urgent/follow‑up care outside service area after stabilization

Documentation Required

Enrollment agreement and required documentation

The PACE enrollment process requires a signed enrollment agreement that meets the minimum content and post‑signing documentation requirements in 42 CFR 460.152–460.158. After signing, the PACE organization must provide the participant with the enrollment agreement copy, a membership card, emergency information for the participant's residence, and any other information required by regulation.

Enrollment agreement must contain required applicant identifiers and status (Medicare/Medicaid numbers)
Participant must receive a copy of the signed agreement, a PACE membership card, and emergency information
Payers and enrollment obligations (premiums, spenddown) and conditions for disenrollment must be documented

Documentation Required

Required medical record content and retention

The PACE organization must maintain a complete, accurate, and readily accessible single comprehensive medical record for each participant at the PACE center. Records must include identification, documentation of all services (including contractor reports), interdisciplinary assessments and plans of care, medication records, lab/radiology reports, hospital discharge summaries, enrollment agreement, discharge and disenrollment justification if applicable, and originals or unaltered electronic copies of all communications relevant to the participant's care.

Record must be complete, accurately documented, readily accessible, systematically organized, available to staff, and maintained at the PACE center
Minimum contents: identifying information; all services furnished; interdisciplinary assessments; plan of care and updates; medication and test reports; enrollment agreement; discharge summaries; communications; advance directives; signed releases as applicable

Documentation Required

Documentation required for involuntary disenrollment and plan of care

Before initiating an involuntary disenrollment, the PACE organization must submit health record documentation and information about the circumstances prompting disenrollment and the steps taken to correct the situation. The State administering agency (SAA) will review and make a timely determination that acceptable grounds for disenrollment exist.

Submit health record documentation and circumstances causing proposed involuntary disenrollment
Document steps taken to correct the situation and provide a transition plan of care to the SAA

Note

Compliance oversight and fraud/waste/abuse controls

PACE organizations must implement an effective compliance oversight program that prevents, detects, and corrects non‑compliance, including fraud, waste, and abuse. The program must provide timely investigation of potential misconduct (including payment/delivery issues), corrective action, and voluntary self‑reporting procedures to CMS and the SAA when appropriate.

Establish procedures for prompt response to compliance issues and investigations
Conduct corrective actions to reduce recurrence
Timely, reasonable inquiry into suspected misconduct and voluntary self‑reporting to CMS and SAA

Billing Rule

Capitation payment acceptance and prohibition on additional billing

The PACE organization (provider) must accept the monthly capitation payment as payment in full for Medicaid participants and may not bill, charge, collect, or receive any other form of payment from the SAA or from the participant or caregiver in accordance with 42 CFR 460.182(c).

No additional billing to participant or caregiver for covered services
Capitation payment is payment in full for Medicaid participants

Note

Private‑pay enrollment and regulatory requirements

Private‑pay enrollment is permitted under federal regulations; PACE organizations may accept private‑pay participants and collect premiums from individuals who are Medicare‑only or Medicaid‑only, but all applicable federal and state enrollment regulations must be followed.

Private‑pay participants subject to same federal/state enrollment rules
Organizations may collect premiums from Medicare‑only or Medicaid‑only private‑pay individuals

Note

Reporting, data access, and submission of assessments

PACE organizations must provide copies of participant assessments (physical, functional, psychosocial), initial and annual Health and Safety Assessments, and other required reports to the SAA in the form or format the SAA approves. CMS and the SAA must be able to obtain, examine, or retrieve required information, either on site or remotely, and organizations must submit all reports required to monitor operation, cost, quality, and effectiveness.

Submit participant assessments and Health and Safety Assessments to the SAA
Make records and reports available for CMS and SAA review (on‑site or remote)
Upload or electronically transmit information or provide hard copies as required

Denial Risk

Health and Safety Assessment, submission, and retention

The Health and Safety Assessment must be completed prior to enrollment and annually thereafter, and the PACE program must submit the results to the SAA for review (SAA has up to 5 business days to determine whether enrollment would jeopardize health or safety). Enrollment may be denied if the assessment shows the individual's health, safety, or welfare would be jeopardized in the community.

Complete health and safety assessment prior to enrollment and annually
Submit assessment results to the SAA for review (SAA review up to 5 business days)
Assessment factors include safety when alone, caregiver support, residence habitability and safety, disruptive or harmful behavior, and risk of abuse/neglect/exploitation

Documentation Required

Post‑signing enrollment obligations and documentation

After signing the enrollment agreement, the PACE organization must provide post‑signing materials and update participants if enrollment information changes. The organization must submit a timely and accurate enrollment transaction to CMS systems to establish the effective date (first day of the calendar month following receipt of the signed agreement).

Provide participant a copy of the enrollment agreement, membership card, and emergency information
Submit enrollment transaction to CMS to establish effective date
Update participant with any changes to enrollment information and explain changes in understandable terms

Key Definitions

State Administering Agency

DefinitionState Administering Agency: as defined under 42 CFR 460.6.

Role impliedSAA reviews Health and Safety Assessments and approves PACE provider organizations per regulatory requirements.

Nursing facility level of care

DefinitionNursing facility level of care: the clinical eligibility threshold determined by Medicaid's level of care screening tool and confirmed by the PACE organization's initial comprehensive assessment.

Confirmation stepMedicaid must certify the applicant meets the state's nursing facility level of care prior to enrollment (Initial Level of Care Review).

Sole source of services

Sole-source requirementEach individual enrolling in PACE must accept PACE as the sole source for covered services; this requirement must be included in and acknowledged on the Enrollment Agreement.

Enrollment acknowledgementThe individual or legally responsible person must sign a form approved by the SAA acknowledging the sole-source requirement.

Initial Level of Care Review

Initial Level of Care ReviewPrior to enrollment, Medicaid shall certify that the PACE applicant meets the state's nursing facility level of care criteria in accordance with 42 CFR 460.152(a)(3).

TimingCertification is required before the applicant may enroll in PACE.

Health and Safety Assessment

Health and Safety Assessment contentA comprehensive assessment including on-site residence evaluation, caregiver support assessment, and evaluation of transportation and environmental safety to determine if community living would jeopardize health or safety.

Timing and submissionHealth and Safety Assessment should be completed prior to enrollment and annually thereafter; results must be submitted to the SAA.

Interdisciplinary Team (IDT)

IDT definitionInterdisciplinary Team (IDT): multidisciplinary team responsible for providing and case-managing all services for each participant; minimum members include primary care provider, RN, master's-level social worker, physical therapist, occupational therapist, recreational therapist or activity coordinator, dietitian, PACE center manager, home care coordinator, personal care attendant (or representative), and driver (or representative).

Role flexibilityOne individual may fill two roles if state licensure and qualifications permit.

PACE Center

PACE Center servicesPACE Center: facility operated by the PACE organization providing at minimum primary care, social services, restorative therapies, personal care, nutritional counseling, recreational therapy, and meals.

Operational requirementThe PACE organization must operate at least one PACE center in or contiguous to its service area with sufficient capacity; each center must offer the full range of services.

Capitation payment

Capitation payment definitionCapitation payment: a prospective monthly payment provided by the state for each PACE participant who is eligible for Medicaid; amount specified in the PACE program agreement and is payment in full for required services.

Eligibility for dually eligibleDually eligible beneficiaries may trigger additional capitation arrangements when the organization is approved by the SAA and CMS and the three-way agreement is executed.

Dually eligible beneficiary

Dually eligible beneficiaryAn individual eligible for both Medicare and Medicaid for whom the PACE program may receive monthly capitated payments when the organization is approved by the SAA and CMS and the three-way agreement is properly executed.

Payment acceptanceThe PACE program must accept capitation payments as payment in full for services required by the participant.

Private-pay participant

Private-pay participant definitionPrivate-pay participant: an individual who pays a premium to participate in PACE despite not being Medicaid eligible; federal regulations (42 CFR 460.186) permit their acceptance.

Regulatory complianceAll federal and state enrollment regulations apply to private-pay participants.

42 CFR 460.152	Enrollment agreement requirements
42 CFR 460.154	Enrollment procedures
42 CFR 460.156	Enrollment-related rules
42 CFR 460.158	Related enrollment citations

OpenPayer

Program of All-Inclusive Care for the Elderly (PACE)

Coverage and Medical Necessity Criteria

Attachments, Codes, and Regulatory Citations

Provider Responsibilities, Prior Authorization, and Operational Requirements

Program Background and Scope

Key Definitions

42 CFR 460.180	Payment for Medicare and Medicaid Dually Eligible Beneficiaries
42 CFR 460.182	Related payment requirements for PACE