H. R. 2015—290
described in subparagraph (A), (B), (C), or (D) of para-
graph (2) of such section are true.
‘‘(4) PACE PROGRAM AGREEMENT DEFINED.—For purposes
of this section, the term ‘PACE program agreement’ means,
with respect to a PACE provider, an agreement, consistent
with this section, section 1894 (if applicable), and regulations
promulgated to carry out such sections, among the PACE pro-
vider, the Secretary, and a State administering agency for
the operation of a PACE program by the provider under such
sections.
‘‘(5) PACE PROGRAM ELIGIBLE INDIVIDUAL DEFINED.—For
purposes of this section, the term ‘PACE program eligible
individual’ means, with respect to a PACE program, an individ-
ual who—
‘‘(A) is 55 years of age or older;
‘‘(B) subject to subsection (c)(4), is determined under
subsection (c) to require the level of care required under
the State medicaid plan for coverage of nursing facility
services;
‘‘(C) resides in the service area of the PACE program;
and
‘‘(D) meets such other eligibility conditions as may
be imposed under the PACE program agreement for the
program under subsection (e)(2)(A)(ii).
‘‘(6) PACE PROTOCOL.—For purposes of this section, the
term ‘PACE protocol’ means the Protocol for the Program of
All-inclusive Care for the Elderly (PACE), as published by
On Lok, Inc., as of April 14, 1995, or any successor protocol
that may be agreed upon between the Secretary and On Lok,
Inc.
‘‘(7) PACE DEMONSTRATION WAIVER PROGRAM DEFINED.—
For purposes of this section, the term ‘PACE demonstration
waiver program’ means a demonstration program under either
of the following sections (as in effect before the date of their
repeal):
‘‘(A) Section 603(c) of the Social Security Amendments
of 1983 (Public Law 98–21), as extended by section 9220
of the Consolidated Omnibus Budget Reconciliation Act
of 1985 (Public Law 99–272).
‘‘(B) Section 9412(b) of the Omnibus Budget Reconcili-
ation Act of 1986 (Public Law 99–509).
‘‘(8) STATE ADMINISTERING AGENCY DEFINED.—For purposes
of this section, the term ‘State administering agency’ means,
with respect to the operation of a PACE program in a State,
the agency of that State (which may be the single agency
responsible for administration of the State plan under this
title in the State) responsible for administering PACE program
agreements under this section and section 1894 in the State.
‘‘(9) TRIAL PERIOD DEFINED.—
‘‘(A) IN GENERAL.—For purposes of this section, the
term ‘trial period’ means, with respect to a PACE program
operated by a PACE provider under a PACE program
agreement, the first 3 contract years under such agreement
with respect to such program.
‘‘(B) TREATMENT OF ENTITIES PREVIOUSLY OPERATING
PACE DEMONSTRATION WAIVER PROGRAMS.—Each contract
year (including a year occurring before the effective date
H. R. 2015—291
of this section) during which an entity has operated a
PACE demonstration waiver program shall be counted
under subparagraph (A) as a contract year during which
the entity operated a PACE program as a PACE provider
under a PACE program agreement.
‘‘(10) REGULATIONS.—For purposes of this section, the term
‘regulations’ refers to interim final or final regulations promul-
gated under subsection (f) to carry out this section and section
1894.
‘‘(b) SCOPE OF BENEFITS; BENEFICIARY SAFEGUARDS.—
‘‘(1) IN GENERAL.—Under a PACE program agreement, a
PACE provider shall—
‘‘(A) provide to PACE program eligible individuals,
regardless of source of payment and directly or under con-
tracts with other entities, at a minimum—
‘‘(i) all items and services covered under title XVIII
(for individuals enrolled under section 1894) and all
items and services covered under this title, but without
any limitation or condition as to amount, duration,
or scope and without application of deductibles, copay-
ments, coinsurance, or other cost-sharing that would
otherwise apply under such title or this title, respec-
tively; and
‘‘(ii) all additional items and services specified in
regulations, based upon those required under the
PACE protocol;
‘‘(B) provide such enrollees access to necessary covered
items and services 24 hours per day, every day of the
year;
‘‘(C) provide services to such enrollees through a com-
prehensive, multidisciplinary health and social services
delivery system which integrates acute and long-term care
services pursuant to regulations; and
‘‘(D) specify the covered items and services that will
not be provided directly by the entity, and to arrange
for delivery of those items and services through contracts
meeting the requirements of regulations.
‘‘(2) QUALITY
ASSURANCE; 
PATIENT
SAFEGUARDS.—The
PACE program agreement shall require the PACE provider
to have in effect at a minimum—
‘‘(A) a written plan of quality assurance and improve-
ment, and procedures implementing such plan, in accord-
ance with regulations, and
‘‘(B) written safeguards of the rights of enrolled partici-
pants (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 designed for the protection of patients.
‘‘(c) ELIGIBILITY DETERMINATIONS.—
‘‘(1) IN GENERAL.—The determination of—
‘‘(A) whether an individual is a PACE program eligible
individual shall be made under and in accordance with
the PACE program agreement, and
‘‘(B) who is entitled to medical assistance under this
title shall be made (or who is not so entitled, may be
made) by the State administering agency.
H. R. 2015—292
‘‘(2) CONDITION.—An individual is not a PACE program
eligible individual (with respect to payment under this section)
unless the individual’s health status has been determined by
the Secretary or the State administering agency, in accordance
with regulations, to be comparable to the health status of
individuals who have participated in the PACE demonstration
waiver programs. Such determination shall be based upon
information on health status and related indicators (such as
medical diagnoses and measures of activities of daily living,
instrumental activities of daily living, and cognitive impair-
ment) that are part of a uniform minimum data set collected
by PACE providers on potential eligible individuals.
‘‘(3) ANNUAL ELIGIBILITY RECERTIFICATIONS.—
‘‘(A) IN GENERAL.—Subject to subparagraph (B), the
determination described in subsection (a)(5)(B) for an
individual shall be reevaluated at least annually.
‘‘(B) EXCEPTION.—The requirement of annual reevalua-
tion under subparagraph (A) may be waived during a period
in accordance with regulations in those cases in which
the State administering agency determines that there is
no reasonable expectation of improvement or significant
change in an individual’s condition during the period
because of the severity of chronic condition, or degree of
impairment of functional capacity of the individual
involved.
‘‘(4) CONTINUATION OF ELIGIBILITY.—An individual who is
a PACE program eligible individual may be deemed to continue
to be such an individual notwithstanding a determination that
the individual no longer meets the requirement of subsection
(a)(5)(B) if, in accordance with regulations, in the absence of
continued coverage under a PACE program the individual
reasonably would be expected to meet such requirement within
the succeeding 6-month period.
‘‘(5) ENROLLMENT; DISENROLLMENT.—
‘‘(A) VOLUNTARY DISENROLLMENT AT ANY TIME.—The
enrollment and disenrollment of PACE program eligible
individuals in a PACE program shall be pursuant to regula-
tions and the PACE program agreement and shall permit
enrollees to voluntarily disenroll without cause at any time.
‘‘(B) LIMITATIONS ON DISENROLLMENT.—
‘‘(i) IN GENERAL.—Regulations promulgated by the
Secretary under this section and section 1894, and
the PACE program agreement, shall provide that the
PACE program may not disenroll a PACE program
eligible individual except—
‘‘(I) for nonpayment of premiums (if applicable)
on a timely basis; or
‘‘(II) for engaging in disruptive or threatening
behavior, as defined in such regulations (developed
in close consultation with State administering
agencies).
‘‘(ii) 
NO
DISENROLLMENT
FOR
NONCOMPLIANT
BEHAVIOR.—Except 
as 
allowed 
under 
regulations
promulgated to carry out clause (i)(II), a PACE pro-
gram may not disenroll a PACE program eligible
individual on the ground that the individual has
engaged in noncompliant behavior if such behavior
H. R. 2015—293
is related to a mental or physical condition of the
individual. For purposes of the preceding sentence,
the term ‘noncompliant behavior’ includes repeated
noncompliance with medical advice and repeated fail-
ure to appear for appointments.
‘‘(iii) TIMELY REVIEW OF PROPOSED NONVOLUNTARY
DISENROLLMENT.—A proposed disenrollment, other
than a voluntary disenrollment, shall be subject to
timely review and final determination by the Secretary
or by the State administering agency (as applicable),
prior to the proposed disenrollment becoming effective.
‘‘(d) PAYMENTS TO PACE PROVIDERS ON A CAPITATED BASIS.—
‘‘(1) IN GENERAL.—In the case of a PACE provider with
a PACE program agreement under this section, except as pro-
vided in this subsection or by regulations, the State shall make
prospective monthly payments of a capitation amount for each
PACE program eligible individual enrolled under the agreement
under this section.
‘‘(2) CAPITATION
AMOUNT.—The capitation amount to be
applied under this subsection for a provider for a contract
year shall be an amount specified in the PACE program agree-
ment for the year. Such amount shall be an amount, specified
under the PACE agreement, which is less than the amount
that would otherwise have been made under the State plan
if the individuals were not so enrolled and shall be adjusted
to take into account the comparative frailty of PACE enrollees
and such other factors as the Secretary determines to be appro-
priate. The payment under this section shall be in addition
to any payment made under section 1894 for individuals who
are enrolled in a PACE program under such section.
‘‘(e) PACE PROGRAM AGREEMENT.—
‘‘(1) REQUIREMENT.—
‘‘(A) IN GENERAL.—The Secretary, in close cooperation
with the State administering agency, shall establish proce-
dures for entering into, extending, and terminating PACE
program agreements for the operation of PACE programs
by entities that meet the requirements for a PACE provider
under this section, section 1894, and regulations.
‘‘(B) NUMERICAL LIMITATION.—
‘‘(i) IN GENERAL.—The Secretary shall not permit
the number of PACE providers with which agreements
are in effect under this section or under section 9412(b)
of the Omnibus Budget Reconciliation Act of 1986 to
exceed—
‘‘(I) 40 as of the date of the enactment of
this section, or
‘‘(II) as of each succeeding anniversary of such
date, the numerical limitation under this subpara-
graph for the preceding year plus 20.
Subclause (II) shall apply without regard to the actual
number of agreements in effect as of a previous
anniversary date.
‘‘(ii) TREATMENT OF CERTAIN PRIVATE, FOR-PROFIT
PROVIDERS.—The numerical limitation in clause (i)
shall not apply to a PACE provider that—
‘‘(I) is operating under a demonstration project
waiver under subsection (h), or
H. R. 2015—294
‘‘(II) was operating under such a waiver and
subsequently qualifies for PACE provider status
pursuant to subsection (a)(3)(B)(ii).
‘‘(2) SERVICE AREA AND ELIGIBILITY.—
‘‘(A) IN
GENERAL.—A PACE program agreement for
a PACE program—
‘‘(i) shall designate the service area of the program;
‘‘(ii) may provide additional requirements for
individuals to qualify as PACE program eligible
individuals with respect to the program;
‘‘(iii) shall 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, and is
subject to termination by the Secretary and the State
administering agency at any time for cause (as pro-
vided under the agreement);
‘‘(iv) shall require a PACE provider to meet all
applicable State and local laws and requirements; and
‘‘(v) shall contain such additional terms and condi-
tions as the parties may agree to, so long as such
terms and conditions are consistent with this section
and regulations.
‘‘(B) SERVICE AREA OVERLAP.—In designating a service
area under a PACE program agreement under subpara-
graph (A)(i), the Secretary (in consultation with the State
administering agency) may exclude from designation an
area that is already covered under another PACE program
agreement, in order to avoid unnecessary duplication of
services and avoid impairing the financial and service
viability of an existing program.
‘‘(3) DATA COLLECTION; DEVELOPMENT OF OUTCOME MEAS-
URES.—
‘‘(A) DATA COLLECTION.—
‘‘(i) IN GENERAL.—Under a PACE program agree-
ment, the PACE provider shall—
‘‘(I) collect data;
‘‘(II) maintain, and afford the Secretary and
the State administering agency access to, the
records relating to the program, including perti-
nent financial, medical, and personnel records; and
‘‘(III) submit to the Secretary and the State
administering agency such reports as the Secretary
finds (in consultation with State administering
agencies) necessary to monitor the operation, cost,
and effectiveness of the PACE program.
‘‘(ii) REQUIREMENTS DURING TRIAL PERIOD.—During
the first 3 years of operation of a PACE program
(either under this section or under a PACE demonstra-
tion waiver program), the PACE provider shall provide
such additional data as the Secretary specifies in regu-
lations in order to perform the oversight required under
paragraph (4)(A).
‘‘(B) DEVELOPMENT OF OUTCOME MEASURES.—Under a
PACE program agreement, the PACE provider, the Sec-
retary, and the State administering agency shall jointly
cooperate in the development and implementation of health
H. R. 2015—296
‘‘(II) the provider has failed to comply substan-
tially with conditions for a program or provider
under this section or section 1894; and
‘‘(ii) the entity has failed to develop and success-
fully initiate, within 30 days of the date of the receipt
of written notice of such a determination, a plan to
correct the deficiencies, or has failed to continue
implementation of such a plan.
‘‘(C) TERMINATION AND TRANSITION PROCEDURES.—An
entity whose PACE provider agreement is terminated
under this paragraph shall implement the transition proce-
dures required under subsection (a)(2)(C).
‘‘(6) SECRETARY’S OVERSIGHT; ENFORCEMENT AUTHORITY.—
‘‘(A) IN GENERAL.—Under regulations, if the Secretary
determines (after consultation with the State administering
agency) that a PACE provider is failing substantially to
comply with the requirements of this section and regula-
tions, the Secretary (and the State administering agency)
may take any or all of the following actions:
‘‘(i) Condition the continuation of the PACE pro-
gram agreement upon timely execution of a corrective
action plan.
‘‘(ii) Withhold some or all further payments under
the PACE program agreement under this section or
section 1894 with respect to PACE program services
furnished by such provider until the deficiencies have
been corrected.
‘‘(iii) Terminate such agreement.
‘‘(B) APPLICATION OF INTERMEDIATE SANCTIONS.—Under
regulations, the Secretary may provide for the application
against a PACE provider of remedies described in section
1857(g)(2) (or, for periods before January 1, 1999, section
1876(i)(6)(B)) or 1903(m)(5)(B) in the case of violations
by the provider of the type described in section 1857(g)(1)
(or 1876(i)(6)(A) for such periods) or 1903(m)(5)(A), respec-
tively (in relation to agreements, enrollees, and require-
ments under section 1894 or this section, respectively).
‘‘(7) PROCEDURES FOR TERMINATION OR IMPOSITION OF SANC-
TIONS.—Under regulations, the provisions of section 1857(h)
(or for periods before January 1, 1999, section 1876(i)(9)) shall
apply to termination and sanctions respecting a PACE program
agreement and PACE provider under this subsection in the
same manner as they apply to a termination and sanctions
with respect to a contract and a Medicare+Choice organization
under part C of title XVIII (or for such periods an eligible
organization under section 1876).
‘‘(8) TIMELY CONSIDERATION OF APPLICATIONS FOR PACE PRO-
GRAM
PROVIDER
STATUS.—In considering an application for
PACE provider program status, the application shall be deemed
approved unless the Secretary, within 90 days after the date
of the submission of the application to the Secretary, either
denies such request in writing or informs the applicant in
writing with respect to any additional information that is
needed in order to make a final determination with respect
to the application. After the date the Secretary receives such
additional information, the application shall be deemed
H. R. 2015—297
approved unless the Secretary, within 90 days of such date,
denies such request.
‘‘(f) REGULATIONS.—
‘‘(1) IN GENERAL.—The Secretary shall issue interim final
or final regulations to carry out this section and section 1894.
‘‘(2) USE OF PACE PROTOCOL.—
‘‘(A) IN GENERAL.—In issuing such regulations, the Sec-
retary shall, to the extent consistent with the provisions
of this section, incorporate the requirements applied to
PACE demonstration waiver programs under the PACE
protocol.
‘‘(B) FLEXIBILITY.—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 nonstaff physicians according to State licensing law
requirements) under this section and section 1894, the
Secretary (in close consultation with State administering
agencies) may modify or waive provisions of the PACE
protocol so long as any such modification or waiver is
not inconsistent with and would not impair the essential
elements, objectives, and requirements of this section, but
may not modify or waive any of the following provisions:
‘‘(i) The focus on frail elderly qualifying individuals
who require the level of care provided in a nursing
facility.
‘‘(ii) The delivery of comprehensive, integrated
acute and long-term care services.
‘‘(iii) The interdisciplinary team approach to care
management and service delivery.
‘‘(iv) Capitated, integrated financing that allows
the provider to pool payments received from public
and private programs and individuals.
‘‘(v) The assumption by the provider of full finan-
cial risk.
‘‘(3) APPLICATION OF CERTAIN ADDITIONAL BENEFICIARY AND
PROGRAM PROTECTIONS.—
‘‘(A) IN GENERAL.—In issuing such regulations and sub-
ject to subparagraph (B), the Secretary may apply with
respect to PACE programs, providers, and agreements such
requirements of part C of title XVIII (or, for periods before
January 1, 1999, section 1876) and sections 1903(m) and
1932 relating to protection of beneficiaries and program
integrity as would apply to Medicare+Choice organizations
under such part C (or for such periods eligible organizations
under risk-sharing contracts under section 1876) and to
medicaid managed care organizations under prepaid capita-
tion agreements under section 1903(m).
‘‘(B) CONSIDERATIONS.—In issuing such regulations, the
Secretary shall—
‘‘(i) take into account the differences between popu-
lations served and benefits provided under this section
and under part C of title XVIII (or, for periods before
January 1, 1999, section 1876) and section 1903(m);
‘‘(ii) not include any requirement that conflicts
with carrying out PACE programs under this section;
and
H. R. 2015—298
‘‘(iii) not include any requirement restricting the
proportion of enrollees who are eligible for benefits
under this title or title XVIII.
‘‘(4) CONSTRUCTION.—Nothing in this subsection shall be
construed as preventing the Secretary from including in regula-
tions provisions to ensure the health and safety of individuals
enrolled in a PACE program under this section that are in
addition to those otherwise provided under paragraphs (2) and
(3).
‘‘(g) WAIVERS OF REQUIREMENTS.—With respect to carrying out
a PACE program under this section, the following requirements
of this title (and regulations relating to such requirements) shall
not apply:
‘‘(1) Section 1902(a)(1), relating to any requirement that
PACE programs or PACE program services be provided in
all areas of a State.
‘‘(2) Section 1902(a)(10), insofar as such section relates
to comparability of services among different population groups.
‘‘(3) Sections 1902(a)(23) and 1915(b)(4), relating to freedom
of choice of providers under a PACE program.
‘‘(4) Section 1903(m)(2)(A), insofar as it restricts a PACE
provider from receiving prepaid capitation payments.
‘‘(5) Such other provisions of this title that, as added or
amended by the Balanced Budget Act of 1997, the Secretary
determines are inapplicable to carrying out a PACE program
under this section.
‘‘(h) DEMONSTRATION PROJECT FOR FOR-PROFIT ENTITIES.—
‘‘(1) IN GENERAL.—In order to demonstrate the operation
of a PACE program by a private, for-profit entity, the Secretary
(in close consultation with State administering agencies) shall
grant waivers from the requirement under subsection (a)(3)
that a PACE provider may not be a for-profit, private entity.
‘‘(2) SIMILAR TERMS AND CONDITIONS.—
‘‘(A) IN GENERAL.—Except as provided under subpara-
graph (B), and paragraph (1), the terms and conditions
for operation of a PACE program by a provider under
this subsection shall be the same as those for PACE provid-
ers that are nonprofit, private organizations.
‘‘(B) NUMERICAL LIMITATION.—The number of programs
for which waivers are granted under this subsection shall
not exceed 10. Programs with waivers granted under this
subsection shall not be counted against the numerical
limitation specified in subsection (e)(1)(B).
‘‘(i) POST-ELIGIBILITY TREATMENT OF INCOME.—A State may
provide for post-eligibility treatment of income for individuals
enrolled in PACE programs under this section in the same manner
as a State treats post-eligibility income for individuals receiving
services under a waiver under section 1915(c).
‘‘(j) MISCELLANEOUS PROVISIONS.—Nothing in this section or
section 1894 shall be construed as preventing a PACE provider
from entering into contracts with other governmental or nongovern-
mental payers for the care of PACE program eligible individuals
who are not eligible for benefits under part A, or enrolled under
part B, of title XVIII or eligible for medical assistance under this
title.’’.
(b) CONFORMING AMENDMENTS.—
H. R. 2015—299
(1) Section 1924(a)(5) (42 U.S.C. 1396r–5(a)(5)) is amend-
ed—
(A) in the heading, by striking ‘‘FROM ORGANIZATIONS
RECEIVING CERTAIN WAIVERS’’ and inserting ‘‘UNDER PACE
PROGRAMS’’; and
(B) by striking ‘‘from any organization’’ and all that
follows and inserting ‘‘under a PACE demonstration waiver
program (as defined in section 1934(a)(7)) or under a PACE
program under section 1934 or 1894.’’.
(2) Section 1903(f)(4)(C) (42 U.S.C. 1396b(f)(4)(C)) is amend-
ed by inserting ‘‘or who is a PACE program eligible individual
enrolled in a PACE program under section 1934,’’ after ‘‘section
1902(a)(10)(A),’’.
SEC. 4803. EFFECTIVE DATE; TRANSITION.
(a) TIMELY ISSUANCE OF REGULATIONS; EFFECTIVE DATE.—The
Secretary of Health and Human Services shall promulgate regula-
tions to carry out this subtitle in a timely manner. Such regulations
shall be designed so that entities may establish and operate PACE
programs under sections 1894 and 1934 of the Social Security
Act (as added by sections 4801 and 4802 of this subtitle) for periods
beginning not later than 1 year after the date of the enactment
of this Act.
(b) EXPANSION
AND TRANSITION
FOR PACE DEMONSTRATION
PROJECT WAIVERS.—
(1) EXPANSION
IN
CURRENT
NUMBER
AND
EXTENSION
OF
DEMONSTRATION
PROJECTS.—Section 9412(b) of the Omnibus
Budget Reconciliation Act of 1986, as amended by section
4118(g) of the Omnibus Budget Reconciliation Act of 1987,
is amended—
(A) in paragraph (1), by inserting before the period
at the end the following: ‘‘, except that the Secretary shall
grant waivers of such requirements to up to the applicable
numerical limitation specified in sections 1894(e)(1)(B) and
1934(e)(1)(B) of the Social Security Act’’; and
(B) in paragraph (2)—
(i) in subparagraph (A), by striking ‘‘, including
permitting the organization to assume progressively
(over the initial 3-year period of the waiver) the full
financial risk’’; and
(ii) in subparagraph (C), by adding at the end
the following: ‘‘In granting further extensions, an
organization shall not be required to provide for report-
ing of information which is only required because of
the demonstration nature of the project.’’.
(2) ELIMINATION OF REPLICATION REQUIREMENT.—Section
9412(b)(2)(B) of such Act, as so amended, shall not apply to
waivers granted under such section after the date of the enact-
ment of this Act.
(3) TIMELY CONSIDERATION OF APPLICATIONS.—In consider-
ing an application for waivers under such section before the
effective date of the repeals under subsection (d), subject to
the numerical limitation under the amendment made by para-
graph (1), the application shall be deemed approved unless
the Secretary of Health and Human Services, within 90 days
after the date of its submission to the Secretary, either denies
such request in writing or informs the applicant in writing