CMS Pub. 100-11, ch. 15
(Rev. 2, Issued: 06-09-11)
10 - Introduction
20 - General Monitoring and Auditing Requirements
20.1 - PACE Organization Responsibilities
20.2 - Technical Assistance
30 - Audit
30.1 - Pre-Audit Activities
30.2 - Audit Process
30.3 - Audit Team
30.4 - Audit Categories
30.5 - Trial Period
30.6 - Trial Period Review
30.7 - Scope of Review
30.8 - Biennial
30.9 - Focused
40 - Post Audit
40.1 - CAR/CAP
40.2 - Release from Corrective Action Plan
50 - Disclosure of Results
60 - State Administering Agency
60.1 - Readiness Review
60.2 - Monitoring During Trial Period
60.3 - Annual Monitoring
60.4 - Monitoring of Corrective Action Plans
70 - Financial Recordkeeping and Reporting Requirements
70.1 - Accurate Reports
70.2 - Accrual Accounting
70.3 - Accepted Reporting Practices
70.4 - Trial Period Reporting Requirements
70.5 - Annual Reporting Requirements
80 - HPMS Quality Data Submission
(Rev. 2, Issued: 06-09-11; Effective: 06-03-11; Implementation: 06-03-11)
The PACE program agreement is a three-way agreement between the PACE organization, CMS and the State Administering Agency. Monitoring and auditing are the responsibility of CMS and the State Administering Agency.
[42 CFR §§ 460.30, 460.112]
(Rev. 2, Issued: 06-09-11; Effective: 06-03-11; Implementation: 06-03-11)
As noted above, the State Administering Agency and CMS have primary responsibility to ensure that every PACE organization maintains compliance with State and Federal requirements. This function includes the monitoring and effectiveness evaluation of organizational structure, procedures, protocols, and policies of each PACE organization.
(Rev. 2, Issued: 06-09-11; Effective: 06-03-11; Implementation: 06-03-11)
[42 CFR §§ 460.70, 460.200(a), (b), and (c), 460.204(d); 71 FR 71324 (Dec. 8, 2006)]
(Rev. 2, Issued: 06-09-11; Effective: 06-03-11; Implementation: 06-03-11)
CMS or the State Administering Agency may perform conference calls, webinars, or onsite visits to assist the PACE organization with operational or clinical issues. A PACE organization may request this assistance, or CMS or the State Administering Agency may provide technical assistance as a result of identified issues or opportunities for improvement.
(Rev. 2, Issued: 06-09-11; Effective: 06-03-11; Implementation: 06-03-11)
(Rev. 2, Issued: 06-09-11; Effective: 06-03-11; Implementation: 06-03-11)
The pre-audit activities are very similar to those required for a Technical Advisory Visit (TAV). The PACE organization is required to provide operational and policy documents for review. Staff must be scheduled to be available for interview regarding administrative, clinical and Part D elements. In addition, documentation to validate actions performed concerning findings from the TAV, prior audits, Level Two Reporting, monitoring outcomes and compliance actions may be requested during this phase or during the course of the audit. This aspect may include the results of previous routine and focused audits, including audits the State Administering Agency or other State and Federal entities may have conducted. A notice including the audit date, draft agenda, documentation request and other additional requirements will be sent to the PACE organization.
(Rev. 2, Issued: 06-09-11; Effective: 06-03-11; Implementation: 06-03-11)
(Rev. 2, Issued: 06-09-11; Effective: 06-03-11; Implementation: 06-03-11)
The audit team consists of administrative and clinical staff from CMS and the State Administering Agency. The team reviews clinical, administrative and Part D elements as noted within the PACE Audit Guide. An external version of the guide is located on the CMS website at:
http://www.cms.hhs.gov/PACE/Downloads/2008%20PACE%20Audit%20Guide.pdf.
(Rev. 2, Issued: 06-09-11; Effective: 06-03-11; Implementation: 06-03-11)
Every PACE organization must have, as required by Sections 1894(a)(9) and (e)(4) and 1934(a)(9) and (e)(4), an annual audit during the PACE organization's trial period - the first three contract years following the PACE organization program's effective date. Routine or Biennial audits are conducted at least every two years following a PACE organization's successful completion of the trial period audits. A Focused audit may be performed if CMS or the State Administering Agency determines that additional monitoring or auditing is required due to identified issues of non-compliance, operational
deficiencies or significant audit findings. Focused audits may occur during the trial period or thereafter.
CMS does not share its method of evaluation or protocols with PACE organizations. PACE organizations must comply with all PACE regulations and preparations for audits should focus on a self-evaluation of the organization’s compliance with PACE regulations. The PACE organizations must comply with local policies and procedures and performance on monitoring requirements such as quarterly HPMS reporting elements. The elements covered include, but are not limited to, the following:
| Element | Title |
|---|---|
| Section 1 – Clinical PACE Elements | |
| PRS 02 | Personnel Training |
| PRS 04 | Oversight of Direct Patient Care |
| ENV 01 | Physical Environment |
| ENV 02 | Infection Control |
| TRS 01 | Transportation Services |
| DTY 01 | Dietary Services |
| SDY 01 | Service Delivery |
| SDY 02 | Emergency Care |
| SDY 03 | Interdisciplinary Team |
| SDY 04 | Participant Assessment |
| SDY 05 | Plan of Care |
| QAP 04 | Internal Quality Assessment and Performance Improvement Activities |
| Section 2 A – Administrative PACE Elements | |
| CTS 01 | Contracted Services |
| FIN 01 | Fiscal Soundness |
| PRT 04 | Explanation of rights |
| PRT 06 | Grievance Process |
| PRT 07 | PACE Organization’s Appeals Process |
| PRT 08 | Additional Appeal Rights Under Medicare or Medicaid |
| MKT 03 | Enrollment Process |
| MKT 08 | Voluntary Disenrollment |
| MKT 09 | Involuntary Disenrollment |
| Section 2B – Operational Part D Elements | |
| ER 13 | Confirmation of Enrollment for Members of Employer Group/Union |
| PR 02 | Use of SSN/HICN |
| EP01 | Electronic Prescribing |
| CB 01 | Collecting/Updating Enrollees’ Other health Insurance Information |
| CB03 | TrOOP Status at Disenrollment |
| CP06 | Internal Monitoring and Auditing Procedures |
| CP07 | Response to Detected Offenses and Corrective Action Plan |
| CP08 | Comprehensive Fraud and Abuse Plan |
| Element | Title |
|---|---|
| CL01 | Online Claims Processing System |
| CL02 | Data Elements Needed to Link Medicare Parts A, B and D Data |
| CL03 | Processing Systems |
| CL04 | Disputed Claims |
| CL06 | Certification of Claims Data |
| PA 01 | Certification of Monthly Enrollment and Payment Data Relating to CMS Payment |
| PA02 | Submission of Prescription Drug Event Data |
| PA03 | Overpayment and Underpayment Requirements |
(Rev. 2, Issued: 06-09-11; Effective: 06-03-11; Implementation: 06-03-11)
Trial period means the first three contract years in which a PACE organization operates under a PACE Program Agreement, including any contract year during which the entity operated under a PACE demonstration waiver program. The first contract year can extend from 12 months up to 23 months for purposes of the audit period, that is, to December 31st of the year following the effective date of the contract. The first trial period audit can be conducted at any point during this 12 to 23-month period.
[42 CFR §§ 460.6, 460.190(a)]
(Rev. 2, Issued: 06-09-11; Effective: 06-03-11; Implementation: 06-03-11)
During the trial period, CMS, in cooperation with the State Administering Agency, conducts comprehensive annual reviews of the operations of a PACE organization to ensure compliance.
[42 CFR § 460.190(a)]
(Rev. 2, Issued: 06-09-11; Effective: 06-03-11; Implementation: 06-03-11)
As noted above, the review includes the utilization of the PACE Audit Guide. In addition, the review may include performance of the following:
o Interviews with participants and caregivers; and,
o Interviews with contractors;
• Observation of program operations, including marketing, participant services, enrollment and disenrollment procedures, grievances, and appeals;
• A comprehensive assessment of an organization's fiscal soundness;
• A comprehensive assessment of the organization's capacity to furnish all PACE services to all participants; and
• Any other elements that CMS or the State Administering Agency find necessary.
[42 CFR § 460.190(b)]
(Rev. 2, Issued: 06-09-11; Effective: 06-03-11; Implementation: 06-03-11)
At the conclusion of the trial period, CMS, in cooperation with the State Administering Agency, continues to conduct reviews of a PACE organization, as appropriate. These reviews take into account the performance level of the PACE organization with respect to the quality of care provided and compliance of the organization in meeting the PACE program requirements. Such reviews include an on-site visit at least every two years.
[42 CFR § 460.192]
(Rev. 2, Issued: 06-09-11; Effective: 06-03-11; Implementation: 06-03-11)
After the trial period, CMS or the State Administering Agency may determine that a PACE organization has some areas of their program that need further monitoring. In these situations, CMS or the SAA may perform Focused Audits on these or other areas. These audits may be announced, unannounced, onsite or offsite.
[42 CFR § 460.192]
(Rev. 2, Issued: 06-09-11; Effective: 06-03-11; Implementation: 06-03-11)
CMS, the State Administering Agency or their designees will deliver an audit report containing findings, deficiencies, corrective action required, recommendations, notes and conclusions to the PACE organization concerning the audit. A letter detailing instructions, as noted below, is mailed to the primary contact for the PACE organization.
[42 CFR § 460.196(a)]
(Rev. 2, Issued: 06-09-11; Effective: 06-03-11; Implementation: 06-03-11)
A PACE organization must take action to correct deficiencies identified during reviews. Corrective Action Required (CAR) and Corrective Action Plan (CAP) are formal processes where CMS informs PACE organizations that they are out of compliance with CMS requirements. Corrective Action Required (CAR)/Corrective Action Plan (CAP) may result from a PACE audit or result from other ad-hoc compliance events unrelated to an audit. For example, CMS issues a compliance warning letter to a PACE organization and the PACE organization fails to satisfactorily resolve the matter cited in the warning letter.
More specifically, Corrective Action Required (CAR) letters are issued when CMS identifies an area of concern that requires a formal plan for a demonstrated cure. A Corrective Action Required (CAR) should be considered when a PACE organization has not provided a satisfactory response to a single warning letter on a specific subject (an egregious single event) or the issue is of a highly serious nature.
A Corrective Action Required (CAR) letter may also be issued by CMS directly to the PACE organization when CMS has identified an ad hoc compliance event. Once a PACE organization receives a CAR letter, they would respond to CMS with either a dispute of findings or a Corrective Action Plan (CAP).
The PACE organization must provide a plan containing actions, activities, policies and procedures that will be implemented to correct the deficiencies and to be in compliance. The PACE organization must respond promptly to the deficiencies following receipt of formal notice from CMS via an HPMS email. The Corrective Action Plan is promptly reviewed by CMS following receipt of the PACE organization's submission of the Corrective Action Plan. If the Corrective Action Plan is unacceptable, the PACE organization will be provided an opportunity to promptly resubmit a revised Corrective Action Plan. CMS will review the revised Corrective Action Plan and provide a prompt response.
Corrective Action Plans are public documents which are posted on the CMS website at http://www.cms.hhs.gov/MCRAdvPartDEnrolData/.
[42 CFR § 460.196(b)]
(Rev. 2, Issued: 06-09-11; Effective: 06-03-11; Implementation: 06-03-11)
Once CMS accepts the Corrective Action Plan, the PACE organization must implement the CAP. The amount of time allowed to implement a Corrective Action Plan depends on the number of deficiencies and the complexity of the deficiencies. CMS or the State
Administering Agency monitors the implementation and effectiveness of corrective actions to determine if adequate progress is being made on the CAP before giving consideration to releasing the PACE organization from its Corrective Action Plan.
The Corrective Action Plan process ends when the PACE organization has fully implemented the CAP and CMS formally releases the PACE organization from the Corrective Action Plan. The Corrective Action Plan release process occurs via an HPMS-generated notice.
CMS or the State Administering Agency may take enforcement action if the PACE organization fails to submit an acceptable Corrective Action Plan to CMS or if the PACE organization fails to satisfactorily implement an accepted Corrective Action Plan. Failure to develop and implement a Corrective Action Plan within the timeframes specified by CMS may result in sanctions or termination of a PACE organization’s contract by CMS or the State Administering Agency.
[42 CFR § 460.194(b) and (c)]
(Rev. 2, Issued: 06-09-11; Effective: 06-03-11; Implementation: 06-03-11)
CMS and the State Administering Agency promptly report the results of reviews to the PACE organization, along with any recommendations for changes to the organization’s program. The results are made available to the public upon request and are posted on the CMS website. In addition, CMS and the State Administering Agency require that the PACE organization post a notice of the availability of the results of the most recent review and any Corrective Action Plans or responses related to the most recent review. The PACE organization must also make the results available for examination in a place readily accessible to participants.
[42 CFR § 460.196]
(Rev. 2, Issued: 06-09-11; Effective: 06-03-11; Implementation: 06-03-11)
The State Administering Agency assures that its responsibilities under Sections 1894 and 1934 of the Social Security Act will be met. All relevant provisions are included in the contract with the PACE entities, either as a contractor or State Administering Agency responsibility. Both scheduled and unscheduled on-site reviews will be conducted by State Administering Agency staff.
[42 CFR §§ 460.30, 460.32, 460.190, 460.192]
(Rev. 2, Issued: 06-09-11; Effective: 06-03-11; Implementation: 06-03-11)
The State Administering Agency will perform a Readiness Review of the applicant entity that assures the entity has fully developed its policies and procedures, obtained commitments from key staff, developed its solvency plan and has a facility that meets State and Federal requirements at the time of the application.
[42 CFR § 460.12(b)(1); 71 FR 71252 (Dec. 8, 2006)]
(Rev. 2, Issued: 06-09-11; Effective: 06-03-11; Implementation: 06-03-11)
During the trial period, the State Administering Agency, in cooperation with CMS, will conduct comprehensive reviews of a PACE organization to ensure compliance with State and Federal requirements. At the conclusion of the trial period, the State Administering Agency, in cooperation with CMS, will continue to conduct reviews of a PACE organization, as appropriate, taking into account the quality of care furnished and the organization’s compliance with State and Federal requirements.
[42 CFR §§ 460.190, 460.192(a)]
(Rev. 2, Issued: 06-09-11; Effective: 06-03-11; Implementation: 06-03-11)
The State Administering Agency assures that at least annually it will reevaluate whether a participant meets the level of care required under the State Medicaid plan for coverage of nursing facility services. The State Administering Agency understands that this determination may be waived if there is no reasonable expectation of improvement or significant change in the participant’s conditions because of the severity of a chronic condition or the degree of impairment of functional capacity. The State Administering Agency assures that it will make reviews conducted in accordance with 42 CFR §§ 460.190 and 460.192 available to the public upon request.
[42 CFR §§ 460.160(b)(a), 460.196(b)]
(Rev. 2, Issued: 06-09-11; Effective: 06-03-11; Implementation: 06-03-11)
CMS works in partnership with the State Administering Agency to monitor the effectiveness of corrective actions required to be taken by the PACE organization.
[42 CFR § 460.194]
(Rev. 2, Issued: 06-09-11; Effective: 06-03-11; Implementation: 06-03-11)
(Rev. 2, Issued: 06-09-11; Effective: 06-03-11; Implementation: 06-03-11)
A PACE organization must provide CMS and the State Administering Agency with accurate financial reports that are:
[42 CFR § 460.204(a)]
(Rev. 2, Issued: 06-09-11; Effective: 06-03-11; Implementation: 06-03-11)
A PACE organization must maintain an accrual accounting recordkeeping system that does the following:
[42 CFR § 460.204(b)]
(Rev. 2, Issued: 06-09-11; Effective: 06-03-11; Implementation: 06-03-11)
Except as specified under Medicare principles of reimbursement, a PACE organization must follow standardized definitions, accounting, statistical, and reporting practices that are widely accepted in the health care industry.
[42 CFR § 460.204(c)]
(Rev. 2, Issued: 06-09-11; Effective: 06-03-11; Implementation: 06-03-11)
Throughout a trial period, the PACE organization is required to submit a quarterly financial statement to CMS within forty-five days after the last day of each quarter of the organization's fiscal year. These statements are not required to be certified by an independent certified public accountant. After the trial period, CMS and/or the State Administering Agency may require a PACE organization to submit monthly and/or quarterly financial statements, or both, if there are concerns about the fiscal soundness of the organization.
[42 CFR § 460.208(c)]
(Rev. 2, Issued: 06-09-11; Effective: 06-03-11; Implementation: 06-03-11)
CMS requires the PACE organization to submit an annual financial statement with appropriate footnotes no later than 180 days after the end of the organization's fiscal year. The financial statement must be certified by an independent certified public accountant and, at a minimum, include the following items:
[42 CFR § 460.208(a) and (b)]
(Rev. 2, Issued: 06-09-11; Effective: 06-03-11; Implementation: 06-03-11)
PACE organizations are required to maintain a health information system that collects, analyzes, integrates, and reports data necessary to measure their performance and to develop their QAPI.
HPMS is a CMS internal health information system that collects, analyzes, integrates, and reports data to measure the organization's performance and to develop and implement procedures to furnish data pertaining to the provision of care to external oversight entities in the manner and at the time intervals specified by CMS and the State Administering Agency. A PACE organization must submit to CMS and the State Administering Agency all reports required to monitor the operation, costs, quality, and effectiveness of the PACE program and established payment rates.
In developing procedures for external reporting, the PACE organization must include the submission of CMS monitoring data which is specified as "participant data" in Appendix L of the PACE Program Agreement. CMS requires the data to be reported quarterly/seasonally through the HPMS system. A listing of the nine data elements can be found in Chapter 10 Section 30.
PACE programs are required to submit Data Elements for Monitoring on a quarterly basis via the HPMS. HPMS information may be used by CMS and State Administering Agencies in the time period before or after signing the program agreement which contains these reporting requirements. PACE organizations are provided with instructions on the HPMS: The HPMS Connectivity Guide, HPMS User's Guide and HPMS Connectivity for States. These materials can also be found on the CMS Web site at http://www.cms.hhs.gov/PACE/09_AdditionalResources.asp.
[42 CFR §§ 460.134, 460.140, 460.200, 460.202, 460.204; 71 FR 71307 (Dec. 8, 2006)]
| Rev # | Issue Date | Subject | Impl Date | CR# |
|---|---|---|---|---|
| R2PACE | 06/09/2011 | Initial Publication of Manual | 06/03/2011 | NA |
| R1_SO | 06/03/2011 | Initial Publication of Manual - Rescinded and replaced by Transmittal 2 | 06/03/2011 | NA |
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