Health Care Law Blog

MDHHS Issues New Guidelines for Programs of All-Inclusive Care for the Elderly (PACE) Organizations in Michigan

Programs of All-Inclusive Care for the Elderly (PACE) organizations provide certain medical and social services to eligible individuals who meet the Long Term Care level of care criteria.

The services offered by a PACE organization allow many PACE participants to continue living at home rather than being institutionalized.

The Michigan Department of Health and Human Services (MDHHS) recently released new guidelines regarding PACE organization application criteria, alternative care settings, and the inclusion of for-profit PACE organizations in Michigan. The new guidelines became effective as of December 1, 2017.

Organizations that wish to provide PACE services must meet certain criteria. For example, a PACE organization must participate in both Medicare and Medicaid and must be engaged primarily in the provision of PACE services. Previously, for-profit organizations were not permitted to become PACE organizations. The new guidelines permit a for-profit entity to serve as a PACE organization.

The new guidelines also clarify the PACE application process for initial applications and expansion applications. A prospective PACE provider must begin the application process by (1) submitting a letter of intent to MDHHS, and then (2) submitting a feasibility study within 90 days thereafter. To the extent that multiple providers submit letters of intent to serve a specific service area, MDHHS will review feasibility studies in the order in which they are received.

Once a feasibility study is approved, prospective providers have one year within which to submit a formal application. Initial applicants and existing PACE organizations seeking to expand a geographic service area and/or open a new PACE center must wait until after the first CMS audit has been completed which finds the organization to be in good standing and fiscally sound.

The MDHHS guidelines also established a number of criteria that must be met in order for a PACE organization to establish an Alternative Care Setting (ACS). Under federal guidelines, an ACS is permitted to be established when a limited number of services may be provided. An alternative care setting is a physical facility, other than the participant’s place of residence, where PACE participants receive required PACE services.

To be eligible to request an ACS, the following criteria must be met:

• the PACE organization must have successfully completed its first trial period audit and be in good standing with CMS, per CMS audits;
• an ACS participant must belong to a PACE organizations center;
• the PACE organization’s enrollment limit must have adequate space to accommodate projected ACS attendants;
• MDHHS must tour the proposed ACS location prior to approval; and
• the ACS must be less than one hour travel time from the PACE Center.

The following documents must be submitted to MDHHS when an ACS is requested:

• the previous year’s annual financial report for the PACE organization;
• the PACE organization’s business plan for ACS;
• financial projections for the ACS site (to include the cost of the ACS site, renovations, staff, equipment, etc.);
• a description of what population of participants will attend the ACS;
• a description of what and how services will be provided at the ACS. ACS services must include but are not limited to: meals, activities, personal care, laundry, and nursing (triage); and
• a description of how services that are not provided at the ACS will be available to participants.

If you have any questions about these guidelines or PACE issues in general, please contact Jennifer Van Regenmorter or Julie Hamlet.

Categories: Medicare/Medicaid