CMS Pub. 100-11, ch. 1, § 10.2

Section 4801 of the BBA (Pub. L. 105–33) authorized the establishment of PACE under

the Medicare program by adding Section 1894 to Title XVIII of the Social Security Act

(the Act) which addresses Medicare payments to, and coverage of benefits under, PACE.

Section 4802 of the BBA authorized the establishment of PACE as a State option under

Medicaid by adding Section 1934 to Title XIX of the Act, which directly parallels the

provisions of Section 1894 and addresses Medicaid payments to, and coverage of benefits

under, PACE. Section 4803 of the BBA addresses the timely issuance of regulations,

expansion and transition for PACE demonstration project waivers, priority and special

consideration in processing applications, and repeal of current PACE demonstration

project waiver authority.

In addition, Sections 1894(a)(3)(B) and 1934(a)(3)(B) of the Act allowed private, for-profit entities to participate in PACE, subject to a demonstration waiver described in

Sections 1894(h) and 1934(h) of the Act. For-profit entities wishing to participate in

PACE applied for a demonstration waiver under Section 1894(h) and 1934(h) of the Act.

While participating in the PACE for-profit demonstration, they must meet all

requirements set forth in PACE regulations. The PACE organization is expected to retain

all key administrative functions including marketing and enrollment, quality assurance

and program improvement, and contracting for institutional providers and other key staff.

On July 24, 2009, CMS issued a Federal Register Notice announcing a closing date of

July 26, 2010 for submission of proposals for the PACE for-profit demonstration project.