CMS Pub. 100-11, ch. 1, § 30.4

PACE services are financed by combined Medicare and Medicaid prospective capitation

payments, and, in some instances, through private premiums. PACE organizations

receive a monthly capitation payment for each eligible enrollee, and combine these funds

into a common pool from which providers pay health care expenses. This capitated

financing allows PACE organizations to deliver all services participants need rather than

be limited to those reimbursable under the Medicare and Medicaid fee-for-service

systems. In exchange, PACE organizations assume full financial risk for all the health

care services enrollees need.

As a Medicare program and a Medicaid state plan option, PACE organizations receive

two capitation payments per month for dually eligible participants.

Medicare eligible participants who are not eligible for Medicaid pay monthly premiums

equal to the Medicaid capitation amount and a premium for Medicare Part D drugs, but

no deductibles, coinsurance, or other type of Medicare or Medicaid cost-sharing applies.

For those participants eligible for Medicaid, but not Medicare, the state will pay the full

cost to the PACE organizations. PACE providers assume full financial risk for

participants' care without limits on amount, duration, or scope of services.