CMS Pub. 100-11, ch. 2, § 50.2

The PACE organization shall identify members of its governing body or any immediate

family member having direct or indirect interest in any contract that supplies any

administrative or care-related service or materials to the PACE organization. PACE

organizations must develop policies and procedures for handling any direct or indirect

conflict of interest by a member of the governing body or by the member’s immediate

family. In the event of a direct or indirect conflict of interest by a member of the PACE

organization’s governing body or his or her immediate family member, the board

member must (1) fully disclose the exact nature of the conflict to the board of directors

and have the disclosure documented; and (2) recuse himself or herself from discussing,

negotiating, or voting on any issue or contract that could result in an inappropriate

conflict.

Examples of indirect interests are holdings in the name of the spouse, dependent child, or

other relative who resides with the member of the governing body. These requirements

are intended to protect participants by preventing fraud under Medicare and Medicaid by

preventing members of the governing body with conflicts of interest from inappropriately

influencing PACE organization decisions.

CMS remains committed to working with rural and Tribal communities to help them

address the challenges of developing successful PACE programs. Due to potential limited

availability of individuals willing to and capable of performing key functions for the

PACE organization, there is a special need for flexibility in rural and Tribal areas, and

CMS remains committed to allowing waivers to promote PACE in medically underserved

areas.

[42 CFR § 460.68(b); 71 FR 71269 (Dec. 8, 2006)]