CMS Pub. 100-11, ch. 2, § 60.1

A PACE organization must have a fiscally sound operation, as demonstrated by the

following:

• Total assets greater than total unsubordinated liabilities;

• Sufficient cash flow and adequate liquidity to meet obligations as they

become due;

• A net operating surplus or a financial plan for maintaining solvency that is

satisfactory to CMS and the State Administering Agency.

A PACE organization under the three-year trial period is required to submit quarterly

financial statements to CMS within 45 days from the end of each quarter of the PACE

organization’s fiscal year. After the trial period, if CMS or the State Administering

Agency determines that an organization’s performance requires more frequent

monitoring and oversight due to concerns about fiscal soundness, CMS or the State

Administering Agency may require a PACE organization to submit monthly or quarterly

financial statements, or both. The financial statements shall include a balance sheet,

income statement, and a cash flow statement. In addition to the quarterly financial

statements, PACE organizations under a three year trial period are required to submit

their latest independently prepared audit report containing their audited financial

statements along with the auditor's opinion and auditor notes. PACE organizations

operating within larger sponsoring entities must also submit their sponsoring entities’

independently prepared audit report. The audit reports are due within 180 days from an

organization's fiscal year end.

CMS no longer accepts hardcopy documentation. Instead, PACE organizations are

required to upload a PDF or zip file of their quarterly financial statements and annual

audit reports to the fiscal soundness module within the Health Plan Management System

(HPMS).

In addition to the financial statements PACE organizations must upload 4 financial data

elements (taken from the audited and quarterly financial statements) along with the

financial statements. The fiscal soundness module will not accept the financial statements

if the data elements are not uploaded at the same time.

If you cannot file the financial information by the regulatory deadlines shown under 42

CFR § 460.208(a), you must contact CMS before the prescribed due date. Failure to

submit on time without notifying CMS places your company in non-compliance status

and could result in your company receiving a non-compliance letter with the requirement

of a corrective action plan to resolve the deficiency.

[42 CFR §§ 460.80(a), 460.208(c)]