CMS Pub. 100-11, ch. 2, § 60.3

A PACE organization must demonstrate that it has arrangements to cover expenses in the

amount of at least the sum of the following in the event it becomes insolvent:

• One month’s total capitation revenue to cover expenses the month before

insolvency;

• One month’s average payment to all contractors, based on the prior quarter’s

average payment, to cover expenses the month after the date it declares

insolvency or ceases operation;

• Arrangements to cover expenses may include, but are not limited to, the

following:

ο Insolvency insurance or reinsurance;

ο Hold harmless arrangement;

ο Letters of credit, guarantees, net worth, restricted State reserves, or State

law provisions.

[42 CFR § 460.80(c)]