Insights & Resources

August 26, 2024 | Alerts

NYS Department of Health Issues Proposed PACE Regulations

NYS Department of Health Issues Proposed PACE Regulations

On August 7, 2024, the New York State Department of Health’s (DOH) proposed regulations for a new, unified licensure process for Program of All-Inclusive Care for the Elderly (PACE) organizations were published in the New York State Register. The proposed regulations implement New York Public Health Law (PHL) Article 29-EE, which was enacted in 2022. The proposed regulations, if adopted, will impact PACE organizations that are currently operating, as well as entities with pending and future PACE applications.

PACE organizations provide a comprehensive system of health care services for members age 55 and older who are otherwise eligible for nursing home admission, most of whom are dually eligible for Medicaid and Medicare benefits. PACE organizations can be not-for-profit or for-profit entities.  Historically, PACE licensure has been a complex process, requiring three different state licenses and license applications: managed long-term care plan (PHL Article 44), diagnostic and treatment center (PHL Article 28) and home care agency (PHL Article 36). Under the proposed regulations, applicants for PACE licensure will submit a single streamlined application to DOH, in addition to obtaining necessary approval from the federal Centers for Medicare and Medicaid Services (CMS).

Among other things, the proposed PACE regulations include:

  • criteria for the application process and requirements for approval;
  • requirements for revision, amendment, or modification of a licensure application;
  • rules for withdrawal or abandonment of a licensure application and the process if an applicant fails to satisfy contingencies;
  • provisions for revocation, limitation, or annulment of licensure approvals;
  • provisions regarding the governing authority or operator of a PACE organization, including requirements concerning contracting for management services; and
  • the process for PACE operator name or purposes changes.

A complete copy of the proposed regulations is available here.

The proposed regulations present numerous questions for PACE organizations that are currently operating, and for entities that have PACE applications pending before DOH or that are considering submitting a PACE application.

For example, the proposed regulations state  that a PACE organization lawfully operating when the regulations take effect may continue to operate while the PACE organization transitions into full compliance with the regulations under a process and requirements established by DOH that will take effect 180 days after the effective date of the regulations.  Currently established PACE organizations must notify DOH of their intention to continue to be established within 30 days of the effective date of the regulations.  Also, any material change to the make-up and composition of an existing PACE program (e.g., change in PACE-related services, location or established operators) will automatically trigger requirements for licensure of the PACE organization under PHL Article 29-EE. These provisions raise numerous questions as to how these requirements will be applied to existing PACE organizations.

Similarly, the proposed regulations state that all pending applications for PACE-related programs currently under review under PHL Articles 28, 44 and 36 shall automatically be reviewed by DOH for compliance with the regulations and licensure under PHL Article 29-EE.  This raises questions for entities with pending applications on how applications made under the historical application process comport with the proposed regulations and what, if any, modifications to pending applications may be required.

Also, while the proposed regulations create a new, unified PACE licensure process, they also state that provisions in PHL Articles 28, 36 and 44 still apply.  This raises questions for future applicants and others regarding how DOH will reconcile the proposed regulations with those statutory schemes and the extent to which the new, unified PACE licensure process will differ — or be streamlined — compared to the historical process involving multiple licensure applications.

Next Steps

Above are examples of some of the many questions raised by the proposed regulations.  It is important for current PACE organizations, entities with pending PACE applications, and entities considering submitting a PACE application to understand the proposed regulations, especially in the context of their specific circumstances, and to follow developments concerning implementation of the regulations.  As part of that, it is important that such organizations and entities take advantage of the public comment period for rulemaking and submit any questions or comments they may have regarding the proposed regulations to DOH.  The public comment period expires on October 7, 2024, and during that time questions or comments can be emailed to DOH at [email protected].  DOH must assess any comments it receives, and then decide whether to make any substantial changes to the proposed regulations or to adopt them in their current form.  Garfunkel Wild can advise clients regarding the proposed regulations and assist them with drafting and submitting comments and questions to DOH.

Should you have any questions regarding the above, please contact the authors, the Garfunkel Wild attorney with whom you regularly work, or contact us at [email protected].