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Medicare and Medicaid Programs; Notice of Withdrawal of the Solicitation of Proposals for the Private, for-Profit Demonstration Project for the Program of All-Inclusive Care for the Elderly (PACE)

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Information about this document as published in the Federal Register.

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This document has been published in the Federal Register. Use the PDF linked in the document sidebar for the official electronic format.

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Centers for Medicare & Medicaid Services (CMS), HHS.


Withdrawal notice.


This document withdraws the “Notice for the Solicitation of Proposals for the Private, For-Profit Demonstration Project for the Program of All-Inclusive Care for the Elderly (PACE)” published in the Federal Register on August 10, 2001. That notice solicited proposals from private, for-profit organizations for a fully captitated joint Medicare and Medicaid demonstration. The goal of the solicitation notice was to determine whether the risk-based long-term care model employed by the nonprofit PACE could be replicated successfully by for-profit organization.


March 28, 2005.

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Michael Henesch, (410) 786-6685.

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I. Background

Section 4804(a)(2) of the Balance Budget Act of 1997 (BBA) requires us to conduct a study to compare the costs, quality, and access to services provided by for-profit entities to those of nonprofit Program of All-Inclusive Care for the Elderly providers (PACE). Section 4801(h)(2)(A) of the BBA states that the terms and conditions for the for-profit PACE must be the same as those for PACE providers that are nonprofit, private organizations except that only 10 waivers may be granted.

On August 10, 2001, we published a notice in the Federal Register (66 FR 42229). The notice solicited proposals from for-profit entities to demonstrate that they could successfully provide comprehensive coordinated care for the frail elderly under a prepaid fully capitated payment system. The solicitation notice specified that we would consider proposals only from for-profit organizations and the demonstration would operate for 3 years.

II. Provisions of the Notice

This notice withdraws the solicitation notice that we published in the Federal Register on August 10, 2001. As specified in the solicitation notice, we would consider proposals only from for-profit organizations and the demonstration would operate for 3 years. Before submitting a proposal, all interested applicants were to submit letters of intent. We indicated that proposals would be accepted until 10 sites were awarded. Following the selection of 10 sites, organizations that had submitted letters of intent, but had not yet submitted proposals, would be notified that the limit of approved sites had been reached.

Since the publication of the solicitation notice, we received only ten letters of intent. Of these 10 letters of intent, 8 were received in 2001 and early 2002, 1 was received in February 2003, and 1 was received in August 2003. Although we have provided information to numerous organizations including having discussions with the organizations that have submitted letters of intent, we have not received any proposals. We have also contacted the two most recent organizations that have submitted letters of intent to offer technical assistance and have ascertained that only one organization has considered submitting a proposal. In addition, we have been informed by the National PACE Association, that it has consulted with organizations that have not submitted letters of interest.

Although the demonstration is mandated by the BBA, since CMS has not received any proposals that it could fund under the authority of the BBA, we are withdrawing our solicitation.

The need to keep abreast of regulatory provisions of the nonprofit PACE requires us to attend all PACE meetings, since the for-profit PACE demonstration would mirror nonprofit PACE policy. In the nearly 3 years since the implementation of the solicitation notice, the effort to maintain this level of activity has been extensive. With the enactment of the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (Pub. L. 108-173), we believe that our resources can better be utilized in addressing other workloads, including various studies, and other efforts related to the start-up of new programs and benefits. Furthermore, we believe it is unlikely that we will receive a proposal for a for-profit PACE demonstration. Therefore, we are withdrawing the August 10, 2001, solicitation notice.

This notice is intended to withdraw the solicitation by March 28, 2005. This withdrawal notice provides an opportunity for organizations that remain interested to submit proposals until that time.

III. Collection of Information Requirements

This document does not impose information collection and recordkeeping requirements. Consequently, it need not be reviewed by the Office of Management and Budget under the authority of the Paperwork Reduction Act of 1995.

Authority: Section 1894(h) and 1934(h) of the Social Security Act (42 U.S.C. 1395)

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(Catalog of Federal Domestic Assistance Program No. 93.778, Medical Assistance Program; No. 93.773 Medicare—Hospital Insurance Program; and No. 93.774, Medicare—Supplementary Medical Insurance Program)

Dated: September 10, 2004.

Mark B. McClellan,

Administrator, Centers for Medicare & Medicaid Services.

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[FR Doc. 04-25980 Filed 11-24-04; 8:45 am]