(a) CMS may take compliance actions as described in paragraph (c)(1) of this section if CMS determines that the PACE organization has not complied with the terms of a current or prior PACE program agreement with CMS and a State administering agency.

(1) CMS may determine that a PACE organization is out of compliance with requirements when the organization fails to meet performance standards articulated in sections 1894 and 1934 of the Act and regulations in this chapter.

(2) If CMS has not already articulated a measure for determining non-compliance, CMS may determine that a PACE organization is out of compliance when its performance in fulfilling requirements represents an outlier relative to the performance of other PACE organizations.

(b) CMS bases its decision on whether to issue a compliance action and what level of compliance action to take on an assessment of the circumstances surrounding the non-compliance, including all of the following:

(1) The nature of the conduct.

(2) The degree of culpability of the PACE organization.

(3) The actual or potential adverse effect on beneficiaries which resulted or could have resulted from the conduct of the PACE organization.

(4) The history of prior offenses by the PACE organization or its related entities.

(5) Whether the non-compliance was self-reported.

(6) Other factors which relate to the impact of the underlying non-compliance or to the PACE organization's inadequate oversight of the operations that contributed to the non-compliance.

(c) CMS may take one of three types of compliance actions based on the nature of the non-compliance.

(1) Notice of non-compliance. A notice of non-compliance may be issued for any failure to comply with the requirements of the PACE organization's current or prior PACE program agreement with CMS and a State administering agency, as described in paragraph (a) of this section.

(2) Warning letter. A warning letter may be issued for serious and/or continued non-compliance with the requirements of the PACE organization's current or prior PACE program agreement with CMS and a State administering agency, as described in paragraph (a) of this section and as assessed in accordance with paragraph (b) of this section.

(3) Corrective action plan. (i) Corrective action plans are issued for particularly serious or continued non-compliance with the requirements of the PACE organization's current or prior PACE program agreement with CMS and a State administering agency, as described in paragraph (a) of this section and as assessed in accordance with paragraph (b) of this section.

(ii) CMS issues a corrective action plan if CMS determines that the PACE organization has repeated or not corrected non-compliance identified in prior compliance actions, has substantially impacted beneficiaries or the program with its non-compliance, or must implement a detailed plan to correct the underlying causes of the non-compliance.