(a) A PACE organization, or an entity submitting an application to become a PACE organization, must submit its waiver request through the State administering agency for initial review.

(1) The State administering agency forwards a PACE organization's waiver requests to CMS along with any concurrence, concerns or conditions regarding the waiver.

(2) Entities submitting an application to become a PACE organization may:

(i) Submit a waiver request as a document separate from the application by submitting it first to the State administering agency which, in turn, will forward the waiver request to CMS indicating the State's concurrence, concerns or conditions regarding the waiver request; or

(ii) Submit a waiver request directly to CMS in conjunction with the application. This request must include a letter from the State administering agency indicating the State's concurrence, concerns or conditions regarding the waiver request.

(b) CMS evaluates a waiver request from a PACE organization or PACE applicant on the basis of the following information:

(1) The adequacy of the description and rationale for the waiver provided by the PACE organization or PACE applicant, including any additional information requested by CMS.

(2) Information obtained by CMS and the State administering agency in on-site reviews and monitoring of the PACE organization.

(c) Requirements related to the following principles may not be waived:

(1) A focus on frail elderly qualifying individuals who require the level of care provided in a nursing facility.

(2) The delivery of comprehensive, integrated acute and long-term care services.

(3) An interdisciplinary team approach to care management and service delivery.

(4) Capitated, integrated financing that allows the provider to pool payments received from public and private programs and individuals.

(5) The assumption by the provider of full financial risk.