Rural PACE

CMS Issues Guidance on Expanding PACE Access in Rural Areas

On July 22, 2026, the Centers for Medicare & Medicaid Services (CMS) issued a memo to PACE organizations and state Medicaid agencies addressing barriers to expanding PACE access in rural and frontier areas, an issue that NPA and our members have been actively engaged in with CMS.

Except for the final section on Rural Health Transformation (RHT) timelines and payment, the memo is broadly applicable to all PACE organizations, not just those impacted by RHT grants. The guidance responds directly to state interest in using Rural Health Transformation Program funds to expand PACE. Nine states included PACE in their RHT plans: Connecticut, Kansas, Louisiana, Michigan, Montana, Oklahoma, Pennsylvania, Rhode Island and West Virginia. NPA looks forward to continuing to advance these efforts with CMS. Following are the key points of the memo for members.

Mobile Clinic As ACS

CMS confirms that a mobile clinic is an acceptable alternative care setting (ACS) to extend clinical services in rural service areas, provided it meets existing ACS requirements and applicable local, state and federal facility rules. ACS services supplement, don’t replace, PACE center services (42 CFR § 460.98(c)). HPMS and other documentation must clearly flag the location as a mobile clinic (e.g., a parenthetical “(Mobile Clinic)” notation in the Legal Entity Address fields).

No Federal Time-and-Distance Standard

CMS clarifies there is no specific federal travel time requirement (e.g., a 60-minute cap) for participant travel to a PACE center. PACE organizations remain responsible for ensuring accessible and adequate services under § 460.98(e)(2) – which may require adding centers, staff or services – and should consult their state administering agency, as states may impose their own travel time policies.

Workforce Pipeline: NHSC and Nurse Corps Site Approval

CMS highlights that some PACE organizations have become approved sites for the National Health Service Corps (NHSC) and Nurse Corps, gaining access to additional trainees to support care delivery. All PACE organizations, rural and otherwise, may want to evaluate whether site approval is a fit. Requirements are posted on the Health Resources and Service Administration (HRSA) website.

Telehealth: No New Flexibilities

While CMS recognizes the value of technology in increasing access to care for rural participants, the memo confirms no new telehealth flexibilities. Existing policy stands, stating that telehealth is permissible for certain services at the discretion of the interdisciplinary team (IDT), based on participant need (§ 460.92(b)(1)); but required in-person assessments – initial comprehensive, semi-annual and unscheduled reassessments – remain non-waivable under § 460.26(c)(1). CMS notes that rural PACE organizations have had success aligning semi-annual reassessments with already scheduled in-person center or primary care visits or conducting them via home visit.

RHT Timelines and Payment Rules

States should track the standard quarterly PACE application deadlines as they engage current or prospective PACE organizations, though RHT funds may be used before and during application review to establish or bolster PACE capacity. Any RHT payments to PACE organizations for participant health care items/services must be built into the PACE Medicaid capitation rate (and remain below the AWOP benchmark). PACE organizations may not bill or accept separate payment for covered services (§ 460.182(c)). RHT payments for non-clinical purposes – workforce/staffing support, health IT or other infrastructure – fall outside the capitation rate and are not restricted by this rule.

For more information, contact Katie Pahner, vice president of Regulatory Affairs.

HRSA Grant Funding Opportunity Withdrawn

The HRSA Rural PACE Planning and Development Grant funding opportunity has been withdrawn on Grants.gov and is not being offered at this time. While NPA was disappointed to learn of this development, we are hopeful that this critical funding opportunity will be reissued and interested stakeholders, including organizations that were diligently working on their applications, will have an opportunity to respond to that opportunity.

NPA is working closely with our organizational partners and congressional champions to encourage the U.S. Department of Health and Human Services (HHS) to reissue the grants expeditiously. We will share key updates as they become available.

Rural PACE Grant Opportunity Webinar

NPA held an informational webinar on Friday, March 21 concerning the new Rural PACE grants that can be applied for by April 17. 2025.

• Webinar Recording
• PowerPoint Slides

Federal Grants Available to Support PACE in Rural Communities

NPA is pleased to share that the Health Resources & Services Administration (HRSA) announced the availability of up to $2 million in fiscal year (FY) 2025 federal grant funding to support the expansion of the Program of All-Inclusive Care for the Elderly (PACE) model into rural communities. The Notice of Funding Opportunity (NOFO), along with important pre-registration and application requirements, are available on Grants.gov. Applications are due by 11:59 p.m. ET on April 17, 2025.

Through the Rural PACE Planning and Development program, HRSA will make up to four awards, of up to $500,000 per year, to provide resources to assist with the development of an initial Centers for Medicare & Medicaid Services (CMS) PACE program serving HRSA-designated rural areas or to expand an existing certified CMS PACE program into HRSA-designated rural areas through PACE service area expansion (SAE).

The HRSA announcement follows the critical work of the National Advisory Committee on Rural Health and Human Services (NACRHHS) and its 2023 policy report, to which numerous NPA and PACE stakeholders contributed, outlining recommendations and considerations to expand PACE in rural America.

HRSA will hold a technical assistance webinar for prospective applicants on Feb. 11, 2025, at 2:30 p.m. ET. More information on the webinar will be posted on Grants.gov under the Related Documents tab. A recording of the webinar is expected to be made available.

NPA also intends to convene a webinar with our members to discuss the opportunity in more detail. Please stay tuned for those details, including advance registration. The webinar will be recorded.

Key details of the HRSA funding opportunity are as follows:

• Eligibility: Eligible applicants include all domestic public and private, nonprofit or for-profit entities, including state, county and local governments, as well as various nonprofit and for-profit health providers, such as hospitals and federally qualified health centers (FQHCs), with demonstrated experience serving or having the capacity to serve rural underserved populations. 
• State, CMS and Other Partner Collaboration: Awardees are required to work with their State Administering Agency (SAA) and CMS on completing and submitting their PACE application. Funding awarded under this program does not guarantee CMS approval of any PACE application(s). Applicants also must identify in their business plan any organization, provider or service partners involved in the project. Please note that a letter of support from the SAA is required as part of the application.
• Anticipated Performance Period: HRSA intends to fund awards in four 12-month budget periods for a total four-year performance period of Sept. 20, 2025, to Sept. 29, 2029. By the end of the four-year period of performance, HRSA expects award recipients to have a plan in place for long-term financial sustainability of the new or expanded PACE organization.
• Funding Pathways: HRSA will provide start-up funding to new CMS applicants seeking to become a PACE organization in a rural area for the first time (Funding Pathway 1) and to existing PACE organizations that seek to expand their service area to a HRSA-designated rural area (Funding Pathway 2). The latter pathway includes an expansion of the currently approved service area and/or the addition of a new PACE center site (SAE).
• Cost-Sharing: This program has no cost-sharing requirement. However, if an applicant chooses to share in the costs of the project, HRSA will not consider it during merit review. HRSA will hold the awardee accountable for any funds the awardee adds, including through reporting.
• Priority to Existing PACE Program Implementation Status: During its review of applications, HRSA reserves the right to award up to 10 priority points for applicants proposing to start a new PACE program or proposing to expand an existing PACE program in a state that has approved state benefits under the PACE program. (See Appendix B of the NOFO or NPA PACE Finder.)
• Non-Duplication of Services: HRSA recognizes that more than one PACE organization may provide complementary services in a rural area. However, applicants proposing to serve an area served by other PACE organization(s) must detail in their application how they will avoid duplicating efforts of the other PACE organizations in any areas of overlap.
• Data Collection: Award recipients must report annually to HRSA through an electronic performance measurement data collection system. Following receipt of the award, HRSA will provide awardees with the final set of measures they must report.
• Anticipated Award Date: HRSA expects to make awards by Sept. 1, 2025.

For more information, refer to the NOFO on Grants.gov, email HRSA, or contact the NPA Policy Team.