(a) Persons with criminal convictions. A PACE organization must not employ individuals or contract with organizations or individuals—
(1) Who have been excluded from participation in the Medicare or Medicaid programs;
(2) Who have been convicted of criminal offenses related to their involvement in Medicaid, Medicare, other health insurance or health care programs, or social service programs under title XX of the Act; or
(3) In any capacity where an individual's contact with participants would pose a potential risk because the individual has been convicted of physical, sexual, drug, or alcohol abuse.
(b) Direct or indirect interest in contracts. The PACE organization shall identify members of its governing body or any immediate family member having a direct or indirect interest in any contract that supplies any administrative or care-related service or materials to the PACE organization.
(1) PACE organizations must develop policies and procedures for handling any direct or indirect conflict of interest by a member of the governing body or by the member's immediate family.
(2) In the event of a direct or indirect conflict of interest by a member of the PACE organization's governing body or his or her immediate family member, the board member must—
(i) Fully disclose the exact nature of the conflict to the board of directors and have the disclosure documented; and
(ii) Recuse himself or herself from discussing, negotiating, or voting on any issue or contract that could result in an inappropriate conflict.
(c) Disclosure and recusal requirements. A PACE organization must have a formal process in place to gather information related to paragraphs (a) and (b) of this section and must be able to respond in writing to a request for information from CMS within a reasonable amount of time.