(a) Programs of All-Inclusive Care for the Elderly (PACE) provide community-based acute and long-term care services to persons who meet the medical requirements for nursing facility care and can be served safely in the community. PACE is jointly funded and administered by the Centers for Medicare and Medicaid Services and the state of Texas. The PACE provider agency receives a monthly capitation payment and is at full risk for the delivery of all services needed by the client.(b) Rules governing the operation of the PACE program are contained in 42 Code of Federal Regulations, Part 460. These regulations, as currently written or amended in the future, are incorporated by reference as the rule base for operating the PACE program in Texas.