Program of All-Inclusive Care for the Elderly (“PACE”)

I.  Introduction and Background of PACE

The Program of All-Inclusive Care for the Elderly (PACE) provides comprehensive long term services and support to Medicaid and Medicare enrollees.  A multi-disciplinary team of health professionals provides individuals with coordinated care.  For most participants, the comprehensive service package enables them to receive care at home rather than receive care in a nursing home.

The starting principle is that individuals prefer to remain at home and independent rather than be institutionalized in a facility where the individual believes it may be their final resting stop! The philosophy of the program is to maintain participants in the community for as long as medically and socially feasible. Continued community residence, independence, family support and minimal disruption of the older person’s life are the guiding precepts.

The PACE model was pioneered by On Lok, a community based non-profit agency in San Francisco, California. The model evolved over a period of fifteen years in response to community needs. By 1983, On Lok was operating a comprehensive, consolidated program with capitation financing from Medicare and Medicaid. On Lok’s success led to the federal government replicating this model under the name Program of All-Inclusive Care for the Elderly. Costs are controlled under a capitated payment system. The anticipated benefits of program participation include the avoidance of the client’s functional decline and use of more costly nursing home services.

The PACE program goal is to target individuals who would otherwise qualify for nursing home placement paid for by Medicaid and provide them with an all-inclusive menu of home and community-based services at a lower cost than that in a nursing home.  Moreover, arguably with the care being provided in the home or through community-based providers, the quality of care would exceed that provided in a nursing home.

II.  Eligibility for PACE

Individuals age 55 and older, living in an area where there exists a program and requiring the level of care typically provided at a nursing home are eligible for PACE.  PACE programs are capitated for both Medicare and Medicaid services and cover both acute and long-term care services with the full continuum of care available.  The program provides community-based, long-term care services in a center for adult daycare managed by the PACE site.  The program involves a unique service delivery system.  Services are provided through an adult daycare center and case management is provided through multidisciplinary teams. 

III.  Services

By delivering all needed medical and supportive services, PACE is able to provide the entire continuum of care and services to seniors with chronic care needs while maintaining their independence in their homes for as long as possible.

Care and services include:

• Adult day care that offers nursing; physical, occupational and recreational therapies; meals; nutritional counseling; social work and personal care
• Medical care provided by a PACE physician familiar with the history, needs and preferences of each participant
• Home health care and personal care
• All necessary prescription drugs
• Social services
• Medical specialists such as audiology, dentistry, optometry, podiatry, and speech therapy
• Respite care
• Hospital and nursing home care when necessary

The obvious advantage of the PACE program is a scenario whereby elderly men and women come together for the purpose of socializing and receiving limited care in a central setting.  The setting envisioned is far superior than the traditional nursing home model and does not involve the cost of overnight supervision and care.  As the population continues to grow, especially the elder population, there is going to be a critical need for caring for the elderly in the most cost efficient manner.  The PACE program provides a model in caring for this population, a model which will undoubtedly evolve over the years.

Financing for the program is capped, which allows providers to deliver all services participants need rather than limit them to those reimbursable under Medicare and Medicaid fee-for-service plans.  The PACE model of care is established as a provider in the Medicare program and as such enables states to provide PACE services to Medicaid beneficiaries as a state option.

One of the unique features of PACE is that it is able to combine funding from Medicare, Medicaid and private sources to create a pool of resources to meet each participant’s needs. While it varies across the country, for PACE participants who are eligible for both Medicare and Medicaid, approximately one-third of the payment for each PACE enrollee comes from Medicare and two-thirds comes from Medicaid. Medicaid payment is negotiated between the PACE provider and the state with some federal oversight.

The Balanced Budget Act of 1997 established the PACE model as a permanently recognized provider type under both the Medicare and Medicaid programs. As of 2012, 88 PACE programs are operational in 29 states.

IV.   Conclusion

PACE is one example of managing a population more efficiently. By bring elderly participants together in a day care setting, less healthcare workers are needed to care for the group. Meanwhile, the participants may assist each other with non-healthcare related needs as they interact and benefit from the socialization aspect.