Keep up the PACE!  The Program of All Inclusive Care for the Elder (PACE) – Is it Coming to Maine?

January 2013

The PACE program is a permanent Medicare program that provides support, services and other health care benefits to seniors.  It has been around since the early 1970’s, slowly caught on in the western part of the country and began moving eastward in the mid 1980’s.

PACE roots stem from a combination of Asian influence to medical practice and their societal cultures regarding families and their elders.  In the late 1970’s, as the end of the Viet Nam War neared, many Asian refugees settled in the San Francisco Bay area.  When their family elders became sick, the only programs available in the United States that provided necessary care to help them were nursing homes. 

Based on an Asian value system that family units stayed intact, sons and daughters did not leave the home when they married.  Renovations were made to expand the home or the extended family made due with the room they had.

It was unconscionable for the family to think that a grandmother, grandfather or family elder would be taken out of their home when ill or needed assistance with their activities of daily living.  The Asian community worked with state health officials and medical professionals to develop a person centered care program that provided as much care at home as possible.  And, when it became necessary to receive care in a medical setting, home transportation was provided to bring the person to and from the clinic or dentist or doctor’s office – and then back home.  The Program of All Inclusive Care for the Elderly, or PACE, was born.

PACE is a capitated comprehensive benefits program that, by design, lowers health care cost, provides support and services in the most appropriate setting, and enhances the patient experience. 

Sound familiar?  That is exactly what the health care reform goals contained in the Affordable Care Act require today.  In fact, those major pieces of the ACA were probably borrowed from the success of the PACE program.

To be eligible for PACE, you must be 55 years or older and eligible for nursing facility placement.  That’s it!  Membership is not based on Medicaid or Medicare status.

PACE is run by a heavily regulated, mandated non-profit company that develops a PACE center, or health care hub in the community and partners with other established medical professionals to provide an array of health care services designed to keep the PACE member in their home as long as possible. 

Why would CMS want to do that?  Because CMS knows that institutionalized care is more expensive than taking care of a person in their home.

The PACE Center is similar to a strip mall whereby many small shops are contained in a singular building.  However, in the PACE Center you would see several services wrapped around an Adult Day Health Center.

PACE covers an array of services including but not limited to:  All therapy disciplines (PT, OT, Speech and Recreational), mental health services, podiatry, dentistry, dietary and nutrition management, pharmaceutical coverage, medical supplies, personal care services, home health agency services, assisted living, nursing facility, acute hospital stays, minor home repairs and improvements, and transportation to and from appointments at the PACE Center or in the community.  It even includes meals.  And, there are no co-pays or deductibles!

PACE is funded through a combination of Medicaid and Medicare payments to the PACE provider.  If a member does not qualify for Medicaid or Medicare, they can still obtain membership in a PACE program but would have to make arrangements to pay privately.

For each PACE member, the program will establish a person centered heavily case-managed care plan designed to keep the person at home and to prevent any decline in their activities of daily living.  This is coordinated with the approval of the PACE member’s primary care physician.

Person centered services are provided to the member by PACE Center employees or contracted with established and reputable medical professionals within the PACE community.  Services are either brought to the home of the PACE member or the member is transported to the PACE Center to receive services by trained medical professionals.  A PACE member may be at the Center daily or one, two or three days a week; whatever they require to remain independent and healthy.

PACE membership is voluntary and one can terminate their participation in the program anytime.

If a person qualifies for Medicaid benefits, there would be no charge to that individual to become a PACE member.  If a person qualifies for Medicare but not Medicaid, then that individual would be responsible for paying the Medicaid portion of the PACE payment to the PACE provider.  If a person is deemed dually eligible, Medicaid and Medicare qualified, then that individual would be a PACE member at no charge (90% of current PACE national membership).  If a person is not eligible for Medicaid or Medicare, that individual could still become a PACE member but would have to pay the full member monthly fee.

The PACE membership fee is a composite charge made up of a Medicaid and Medicare payment.  The Medicaid payment is based on the calculation of the PACE service area (usually designated by a contiguous set of zip codes) upper payment limit (UPL).  The UPL is defined as the cost of providing services to a person that may be eligible to participate in PACE, but is not a member.  Once the UPL is determined, the state will then, for example, establish a contracted price with the PACE provider at, say, 90% of the UPL.  In this instance, the state has saved at least 10% of anticipated payments for a person not in PACE and has passed on all the risk of additional services to the PACE provider to manage because that is all the payment they would receive.  Hence, why the member is so heavily case managed; to keep costs down!

PACE payments are not like the volume driven payment models some providers are reimbursed under today.  Those fee-for-service models are outdated whereby the more services you perform the more money you get whether your patient is actually healthier or stabilized after their visit.  And, you get paid to make mistakes if your initial diagnosis was incorrect and your patient has to be readmitted, under volume based reimbursement models.

The PACE state payment is capitated, or fixed.  It is a more predictive and attractive model for the state since they will know their cost for treating that population.

The remaining portion that makes up the PACE membership fee is constructed on a sliding Medicare fee scale that pays an initial amount per member per month and provides additional coverage should a member require, say, an acute hospital stay.

When the PACE Center is developed the provider will look to the community to partner with established reputable medical professionals.  This helps the PACE Center remain cost efficient.  It also provides them with instant credibility because they are not necessarily a start-up operation since they are working with established and recognized medical professionals and organizations.

The average PACE member is an 80 year old woman with 7.9 medical conditions and requires assistance with three activities of daily living.  49% of PACE members have some form of dementia or related diseases.

Despite these high levels of care needs, over 90% of PACE members are able to live in their homes!

The State of Maine is not a PACE state.  That is to say that Maine has not completed the approval process with CMS to begin offering the services.

However, much research has been conducted by the Maine Department of Health and Human Services since September 2011 to learn more about the merits of PACE and determine if it would be a good fit as Maine looks to rebalance its long-term care services programming.

If you would like to learn more about PACE and its comprehensive benefits package, please call your BNN advisor at 1.800.244.7444.

Disclaimer of Liability: This publication is intended to provide general information to our clients and friends. It does not constitute accounting, tax, or legal advice; nor is it intended to convey a thorough treatment of the subject matter.