PACE has shown path to improved elder care

As the number of seniors with long-term service and support needs continues to grow, Medicare and Medicaid are seeking new ways to provide care and services more effectively and efficiently. One model, Programs of All-inclusive Care for the Elderly, or PACE, has a successful track record of serving low-income, dual-eligible seniors—the frailest of the frail—since its inception more than 25 years ago.

Now with more than 100 programs in 31 states, PACE is looking to build on its experience and make a significant contribution toward achieving state and federal goals for dual-eligibles needing long-term support services. But responding to the new needs of state and federal policymakers means updating regulations and oversight to support innovative models.

PACE came into existence as a way to serve nursing home-eligible elders in the community. The program's ability to integrate all medically necessary care with services and social support through a bundled, capitated payment system is the key to its success. PACE has demonstrated its ability to control the costs of caring for dual-eligibles in need of long-term support, while keeping them out of nursing homes. More than 90% of PACE enrollees reside in a community setting.

Today, PACE organizations, potential sponsors and states interested in expanding access are limited by a regulatory approach that needs to be updated. While federal regulations governing PACE were designed to ensure the successful transition of PACE from a demonstration program to a permanent part of Medicare, they have not kept up with today's innovations. Many PACE organizations are eager to expand their service areas, engage community physicians and utilize alternative-care settings, yet current regulations stymie these efforts.

As a result, much of the promise of PACE is being left untapped. PACE is best positioned to help states and the federal government achieve their goals of better-integrated, more cost-effective support, in comparison to Medicaid managed-care plans. According to a recent Truven Health Analytics report, states that have Medicaid managed-care plans keep less than half of their nursing home-eligible enrollees out of nursing homes.

If the goal of care innovation for this vulnerable population is to improve results, then we need a federal and state regulatory environment that can build on and expand the role of PACE through growth, innovation and accountability.

Shawn Bloom is president and CEO of the National PACE Association.