House lawmakers ask how Medicare can manage complex patients better

House lawmakers on Wednesday praised a small program used to manage care for frail seniors and disabled adults, saying they wished the initiative could be expanded to their districts.

Although PACE, or the Program of All-inclusive Care for the Elderly, is the smallest of three managed-care programs for seniors or disabled adults, it drew attention from House Ways and Means Health subcommittee members on Wednesday. Studies have shown that PACE participants—all of whom qualify for skilled-nursing care—live longer than Medicaid beneficiaries in nursing homes or receiving home-based care through state waivers without added costs.

PACE uses an interdisciplinary team of nurses, therapists, drivers and other healthcare providers to manage care. It covers only 42,000 dual beneficiaries, whereas another managed-care program Medicare Advantage Special Needs Plans, covers 2 million people.

But the program has struggled to scale up in 35 years of operation.

PACE requires about $8 million in startup costs per site, and providers often don't break even until 18 months to two years after starting their operations, said Cheryl Wilson, CEO of St. Paul's Senior Services, who testified on behalf of the National PACE Association.

"Those upfront costs are never reimbursed," she said.

The CMS has been considering a rule since last August that would allow nurse practitioners and physician assistants to lead PACE interdisciplinary teams. The move would help the organizations, mostly not-for-profits, save money on the services, as PACE team members are paid a capitated monthly rate for their work.

The proposed rule would also relax a requirement that all drivers, social workers, etc., have at least one year of experience working with the frail or elderly.

"We need CMS to pull the trigger," Wilson said, and asked representatives to call the CMS.

She reassured subcommittee members that PACE can work in rural areas or small towns, and that their locations are not to blame for the lack of a program.

The program has impressed some lawmakers. Rep. Judy Chu (D-Calif.) praised the PACE program in her district, and two other members of the subcommittee said they wished they could have one in their regions.

The other two programs discussed during Wednesday's hearing were insurance-based, rather than provider-based, approaches to serving complex patients. The largest program, SNPs, is often is no better, and sometimes is worse than Medicare Advantage generally, two expert witnesses said.

Harvard professor David Grabowski said SNPs for dual-eligibles (DSNPs) only work better when the Medicare Advantage company is well-integrated with Medicaid—and most aren't. He said most DSNPs are "still not accountable for Medicaid spending."

The other approach discussed was allowing Medicare Advantage plans to charge different co-pays to different groups of patients for certain services, or use co-pays to steer patients to higher-quality providers.

Dr. Mark Fendrick, director of University of Michigan's Center for Value-Based Insurance Design, said Congress should give insurers that authority beyond a pilot program. He also suggested lawmakers give insurers the option to reduce or eliminate cost-sharing for people with chronic diseases who are cooperating in a disease management program. But Kaiser Family Foundation Associate Director of Medicaid Gretchen Jacobson said varying co-pays could confuse patients, and questioned whether insurers are able to make the right decisions on who's high quality.