Program of All-Inclusive Care for the Elderly (PACE) History
The Program of All-Inclusive Care for the Elderly (PACE) is a new capitated benefit authorized by the Balanced Budget Act of 1997 (BBA) that features a comprehensive service delivery system and integrated Medicare and Medicaid financing. The program is modeled on the system of acute and long term care services developed by On Lok Senior Health Services in San Francisco, California. The model was tested through CMS (then HCFA) demonstration projects that began in the mid-1980s. The PACE model was developed to address the needs of long-term care clients, providers, and payers. For most participants, the comprehensive service package permits them to continue living at home while receiving services rather than be institutionalized. Capitated financing allows providers to deliver all services participants need rather than be limited to those reimbursable under the Medicare and Medicaid fee-for-service systems.
The BBA establishes the PACE model of care as a permanent entity within the Medicare program and enables States to provide PACE services to Medicaid beneficiaries as a State option. The State plan must include PACE as an optional Medicaid benefit before the State and the Secretary of the Department of Health and Human Services (DHHS) can enter into program agreements with PACE providers.
The BBA also limits annual growth of the PACE program. It limits the number of PACE program agreements in the first year after enactment to no more than 60; the limit increases by 20 each year thereafter. The statute further provides for priority processing and special consideration of applications for existing PACE demonstration sites and to those entities that applied to operate a PACE demonstration project on or before May 1, 1997.
Participants must be at least 55 years old, live in the PACE service area, and be certified as eligible for nursing home care by the appropriate State agency. The PACE program becomes the sole source of services for Medicare and Medicaid eligible enrollees.
An interdisciplinary team, consisting of professional and paraprofessional staff, assesses participants' needs, develops care plans, and delivers all services (including acute care services and when necessary, nursing facility services) which are integrated for a seamless provision of total care. PACE programs provide social and medical services primarily in an adult day health center, supplemented by in-home and referral services in accordance with the participant's needs. The PACE service package must include all Medicare and Medicaid covered services, and other services determined necessary by the multidisciplinary team for the care of the PACE participant.
PACE providers receive monthly Medicare and Medicaid capitation payments for each eligible enrollee. Medicare eligible participants who are not eligible for Medicaid pay monthly premiums equal to the Medicaid capitation amount, but no deductibles, coinsurance, or other type of Medicare or Medicaid cost-sharing applies. PACE providers assume full financial risk for participants' care without limits on amount, duration, or scope of services.
PACE sites have the option to seek extension of their current demonstration authority for a limited period of time after the date of promulgation of the PACE regulations. Therefore, States that currently have PACE demonstration sites do not need to submit a SPA electing the PACE State option to continue to provide services through the demonstration. However, to continue the PACE program at any time the demonstration ceases, a State must elect to provide PACE as a Medicaid State plan option in their State plan, and the PACE demonstration site must submit an application to enter into a program agreement with the State and the Secretary of DHHS as a PACE provider.
For more information on specific State activity, go to the national map.
Contact: E-mail pace@cms.hhs.gov.
