Illinois Launches PACE Program, But Is It The Best Option for Consumers?

PACE offers some benefits that extend beyond traditional care models. Studies show that PACE participants experience fewer hospitalizations and emergency room visits compared to similar populations. A study published in the Journal of the American Geriatrics Society found that PACE participants had lower hospitalization rates and fewer emergency department visits than non-participants. The Urban Institute’s research also highlights that PACE’s integrated care model leads to fewer hospitalizations than other models of care. Additionally, participants report higher satisfaction with care quality and improved overall health outcomes. 

In addition to reduced hospitalizations, PACE also makes aging at home more affordable, especially for those needing complex care. Judith Wright, a diabetic with anemia and limited mobility, has received all kinds of free help — an electric lift chair, a bed rail, eyeglasses and other accommodations through PACE. She takes 17 medicines, all free through the program. There are also health clinics and urgent care centers at PACE centers, which allows seniors a one-stop shop for all their medical needs.

While PACE offers some benefits, there are major limitations that simply cannot be overlooked. One major challenge is its limited geographic availability. PACE centers are only available in certain areas, which restricts access for eligible seniors living outside these regions. While PACE is available in most states, there are only 300 PACE centers across the country. Some states also have requirements, where you need to live in a certain mile radius of a local PACE center to partake in the program, which seriously hinders availability. 

Another limitation is that PACE primarily targets those who qualify for nursing home-level care. This excludes seniors who have significant needs but do not meet these specific criteria. Moreover, while PACE integrates multiple services under one umbrella, this approach may not always accommodate highly specialized care needs that require unique expertise outside the PACE network.

The comprehensive nature of PACE also might not suit all seniors. Because all services must be provided in the PACE center, someone who prefers to choose their own healthcare providers or requires services not included in the program’s network would not be a good fit. With consumers forced to obtain all services through the PACE centers, the lack of consumer choice is alarming. And, for those unhappy with services, the red tape surrounding PACE is astounding. Once a consumer chooses to enter the PACE program, they essentially cannot go back to another form of Medicaid for the rest of their life. Coupled with the fact that you are limited to a single provider, this is a major flaw with PACE.  

Another issue is that while PACE is technically a value-based payment (VBP) models, and the upfront-payment capitation model puts emphasis on high-quality and cost-effective care, the “hold back” is a punitive approach. States like New York have integrated value-based payment models into their PACE programs by linking provider reimbursement to performance metrics such as reduced hospital admissions, improved chronic disease management, and participant satisfaction scores. And while the approach encourages continuous improvement and innovation in service delivery, there is little concrete evidence to support its success. 

CMS also has strict guidelines on Quality Assessment and Performance Improvement that states must detail in their applications for PACE funding. There are also guides for PACE Medicaid Capitation Rate Setting. CMS has a big role in overseeing PACE programs, but the program’s funding structure, means providers must operate within fixed budgets. This can pose financial challenges, especially when serving participants with complex, costly health conditions. 

Another thing to note is that in 2019, CMS finalized a rule removing the requirement that nonprofit organizations run PACE programs. As for-profit PACE organizations have entered the program in recent years, private equity has taken an increasing interest in acquiring PACE programs. This is something stakeholders need to keep an eye on, to ensure that quality of care remains at the forefront and for-profit PACE organizations are not cutting corners.