POTUS Signs Innovation Act, Expands Home Health Opportunties

Long-awaited legislation that could allow more individuals to receive care services in their homes has been signed into law.

President Obama recently signed the Innovation Act, opening up the Programs of All-Inclsuive Care for the Elderly (PACE) for people in need of nursing home level of care to receive these services at home. The bill was approved by Congress earlier this fall.

Some of the major changes to the programs included getting rid of the age restriction for eligibility. Under the new regulations, anyone over the age of 21 who meets the criteria for nursing home care is eligible to be enrolled in a PACE program, rather than just those over the age of 55. The programs provide high levels of care for eligible patients in community-based settings, with the aim of keeping people out of higher-cost care settings such as nursing homes.


This change will likely increase opportunities for home health agencies, hospitals and other health systems and long-time care providers across the country to implement new programs. Currently, there are 116 PACE programs in 32 states.

“This Innovation Act reduced the age and opened up opportunities for not only states, but entities to open up these programs and enroll more people in them,” Eileen Sullivan-Marx, dean of the New York University College of Nursing and a former fellow with the Centers for Medicare and Medicaid Services (CMS) who worked on the legislation, tells Home Health Care News.

The change reduces the level of risk due to a wider pool of eligible patients.


“The models that are currently open will contract with home care agencies to provide services in the home,” Sullivan-Marx says. “A home care agency could certainly open [a PACE program] if they wanted to run the program itself. It may be that they may want to enter it with a contract.”

More hospitals are also likely to partner with home care agencies due to the looming burden of value-based purchasing, according to Sullivan-Marx. Hospitals engaged in a PACE program might experience smoother transitions of care without worry of penalties for readmissions, as well as potentially earlier releases following hospital visits to a lower-cost care setting.

“There is an incentive from a payment perspective and that has a led to more hospitals looking at community-based engagement and services that are part of transitional care,” says Sullivan-Marx. “The PACE models are often engaged with the hospitals so that they know who can leave hours sooner than other folks who may still be waiting to identify which services will be done at home.”

However, there are also notable opportunities for expanding these program models beyond Medicaid since the Innovation Act has expanded the population of those who can receive this type of care, Sullivan-Marx says.

“There are opportunities for this model to be done outside of Medicaid,” she explains. “You could have Medicare and commercial coverage for this kind of program. This has been one of the reasons to open up the opportunities beyond the age of 55 because now you can open up markets to another level of care and other insurers may see that to their advantage, not just Medicaid. They may not have been willing to enter that market before because it was a very restricted group of people who could be in these kinds of programs.”

A major barrier to expanding PACE programs beyond the 32 states where they already exist is policy issues related to the Affordable Care Act.

“One of the difficulties to consider—from the Medicare-Medicaid perspective—is that some state are caught up with not wanting to engage with the current health care reform plans on Medicaid,” says Sullivan-Marx. “When we were first looking at the bill, there hadn’t yet been the Supreme Court decision about separation of that Medicaid state enrollment aspect of health care reform that is now still problematic in certain states.”

The next step for CMS is to seek out requests for proposals from states and entities to create demonstration models of the new PACE programs, says Dr. Tara Cortes, professor of nursing at New York University College of Nursing and a current fellow with CMS’ Medicare-Medicaid Coordination Office.

“There are a lot of demonstration models now and more to come that are looking at cost effective manners for keeping people at home,” she tells HHCN. “CMS can analyze the services to be cost effective with better patient health and better patient experience. At the end of the day, it’s about the triple aim: patient experience, better population health and cost effective quality care.”

Written by Amy Baxter

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