Why CMS’s Final PACE Rule Spells Opportunity for At-Home Care Providers

Programs for All-Inclusive Care for the Elderly (PACE) organizations were given much-needed operational clarity on Tuesday, as the Centers for Medicare & Medicaid Services (CMS) finally announced a new rule to update and modernize program requirements.

The new rule — the first major update to the PACE program since 2006 — will likely lead to more partnership opportunities for in-home care providers down the road, experts say. The PACE program uses funds from Medicare, Medicaid and private sources to offer various medical and social services to eligible frail, older adults who qualify for nursing home care but choose to remain in the community.

PACE programs often operate with the support of in-home care providers and their staff.


“I do think this is an opportunity for [in-home providers contracting with PACE organizations] to increase,” Robert Greenwood, vice president of public affairs at the National PACE Association, told Home Health Care News. “As PACE programs grow faster and reach out into more communities, it will be unlikely that they’ll be able to just hire their own in-home staff to meet those needs. It will make more sense for them to contract in-home providers rather than develop this within their staffing structure.”

Based in Alexandria, Virginia, the National PACE Association is an industry advocacy group that focuses on federal and state policies to support the financial viability of the PACE model.

In 2016, CMS proposed updated rules governing the PACE program — at the time these efforts were slow moving.


Two years later, the House of Representatives passed the Comprehensive Care for Seniors Act of 2018, which required CMS to issue a final PACE rule by Dec. 31 of that year, a deadline the agency missed.

Under the newly announced final rule, CMS sets out to establish more flexibility for PACE organizations’ interdisciplinary teams, striking a previous rule that team members can only fill one role at a time. The rule also allows certain non-physician primary care providers to offer services in place of primary care physicians.

Additionally, the rule establishes patient protections that call for PACE organizations to comply with Medicare Part D prescription drug program requirements and ensures individuals with certain criminal convictions are barred from employment.

“The changes we are making to the PACE program will help to protect our seniors from abuse and neglect,” CMS Administrator Seema Verma said in a statement. “This rule strengthens the PACE program by offering a more flexible and adaptable approach to the coordinated care that patients receive from PACE organizations, which will allow care teams to provide seamless, better-tailored care to individual patients.”

Today, the PACE program is relatively small in scale, with about 45,000 older adults enrolled in the program across 100 participating organizations in 31 states, according to CMS. Other statistics put PACE enrollment closer to 49,000.

While small, the PACE program is growing rapidly. Overall, enrollment has increased by more than 120% since 2011. The new flexibility for PACE team members to take on multiple roles will likely keep that growth rate high, Greenwood said.

“If a person has all of the certifications and licenses to take on two roles within the interdisciplinary team, they can do this, and it helps a PACE at startup, where there may be more employees than PACE participants,” he said. “This is one way the rule helps PACE organizations start more quickly.”

Brendan Flinn — director of home- and community-based services for Washington, D.C.-based LeadingAge — echoed that idea.

“Since CMS first issued the proposed rule in 2016, we have encouraged the agency to finalize a rule and provide PACE organizations more clarity and flexibility, most recently by including a call for a PACE final rule in our policy priorities for 2019,” Flinn told HHCN in an email. “Based on our initial review, we are supportive of the changes made to the PACE interdisciplinary team rules.”

Ultimately, CMS’s policy changes will likely allow PACE organizations to staff their operations more in-line with the needs of their participants, he also noted.

Apart from provisions included in the newly announced final rule, the PACE program may be positioned for future growth due to the rising cost of home-based care, often driven upward by a lack of available caregivers.

It’s a point that Magnet Health CEO Mark Heaney has previously discussed with HHCN when speaking about investment opportunities in the adult day services space.

The national median cost for one day of adult day health care is about $72, according to the most recent Genworth Financial (NYSE: GNW) Cost of Care Survey. The national median costs for one day of homemaker and home health aide services is about $132 and $138, respectively.

“We think that personal care — one-to-one care — is vital, but we believe that one-to-one care is becoming increasingly expensive, and we think the solution over the long term is group care,” said Heaney, who previously served as CEO of Addus HomeCare Corporation (Nasdaq: ADUS).

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