PACE Is Poised for Expansion as COVID Highlights Home Needs

by Lauren Flynn Kelly

As Congressional lawmakers consider additional funding for home and community-based services (HCBS) in Medicaid and the pandemic underscores the importance of enhanced support for community-dwelling seniors, a small but growing segment of the Medicare market is experiencing a resurgence. Programs of All-Inclusive Care for the Elderly are designed to support elderly Americans who require a nursing home level of care by providing comprehensive medical care and social supports to help them remain at home, and sources tell AIS Health that PACE competition is heating up as more venture capital firms look to invest in PACE organizations and as multiple states expand their programs.

PACE Shows Strong Outcomes, Even as COVID Looms

• The PACE market has seen steady growth in recent years and currently serves about 51,000 participants in 30 states, up from 34,000 participants in 2015, according to AIS’s Directory of Health Plans.
• “It’s a model that works and delivers quality care — and what became unmistakably clear — during COVID, is just how well the model does work,” says Jade Gong, who consults nationally with PACE organizations.
• She points to strong evidence published in October 2021 by the HHS Office of the Assistant Secretary for Planning and Evaluation, which compared utilization and outcomes across integrated care models for duals and highlighted PACE as a “consistently high performer.”
• Additionally, PACE participants fared better than their institutionalized counterparts during the COVID-19 pandemic, with comparison data consistently showing that PACE participants are at approximately one-third the risk of nursing home residents for contracting or dying from COVID-19, according to the National PACE Association (NPA).

Market Is Ripe for Growth

• PACE has all the “right ingredients” for managed care investors: “good revenue flow, lots of unnecessary health care utilization that could be reduced, and unaddressed market need,” says Gong.
• “We are at a point where policymakers and consumers can clearly see that PACE had the unique flexibility to deliver quality care during COVID — so the case for expansion is so much more compelling.”
• When asked why traditional managed care organizations haven’t started a PACE program, Gong says there is “definitely interest” among the MCOs.
• The Build Back Better Act, which passed the House on Nov. 19 and is currently being debated in the Senate, includes a $150 billion investment in HCBS so that states could make long-term, systemic changes to improve access to care, which could be used to further bolster PACE.
• “As states look for ways to provide care and services for a population that is growing, I think these are monies that they could use to expand and support PACE development,” remarks Robert Greenwood, the NPA’s senior vice president of communications and member engagement.

From Radar on Medicare Advantage