HCFA’s interim rule for PACE offers home care opportunity
By MATTHEW HAY
HHBR Washington Correspondent
BALTIMORE The Health Care Financing Administration (HCFA; Baltimore) released on Nov. 24 its interim final rule for the Program of All-inclusive Care for the Elderly (PACE). So far, the rule is receiving a positive endorsement from PACE.
PACE was established as a permanent program under Medicare and a state option under Medicaid by the Balanced Budget Act of 1997 (BBA). The key requirement is that any PACE organization must, either independently or through contract, have the capacity to deliver a full range of services. Once seniors are enrolled in the program, they receive all Medicare and Medicaid covered services, including preventive, primary, acute, and long term care, through PACE. These services are provided either directly by program staff or through contracts with other providers, such as hospitals and nursing homes.
The BBA provided for 40 initial centers and an additional 20 sites each year thereafter. That gives PACE current authority for up to 80 programs with 25 already in place. "That number will grow now that the federal regulation is published, telling healthcare providers exactly what is required," predicted PACE’s Christine Van Reenan. "Based on our experience, each of those programs will probably enroll 500 individuals, which means our current capacity is roughly 40,000."
According to Van Reenan, if a home health organization wanted to act as the PACE organization itself, it would have to expand its range of services beyond home health to include all PACE-covered services. "Obviously, home health agencies would be in a good position to provide the home health services provided under PACE," she said. But the organization would also have to provide for all inpatient care, including hospital and nursing home care, as well as primary and specialty care.
Since it is highly unlikely that any home health agency, regardless of its size, is prepared to do that, Van Reenan suggested home health agencies are more likely to contract with other healthcare providers to provide the home care component. "The VNS in New York is actually pursuing its own managed care program, but that is a huge entity," she explained. "Other home health agencies might more realistically think about how they can partner with PACE as a contractor."
PACE is generally satisfied with HCFA’s interim regulation, according to Van Reenan. "Our comments right now are preliminary because we have a 60-day comment period, and we are going over it with a fine-tooth comb," she said. "But our initial impression is reasonably positive."
Van Reenan said her organization’s primary concerns revolve around flexibility and payment. "Our first major concern is the degree of flexibility that will be allowed as the model moves forward," she said. Under the BBA, there is a legislative provision that allows for Medicare and Medicaid to grant waivers for flexibility in implementation of the model. "We think HCFA has interpreted that section too narrowly to allow the model to evolve over time," she said.
Van Reenan said her organization’s other major concern is payment. The statute makes reference to the Medicare+Choice payment methodology as the basis for PACE payment, she noted. "But there has been quite a bit of change in the Medicare+Choice payment methodology since BBA was passed," she said. "We see some difficulties in applying the Medicare+Choice methodology to PACE in its entirety."
According to Van Reenan, PACE will encourage HCFA to examine its service delivery model and develop a reimbursement methodology that is consistent with that model. She said such a payment methodology should preserve the requirement for cost-effectiveness, but recognize that PACE is a very different service delivery model with a very unique population. "State-of-the-art rate development is not as far along in looking at the specialized, frail population as it may be for the Medicare population," she said.
To date, the most ambitious PACE model is On Lok Senior Health Services (San Francisco), a fully integrated, managed care system that uses home care as one of the cornerstones of its program. In fact, it was the On Lok program nearly 10 years ago that was replicated nationwide as the Medicare demonstration. Today, it is a permanent provider of comprehensive medical and long term care services to the elderly.
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