PACE (Program of All-Inclusive Care for the Elderly)

PACE organizations receive fixed monthly capitation payments from Medicare and Medicaid (most enrollees are dual eligibles) and in exchange become responsible for all of the participant's care: primary and specialty medical care, prescription drugs, day center services, transportation, meals, personal care, rehabilitation therapies, home care, and even hospital and nursing facility stays when needed. Care is planned and delivered by a mandated interdisciplinary team including a primary care provider, nurses, therapists, social workers, dietitians, aides, and drivers. Eligibility requires being 55 or older, living in a PACE organization's service area, meeting the state's nursing facility level of care, and being able to live safely in the community with PACE supports at enrollment. Participants generally must use PACE-contracted providers for everything except emergencies.

PACE changes the payer relationship entirely. Once a patient enrolls, traditional Medicare fee-for-service billing for that patient ends; the PACE organization controls utilization and either delivers home-based services with its own staff or purchases them from contracted providers. That creates two postures for an agency. As a competitor, PACE enrolls exactly the frail, chronically ill, dual eligible seniors who otherwise generate recurring home health episodes. As a partner, PACE organizations frequently contract with home health agencies for skilled nursing, therapy, and aide services in participants' homes, paying negotiated rates outside PDGM. Contracted work is authorization-driven and documentation expectations come from the PACE interdisciplinary team rather than Medicare episode rules, so agencies should treat it operationally like a managed care line of business.

The typical crossover moment is the patient who keeps recertifying: functionally declining, socially isolated, hard to keep safe between intermittent visits, but adamant about not entering a nursing facility. If a PACE program serves the area and the patient is likely Medicaid-eligible, PACE can be the right discharge destination, wrapping daily supports around them that no intermittent benefit can match. The reverse flow happens too: PACE disenrollment (moving out of the service area, dissatisfaction, or program closure) returns the person to conventional coverage, where they may need a home health admission quickly. Agencies should treat local PACE census teams like any other referral relationship, with clear intake contacts in both directions.

Practical diligence for operators:

• Rates and units: negotiate per-visit or hourly rates that clear your cost per visit, since PDGM economics do not apply
• Authorization workflow: who approves visits, how fast, and how changes in condition get re-authorized
• Documentation expectations and how your notes reach the PACE interdisciplinary team
• Volume reality: PACE programs are small relative to Medicare Advantage, so contract volume is steady but modest
• Liability and credentialing requirements, which mirror institutional contracting more than Medicare certification