With all the debate about how to best implement coordinated care that benefits patients while being feasible for providers and economical for the government, it’s ironic that little attention has been given to a decades-old managed care model that does all this.

But as Medicaid reform progresses in New York and elsewhere, that may be about to change.

The program is called PACE, or the Program of All-inclusive Care for the Elderly, and it covers patients 55 and older who are eligible for Medicaid or Medicaid and Medicare and have been certified as eligible to live in a nursing home, even if they currently do not. PACE deploys multi-disciplinary teams of doctors, nurses, therapists and social workers who put together a customized, virtually all-inclusive care program for each patient. The goal is to optimize healthcare and quality of life, and allow patients to live as long as possible in the community rather than a nursing home.

In essence, PACE allows physicians to do what they do best – care for patients.

Results from this coordinated care approach are illustrated by a study conducted by PACE programs around the country that showed hospital days are 50% lower for PACE members compared to a fee for service Medicaid nursing home eligible population. Other studies have shown reduced rates of nursing home occupancy for PACE members compared to similar members in fee-for-service Medicaid programs along with a significant cost of care reduction.

So if PACE works so well, why isn’t it better known? The reason is that scaling the program has been difficult because the program’s rules require members to be seen by PACE physicians. Many seniors would prefer to see their own doctors in the community and fee-for-service Medicaid programs have allowed them to do so.

Recently CMS issued a waiver of that rule to one PACE program in a move that could presage a nationwide loosening of the restriction. Under this waiver, community physicians will be allowed to participate in PACE and receive capitated fees for providing care to patients.

Community physician participation is expected to be high, and PACE enrollment to increase substantially, because:

• Physicians will be relieved of the burden of addressing the multiple non-medical needs of these seniors. Those will be taken care of by the non-physician members of the multi-disciplinary team working in conjunction with the community physician.
• Physicians will be able to spend more time on each patient visit because the capitated rate will be high enough to allow them to do so. That capitated rate is made possible by the financial structure of the program, which funnels payments from both Medicare and Medicaid to the PACE provider that are significantly higher than individual fees from either provider.

As Medicaid programs increasingly move to managed care, as is being mandated in New York State beginning in April, PACE offers a model of how to improve care while creating physician satisfaction and controlling costs.

Stephan Deutsch is Chief Medical Officer of CenterLight Healthcare, a provider of long term care in New York City.

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