"We appreciate the administration's willingness to
modernize PACE, particularly the payment and regulatory aspects," said
California PACE Association (CalPACE) Board Chair Linda Trowbridge.
"If structured appropriately, the legislation will allow
PACE to expand and serve additional older adults and frail seniors who want to
live independently."
Established in the 1970s in San Francisco as a novel
way of keeping frail seniors living in the community as long as possible, PACE provides and
coordinates an array of medical, social, and long-term care services and
supports to help keep frail seniors out of hospitals and nursing
facilities. Eleven PACE organizations currently serve nearly 6,000 seniors
statewide in 12 counties.
While demand for the program has been growing, outdated
payment and regulatory systems have prevented the program from reaching its
full potential.
Payments for PACE providers are tied to costs incurred in the
state's fee-for-service Medi-Cal program, which is rapidly shrinking due to the
growing use of managed-care plans to deliver services for
beneficiaries. Disparities in rates and questions about the adequacy of
the rates have plagued the program for years. The program operates under a
complicated network of federal and state requirements that necessitate lengthy
approval processes for both new and expanded programs.
Recognizing this, the Brown administration introduced legislation as part of its
2016-17 budget proposal in January to revamp the PACE reimbursement structure
and create additional regulatory flexibility for the program.
Under the legislation, payments would be based on the actual
costs of serving beneficiaries with a goal of providing more accurate and fair
payments and aligning the payment methodology more closely with the methods the
state uses to pay managed-care plans.
The legislation also requires the state to seek greater
regulatory flexibility for PACE from the federal Centers for Medicare and
Medicaid Services for operational aspects of PACE.
These include the make-up and operation of PACE
interdisciplinary care teams, the programs' ability to contract for services
with community-based physicians and other senior service providers, and the
ability to market PACE services.
Assuming the new rate methodology is approved by the federal
government, a current cap on the number of PACE organizations that can operate
in the state would be lifted and, for the first time, for-profit organizations
would be allowed operate PACE programs, bringing state law into conformity with
recent federal regulatory changes.
Both provisions are expected to increase the number of
programs as well as the geographic areas served by PACE.
In response to requests from PACE organizations, the final
legislation requires the new payment methodology to take into account the
unique features of PACE, including its use of dedicated care centers to deliver
and coordinate care.
In addition, the legislation contains provisions to ensure the
payment methodology accounts for high-cost conditions, such as Hepatitis C,
recognizes the higher costs of start-up programs, and mitigates financial
impacts on PACE programs during the transition to the new rate methodology.
In conjunction with the legislation, the state has committed
to further streamlining the application process for new and expanding programs,
including the use of a new electronic application process and providing
concurrent review of applications by the state and federal governments, which
is expected to speed up the review of applications.
"We are grateful the Department of Health Care Services
has worked with PACE providers on the issues and concerns we've put
forward," noted CalPACE Chief Executive Officer Peter Hansel.
"This is a win-win for the state and PACE and, most importantly, for the
individuals the programs serve."
CalPACE is dedicated to the expansion of
comprehensive healthcare services to seniors with chronic care needs through
PACE. Through education and advocacy, CalPACE members strive to support,
maintain and safeguard the PACE model and promote high-quality healthcare
services to California's seniors.
