1. Program of All Inclusive Care for the Elderly (PACE)

FEDERAL INITIATIVES 1. Program of All Inclusive Care for the Elderly (PACE) What is PACE? The Program for All-Inclusive Care for the Elderly, or PACE, is an integrated managed care program for the frail elderly. The program is based on the belief that “it is better for the well-being of seniors with chronic care needs and their families to be served in the community whenever possible.”1 PACE was originally authorized as a demonstration project in 1986 as a way of replicating the On Lok Senior Health Services program in San Francisco. Prior to the passage of the Balanced Budget Act (BBA) of 1997, PACE was a demonstration project with a fixed number of approved sites. After the BBA was passed, however, PACE was established as a permanently recognized provider under both Medicare and Medicaid. There are currently 33 approved PACE sites across the country (a list will be provided later).

Who is eligible? PACE enrollment is limited to individuals aged 55 and older who are in need of nursing home care as determined by the individual state’s Medicaid eligibility rules. It is important that one is aware that individual state assessments of eligibility will vary in terms of nursing home eligibility criteria, whether or not the state requires a specific amount of impairments in individuals, and ultimately how the sophistication associated with how those impairments are determined and documented. However, on average, PACE enrollees are generally required to need assistance with at least three activities of daily living (ADLs), and are usually around 80 years old. Individuals must also reside within a PACE organization service area.

1 National PACE Association, What is PACE? Available at: http://www.npaonline.org/website/article.asp? id=12 © 2005-2006 CDHS/Research Foundation of SUNY/BSC College Relations Group What services do PACE sites provide? PACE uses an interdisciplinary team approach to care coordination with all services being provided in an adult day health center setting. If needed, services can be supplemented with in-home care and provider referrals. The program is able to provide the entire continuum of care and services needed by seniors with chronic care needs while allowing the individuals to maintain his/her independence is his/her own home for as long as possible. Specific services that may be provided by a PACE site include: nursing, physical therapy, occupational therapy, recreation therapy, meals, nutritional counseling, social work, personal care, social services, respite care, and hospital and nursing home care when necessary. In addition, beneficiaries can receive PACE coverage for over-the-counter medications if they are approved by the interdisciplinary care team and are part of the authorized care plan.

What are the distinguishing features of PACE programs? PACE programs allow for integrated funding and allows for providers’ financial risk through capitated Medicaid and Medicare reimbursements. PACE takes all steps necessary to attempt to keep individuals in the community and out of nursing homes. In addition, PACE allows for case management through the use of interdisciplinary care teams. PACE provides an integrated health care service delivery with the use of adult day care centers as the focal point.

Who makes up the interdisciplinary care teams? The interdisciplinary teams are made up of primary care physicians, registered nurses, social workers, physical therapists, occupational therapists, recreational therapists, dieticians, a PACE center manager, home care coordinators, and personal care attendants. Members of the care team do not need to be fulltime employees and also do not need to be employees of the PACE organization. The team meets on a basis

© 2005-2006 CDHS/Research Foundation of SUNY/BSC College Relations Group that is determined to be frequent enough to ensure that the program enrollee is getting the appropriate level of care and that all of the needs of the enrollee are being met. How is care coordination achieved? Care coordination is achieved through the use of interdisciplinary care teams, as discussed above. An initial comprehensive assessment of the individual is performed. The differing team members evaluate the individual during an in-person visit, and based on this evaluation, the team member develops a discipline-specific assessment of the individual. These discipline-specific assessments are then compiled into a single plan of care for the individual. The team members monitor the individual’s health and psychosocial well-being. The care plan is reevaluated at least twice a year to determine if it is still functionally appropriate for the individual. If any changes need to be made to the care plan, the care team works together to come up with a new plan that meets the needs of the beneficiary.

How is reimbursement determined under PACE? Under Medicare, PACE’s reimbursement capitation rate is determined by a blend of two formulas. First, the county rate is multiplied by a uniform PACE adjuster of 2.39 for individuals who are classified as frail elderly. Secondly, Medicare reimbursement is based on other risk adjusted payment methodology. It is believed that this blend will transition to a 100% risk adjustment in the near future. When it comes to Medicaid reimbursement, the monthly capitation rate is determined through negotiations between the PACE provider and the State Medicaid Agency and will be specified in the contract between the two. This capitation rate will remained fixed during the contract year regardless of whether or not there are changes to the beneficiary’s health status.

What are the key advantages to a PACE program?

© 2005-2006 CDHS/Research Foundation of SUNY/BSC College Relations Group PACE is a sound alternative for states to look into because payments under PACE are higher than under Medicare+Choice programs when dealing with frail elderly living in the community. PACE applies risk adjusted capitation rates whereas Medicare+Choice does not adjust for higher costs associated with frail elderly individuals living in the community. The PACE rate adjuster for frail elderly living in the community is 2.39 times higher than that of Medicare+Choice. Second, PACE authority overrides many of the Medicare and Medicaid regulatory requirements. PACE also has the ability to describe its benefit packages as PACE benefits and not a series of benefits from a variety of providers. This is a strong advantage when it comes to marketing and publicity of the program. Third, PACE programs provide care coordination and integration of services. Lastly, Federal Demonstration Waiver approval is not needed for the implementation of a PACE site. The BBA provides statutory authority for states to implement PACE programs without having to go through the waiver review process.

What are the main drawbacks of PACE? First and foremost one of the main drawbacks of PACE is its limited eligibility. PACE is only available to individuals over age 55 in need of nursing home care. Secondly, PACE sites are usually non-profit providers since under the BBA permanent PACE cites were only authorized if they were not-for-profit. However, PACE also requires a high overhead to operate, and costs may be overwhelming for not-for- profit organizations. For-profit organizations are still only permitted as demonstration sites and need federal approval for implementation. There are also shortcomings in the delivery system of PACE sites. First, the strength of the system is dependent upon the individual getting all of his/her care at one place—usually an adult day care center. Enrollees also must elect to change all of their providers, including their primary care physician, to PACE providers. Many individuals may feel as though the

© 2005-2006 CDHS/Research Foundation of SUNY/BSC College Relations Group restrictions regarding where they can get their care and who they can choose as providers are too restrictive. Lastly, PACE must have voluntary enrollment by law, Medicare programs are not permitted to have mandatory enrollment. All Medicare beneficiaries must have freedom of choice regarding their providers.

Where are existing PACE programs located?2 Information about each of the following sites is available through the National PACE Association’s website, which can be accessed via the following web address: http://www.npaonline.org/ website/article.asp?id =71 . The programs are as follows:

1. Alexian Brothers Community Services, Chattanooga, TN 2. Alexian Brothers Community Services, St. Louis, MO 3. AltaMed Senior BuenaCare, Los Angeles, CA 4. Bienvivir Senior Health Services, El Paso, TX 5. Center for Elders Independence, Oakland, CA 6. Center for Senior Independence, Detroit, MI 7. Community Care Organization, Milwaukee, WI 8. Community LIFE, Pittsburgh, PA 9. Comprehensive Care Management, Bronx, NY 10. Concordia Care, Cleveland Heights, OH 11. Eddy SeniorCare, Schenectady, NY 12. Elder Service Plan at Fallon, Worcester, MA 13. Elder Service Plan of Harbor Health Services, Inc., Dorchester, MA 14. Elder Service Plan of the Cambridge Health Alliance, Cambridge, MA 15. Elder Service Plan of the East Boston Neighborhood Health Center, E. Boston, MA

2 List courtesy of National PACE Association, available at http://www.npaonline.org/website/download.asp?id=745 © 2005-2006 CDHS/Research Foundation of SUNY/BSC College Relations Group 16. Elder Service Plan of the North Shore, Inc., Lynn, MA 17. Florida PACE Centers, Inc., Miami, FL 18. Hopkins ElderPlus, Baltimore, MD 19. Independent Living for Seniors, Rochester, NY 20. LIFE – Pittsburgh, Inc., Pittsburgh, PA 21. LIFE – University of Pennsylvania School of Nursing, Philadelphia, PA 22. On Lok Senior Health Services, San Francisco, CA 23. PACE CNY, North Syracuse, NY 24. Palmetto SeniorCare, Columbia, SC 25. Providence ElderPlace – Seattle, Seattle, WA 26. Providence ElderPlace in Portland, Portland, OR 27. Sutter SeniorCare, Sacramento, CA 28. The Basics at Jan Werner, Amarillo, TX 29. Total Community Care, Albuquerque, NM 30. Total Longterm Care, Denver, CO 31. TriHealth SeniorLink, Cincinnati, OH 32. Upham’s Elder Service Plan, Boston, MA 33. Via Christi HOPE, Inc., Wichita, KS

2. EverCare What is EverCare? EverCare is a subsidiary of UnitedHealth Group, which began in 1993. HCFA has granted Medicaid and Medicare waivers to develop test sites in nine areas. EverCare is committed to optimizing the health and well-being of aging vulnerable and chronically ill individuals. This program focuses on prevention and early detection of new diseases and complications from existing diseases, and provides timely coordinated and comprehensive medical management in the most appropriate setting.

Where are EverCare programs located? There are currently EverCare programs in Arizona, Colorado, Connecticut, Florida, Georgia, Maryland, Massachusetts, Minnesota, New Mexico, New York, North Carolina, Ohio, Pennsylvania, Rhode Island, Texas, Washington and Wisconsin.

What is the intent of the EverCare program? EverCare intends to work to maintain the enrollee’s health and functional ability by treating enrollees holistically. EverCare strives to prevent any type of medical crisis that could ultimately lead to unnecessary and preventable hospitalizations. EverCare hopes to improve the quality of care for individuals and the resulting health outcomes. In addition, EverCare strives to develop practice guidelines. The primary goal of EverCare is to provide better case management for permanent nursing home residents.

Who is eligible for enrollment in EverCare programs? EverCare is open to nursing home residents participating in risk based HMOs. On average, enrollees must require assistance with four to five activities of daily living. There is no enrollment cap for the EverCare program, and as of April 2000, there were 10,725 enrollees in the EverCare program.

How is care coordination achieved in EverCare? Care is provided by teams of geriatricians and nurse practitioners who provide intensive primary care. Long-term care services are provided by nurses and nurse assistants. The program assigns a physician and geriatric nurse practitioner to each nursing home residents and ensures that

© 2005-2006 CDHS/Research Foundation of SUNY/BSC College Relations Group these individuals are thoroughly involved in the care plan for the individual. Primary care in provided in the nursing home and is overseen by the care team. Providers supply geriatric services, coordinate the care plans, oversee any needed hospital services that may be needed. In addition, care teams are necessary for communicating with family members of nursing home residents to ensure that the family is kept up-to- date on the care that the resident is receiving. It is important to note that EverCare does not offer prescription drug coverage or long-term nursing home care.

What are the key benefits of the EverCare program? EverCare works to ensure that the program is viewed as being more beneficial than other available programs. EverCare uses capitation payments that are sometimes increased above the Medicare capitation amounts to encourage physician visits for nursing home residents. EverCare also provides for improved coordinated health care for nursing home residents, which represents a strong marketing advantage to increase nursing home participation. Also, EverCare pays for all medical services incurred by the nursing home resident regardless of where the care is delivered. Therefore, there is no incentive for the nursing home provider to have the resident hospitalized as a means of shifting care costs to Medicare. In fact, EverCare will provide the nursing homes with additional funding to cover the costs associated with caring for an individual who would otherwise be hospitalized. By working to decrease unnecessary hospitalizations and the length of hospitalizations, EverCare has saved money that would otherwise have been spent.

What are the main drawbacks of the EverCare program? Like PACE, the EverCare program is limited to a very specific group of individuals. EverCare is restricted to individuals who are actually residents in nursing homes. Also, there are very few EverCare

© 2005-2006 CDHS/Research Foundation of SUNY/BSC College Relations Group sites in operation, thus making it even more restricted in the number of individuals who are provided for under the program. The services provided for under EverCare, while very extensive for nursing home residents, does not include prescription drug coverage or long-term nursing home care. EverCare does not have any criteria in place to significantly expand Medicare benefit packages.

3. Social HMOs (SHMO I and SHMO II) What are SHMO I and SHMO II? Social HMOs began in 1985 as a means of adding community care services and short term nursing home are to Medicare acute care plans. SHMO I was intended to integrate acute, chronic, long-term care, and social services provided through a capitated HMO. SHMO II was Congressionally mandated in 1990. It represented a refined targeting of the at-risk beneficiaries, financing methods, and benefit design of the original SHMO model. SHMOs allow for a broad cross-section of people who are Medicare eligible to receive acute care and limited community based long-term care.

Why was SHMO II established? SHMO II was originated when it was determined that the first generation of SHMOs failed to integrate services by acute and long-term care providers. SHMO IIs were developed to establish reimbursement rates based on the individual’s impairment and illness profile and the time of his/her enrollment. This profile will also be reevaluated annually.

What waiver are SHMOs operating under? SHMOs currently operate under section 222 federal waivers.

© 2005-2006 CDHS/Research Foundation of SUNY/BSC College Relations Group Who can enroll in a SHMO? For both SHMO I and SHMO II enrollment is available for individuals aged 65 and older who are entitled to Medicare part A and part B. In addition, SHMO II allows for the enrollment of disabled individuals under the age of 65. As of April 2000, enrollment in SHMOs was counted to be 81,718. Enrollment is capped at 324,000 for all the sites, not by individual site.

Where are there currently SHMO sites? There are currently four SHMO sites. Three of these sites are SHMO I sites and one is a SHMO II site. The SHMO I sites consist of the following: Medicare Plus II in Portland, Oregon; Elderplan in Brooklyn, New York; and SCAN Health Plan in Long Beach, California. While originally planned to include 6 sites, only one SHMO II site is in operation, and that site is located in Nevada.

What kinds of services are provided by SHMOs? All enrollees are entitled to basic Medicare benefits. In addition SHMOs offer expanded benefit coverage, such as prescription drug coverage and eye glasses coverage. If the enrollee is at risk of institutionalization—aka nursing home certifiable—then this enrollee is entitled to long-term care benefits. SHMOs also include a case management component that emphasizes community based services and coordination of nursing home and non-nursing home care. SHMOs incorporate practices developed by geriatricians into the creation and operating of their care plans. Such practices include comprehensive geriatric assessments for certain patients, treatment of functional problems, and an interdisciplinary team approach.