Better Together: Adult Day & PACE

Blogs | 4 Minute Read

As an adult day organization, you serve an important role in your community: giving seniors access to care that addresses their medical, therapeutic, social, and personal needs. It can be challenging to provide this care within the limits of Medicaid and private pay funding—the two reimbursement models that fund adult day services—as the cost of delivering that care can exceed the reimbursement.

Additional challenges, like lack of transportation and continuity of care, hinder adult day organizations’ ability to easily provide the services that are central to caring for older adults. And when adult day organizations factor in the rising costs of labor, supplies, and other services, many may be looking for solutions that will ensure their long-term financial stability.

If any of these challenges are familiar to you, maybe it’s time to consider adding Programs of All-Inclusive Care for the Elderly (PACE) to your service offering.

PACE solves the funding problem

Funding has been a long-standing challenge for adult day organizations, even before COVID-19. Many fee-for-service reimbursement models provide episodic payments, so providers are paid for the treatment they give a participant rather than the conditions that a participant has. And with a mostly Medicaid population, this model often doesn’t cover the costs for the treatment needed.

PACE is funded under a capitated payment model through a three-way agreement between PACE, the Centers for Medicare and Medicaid Services (CMS), and State Administering Agencies (SAAs). Medicare rates are adjusted for demographic and diagnostic characteristics, while Medicaid rates vary by state. The organization assumes full risk and acts as a health insurer for its participants, including providing Medicare Part D coverage. This reimbursement model combines dollars from different funding streams to deliver a comprehensive set of services focused on the health and well-being of each participant.

PACE organizations fully integrate all Medicare and Medicaid services into participant care, which leads to better outcomes and lower healthcare costs. Interdisciplinary teams (IDTs) provide and coordinate all care for the individual, so PACE participants experience fewer emergency department visits, hospitalizations, and nursing home admissions.

The other benefit of capitated payments is less complication. Many fee-for-service organizations often need to diversify funding in order to optimize revenue, but capitation is a fixed payment with one method.

With a more feasible reimbursement method and a value-based care approach, PACE programs can provide quality care for less.

Female healthcare provider pointing to tablet and smiling with older patient.

Transportation services keep participants coming to the center

For seniors, especially the underserved, transportation can be a challenge. The issue is simple: If participants do not have access to transportation, they cannot make it to their appointments, and providers cannot care for them. Transportation is one of the core services in the PACE model. In fact, the IDT approach ensures that every PACE program has a driver. Public transportation isn’t always feasible, and caregivers can’t always be available to drive participants to appointments. Providing transportation helps organizations get participants to the center. In turn, it allows providers to care for their patients and get reimbursed for it.

Community collaboration ensures continuity of care

Adult day organizations often face barriers to tracking participant care for services received from outside providers. PACE contracts with other specialists in the community for services that aren’t provided in the center. Contracted providers measure and share health outcomes with their partnered PACE organization, maintaining care continuity and accountability. This collaboration ensures participants have access to all aspects of care while keeping it under PACE.

Taking it a step further

Beyond its ability to solve some of the biggest challenges that adult day organizations face, PACE holds many benefits. Adding PACE to your model of care provides another source of revenue without entirely disrupting your organization. You can include the PACE care model within your adult day program with slight modifications to your existing operations, and you can bring in new revenue in the process
From reimbursement to integrated care, PACE equips and incentivizes organizations to provide effective, quality, and cost-effective care. The individualized approach of PACE complements the goals of adult day organizations, making it a compatible addition to their mission of giving seniors access to care that addresses their medical, therapeutic, social, and personal needs.

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