Does Medicaid pay more to a program of all-inclusive care for the elderly (PACE) than for fee-for-service long-term care?
Abstract
BACKGROUND: In rebalancing from nursing homes (NHs), states are increasing access
of NH-certified dually eligible (Medicare/Medicaid) patients to community waiver programs
and Programs of All-Inclusive Care for the Elderly (PACE). Prior evaluations suggest
Medicaid's PACE capitation exceeds its spending for comparable admissions in alternative
care, although the latter may be underestimated. We test whether Medicaid payments
to PACE are lower than predicted fee-for-service outlays in a long-term care admission
cohort. METHODS: Using grade-of-membership methods, we model health deficits for dual
eligibles aged 55 or more entering waiver, PACE, and NH in South Carolina (n = 3,988).
Clinical types, membership vectors, and program type prevalences are estimated. We
calculate a blend, fitting PACE between fee-for-service cohorts, whose postadmission
1-year utilization was converted to attrition-adjusted outlays. PACE's capitation
is compared with blend-based expenditure predictions. RESULTS: Four clinical types
describe population health deficits/service needs. The waiver cohort is most represented
in the least impaired type (1: 47.1%), NH entrants in the most disabled (4: 38.5%).
Most prevalent in PACE was a dementia type, 3 (32.7%). PACE's blend was waiver: 0.5602
(95% CI: 0.5472, 0.5732) and NH: 0.4398 (0.4268, 0.4528). Average Medicaid attrition-adjusted
1-year payments for waiver and NH were $4,177 and $77,945. The mean predicted cost
for PACE patients in alternative long-term care was $36,620 ($35,662 and $37,580).
PACE's Medicaid capitation was $27,648-28% below the lower limit of predicted fee-for-service
payments. CONCLUSIONS: PACE's capitation was well under outlays for equivalent patients
in alternative care-a substantial savings for Medicaid. Our methods provide a rate-setting
element for PACE and other managed long-term care.
Type
Journal articleSubject
AgedCohort Studies
Costs and Cost Analysis
Fee-for-Service Plans
Female
Health Services for the Aged
Humans
Long-Term Care
Male
Managed Care Programs
Medicaid
Medicare
Middle Aged
Models, Economic
Nursing Homes
South Carolina
United States
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https://hdl.handle.net/10161/14891Published Version (Please cite this version)
10.1093/gerona/gls137Publication Info
Wieland, Darryl; Kinosian, Bruce; Stallard, Eric; & Boland, Rebecca (2013). Does Medicaid pay more to a program of all-inclusive care for the elderly (PACE) than
for fee-for-service long-term care?. J Gerontol A Biol Sci Med Sci, 68(1). pp. 47-55. 10.1093/gerona/gls137. Retrieved from https://hdl.handle.net/10161/14891.This is constructed from limited available data and may be imprecise. To cite this
article, please review & use the official citation provided by the journal.
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Darryl Wieland
Research Scientist, Senior

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