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MedPAC June 2012 Report: Recommendations on PACE Expansion

by Published On: Jun 19, 2012
MedPAC June 2012 Report to Congress

The Medicare Payment Advisory Commission (MedPAC) released its June 2012 Report to the Congress: Medicare and the Health Care Delivery System, which discusses the Program of All Inclusive Care for the Elderly (PACE) and makes recommendations on expanding PACE. 

The report states that PACE operates on a small scale, and enrollment in PACE is slow. Research indicates that the PACE program improves quality of care relative to fee-for-services (FFS). 

Medicare spending on PACE exceeds fee-for-services spending for similar beneficiaries according to MedPAC. PACE payments are based on Medicare Advantage (MA) payment rates in force prior to enactment of the Patient Protection and Affordable Care Act (PPACA) of 2010. 

Those rates are significantly higher than current law MA benchmarks.  

MedPAC recommendations

The MedPAC recommendations are:

  1. The Congress should direct the secretary to improve the Medicare Advantage (MA) risk-adjustment system to more accurately predict risk across all MA enrollees. Using the revised risk-adjustment system, the Congress should direct the secretary to pay PACE providers based on the MA payment system for setting benchmarks and quality bonuses. These changes should occur no later than 2015.  

  2. After the changes in Recommendation 1 take effect, the Congress should change the age eligibility criteria for PACE to allow nursing home–certifiable Medicare beneficiaries under the age of 55 to enroll.   

  3. After the changes in Recommendation 1 take effect, the secretary should provide prorated Medicare capitation payments to PACE providers for partial-month enrollees.  

  4. After the changes in Recommendation 1 take effect, the secretary should establish an outlier protection policy for new PACE sites to use during the first three years of their programs to help defray the exceptionally high acute care costs for Medicare beneficiaries. The secretary should establish the outlier payment caps so that the costs of all of this chapter’s recommendations do not exceed the savings achieved by the changes in Recommendation 1.  

  5. The Congress should direct the secretary to publish select quality measures on PACE providers and develop appropriate quality measures to enable PACE providers to participate in the MA quality bonus program by 2015. 

MedPAC believes that fully integrated managed care plans and Program of AllInclusive Care for the Elderly (PACE) providers offer the best opportunity to improve care coordination for dual eligibles.  


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