Searching for ways to control the cost of the nation’s most expensive Medicaid program, New York officials are planning for the expansion of Programs of All-Inclusive Care for the Elderly (PACE) in the state. They’re also gearing up for the development of two so-called pre-PACE’ sites, which will offer a similar range of services but will not capitate Medicare services. Additionally, six programs are being set up with money from the Commonwealth Fund that will be similar to PACE except they will not place the same requirements on enrollees. PACE requires that the elderly attend adult day care and that they be treated only by staff physicians. Those in the Commonwealth Fund programs may attend adult day care, but only if they want to, and they can continue to see their own doctors. "Those two things have been big factors that have limited PACE," said Linda Gowdy, director of the Health Department’s Bureau of Long Term Care Initiatives. "Not everyone wants to go to day care or stop seeing a doctor they have been happy with for 20 years." While the focus on day care has helped PACE reduce the amount of home care clients use (in Rochester, the amount of personal care per month dropped from 237 hours in 1987 to 137 hours in 1995), the state hopes to greatly expand the pool of people who sign up by waiving this requirement in the six sites set up under the Commonwealth Fund grant..
Expansion of two sites
PACE is a comprehensive program for frail elderly who meet the state’s nursing home placement standards. Instead of going to nursing homes, however, they are kept at home and provided with a full range of acute care, long-term care and social services. Under federal and state legislation, the program is paid a capitated rate for Medicaid and Medicare. The federal PACE pilot program is limited to 15 sites nationwide. New York’s two sites are in Rochester and the Bronx. The Rochester PACE, run by Independent Living for Seniors out of Rochester General Hospital, now has 288 enrollees, and is about to be expanded to include other parts of Monroe County. The Bronx PACE is operated by Beth Abraham Hospital. With 310 clients at its Bronx site, Beth Abraham in April opened a second facility in Westchester County, where it hopes to enroll another 250-300 seniors. Its plans also call for opening a third site in Manhattan next February, with a capacity of about 350.
The state is developing two "pre-PACE" programs so that they can be launched without federal approval. Only Medicaid services will be capitated and Medicare services will remain fee-for-service unless the state obtains a federal waiver in the future. One program should be open in October at The Eddy, a continuing care facility in Troy. Another, operated by the Loretto Nursing Home in Syracuse, is scheduled to open before the end of the year.
Partial capitation
"For a lot of long-term care providers, getting into full capitation can be rather a daunting undertaking," Ms. Gowdy said. Capitating Medicaid rates while Medicare remains fee-for-service,"will give providers a chance to get their feet wet," she added.
The built-in limitation, of course, is that it will be difficult for the programs to control hospital costs unless Medicare is capitated, too. The sites to be established with the Commonwealth grant, which are
scheduled to begin providing services in the fall, will be operated by the Visiting Nurse Service of New York, serving Queens, Manhattan, Brooklyn and the Bronx; the Hebrew Hospital Home, serving the Bronx and Co-op City; the Good Samaritan Hospital/Better Health Plan of Suffern, serving the mid-Hudson Valley region; the Long Island Home LTD, of Amityville, serving Nassau County; the Visiting Nurse Association of Schenectady, serving Schenectady County; and the Mohawk Valley Network Inc., of Utica, serving Oneida County.
A recent Health Department study of the Rochester PACE program showed agency officials that PACE enrollees use far fewer services. The study looked at utilization by nursing home-certified clients both inside and outside the program. PACE seniors were one-third less likely to be admitted to the hospital than a comparable group not in the program: PACE clients had 409 hospital admissions annually per 1,000 enrollees, while the rate was 628 admissions per 1,000 for nursing home-certifiable people outside the program. Those who were hospitalized also had shorter lengths of stay. PACE clients spent 3,240 Medicare hospital days per year per 1,000 enrollees—or about 8 days per admission. The rate outside the program was 10,312 days in the hospital per 1,000 people—nearly 17 per admission.
"There’s also a real incentive to keep people as well as possible because, if that person has to be put in the hospital, the program has to bear the cost.," said Ms. Gowdy.
While generally applauding these moves, many in the long-term care industry say the state still is far behind the rest of the country in encouraging innovative solutions. Carl Young, executive director of the New York Association of Homes and Services for the Aging, the trade group for voluntary and not-for-profit long-term care providers, complained that the state remains focused on only the most comprehensive approaches. What that is leaving out, he argued, is a wide range of programs that can be run more cheaply and still limit the strain on Medicaid.
As a prime example, he pointed to the state’s law regulating life care communities. Around the country these have become viable alternatives to Medicaid-funded long-term care. Seniors who join them pay varying entry fees depending on the
model of the program. Some provide lifetime nursing home coverage, while others may only guarantee six to nine months. In fact, Mr. Young said, the communities with limited nursing home coverage are the most popular nationwide because they’re the most affordable. These communities reduce Medicaid costs because many participants either never use more than the limited nursing home coverage or, if they exhaust it, they have at least delayed their entry into Medicaid. New York, however, permits only full-coverage life care communities—and puts substantial fiscal roadblocks in the way of any provider wishing to develop one, according to Mr. Young.
This article was written for State Health Watch by Harvey Lippman, a reporter and editor based in Albany, NY.
New York set to expand PACE programs for frail elderly
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