PACE Growth in 2021: How PACE Grew Despite Industry Challenges

PACE Growth in 2021: How PACE Grew Despite Industry Challenges

2021 was a difficult year for senior living and services providers. Due to the COVID-19 pandemic, many organizations continued to struggle to increase census. In this post, we will explore how PACE continued to grow despite many obstacles, and how PACE will see significant expansion over the next few years.

PACE Philosophy and New 2021 Programs

PACE centers 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. By providing or coordinating all needed medical and supportive services through an interdisciplinary team (IDT), PACE programs are able to provide the entire continuum of care and services to older adults with chronic care needs, while enabling them to maintain independence in their homes for as long as possible. (For a brief overview of the PACE program, check out our infographic on the basics of PACE.)

The number of new PACE providers grew by six programs in 2021. It typically takes approximately 18–24 months to start a program. Needless to say, no provider that opened in 2021 opened in ideal circumstances.

Figure 1 shows the number of current PACE providers by time frame of opening.

Figure 1: PACE Programs by Time Frame Opened

Source: National PACE Association (NPA)

Since 2016, there has been an average of 4.8 new programs opened each year. If we go back as far as 2011, there has been an average of 6.4 new programs opened per year, putting 2021 at an average year, despite the expanded difficulties of opening during a pandemic. In January 2022, an additional two programs have already opened, putting 2022 on pace for a year with substantial growth.

Dual-Eligible Enrollment Growth

All senior services providers were impacted by COVID-19 in 2020 and 2021. Understandably, most providers experienced a decline in census and have struggled to regain pre-COVID-19 levels. One exception to the decline in census is PACE. Even with increased challenges in service delivery, dual-eligible enrollment increased from January 2021 through December 2021. Figure 2 shows the month-to-month dual-eligible enrollment.

Figure 2: Dual-Eligible PACE Enrollment in 2021

Source: Centers for Medicare & Medicaid Services (CMS)

With the exception of a small January–March dip, every month increased enrollment from the prior month. In fact, dual-eligible enrollment increased by 6.0 percent from January through December.

Some of the PACE dual-eligible enrollment growth is attributed to the addition of six new programs in 2021. However, that only accounts for a small percentage of the overall increase. Figure 3 shows how the 134 programs that operated during all 12 months of 2021 fared between January and December.

Figure 3: 2021 Dual-Eligible Enrollment Change in Programs Open All 12 Months

Source: CMS

As shown on Figure 3, for programs that were operating in January, most experienced an increase in census throughout the year.

  • Of the 49 programs that experienced a decline in census, the average decline was 14 enrollees, while the median decline was 11 enrollees.
  • Of the 85 programs that experienced an increase in census, the average increase was 40 enrollees, while the median increase was 21 enrollees.
  • Overall, the 134 programs that were open on January 1, 2021, experienced a cumulative growth of 5.5 percent through December.

Figure 4 shows annual program growth for programs that were open for the full 12 months of the prior five years.

Figure 4: Annual Growth of Programs Open Full Year 2016–2021

Source: CMS

As shown on Figure 4, if we eliminate any dual-eligible growth resulting from the opening of new programs, PACE programs experienced a cumulative annual growth of between 8.4 percent and 9.5 percent between 2016 and 2019. Although 2020 saw a significant decline in growth from prior years, PACE still experienced overall growth during the pandemic. Growth in 2021 did not quite hit pre-COVID-19 levels but was higher than 2020.

How Has PACE Grown When Other Providers Have Not?

PACE is an at-risk model, which means the program is responsible for directly providing or coordinating and paying for all of its participants’ care needs. Unlike traditional Medicare Fee-for-Service (MFFS), PACE programs have flexibility in how capitation dollars are used to provide the services their participants need. With PACE centers being closed or limited to only necessary clinic visits, programs have had to be creative in developing new ways to care for participants. These creative measures have included redefining staff responsibilities, utilizing telehealth technology, and shifting to delivering care and meals in the home rather than in the PACE center.

If there is a silver lining for PACE programs during this pandemic, it is that the ingenuity displayed by PACE leaders may reveal new approaches to the PACE model of care that will continue to evolve after the COVID-19 pandemic runs its course.

Future Growth of PACE

In response to the challenges of operating in a COVID-19 environment, many states have encouraged the expansion of PACE. Existing PACE states such as Louisiana, Maryland and Virginia released Requests for Proposals (RFP) for PACE expansion, while new states such as Illinois released its own RFP. The increased federal funding for Medicaid home and community based services as part of the American Rescue Plan signed into law in March 2021 has caused many other states to consider investing in PACE development or expansion.

COVID-19 has highlighted the capabilities of the PACE model, and interest from organizations and financial investors in sponsoring PACE has accelerated, which is an indication that significant growth in new PACE plans is coming within the next few years. Figure 5 shows the number of programs operational as of January 2022.

Figure 5: PACE States and Provider Locations as of January 1, 2022

Source: NPA

For More Information

As a National PACE Association Technical Assistance Center, Health Dimensions Group (HDG) has successfully assisted many organizations with PACE market and financial feasibility studies, program development and implementation support, and operational improvement. If you would like to learn more about how HDG can assist you in exploring PACE as a solution in today’s challenging health care environment, please contact us at 763.537.5700 or info@hdgi1.com and visit our website.

 

Authored by: Colin Higgins,
Director, Analytics and Research

Tom Stitt,
VP, Consulting Services

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