Programs for All-Inclusive Care for the Elderly (PACE) plans are programs aimed at keeping low-income older adults living in the community and out of nursing homes, providing home care, prescriptions, meals, and transportation to participants. The Centers for Medicare & Medicaid Services (CMS) recently proposed changes to the risk score model used for PACE (which determines the calculation for how many Medicare dollars PACE gets) that will create funding vulnerabilities in the Medicare rate. If approved, this would likely mean PACE programs get significantly lower funding amounts from Medicare than under the current model. The final notice is expected to be released in April 2025. If approved, this change would be fully phased in by 2029.
PACE enrollees, as compared to enrollees in Medicare Advantage plans, disproportionally have conditions that will no longer be risk-adjustable, such as depression, leading to an across-the-board drop in risk scores. Along with the reduced funding for PACE programs, this risk model change will create data submission issues for PACE organizations and their vendors. When health plans, who are much more risk-score focused in general than PACE plans, underwent this same change, risk scores dropped by between 5%-20%. If PACE programs don’t fix their data submissions in 2025, they’ll lose money in 2026 and beyond.
To sustain and grow, PACE leaders must understand and plan for the change to v28 risk scores. HMA’s team of consultants and our actuaries from Wakely, an HMA Company, have put together an analysis to help PACE plans understand and prepare for the transition:
- HMA will create reports showing the current (v22) risk score, the proposed (v28) risk score, and the impact by diagnosis category to help with potential recapture efforts.
- Identify data submission problems and suggest strategies for fixing them.
- Outline potential financial and operational adjustments uncovered during the analysis.
HMA has found that this the change in the process of diagnosis submission is a blind spot for many PACE plans and may be more critical to mitigate than the impacts from the risk adjustment model change.
HMA & Wakely will be hosting a booth at the National PACE Association Spring Policy Forum in Washington, DC on March 17 and 18. If you are attending, we hope you will visit us there. If you would like help understanding the potential impact to your PACE organization, contact us about developing an analysis to help you respond to these changes.
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For more information, contact our experts below or HMA Managing Principal Don Novo.
