Aging Research Winter 2015

Long-Term Care Programs in North Carolina: Program for All-Inclusive Care for the Elderly (PACE)

Program for All-Inclusive Care for the Elderly (PACE)

One example is the Program for All- Inclusive Care for the Elderly, commonly known as PACE. The PACE program started as a pilot in California in the 1970s and has since grown to 105 organizations covering 31 states as of 2014.1

 The PACE program provides a coordinated approach to health care for very frail, most often financially needy, seniors who choose to remain in their homes and communities. In North Carolina, there are nine active PACE programs, with 1,097 enrolled, and more are scheduled to open.2

Piedmont Health SeniorCare oversees the administration of the PACE program in Burlington, which serves residents of Alamance and Caswell Counties. Like most PACE programs, the Burlington PACE site primarily serves a senior population that is financially needy and physically frail. Through the PACE model of a coordinated approach to health care, an interdisciplinary team based at the program’s day-health center manages individual plans of care for each enrollee. The team, which meets every morning to review case plans, is composed of a physician, pharmacist, nurse, social worker, dietitian, recreational therapist, rehabilitation staff member, home-care coordinator, and even a driver, who provides transportation to and from the center and to medical appointments as needed.3

While the program is not restricted to Medicare and Medicaid recipients, the vast majority of program participants are dually eligible for both Medicare and Medicaid.4 Dual eligibility means participants pay nothing to participate in the program. Medicare and Medicaid pay a capitated payment per member, per month to the PACE administrator.

A capitated payment is a flat rate paid for the care provided to Medicare- and Medicaid-eligible individuals.5 For Medicare, the rate varies based on the health care needs of the individual. A patient with comorbidity of two or more conditions means the provider receives a higher capitated payment for more complicated medical care. Under the capitated payment system, the provider assumes all the financial risk involved with each individual’s care. If the services provided exceed the individual capitated amount, the PACE administrator must cover the cost. For Medicaid, the PACE program receives a flat rate per month that does not fluctuate based on the health conditions of the individual patient, as the rate does change under Medicare.6

According to Marianne Ratcliffe, Executive Director of Piedmont Health SeniorCare, there is financial risk and accountability that is inherent in a capitated model, due to the chronic conditions and frailty common with the population served by the PACE program.

“We have $3,310 a month for each member from Medicaid, and on average we get about $2,000 from Medicare for parts A, B, and D,” says Ratcliffe. “We get about $5,300 per month for someone’s care.” Ratcliffe explains that the Piedmont Health SeniorCare program serves a typical demographic of PACE patients, with some patients having up to eight medical condi- tions and needing assistance with activities of daily living like bathing and grooming.

“We are a managed-care program with a contract with different area providers who provide services that we cannot provide directly,” says Ratcliffe. “The majority of services are rendered at our adult day-care center. Then other services are provided in the patient’s home or in the community.”

“We have contacts with all those different providers and we still coordinate and authorize those services through our interdisciplinary team and we also pay for those services. So if someone goes to the cardiologist, they’re going to bill us instead of Medicare or Medicaid.”

Analysis has shown that the PACE model can lower Medicare costs by as much as 38 percent and Medicaid costs by as much as 15 percent for comparable patient populations.7 It can also decrease nursing home admissions and mortality rates, and participants have indicated “better self-reported health and quality of life compared to non-PACE populations.”8 At the PACE program in Burlington, the staff of Piedmont Health SeniorCare have seen similar improvements in their own patients and think the better outcomes are due, at least in part, to the community setting.

“Maintaining would be success, but the fact that we’re seeing improvement in some of these scores is quite rewarding.”

“After 12 months, 54 percent of the patients had an improvement in their geriatric depression score from the time they enrolled,” says Ratcliffe. “That is largely due, not to medication, but from coming into the center, developing friendships, having the support network of the interdisciplinary team to coordinate and address their health care needs.”

Given the age and medically frail nature of the patient population base at the Piedmont Health SeniorCare’s senior day center, success is often measured in terms of maintaining the status quo, so any measurable improvement is encouraging.

“The other thing we look at is mental statuses. At three years into the program, we have 46 percent of patients who have seen improvement from enrollment, and 65 percent improvement at 12 months,” says Ratcliffe. “Maintaining would be success, but the fact that we’re seeing improvement in some of these scores is quite rewarding.” Though the PACE model has shown promising results in terms of lowered costs and improved health outcomes, the wide- spread adoption of the model has been slow in some parts of the country, due in part to a lack of public awareness about the service, limited state-level support in some areas, high initial start-up costs for nonprofit  centers, a hesitation by some seniors to participate in the adult day care model, transportation issues in rural communities, and out-of-pocket costs for middle-income individuals who are not eligible for Medicaid.9


Todd Brantley is a researcher and writer from Raleigh. Amy Brantley is a medical instructor and physician assistant at Duke Family Medicine Center in Durham.

Show 9 footnotes

  1.  Sandra Terrell, “Program of All-Inclusive Care for the Elderly (PACE) Report,” Report to the Joint Legislative Oversight Committee on Health and Human Services, N.C. General Assembly, Oct. 14, 2014. Available at http://www.ncleg.net/documentsites/committees/JLOCHHS/HandoutsandMinutesbyInterim/2014-InterimHHSHandouts/October2014,2014/ Va-Report_on_PACE-DHHS-2014-10-14-AM.PDF.
  2. Ibid. There are nine programs in North Carolina at ten sites: Carolina SeniorCare-Lexington, Elderhaus-Wilmington, St. Joseph of the Pines-Fayetteville, PACE of the Southern Piedmont-Charlotte, PACE of the Triad-Greensboro, PACE@
    Home-Newton, Piedmont Health SeniorCare-Burlington, Piedmont Health SeniorCare-Pittsboro, Senior Community Care of North Carolina-Durham, and Senior Total Life Care-Gastonia. Data as of 9/1/14.
  3. Interview with Marianne Ratcliffe, Executive Director of Piedmont Health SeniorCare, Mar. 1, 2013.
  4.  Ibid.
  5.  Tanaz Petigara and Gerard Anderson, “Program of All-Inclusive Care for the Elderly,” Health Policy Monitor (13) 2009. Available at http://www.npaonline.org/website/download.asp?id=3034&title=PACE_-_HealthPolicyMonitor_-_2009.
  6. Interview with Marianne Ratcliffe, note 3 above.
  7. Petigara and Anderson, note 5 above.
  8.  Ibid.
  9. Ibid.

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