Effect of PACE on Costs, Nursing Home Admissions, and Mortality: 2006-2011

Effect of PACE on Costs, Nursing Home Admissions, and Mortality: 2006-2011

Published: Jan 01, 2014
Publisher: Washington, DC: U.S. Department of Health and Human Services, Office of the Assistant Secretary for Planning and Evaluation, Office of Disability, Aging and Long-Term Care Policy

Robert Schmitz

Randall Brown

Key Findings
  • Using the matched comparison group comprising both HCBS waiver enrollees and NH entrants, actual monthly capitated Medicare expenditures for PACE enrollees during successive six-month intervals were mostly similar to the predicted expenditures they would have incurred had they been in fee-for-service Medicare, with significant differences in only a few intervals. However, actual capitated Medicaid expenditures on PACE enrollees significantly exceeded predicted expenditures in all intervals, with the magnitude of the difference remaining stable over time.
  • Results were broadly similar using a matched comparison group composed of HCBS waiver enrollees alone, but the estimated gap in expenditures—with higher actual payments under PACE—was larger, especially for Medicaid payments. State-specific findings uncovered several differences in the Medicaid expenditure results.
  • PACE enrollees experienced significantly better outcomes than the comparison group, as measured by mortality and long-term NH stays. 

We examined the effects of the Program of All-Inclusive Care for the Elderly (PACE) on Medicare and Medicaid expenditures, use of nursing home (NH) services, and mortality. Using a matched comparison group design based on propensity score estimation, we matched new PACE enrollees during 2006–2008 in eight states to two comparison groups composed of: (1) Medicare beneficiaries who were either new recipients of HCBS waiver services or new NH entrants in the same year the new PACE enrollee entered that program and (2) Medicare beneficiaries who were new recipients of HCBS waiver services alone.

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