Early Alignment in the Enrollment Process Helps Financial Sustainability and Participants' Success
Today, the Centers for Medicare & Medicaid Services (CMS) finalized a rule that affects every PACE organization in the country. Starting in 2026, all PACE plans will be required to submit diagnosis data used for risk adjustment to CMS on a schedule.
Risk scores influence the monthly capitation rate that CMS pays for each participant. Those scores depend on complete and accurate diagnosis capture. And that capture doesn’t start with IDT. It starts at intake.
That’s why this rule is an opportunity to rethink how PACE enrollment, assessment, and documentation processes connect. If the team is trained and aligned early, you’ll capture the complexity of participant health more completely. This means the organization gets paid accurately, and not underpaid for months at a time.
What the 2026 CMS Rule Change Means for PACE
PACE organizations have long reported diagnoses to determine risks scores for participants.
Now, CMS has made it a formal rule. PACE organizations have been working towards this ruling for the past few years.
The formal difference now is that PACE must have solid notes to back up every diagnosis (and the complexities of each diagnosis) and each "encounter" (typically a visit with a clinician or therapist).
If it’s not done properly, programs could lose money or face penalties.
PACE Risk Adjustment Now Aligns with Medicare Advantage
Consistency: This long-expected rule aligns PACE with what Medicare Advantage and other risk-based models of care have already been doing. CMS wants risk adjustment activities consistent across all care models. This makes CMS's work - evaluations, audits, quality measurement - more consistent.
Complexity: PACE has more complex participants than Medicare Advantage. CMS wants payments to reflect participant complexity. And they want programs to prove that complexity through documentation.
How the New CMS Rule Impacts PACE Risk Scores and Capitation Payments
Each year, every PACE participant starts with a clean slate.
Risk scores reset every January. CMS uses PACE's submitted diagnoses to calculate a new risk score, first through an initial sweep in early spring, then a mid-year adjustment in summer, and a final reconciliation the following January.
Diagnoses from last year don’t roll over. They need to be re-documented and re-submitted>.
So the sooner you can identify and code chronic conditions in the new year, the more accurate—and stable—the PACE's capitation payments will be.
This makes the intake process more important than ever. And it shifts the focus upstream to pre-enrollment.
How PACE Enrollment Teams Can Improve Diagnosis Capture
IDT is often pressing enrollment for more information. And often, we find that enrollment teams don't thoroughly understand why they are hearing these comments.
Here's what enrollment teams need to know:
The 30-day window after enrollment is when the IDT completes the initial assessment and care plan. That deadline is almost always met.
But, if the team doesn’t have full medical records or background information, some chronic conditions may not be documented completely -- the depth of the complexity of a chronic condition can be missed. The participant still gets the care they need, but the risk score may not reflect their true health status.
If a condition isn’t confirmed early, it may not be included in the data CMS uses to calculate payment for the year. Diagnoses added later don’t always count toward funding. That’s why it’s important for enrollment teams to gather outside records and flag likely conditions up front. It helps the IDT build a more accurate picture and supports the resources needed to care for the participant. Pre-enrollment teams are uniquely positioned to solve this.
1. Request and collect full medical records early
Don’t stop at verifying eligibility or recent PCP notes. Go deeper. Send a human being to visit doctors' offices when necessary!
- Hospital and SNF discharge summaries
- Specialist consults (cardiology, nephrology, psychiatry)
- Pharmacy records showing high-risk meds
- Behavioral health notes
- Home health or hospice records
Put workflows in place to request these records immediately after initial contact. We recommend having one person on the team dedicated to securing medical records as their sole or half-time responsibility. This early lift improves both eligibility decisions and downstream assessments.
2. Educate intake staff on the basics of risk adjustment
They don’t need to know CMS coding rules, but they should understand:
- Chronic conditions = more resources = higher payment
- Diagnoses must be re-captured each year
- Documentation affects both care and revenue
Screen for likely HCC conditions at intake
Enrollment teams are not expected to be level-of-care nurses. But PACE can do better on training non-clinical intake team members on the background of common conditions, and how to look for clues.
HCC stands for Hierarchical Condition Category. It’s a system Medicare uses to group serious or chronic health conditions that require more care and higher costs, so plans can get paid more for participants with greater medical needs. For example, a participant with severe malnutrition may carry a higher HCC weight than one with well-managed congestive heart failure, even though heart failure sounds more serious. This is because malnutrition is a sign of other risks: frailty, poor healing, higher hospitalization chances... all things that drive higher expected care levels.
- Insulin or SGLT2 inhibitors (diabetes)
- Mobility issues or assistive devices (neurologic or musculoskeletal diagnoses)
- Memory concerns, depression, anxiety
- Supplemental oxygen or nebulizer use (COPD, CHF)
Aside: Do you know that, under DHCS Rules, PACE enrollment and marketing teams (but not the LOC nurse) are forbidden from asking potential PACE participants about their medical diagnoses? Which shows how outdated the marketing rules are.
3. Tighten the handoff between enrollment and IDT
Make sure IDT receives a clear picture, not just eligibility paperwork.
How enrollment captures notes, detail and the participants' story and goals can make a difference.
Watch our video about creating a faster process to set up IDT for success:
PACE Risk Adjustment Strategy: Action Steps for Executive Leadership
1. Audit your current intake and enrollment process
Are records being gathered? Are complex conditions being flagged? Is intake aligned with the IDT?
2. Embed clinical documentation support
Close documentation gaps quickly.
Choose an EMR for ease of use; it's not always Epic.
3. Educate providers on why this matters
Connect the dots between risk scores and care resources. Make it real for frontline staff.
4. Monitor diagnosis capture early and often
Set monthly targets. Track open gaps. Don’t wait until Q4 to catch up.
5. Align your risk adjustment process with CMS deadlines
Plan around CMS’ March, September and January deadlines.
If you want help reviewing your intake workflows and setting up a risk-adjustment tools for enrollment, let’s talk. There’s a lot to gain if you start upstream.