PACE vs. Medicare Advantage: CMS is Codifying Differences

PACE Is Treated Differently Than Medicare Advantage Plans

The proposed rule clearly distinguishes PACE from Medicare Advantage (MA) plans.

But why re-state facts which are already known?

Our interpretation is that CMS is reinforcing the foundations of PACE to signal its unique role apart from MA plans.

CMS rule emphasizes coordinated care and risk

Coordinated Care:

• MA plans often allow participants to use providers outside their networks.
• PACE, on the other hand, must provide all care through its own network or through providers it has a direct contract with..

Payment and Reimbursements:

• For PACE, payments are directly tied to the intensive care needs of their participants. This is called "risk adjustment" -- the payments are adjusted for the risk of each PACE's group of participants.

• Medicare Advantage uses a broader risk adjustment model based on a more diverse -- and less frail -- population.

Why Is CMS Doing This Now?

We questioned why CMS is focusing on PACE in this rule. After all, it seems like nothing is changing.

Here are some reasons, based on our own interpretation at Generations Now:

1. Consistency in Regulation

CMS wants PACE regulations to align with Medicare Advantage and other programs. This makes it easier to manage policies across different models of care.

2. Reinforcing Core PACE Values

Sections like §460.112 remind PACE organizations about their role in delivering nondiscriminatory care. These reminders keep participant rights front and center.

3. Preparation for Future Changes

Codifying current practices lays the groundwork for future updates. By clarifying what’s already required, CMS can more easily introduce new policies later - policies that affect MA or PACE.

3 Key Sections Impacting PACE

1. Minimum Services at PACE Centers (§460.70)

This section describes the baseline services PACE centers must provide. These include primary care, therapy (physical, occupational, speech), social work services, and personal care.

Why Is This in the Rule?

CMS wants to emphasize that PACE is about coordinated, integrated care. The services offered at the PACE center are the foundation of this care. Our interpretation: including it in the rule ensures everyone understands these are non-negotiable requirements.

What Should PACE Leaders Do?

All PACE centers already meet or exceed these minimums. No action seems needed.

2. Participant Rights and Nondiscrimination (§460.112)

This section reminds PACE organizations about their duty to treat participants fairly. It prohibits discrimination based on race, gender, disability, or other factors. It also ensures participants have the right to medically necessary care.

Why Is This in the Rule?

CMS isn’t saying PACE programs have been discriminatory. Instead, this section reinforces that all PACE participants should be treated with dignity and respect.

What Should PACE Leaders Do?

Review your policies to ensure compliance with nondiscrimination rules. Train staff regularly on participant rights. Nondiscrimination should remain a visible part of your organization’s values.

Empathy is also critical in day-to-day care interactions. While we assume this as a given, anecdotal, off-the-record conversations with leadership across multiple senior care sectors tell us this can be de-prioritized in a question to move faster. In 2025, we will be offering a new program, Empathy Care Method for care, clinical and therapeutic teams. This will be offered as an adjunct to our well-received Empathy Enrollment Method.

3. Risk Adjustment and Payment to PACE (§460.180)

This section explains how CMS pays PACE organizations. Payments are adjusted based on the frailty of participants. It also requires PACE organizations to submit encounter data, which is information about the services provided to participants.

Why Is This in the Rule?

Accurate data ensures CMS pays PACE organizations fairly. Without this data, payments might not reflect the true healthcare needs of PACE participants. This, in turn, affects your financial sustainability.

What Should PACE Leaders Do?

Make sure your systems for risk scoring, and collecting and submitting encounter data are up-to-date. Risk-scoring was emphasized at several sessions of October's National Conference in San Diego. Train your team to record services accurately. This will ensure your payments are aligned with the needs of your participants. In turn, this keeps your organization on sound financial footing.

What Does This Mean for PACE Marketing and Enrollment?

Marketing and enrollment teams also need to pay attention to this rule. While the operational requirements remain largely unchanged, the emphasis on nondiscrimination and participant rights may influence how PACE programs position themselves to potential enrollees.

What Should PACE Marketing Teams Do?

Prospective participants and families are often comparing PACE to Medicare Advantage plans. By aligning your messaging with the priorities outlined in the rule, you can better differentiate your program and highlight the unique benefits of PACE.

• Highlight Participant Rights: Use your marketing materials to emphasize how PACE protects participant rights. This can build trust with both participants and their families.
• Focus on How PACE is Different: Showcase how care goes beyond what’s available through traditional Medicare Advantage plans.
• Train Enrollment Staff: Ensure that your enrollment team understands the codified requirements, especially around nondiscrimination. Give them tools and training to enable them to clearly tell the "how we are different from Medicare Advantage" story. Generations Now offers such training - get in touch if you want to talk.

What Does This Mean for PACE Day-to-Day Operations?

For most PACE organizations, this rule won’t require major changes. However, in our interpretation, it does mean that leadership should communicate support for these initiatives:

• Stay on Top of Data Submission: Accurate risk-scoring and encounter data is key. Make sure your team understands how to collect and report this data correctly.
• Focus on Nondiscrimination: Participant rights and nondiscrimination are highlighted for a reason. Make sure your policies and practices align with these principles.
• Review Your Services: Ensure your PACE center meets or exceeds the minimum service requirements. Coordinated care is the foundation of PACE, and CMS expects you to deliver it.
• Review Training and Tools: Consider if you are making assumptions on training and coaching -- is it happening? Does your leadership have the skills, experience and bandwidth for this? Generations Now provides expert PACE training for enrollment teams and -- coming in 2025 -- for front line care staff.