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State Funding Cuts Squeeze Program to Help Seniors to Continue to Live at Home

Advocates say NJ can learn from PACE approach to bolsters its own managed-care initiative

elderly wheelchair

As New Jersey tries to increase the number of seniors covered by Medicaid who live in their own homes rather than nursing homes, state officials might look to a long-established program that’s succeeded in doing just that.

Advocates for the Program for All-Inclusive Care for the Elderly, or PACE, see it as a model for a larger statewide effort to improve delivery of healthcare and other services to seniors. But they say the program has been hurt by state funding cuts. They’re now working with state officials to ensure that the program has a stable source of funding in the future, and expect to learn from officials tomorrow what the funding level will be for the year starting on July 1.

PACE organizations receive a set amount for each Medicaid and Medicare recipient accepted into a local program. In return, the organization is responsible for all of the person’s healthcare services, providing many of those services at a central PACE facility while contracting with other specialists when necessary. PACE also transports people to and from the center, as well as to other appointments and social outings.

Teams of healthcare providers work together in the program, with a goal of enabling patients to stay in their homes. PACE will pay for nursing-home care if a participant must leave their home, but continues to use its team of providers to coordinate services for the person.

PACE is similar in some ways to the Medicaid managed-care program for long-term services that the state started last July.

But PACE differs from the state program in that the insurers managing manage care in the new state program don’t generally operate centers that participants visit frequently. In addition, the state’s managed-care program doesn’t have teams of providers who work together as closely as the PACE teams.. PACE programs also provide services – such as hot lunches at their centers, and a chaplain -- that insurers don’t provide through the state program.

To participate in PACE, applicants must qualify for nursing care, have income and assets that are within Medicaid income guidelines, and must livewithin a ZIP code zone served by a PACE program.

The concept of providing healthcare and other services for seniors at community centers as an alternative to nursing homes began in San Francisco in the early 1970s, evolved into the federally funded PACE by 1990, and reached New Jersey in 2009, when LIFE St. Francis opened a center in Hamilton.

Over the next two years, Lourdes Health System in Pennsauken, Lutheran Social Ministries of New Jersey in Jersey City, and Inspira in Vineland opened similar centers.

But PACE’s growth slowed and its future role became uncertain in 2011, as the state prepared for the comprehensive Medicaid waiver allowing managed long-term services. Since then, however, state officials have signaled that they will continue to support PACE.

That’s led to new organizations starting programs, with Beacon Health and Social Services planning to launch a PACE center in Oceanport and AtlantiCare eyeing one in Atlantic City. In addition, St. Francis and Lourdes plan to expand the areas they cover in Burlington County and St. Francis also hopes to open a new PACE center in Middlesex County.

While the state is interested in maintaining PACE, Department of Human Services officials also are seeking to bring its funding in line with the amount the state is paying for its own managed long-term services.

To that end, the state cut the amount it paid for each PACE participant by 5 percent in July 2013, and cut funding for those who receive both Medicaid and Medicare by 10 percent in July 2014.

New Jersey Hospital Association Vice President Theresa Edelstein acknowledged that New Jersey was paying PACE providers at one of the highest rates in the nation, but she noted that New Jersey is among the most expensive states in which to provide care.

Edelstein, who represents the PACE providers, also pointed out that PACE is cost-effective because it reduces the need to provide patients with more expensive care.

PACE organizations could be affected by a pair of bills advancing in the Legislature.

One of the bills, S-2750/A-4168, would require PACE operators to report their costs to the state. Edelstein said program providers don’t oppose the concept of providing more data, but said the bill would give the providers little time to calculate costs that have taken federal officials years to calculate.

The second bill, S-2751/A-4167, would require the state to notify PACE participants when they become eligible for Medicare.

Some PACE participants are between 55 and 65 years old and disabled. These residents are only eligible for Medicaid, which pays PACE less than what the program receives for people who are eligible for both Medicare and Medicaid.

At a recent Assembly Health and Senior Services Committee hearing, a resident who has received services at LIFE St. Francis’s Hamilton center for six years praised PACE.

Al Updike said he was a “shut-in” and in failing health before the program launched.

“If they didn’t come at the right time, I wouldn’t be here today,” Updike told members of the Assembly Health and Senior Services Committee this month. “I had no one to help me and they were just a life-saver for me. … They became my family.”

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