InnovAge, the only publicly traded Program of All-Inclusive Care for the Elderly company, revealed last week that it continues to grapple with regulatory challenges. But its stumbling blocks of late are not curbing interest in PACE. The program — funded by Medicare and Medicaid — has continued to grow in recent years, leading states to explore new and innovative ways to bring PACE to a greater share of residents.
“If you look at the success under COVID, like less death rates and good patient outcomes and patient satisfaction and not as severe in isolation — if you’re a state, you’d want to have those programs,” Jade Gong, a senior advisor at healthcare research and advisory firm ATI Advisory, said in an interview with McKnight’s Home Care Daily Pulse. “Because it’s successful.”
These successes were highlighted in a recent study that found that PACE organizations were able to respond and adapt quickly during the COVID-19 pandemic, and effectively expanded home-based healthcare when providers’ capacity concerns were highest. Now, following these achievements, states are exploring how they can bring PACE to more beneficiaries, especially those living in rural communities.
As a sign of growing interest in rural-serving PACE programs, the National Advisory Committee on Rural Health and Human Services released policy recommendations in March 2023 outlining ways to expand PACE activity in rural places. And other groups, including the Bipartisan Policy Center, have drawn attention to the need for PACE programs to increase capacity, reach and enrollment as demand continues to rise.
There are currently more than 150 PACE organizations operating in 32 states and the District of Columbia, according to the National PACE Association. Most recently, Connecticut passed legislation authorizing the establishment of a PACE program in the state.
Growth challenges
But despite steady development, PACE programs face many of the same challenges that are present across the healthcare industry, making expansion into rural communities tricky, Gong said.
“PACE programs struggle to hire like everybody else, and it’s even harder in rural areas. And especially you need a lot of home health workers in PACE, which are really hard to get,” Gong noted. “PACE programs have tended to be a desirable place to work, but it is hard to hire all the different kinds of staff you need and the home health aides are difficult. … So you definitely have to factor it into whether or not you think you could stand up a program and staff it.”
Movement among for-profits
Another major hurdle to PACE growth Is the ability to raise capital. That’s where for-profit entities come in — and have contributed to driving the program’s expansion, experts noted. Among these entities are WelbeHealth, a California-based for-profit PACE organization that recently opened a new center in San Jose, CA.
“Many for-profit PACE organizations are investing in PACE growth.” Shawn Bloom, president and chief executive officer of the National PACE Association, said in a statement to McKnight’s Home Care Daily Pulse. “In general, PACE continues to grow and thrive … PACE has a bright future, which will get even brighter when Congress removes several barriers to expansion.”
InnovAge has also continued to expand despite facing ongoing regulatory roadblocks. In 2021, the Centers for Medicare & Medicaid Services froze enrollment at InnovAge centers in Colorado and California. While it is free from sanctions, it continues to deal with minor deficiencies. Still, the company has doubled down on a growth strategy that includes acquisitions and a slew of new expansion centers.
