How similar are Medicaid’s PACE payments to its outlays on alternative long-term care for comparable patients?

Wieland GD, Kinosian B, Stallard E. How similar are Medicaid’s PACE payments to its outlays on alternative long-term care for comparable patients? Poster session presented at: American Geriatrics Society Annual Meeting; 2012 May 4; Seattle, WA.

Background. In rebalancing from nursing homes [NH], states are increasing access of NH-certified dual eligibles to aged/disabled waiver programs, and-in 29 states-PACE. Evaluations using community controls suggest Medicaid's [MA] PACE capitation exceeds its spending for alternative fee-for-service [FFS] care.By design, these studies did not compare PACE payments to outlays for patients with equivalent health deficits/needs in both waiver and NH. Here, we develop a multiattribute model of PACE-eligible admissions to waiver, NHs and PACE to test whether MA PACE payments are lower than FFS outlays for equivalent controls. Methods. Using grade-of-membership methods, we model health deficits for duals > = 55 admitted from 1997 to 2005 (n = 3,988) using SC data. Pure patient types, membership vectors, and program type prevalences are described.We calculate a PACE blend--fitting PACE between waiver and NH entrants. FFS utilization was measured to 1-year from admission and converted to attrition adjusted FY05$ outlays. The PACE blend locates FFS estimates for PACE entrants between mean waiver and NH payments, adding the waiver base cost. PACE's capitation is then compared to the expenditure prediction. Results. Four clinical types describe population health deficits/service needs. The waiver cohort is most represented among the least impaired type (1: 47.1%), NH entrants in the most disabled (4: 38.5%). PACE's highest prevalences were inTypes 3 (32.7%) and 2 (32.3%). PACE's blend probabilities are: Waiver-0.5602; 95% c.i., 0.5472, 0.5732, and NH-0.4398; 0.4268, 0.4528. MA attrition-adjusted 1-year per capita payments for waiver and NH were $4,177 and $77,945. The PACE blend is 43.98% of the difference atop the waiver base, i.e., $36,620 (95% c.i.: $35,662, $37,580). PACE's MA capitation was $27,648-28% below the lower limit of predicted FFS payments for the PACE cohort. Discussion. PACE entrants in SC comprise a 56/44% blend of the health deficits/service needs of waiver and NH patients. PACE's capitation was well below outlays for equivalent patients in alternative placement-a substantial savings for the MA program. Further, our methods provide an element of PACE rate setting which states presently lack.