Pictured above: Loretta McNamara moved from a nursing home to this assisted living facility in Pasadena with the help of PACE, a program that allows participants to leave their homes a few times a month for recreation, checkups, treatments, and physical or occupational therapy. (Credit: Jesse Bedayn)

This story appeared on the Sacramento Bee, Modesto Bee, Fresno Bee, Merced Sun-Star and San Luis Obispo Tribune on May 9, 2021.

By Jesse Bedayn (’21)

The coronavirus pandemic and an infusion of new federal money could accelerate California’s expansion of programs that help people age at home.

The virus exposed a need for alternatives to nursing homes, where more than 9,000 people have died from COVID-19 in California alone. Before the pandemic, the Newsom administration was working on the state’s first Master Plan for Aging, which was released in January and prioritizes community programs that would eliminate the need for nursing homes for many people. The virus’ swift spread through nursing facilities adds urgency to that shift. And President Joe Biden’s plan to spend billions on community-based programs could ensure that it happens.

Among the Medi-Cal-funded options that stand to gain is Programs of All-Inclusive Care for the Elderly, which Biden’s plan specifically mentions. It started in San Francisco 50 years ago and has grown to 272 centers across 30 states. Each PACE program revolves around an adult day care center, where participants are bussed from their homes a few times a month for recreation, checkups, treatments, and physical or occupational therapy.

PACE isn’t mentioned by name in Newsom’s Master Plan but was cited by those formulating the initiative because it provides a host of community-based services for older adults and costs considerably less than nursing care. Because PACE participants usually live at home and not in communal settings, they also fared far better during the pandemic than their peers in long-term care facilities.

While over 70% of California’s skilled nursing home residents contracted the coronavirus, only about 17% of those enrolled in PACE did. Still, PACE is a relatively small player in senior care and largely unknown. Only 12,000 of an estimated 180,000 Californians who could qualify for PACE are actually enrolled, and programs rarely have waiting lists, said Peter Hansel, executive director of CalPACE, an association representing nearly two dozen PACE organizations.

AARP, whose members overwhelmingly say they want to age at home, registered its support for PACE with the Centers for Medicare & Medicaid Services. Nina Weiler-Harwell, AARP California associate state director, would like to see the program grow.

“Unfortunately,” she said, “it hasn’t been expanded very widely.”

This year, two new PACE organizations have opened in California and the state Department of Health Care Services is considering expansions to a dozen existing centers. The president’s American Rescue Plan, which passed in March, includes $12.7 billion to shore up home and community-based programs for seniors and disabled people. And in his proposed infrastructure package, Biden is asking Congress for $400 billion to expand Medicaid access to services that help older and disabled Americans live more independently.

Hansel hopes the new federal dollars will go to services like telehealth — used throughout the pandemic — and workforce recruitment and training, which would help expand current PACE programs. DHCS, however, has yet to determine how the new money will be spent.

“President Biden believes more people should have the opportunity to receive care at home, in a supportive community, or from a loved one,” the White House said in a March 31 fact sheet about the latest proposal.

LOWER COSTS THAN SKILLED NURSING HOMES

PACE is one of several resources in California that offer varying levels of help to seniors in their communities. Others include In-Home Support Services, which funds a caregiver for those who live independently. And the Multipurpose Senior Services Program, which offers an array of resources such as meals, transportation and counseling. PACE is for people with multiple medical conditions who need monitoring but not the intensive care a nursing home would provide.

It acts as both a medical provider and insurer, costing the state about $1,000 less per person on average each month than skilled nursing care, in part because of a funding model that PACE’s founders developed in the 1970s. While Medi-Cal pays nursing homes for specific services that include room and board, skilled nursing and help with daily activities, it reimburses PACE a lump sum to cover every facet of a person’s care. And if a PACE participant transitions to a nursing home, PACE pays for that as well, along with continuing to coordinate the person’s care.

While PACE may be an alternative for some, there are many barriers to joining. A bureaucratic morass awaits applicants. First, they must receive a determination from the state Health Department that they need “nursing home level care” — a complex assessment that takes at least five days.

They also must be insured by Medi-Cal, otherwise out-of-pocket costs can be prohibitive. Even then, eligible seniors must live near one of the 20 PACE sites in California, which tend to be in and around cities. The biggest drawback for many participants is the requirement that they switch to a PACE doctor and leave behind the primary care physicians they’ve come to trust.

The whole process is often too long for hospitals to wait when discharging a patient, which is one way seniors end up in long-term care facilities. Nursing homes are a simpler, easier and more familiar solution. That leaves PACE organizations to rely more on word of mouth to steer seniors to their programs.

“Your physician is not going to recommend those to you because your physician doesn’t know they exist,” said Debbie Toth, CEO of Choice in Aging, a nonprofit that transitions seniors out of nursing homes. “Now your only option for living is in the most expensive place for taxpayers and the last place that anybody wants to live.”

A LIFE TRANSFORMED BY PACE

Loretta McNamara wouldn’t have chosen a nursing home for herself. But it was presented as her only option as she aged and struggled to pay the rent. Forced to use a wheelchair since suffering a brain hemorrhage when she was a teenager, McNamara, 59, felt trapped last August in a Los Angeles County long-term care facility that was under lockdown because of the coronavirus pandemic.

“Could you help me?’’ she asked her social worker.

Within weeks, McNamara’s life was transformed. PACE helped move her into an assisted living facility in Pasadena, where she had a roommate and could come and go as she pleased. A PACE medical team — a dozen people representing multiple specialties — tailored a care plan to McNamara’s needs, delivered through telehealth appointments and in-person checkups.

“I feel freer,” McNamara said in an interview in November.

In the last decade, CMS and state officials have allowed for-profit PACE organizations to form. But under PACE’s reimbursement setup, programs have to improve or at least stabilize the health of their patients to see savings and make money.

Nursing homes are under no such obligation. The reimbursement model they use helps explain why the pandemic hit those places hard, said Mike Dark, a lawyer for California Advocates for Nursing Home Reform. Nursing homes, he noted, have a financial incentive to maximize the number of residents and reduce the number of staff. That set the stage, he said, for devastating COVID-19 outbreaks.

Because of the way the system is structured, nursing home residents become “a bundle of diagnoses in a bed and a revenue stream,” he said. “ And that’s why they die so quickly.”

Under the Master Plan, $7.5 million will be dedicated to presenting options to seniors and disabled people through website improvements and resource centers where counselors will explain a range of choices. The plan also will build on pandemic initiatives to fund more affordable housing — a key element for PACE participants.

Unforeseen medical and life emergencies often drive people into short-term nursing care, where costs can reach $15,000 a month and Medicare only covers the first 100 days. After that, residents often pay out-of-pocket unless they qualify for Medicaid. Cash-strapped, many can no longer afford to pay their rent or are evicted from affordable senior housing, where waitlists can be up to five years.

With medical advances extending life expectancy, many more people are destined to spend their later years in nursing homes unless better options emerge.

“Should we be relying on institutional care for our seniors,” asked Tim Lash, executive vice president of West Health, a nonprofit dedicated to helping seniors age in place. “Or should, in every case, we try to find ways that we can maintain their dignity, quality of life, and independence in the community?”

Those were the questions Marie-Louise Ansak, a social worker, and Dr. William Gee, a public health dentist, tackled when they started the precursor to PACE in San Francisco in 1971. Inspired by British day hospitals where patients returned home at night, Ansak and Gee collected a team of health care professionals to look after patients at an adult day care center they established.

Ansak negotiated a unique funding model with Medicare and Medicaid that enabled the team to offer the non-traditional treatments that were preferred by many in the immigrant community. The team had a flexible pot of money to use as it deemed necessary for each patient, which might mean an X-ray for one, acupuncture for another, or new carpets to eliminate a tripping hazard.

HEFTY UPFRONT INVESTMENT IS NEEDED

With this funding model, however, came one catch: The center, as the patient’s health insurer, would be liable for every facet of patient care. If the medical team let a poor diet exacerbate a patient’s diabetes or let an infection get out of hand, it would be on the hook for medications or hospitalization. That provided incentive for more preventive care.

The concept eventually was embraced by several foundations that funded new programs and helped spread PACE across the country.

By their nature, however, PACE programs cost a lot to launch and aren’t highly profitable for the individuals or groups involved. Establishing a new program requires state and federal agencies to agree that the target community is underserved and in need of PACE’s services.

Hefty upfront investment is needed to establish an adult day care center, hire staff for it and buy vans to shuttle participants to and from the centers. Fledgling programs must meet 130 conditions in a readiness review before they can enroll their first patients, which can take more than two years. Still, few that make it to through the process get denied, said Hansel, of CalPACE.

Government regulations also limit how such programs can advertise services. Like nursing homes, community-based programs are barred by state regulations from reaching out to seniors unsolicited. Such rules are in place to protect seniors from fraudulent messaging and a barrage of advertisements. But without the name recognition of nursing homes, community programs struggle to gain public awareness.

PACE organizations, with bipartisan support in Congress, are pushing state health departments and the CMS to roll back constricting regulations on enrollment to make the programs more accessible.

Toth, for one, argues that the pandemic brings the best hope for change. With nearly a quarter of all U.S. COVID-19 deaths linked to nursing homes, “the picture is painted,” Toth said. “If we don’t make changes now, it’s not going to happen.”

Jesse Bedayn writes for Berkeley Journalism’s Investigative Reporting Program.

This story was made possible by a grant from The SCAN Foundation.