Journal of Gerontological Nursing

Public Policy 

A Case Exemplar for National Policy Leadership: Expanding Program of All-Inclusive Care for the Elderly (PACE)

Tara A. Cortes, PhD, RN, FAAN; Eileen M. Sullivan-Marx, PhD, RN, FAAN


In November 2015, President Obama signed the Program of All-Inclusive Care for the Elderly (PACE) Innovation Act, which expands a proven model of care to serve high-cost and high-need populations. Specifically, the law provides the Centers for Medicare & Medicaid Services with the authority to waive Medicaid requirements that could not be waived without additional statutory authority. Those requirements include the age of the beneficiary to be served and nursing home eligibility as a condition for PACE enrollment. The law also allows providers and other entities who are not current PACE providers the opportunity to become PACE providers and serve a predominately dually eligible population that has high needs and high cost through a coordinated, integrated model. The current article describes the impact of nursing on the legislation and policy that has shaped the evolution of the PACE program for more than 40 years. [Journal of Gerontological Nursing, 42(3), 9–14.]


In November 2015, President Obama signed the Program of All-Inclusive Care for the Elderly (PACE) Innovation Act, which expands a proven model of care to serve high-cost and high-need populations. Specifically, the law provides the Centers for Medicare & Medicaid Services with the authority to waive Medicaid requirements that could not be waived without additional statutory authority. Those requirements include the age of the beneficiary to be served and nursing home eligibility as a condition for PACE enrollment. The law also allows providers and other entities who are not current PACE providers the opportunity to become PACE providers and serve a predominately dually eligible population that has high needs and high cost through a coordinated, integrated model. The current article describes the impact of nursing on the legislation and policy that has shaped the evolution of the PACE program for more than 40 years. [Journal of Gerontological Nursing, 42(3), 9–14.]

The Program of All-Inclusive Care for the Elderly (PACE) is one of the oldest and most successful nursing home alternative models that provides comprehensive community-based team care that is family- and person-centered and paid for through integrating Medicare and Medicaid capitated or global payment. PACE has been the only Medicare program that has required and paid for interdisciplinary team care using a capitated payment so that nursing home–eligible older adults in the program receive individualized team-based care requiring that all members of the team, including the patient and family, approve the plan of care. It is a full-service model that covers the cost of primary care, hospitalization, emergency visit, approved specialty services, rehabilitation, home care, medication, and treatment, as well as social and recreation services in a community center environment for older adults who live at home but would otherwise be in nursing home care.

The PACE model serves as an excellent example of how new models of providing care can move from an idea about meeting the health care needs of a specific population to becoming a national program serving diverse populations within a capitated or global payment structure. From an idea based on the needs of frail older adults originating in the Chinese American community in San Francisco, California, in 1971 in the On Lok Program, the PACE model was established through the 1970s and 1980s with foundation and private partnerships to fully develop the service and financial model. In 1990, waivers from Medicare and Medicaid were made available to operate the first PACE programs; by 1996, 21 PACE programs were implemented in 15 states. The results of the high satisfaction for PACE members and families and the quality of care and cost savings belied the lack of full expansion of PACE over the past several decades (National PACE Association, 2016).

To meet the nation's Triple Aim of better health and better outcomes at lower cost, and with the development of the Medicare and Medicaid Coordination Office (MMCO) through the Affordable Care Act (ACA), promoting the expansion of PACE became a priority at the national level and in a number of state governments. The PACE Innovation Act was signed into law by President Obama in November 2015 to expand to other populations and provide coordinated health care within a Medicare and Medicaid capitated payment structure. A review of the factors and processes to implement and expand this program over the past 40 years demonstrates the way in which a model can move from an idea to reality.

Nursing has been central to the PACE care model since its inception, yet few nurses in long-term care are acquainted with the model or can speak to its benefits. Nonetheless, nursing leaders have been crucial in its development in both policy and operational expansion. In the current article, the authors highlight the significance of the PACE model as a best practice for long-term care in the community, which is advocated by nursing.


In the 1970s, On Lok, a pioneering senior day health center in San Francisco, recognized the need to provide an alternate model of care for frail older adults, as there were insufficient nursing home beds to accommodate all those needing long-term support services, and many members of the mostly Asian population served by On Lok did not wish to place their loved ones in institutional care. On Lok worked with legislators to frame a bill to provide community-based care to this population under a managed long-term care plan. The program aimed to provide team-based coordinated care in primary, acute, and home-based care settings to keep individuals out of institutions as long as possible. In 1983, Congress passed legislation to authorize a demonstration for PACE. In 1997, Congress authorized PACE as a permanent program as part of the Balanced Budget Act, and in 2001, the Centers for Medicare & Medicaid Services (CMS) recognized the first PACE provider. The program now has 116 sites across the country serving 32,000 enrollees in 32 states and is recognized as a successful model of integrated capitated care.

This national program offers fully integrated Medicare and Medicaid services for dually eligible adults 55 and older who meet the criteria for nursing home level of care, but are able to live in the community at the time they enroll. Through capitated financing to provide an integrated seamless approach to health care by an interdisciplinary team across the care continuum, PACE provides coordinated acute, chronic care, and long-term services and supports, resulting in greater longevity, better health outcomes, and a better quality of life. Importantly, PACE has demonstrated that it can keep individuals in the community and delay admission to institutions for an average of 2 years. (Temkin-Greener, Bajorska, & Mukamel, 2008).

Current PACE programs are designed around a provider-driven, capitated, and per-member per-month model. The model is characterized by two elements. One is an adult day care center to which older adults can be transported and receive medical care and social services as well as have opportunities for socialization throughout the day. The second is an interdisciplinary team comprising at least primary care providers, nurses, social workers, nutritionists, therapists, care attendants, drivers, and a network of consulting services, including podiatry, psychiatry, cardiology, and dentistry. Evaluations have demonstrated that PACE enrollees have increased use of ambulatory services, lower rates of nursing home use and in-patient hospitalization, lower rates of functional decline, and better reported health status and quality of life than among a comparison population (Chatterji, Burnstein, Kidder, & White, 1998; JEN Associates, 2014). Medicare Payment Advisory Commission (MEDPAC; 2012) reports have shown that cost-effectiveness is related to volume, with larger programs demonstrating greater sustainability than smaller ones.

As PACE is an integrated Medicare and Medicaid payment model, most PACE participants are eligible for both Medicare and Medicaid (i.e., dually eligible); however, a small percentage of enrollees are Medicare eligible only and they pay the Medicaid portion out-of-pocket. The Medicare/Medicaid population is characterized as one of the more frail and vulnerable populations incurring the largest cost per capita to CMS. Per capita spending for Medicare fee-for-service beneficiaries demonstrates that spending on dually eligible individuals is significantly higher than Medicare-only beneficiaries and grows significantly with the number of chronic conditions. Individuals with six or more chronic diseases who are dually eligible account for $37,863 per capita, whereas those who are Medicare only account for $30,109. Approximately 40% of dually eligible individuals are younger than 65, and they account for slightly less than one half of all health care expenses incurred by the dually eligible population (CMS, 2012). Most have disabilities and, until recently, have had limited access to coordinated integrated care. Adults with disabilities account for 39% of all emergency department visits, and 24% (i.e., 840,000 individuals) could be expected to need nursing home level of care. Since implementation of the ACA, many states have mandated all dually eligible individuals in need of long-term support services be enrolled in a managed care plan. This population comprises individuals with developmental, cognitive, behavioral, and physical disabilities. Many of these individuals are in institutions but are capable of living in the community with appropriate housing and services.

Groundwork for Expansion

Recognizing the positive effect of the PACE program on older adults, particularly in reducing hospitalizations and nursing home use, MEDPAC (2012) included recommendations to expand the program to individuals younger than 55 in its June 2012 report to Congress. In keeping with the intent of the ACA, the proven PACE model was already providing integrated, team-based care, and increasing the number of eligible individuals to enroll in the program would increase the volume of existing PACE programs and improve the cost benefit ratio of its operation. The goal of the expanded PACE model would be to improve the quality of health and life for adults 55 and younger and reduce costs by maintaining individuals in, or returning them to, the community with appropriate supports versus defaulting to a form of institutionalization.

Because the parameters of the PACE program were set by the 1997 legislation, which made the program permanent, new legislation was required to expand the program to another population not included in the original legislation. Over the past 4 years, the MMCO at CMS has led an effort to have Congress create new flexibility in the law governing PACE, which had been available only to those 55 or older who were eligible for nursing home placement. Specifically, the goal of the MMCO was to develop a program with similar characteristics to the PACE program, but eligibility would be expanded to reach the younger than 55 population, covering millions more dually eligible adults with disabilities. This program would provide capitated coordinated care for a population that would otherwise be in a fee-for-service model with no integration of Medicare and Medicaid services.

To conceptualize a meaningful program for this population of adults 55 and younger with disabilities and preserve some of the same characteristics of PACE, the MMCO conducted meetings with government offices and nongovernment organizations involved with the care of, or representing the interests of, this population, providers caring for this group, and individuals with disabilities themselves. These discussions also helped gather support and “ownership” from groups that would be needed to promote this expansion program to Congress. Discussion was often around the scope of the interdisciplinary team, consumer choice, and the perception of a “bricks and mortar” day center as being inappropriate for individuals with disabilities and in violation of the Olmstead Act, which calls for integration of individuals with disabilities into mainstream community life.

It was clear that the interdisciplinary team for any PACE expansion needed to be broad enough to address the needs of special populations, particularly those with intellectual, physical, and developmental challenges. Career training, access to specialists in wheelchair and technology design, and housing support were some of the needs identified for populations different than those traditionally served in the original PACE program.

Consumer choice for these special populations will be an important element of any successful PACE expansion. Individuals with disabilities often have providers who understand their special needs and do not want to change to someone who has no experience caring for individuals with disabilities. Simple things, such as access to examination tables that are designed for individuals who can stand and sit, not for those in wheelchairs, can be major barriers in one's ability to receive comprehensive health services. The existing PACE program has a staff of professionals who provide services. PACE expansion programs will need to assure that individuals with special needs have access to providers with whom they are comfortable, which might mean having contracts with outside providers who are not part of the PACE program staff.

Focus groups also expressed concern over individuals with special needs being in a day care setting with only older individuals or those with other disabilities. This segregation from the mainstream population would be a violation of the intent of the Olmstead Act and consumer advocacy groups felt strongly about the need to provide services in the most integrated ways possible. Ideas were generated about “virtual” centers through technology, the use of existing independent living centers for the provision of health services, and using an existing network of providers who join a PACE expansion program and offer coordinated services with an interdisciplinary team and life plan to assure the person-centered goals are addressed by all providers. An example of integration of an existing PACE program for individuals with developmental and intellectual disabilities can be seen in the Archcare PACE program in New York City. Some PACE enrollees in Archcare have adult children with disabilities who are 55 and older and those children have become members of the PACE program. Parents have expressed their comfort with this integration, as they had always been caretakers of their children and now their children are also cared for within the same PACE program.

Organizations such as the National PACE Association, Alzheimer's Association, and March of Dimes and some consumer advocacy groups became engaged as proponents of this expansion. They met with legislators and their staff and congressional committees to make the case for expansion.

In 2014 and 2015, CMS included PACE expansion in its budget request to the President. It was included in the budget both years but not introduced in Congress as a bill until June 2015. On August 5, 2015, the Senate passed the PACE Innovation Act, and on October 21, 2015, the House passed its version of the Bill. On November 5, 2015, President Obama signed into law the PACE Innovation Act 2015. This bill amends title XI of the Social Security Act to authorize the U.S. Department of Health and Human Services to waive applicable general and Medicaid requirements of PACE in section 11934 of the Social Security Act to conduct demonstration projects through the Center for Medicare and Medicaid Innovations (CMMI) that involve PACE. This bill provides statutory authority to CMS to develop pilots using the PACE model of care to serve individuals younger than 55 and those at risk of needing a nursing home, but not necessarily eligible for nursing home–level care, as presently required. Thus, it would include individuals younger than 55 with disabilities with a modified PACE model of care and individuals older than 55 but who are not yet nursing home–eligible with a less intensive PACE model of care.

CMS had authority through section 1115A of the Social Security Act to waive Medicare PACE provisions contained in section 1894 of the Social Security Act but did not have similar Medicaid authority until passage of the PACE Innovation Act.

The PACE Innovation Act also encourages CMS to allow operational flexibilities that would not only support adaptation of the PACE model for new populations but also promote PACE growth, efficiency, and innovation. Populations such as individuals with early Alzheimer's disease, intellectual or developmental disabilities, and older adults who need integrated long-term services and supports but do not qualify for nursing home–level care could be eligible for enrollment. Therefore, this legislation would give the Secretary of Health and Human Services authority to change features of PACE for the purposes of testing whether they improve the program.

CMS now needs to use this broad authority to create PACE demonstration programs to establish the ability of this program to improve outcomes, enhance patient experience, and be cost-effective. This program offers new opportunities to existing PACE providers and other for-profit as well as non-profit providers to explore new ways of providing services to high-need, high-cost populations.

Envisioning Expansion

The PACE expansion will serve individuals with long-term care needs by providing access to the full continuum of preventive, primary, acute, and long-term care services. For patients, it should provide individualized plans of care; coordination of medical, social, and community services to meet their needs; the ability to maintain their health provider with whom they have a relationship; and the opportunity to remain living in the community. For providers, it offers the opportunity to operate within a provider-driven model to offer coordinated, team-based care with a capitated system capable of rewarding best practice and outcomes through value-based payment systems. For payers, the expansion offers a comprehensive cost containment system focused on prevention and keeping individuals out of nursing homes and acute care settings.

A characteristic of the PACE program that has been important to its success is the individualized interdisciplinary care plan for each plan participant. In this envisioned “PACE-like” program, each participant would have a holistic plan to ensure a seamless continual process to address each member's daily needs, as well as his/her lifelong goals. This plan would anticipate potential problems by identifying risks, integrating discipline-specific assessments, and allowing for coordination of continuous reevaluation of care. Plans would require professionals to reevaluate status with the member at prescribed intervals, as well as episodic reassessments prompted by changes in the member's health status.

The expansion will also have to provide care and services consistent with emerging consumer demands for individual choices. Active engagement through adaptive computing, social networking, employment, and social services will need to be part of this program as well. In addition, issues such as adequate housing and the availability of services that preserve the integration of this population with mainstream consumers of services need to be addressed.

Story of Nursing Advocacy for Growing Pace Innovation

In 2006, the American Academy of Nursing (AAN) recognized the PACE Program, Living Independently For Elders (LIFE) at the University of Pennsylvania (UPenn) School of Nursing, as an Edge Runner program that meets its criteria for innovation of a nursing program that drives better care, better quality, and lower cost. Indeed, a number of nurse leaders and fellows in the AAN have been drivers in policy and operations demonstrating the success of PACE programs since the 1970s. This case narrative is an excellent example of nursing leadership in PACE development and expansion via integration of practice, research, policy, and service. Listed below are some of nursing's lead exemplars who have moved the nation's care of older adults and those in need of long-term care community services forward over the years.

Jennie Chin Hansen, MS, RN, FAAN

Hansen was recently named a Top 50 Influencer in Aging, and is the past Executive Director of the American Geriatrics Society. Hansen was the nursing director/manager at On Lok Senior Health Services from 1980 to 2005, just after On Lok received funding from the U.S. Department of Health and Human Services to further develop this model for long-term care for older adults. In 1990, the first PACE programs were established as waiver or “pilot” programs. Hansen and Sheila Burke, MPA, RN, FAAN, who served as a Congressional staff member for Senator Bob Dole at the time, were active in advocating for the permanent provider status that was established in the Balanced Budget Act of 1997. The federal regulations for the permanent PACE programs were specific and prescriptively rigid to avoid fraudulent use by providers; however, after some years of slow growth due to regulatory barriers, Hansen was engaged in “clean up” regulatory legislation in 2000–2001 to promote growth of the PACE model nationally.

Karen Buhler-Wilkerson, PhD, RN, FAAN (deceased), and Mary Naylor, PhD, RN, FAAN

In the late 1990s, the Commonwealth of Pennsylvania established policy to incentivize providers in that state to open PACE models. In Pennsylvania, the name of PACE programs was changed to Living Independently For Elders (LIFE) programs due to the use of the acronym PACE for another state program. Buhler-Wilkerson presented an argument for the LIFE model as a nursing intervention that addresses social and health needs (Naylor & Buhler-Wilkerson, 1999).

Norma Lang, PhD, RN, FAAN

Lang, Dean at UPenn School of Nursing, named Lois Evans, PhD, RN, FAAN, as Director of Academic Nursing Practice and raised funds at UPenn School of Nursing to establish the first PACE program that was nurse-driven, nurse-led, and owned and operated by a school of nursing. The LIFE Program at UPenn School of Nursing was the first Pennsylvania program to receive permanent provider status by Medicare (Evans & Lang, 2004).

Afaf Meleis, PhD, RN, FAAN (AAN Living Legend)

Meleis, Dean of UPenn School of Nursing from 2002–2014, embraced the LIFE Program as a transition exemplar and made it central to her vision of the UPenn School of Nursing as a leader in community partnerships (Horton, 2011).

Eileen M. Sullivan-Marx, PhD, RN, FAAN

Sullivan-Marx was appointed in 2003 by Dean Meleis as the Associate Dean for Practice and Community Affairs with authority over the operations of the LIFE Program at UPenn School of Nursing. She grew a PACE program from 75 to 525 individuals in 5 years, ensuring quality of services, high satisfaction, and minimal staff turnover while saving the state of Pennsylvania $0.15 on the dollar in Medicaid funding compared with nursing home placement (Sullivan-Marx, Bradway, & Barnsteiner, 2010).

In 2010, Sullivan-Marx became a Health and Aging Policy Fellow (HAPF), under the American Political Science Association's Congressional Fellowship, for 2 years with CMS MMCO, an office established as part of the ACA. As a fellow, Sullivan-Marx, an expert in PACE programs, was appointed as a CMS Senior Advisor to update regulations, remove barriers to the growth of PACE models nationally, and assist Melanie Bella to advocate for PACE programs within CMS and Congress. The UPenn School of Nursing LIFE Program as an Edge Runner was an exemplar for the Institute of Medicine (2010) Future of Nursing Report as a nurse-driven model.

Tara Cortes, PhD, RN, FAAN

Cortes, faculty at New York University College of Nursing, became a HAPF fellow from 2013–2015 and was also assigned to CMS as a Senior Advisor in the MMCO to address needed innovations in community-based long-term care. Cortes worked closely with the MMCO staff to hold sessions with a variety of stakeholders and other federal agencies to determine how the program might change to meet the needs of participants younger than 55, namely those with disabilities or mental health issues. This work helped inform other offices in CMS and Congress of the benefits of program expansion. During this time, bills were introduced and passed in both the Senate and House. Cortes is continuing the work with the MMCO and CMMI to develop a request for applications for demonstration projects. The leadership of Sullivan-Marx and Cortes contributed to the Congressional action culminating in the signing of the PACE Innovation Act.

Antonia Villaruel, PhD, RN, FAAN, and Pamela Cacchione, PhD, RN, FAAN

Villaruel, current Dean, and Cacchione, Associate Professor of Geropsychiatric Nursing at UPenn School of Nursing, continue to demonstrate the viability and benefits of the nurse-driven PACE model and sustain it through growth in a larger health system.


For more than four decades, the PACE model has evolved and continues to grow as a viable and sustainable model of community-based long-term care that provides coordinated and comprehensive services with an interdisciplinary patient-centered team model that is paid for through Medicare, Medicaid, and other insurers. Many advocates and leaders have driven the model forward, and nurses have been in key political, policy, and clinical leadership positions to advocate and demonstrate the viability of the program. No doubt this evolution of the PACE program will continue as health practice and policy move ahead.



Dr. Cortes is Clinical Professor of Nursing, and Executive Director, The Hartford Institute for Geriatric Nursing, and Dr. Sullivan-Marx is Dean and Erline Perkins McGriff Professor, College of Nursing, New York University, New York, New York. Dr. Cortes is also 2013–2015 Health and Aging Policy Fellow, Medicare/Medicaid Coordination Office, Centers for Medicare & Medicaid Services, U.S. Department of Health and Human Services, Baltimore, Maryland.

The authors have disclosed no potential conflicts of interest, financial or otherwise.

Address correspondence to Tara A. Cortes, PhD, RN, FAAN, Clinical Professor of Nursing, Executive Director, The Hartford Institute for Geriatric Nursing, College of Nursing, New York University, 433 First Avenue, 6th Floor, New York, NY 10010; e-mail:


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