Understanding PACE: The Model and the Operational Reality

PACE (Program of All-Inclusive Care for the Elderly) is a fully integrated care model designed for older adults who meet nursing home level of care but can safely remain in the community.

It brings Medicare and Medicaid together into a single, capitated structure and delivers care through an interdisciplinary team responsible for the participant’s full clinical, functional, and social needs.

PACE is both the provider and the health plan.
That distinction drives how the model performs.

The Intent of the Model

At its core, PACE was designed to solve a very specific problem:

How do you deliver comprehensive, coordinated care to a medically complex population without defaulting to institutional care?

The model answers that by aligning:

  • Clinical care

  • Long-term services and supports

  • Social and functional support

  • Financial accountability into one structure.

When aligned, the model works exceptionally well.

How the Model Actually Operates

PACE is not passive. It requires active, continuous coordination.

  • A fixed monthly payment supports all participant needs

  • The interdisciplinary team (IDT) meets regularly to assess and adjust care

  • Services extend across settings: center-based, in-home, and community-based

  • The organization manages both direct care and contracted services

  • All care decisions ultimately tie back to the IDT

This is not a referral model.
It is a managed, team-driven model of care delivery.

“PACE is not a coordinated model. It is a fully integrated operating model. ”

The Role of the Interdisciplinary Team

The IDT is the operational core of PACE.

It typically includes:

  • Primary care provider

  • Nursing

  • Social work

  • Rehabilitation therapies

  • Dietary

  • Transportation

  • Home care coordination

The expectation is not just participation.
It is active clinical and operational decision-making.

When the IDT is functioning well:

  • Care is proactive

  • Communication is clear

  • Participants remain stable

When it is not:

  • Issues escalate quickly

  • Utilization increases

  • Documentation and care diverge

Lower hospitalization rates

What Makes PACE Different

PACE is often compared to Medicare Advantage or D-SNP models.
It is fundamentally different.

  • The organization assumes full financial risk

  • Care delivery and payment are integrated

  • The IDT directs all services, not external providers

  • The model is built around high-touch, continuous engagement

This level of integration creates both strength and complexity.

PACE is not easier.
It is more accountable.

What the Data Shows

National outcome comparisons have consistently shown that PACE programs achieve:

Fewer emergency department visits

Reduced nursing home placement

Stable mortality

Despite higher clinical complexity

PACE remains one of the few models that performs consistently across multiple measures.

That performance is not accidental.
It reflects disciplined execution of the model.

Where PACE Gets Operationally Challenging

The model is strong. Execution is variable.

Common pressure points include:

  • Leadership transitions that disrupt team structure and decision flow

  • IDT inconsistency across teams, centers, or regions

  • Misalignment between care plans, documentation, and actual service delivery

  • Utilization patterns that shift without clear intervention

  • Regulatory requirements that compete with operational realities

These issues rarely exist in isolation. They compound.

And when they do, they show up in:

  • Survey outcomes

  • Team fatigue and turnover

  • Financial performance

  • Participant experience

The Financial and Regulatory Reality

PACE operates under a capitated payment structure that requires:

  • Accurate risk adjustment

  • Thoughtful utilization management

  • Strong coordination of services

At the same time, programs must meet:

  • CMS PACE regulations (42 CFR Part 460)

  • State-specific Medicaid requirements

  • Ongoing survey readiness expectations

This creates a dual pressure:

  • Deliver high-quality care
    while maintaining compliance and financial stability

  • That balance is not theoretical.
    It is managed daily.

Why Execution Determines Performance

PACE does not fail because the model is flawed.

It struggles when:

  • Leadership lacks visibility into operations

  • The IDT loses structure or accountability

  • Data is not translated into action

  • Decision-making slows or becomes inconsistent

When execution is strong:

  • Teams function with clarity

  • Care is aligned with participant needs

  • Utilization is controlled

  • Compliance follows naturally

The Archwell Perspective

PACE is not difficult to understand.

It is difficult to execute consistently.

The difference between a stable program and a struggling one is rarely the model itself.
It is how the model is operationalized.

Archwell Consultants focuses on:

  • Stabilizing leadership and team structure

  • Strengthening interdisciplinary team performance

  • Aligning operations with regulatory expectations

  • Supporting programs through transition, growth, or recovery

The work is not theoretical.
It is hands-on, operational, and grounded in real program performance.

Additional Information

For more detailed information on the PACE model, visit the National PACE Association:
https://www.npaonline.org