National PACE Association
PACE did the impossible for my mother. I never thought she would be able to live with us again.
"PACE did the impossible for my mother. I never thought she would be able to live with us again."

State Assessment of PACE: Texas

Study Title: Recommendations of the Texas Comptroller: Chapter 8: Health and Human Services "Expand the Use of an Effective Long-Term Care Program"

Study Date: December 2000

Study Author/Source: Carole Keeton Rylander, Texas Comptroller of Public Accounts, Texas Comptroller

Contact Information for Study: P.O. Box 13528 Capitol Station, Austin, TX 78711-3528 or 1888yourtex

Texas has passed legislation to expand the PACE program from one site to a total of 16 sites. The analysis summarized below was developed to assist the state legislature in its consideration of the legislation.


Major Issues



Cost Savings

PACE saves state and federal governments an estimated 14% compared to nursing home and medical care.

The state should expand the PACE program throughout the state.

PACE vs. Home Care Services

Medicaid home care payments restrict the range of home care services offered, in order to comply with federal requirements.

Because PACE services receive a Medicare and Medicaid capitated payment, they are unrestricted in the types and amounts of home-based services they provide, allowing them to better match the individual's care needs with the services they provide.


Despite caring for a more frail population than Medicare in general (PACE enrollees average 7.8 medical conditions and 2.7 limitations in activities of daily living), PACE enrollees have fewer hospital admissions (2,399 per 1,000 vs. 2,448) and shorter hospital stays (4.1 days vs. 6.6).

PACE care successfully prevents avoidable conditions that could require or lengthen hospitalization.

of Care

People entering home care have an average of three health conditions. This makes the process of scheduling and obtaining needed care complex and burdensome for the frail elderly and their family members.

Providing a full range of all needed care through a single program - PACE - improves quality of life.

Population Cared for by PACE in Texas

An average of 9.3 conditions; 80% require help with meals, medications, paying bills, and/or performing other daily activities.

Despite the number and severity of participant medical conditions, PACE saves Texas about 14% compared to statewide costs of regular nursing home and medical care for the frail elderly.

Demand for PACE Services

Between 1980 and 1990, residents age 85 and older grew by 46 percent.

PACE will help the state to meet growing demand for long-term care.

Sufficient Financial Backing for PACE Sites

Licensure as an HMO is not required by federal regulations and creates an unnecessary barrier to new PACE program development. The risk reserve requirements for HMOs do not reflect the smaller size of the PACE enrollee population or that PACE enrollees can return to regular Medicare/Medicaid if the PACE provider cannot meet its financial obligations. Large HMO risk reserves are designed to assure access to needed care for enrollees that need a significantly higher level of services. The PACE program is already geared to these enrollees, and the payment rates are adjusted accordingly, thus reducing the need for a risk reserve.

PACE organizations should not be required to have an HMO license. Other means to assure financial viability include requiring several months of operating expenses to be on hand, and/or that PACE organizations obtain reinsurance to limit their expenses for exceptional cases.


 Copyright 2002 National PACE Association.  All Rights Reserved.