innovation act: changes for home health

The Innovation Act signed into law recently expands many opportunities for home health agencies.  The signing opens up the PACE program (Programs for All-Inclusive Care for the Elderly) to elderly patients who need intensive nursing care in the home. This intensive care is similar to the care a patient would receive in a skilled nursing facility (SNF/Nursing Home).


As part of the expansion, the PACE program will now allow participants over the age of 21 who need nursing care to receive services.  Previously, participants needed to be 55 or older.  The goal of the program is to allow those in need of intensive services to reside in their own home rather than in a costlier setting – a nursing home.  The new changes also help ease the shortage of SNF and rehab beds by allowing a patient to reside in their own home rather than in a facility while receiving long term care.


Currently, there are 116 PACE programs spread out amongst 32 states servicing 32,000 patients.  Funding for the programs are split between Medicare and Medicaid.  This dual insured program covers the entire cost of services needed for a patient beyond just long term home care. The goal of the legislation was to also spur private insurance companies to set up their own versions of the PACE program to help reduce costs.  Hospitals are also expected to embrace the new changes as it will tie into pay for performance incentives.


If you are a home health agency in one of the 32 states that offer PACE programs, you might want to have your agency check into reimbursement and options for participation.  A home health agency in some states will be permitted to develop and run their own PACE program as opposed to contracting with a regional or local organization that assigns patients to different agencies.  CMS will be the deciding factor as to which organizations can form their own PACE program.  To learn more about PACE, visit the national association,