PACE serves 75K elderly across 176 orgs in 32 states. Learn eligibility, services, costs ($4K-$6K PMPM), and outcomes like 24% fewer hospitalizations.
by
VitalCX Healthcare Operations Team
February 17, 2026
8 minutes
The Program of All-Inclusive Care for the Elderly (PACE) is a comprehensive care model that provides medical, social, and long-term care services to individuals aged 55 and older who meet their state's nursing facility level of care criteria. PACE operates through 176 organizations in 32 states, serving approximately 75,000 participants who would otherwise require nursing home placement. By integrating all services under a single capitated payment — typically $4,000-$6,000 per member per month from combined Medicare and Medicaid funding — PACE achieves outcomes that most fragmented care models cannot: 24% fewer hospitalizations and 50% fewer nursing home placements. For health systems and policymakers exploring comprehensive care models for aging populations, PACE represents the most fully realized version of integrated, capitated, population-level care in the U.S.
PACE was developed in the early 1970s by On Lok Senior Health Services in San Francisco's Chinatown, designed to serve elderly Chinese immigrants who needed nursing home-level care but preferred to remain in their communities. The model was so effective that Congress authorized PACE as a permanent Medicare provider type through the Balanced Budget Act of 1997.
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Each PACE organization operates a PACE center — a physical facility that serves as the hub for services. Participants attend the center for adult day care, primary care, therapy, meals, socialization, and other services. The PACE center also coordinates all care delivered outside the facility: hospitalizations, specialist visits, home health, prescription drugs, DME, transportation, and more.
The interdisciplinary team (IDT) is the core of PACE operations. Every PACE organization maintains an IDT that includes a physician, nurse, social worker, physical therapist, occupational therapist, recreational therapist, dietitian, PACE center manager, home care coordinator, and personal care attendants. The IDT meets regularly to develop and update each participant's care plan.
CMS and the National PACE Association (NPA) oversee PACE standards, quality, and enrollment.
Who Is Eligible for PACE?
PACE eligibility has specific requirements:
Most PACE participants are dually eligible for Medicare and Medicaid. For dually eligible individuals, PACE is fully covered — no premiums, no deductibles, no copays for any service. For individuals with Medicare only (not Medicaid eligible), there may be a monthly premium for the long-term care component.
The enrollment process is deliberate. PACE organizations conduct comprehensive assessments before enrollment, and participants must agree to receive all care through the PACE organization — including using PACE physicians as their primary care provider. This requirement ensures coordinated care but limits choice, which is a common reason individuals decline enrollment.
As of 2026, approximately 75,000 individuals are enrolled in PACE nationally. Given that over 4 million Americans are estimated to meet nursing facility level of care criteria, PACE serves a small fraction of the eligible population — a gap that represents both a challenge and an opportunity.
What Services Does PACE Provide?
PACE provides or arranges every service a participant might need. The comprehensive service package includes:
Medical Services
Rehabilitative Services
Long-Term Care Services
Social and Support Services
Durable Medical Equipment
PACE provide us confort and the support I need.
-Anonimous Patient.
The comprehensive nature of PACE eliminates the fragmentation that characterizes most elderly care. Instead of a patient navigating between a PCP, multiple specialists, a pharmacy, home health agency, transportation provider, meal delivery service, and adult day program — each with separate billing, separate records, and separate care plans — PACE integrates everything under one organization with one care plan.
PACE has grown steadily but remains a relatively small program:
The largest PACE operators include:
CMS has actively encouraged PACE expansion. The PACE Innovation Act of 2015 authorized CMS to test PACE models for populations beyond the traditional elderly nursing-home-eligible demographic, including younger individuals with disabilities. CMS has also streamlined the PACE application process to reduce the time and cost of launching new PACE organizations.
Despite this, PACE growth faces structural constraints. The capital cost of establishing a PACE center, the geographic service area limitation, and the workforce requirements for the interdisciplinary team create barriers to rapid expansion.
The 24% hospitalization reduction and 50% nursing home placement reduction are PACE's signature outcomes, documented across multiple evaluations and published in peer-reviewed literature.
The mechanisms are interconnected:
Comprehensive Primary Care Access
PACE participants receive primary care at the PACE center, with same-day or next-day access to PACE physicians. This eliminates the access barriers — appointment wait times, transportation challenges, cost concerns — that drive elderly patients to the ED for non-emergency conditions.
Early Intervention Through Daily Observation
Participants who attend the PACE center regularly are observed daily by clinical staff. A nurse notices a change in gait. A recreational therapist reports decreased engagement. A dietitian flags reduced food intake. These early signals trigger clinical assessment before a condition deteriorates to the point of hospitalization.
Medication Management
The PACE IDT manages all medications centrally. Medication reconciliation, adherence monitoring, and drug interaction prevention are integrated into daily care. Medication-related hospitalizations — which account for a significant percentage of elderly hospitalizations — are substantially reduced.
Fall Prevention
Falls are a leading cause of hospitalization and nursing home placement for the elderly. PACE programs include physical therapy, home safety assessments, exercise programs, and environmental modifications that reduce fall risk. The comprehensive approach addresses fall prevention from multiple angles simultaneously.
Social Engagement and Mental Health
Isolation and depression are major drivers of health decline in elderly populations. The PACE center provides daily socialization, recreational therapy, and mental health support. Participants with active social connections and managed mental health conditions have lower utilization rates.
Caregiver Support
PACE reduces caregiver burden through adult day care, respite services, and education. Caregiver burnout is a leading cause of nursing home placement; by supporting caregivers, PACE extends the period during which community living is viable.
The 50% reduction in nursing home placements is equally significant financially. Nursing home care costs $7,000-$10,000 per month. PACE's capitated rate of $4,000-$6,000 PMPM covers all services — including the occasional nursing home stay when necessary — at a lower cost than permanent institutional placement.
(See Blog 14: Population Health Management and Blog 11: Care Coordination Models for related frameworks.)
Despite strong outcomes, PACE organizations face significant operational challenges:
Geographic Service Area Limitations
PACE organizations must define a geographic service area and can only enroll participants who live within it. Transportation to and from the PACE center must be feasible, which limits service areas to approximately a 30-45 minute drive radius. Rural areas and sprawling suburban communities are particularly difficult to serve.
Capital and Startup Costs
Launching a PACE organization requires a physical PACE center, clinical staff, transportation fleet, and administrative infrastructure. Startup costs range from $3-$10 million depending on facility requirements and market. The time from application to first enrollment is typically 18-36 months.
Workforce Requirements
The interdisciplinary team model requires a diverse clinical and social work workforce. PACE organizations compete with hospitals, health systems, and home health agencies for nurses, therapists, social workers, and physicians. In a tight healthcare labor market, staffing the IDT is a persistent challenge.
Enrollment Scalability
The PACE center model has inherent capacity constraints. A single center can typically serve 300-500 participants before space, staffing, and transportation logistics limit growth. Expanding requires opening additional centers — each with its own capital cost and operational infrastructure.
Financial Risk Management
PACE organizations bear full financial risk for all participant care. A single participant with a $500,000 hospital stay can significantly impact a small PACE organization's finances. Effective risk management, reinsurance, and reserve requirements are essential but add operational complexity.
Participant Choice Limitations
PACE requires participants to use PACE physicians and PACE-arranged services. Some potential enrollees and their families resist this restriction, preferring to maintain relationships with existing providers. This limits the eligible population willing to enroll.
Quality and Compliance Requirements
CMS conducts regular PACE audits and requires extensive quality reporting. PACE organizations must maintain compliance with CMS PACE regulations (42 CFR Part 460), state licensing requirements, and NPA quality standards. The compliance burden is substantial for small organizations.
