In December 2024, the Centers for Medicare and Medicaid Services (CMS) published an update to existing guidance concerning Medicaid rate setting for organizations participating in the Program of All-Inclusive Care for the Elderly (PACE). The guidance serves as a resource for states and the states’ actuaries in developing and documenting the development of PACE Medicaid capitation rates. In this white paper, we cover the following:

• Background on PACE
• PACE financing overview
• Update of the CMS rate-setting guidance
• Calculation and documentation of the CMS Amount That Would Have Otherwise Been Paid (AWOP)
• Medicaid capitation rate development