The population of older adults is growing across the United States, and the healthcare system is bracing for increased strain on infrastructure and resources. This challenge is particularly acute in rural communities, where populations are aging more rapidly and access to healthcare and long-term services and supports (LTSS) is more limited.
The Administration is approaching this challenge through initiatives such as the Rural Health Transformation Program (RHTP) and the Long-term Enhanced ACO Design (LEAD) model, signaling interest in innovative rural care models.
In response, some states are actively pursuing opportunities to expand the Program of All-Inclusive Care for the Elderly (PACE) to rural areas in their state. PACE represents a promising strategy to expand access to comprehensive, coordinated care for older adults with complex care needs in rural areas. States including Kansas, Rhode Island, West Virginia, South Dakota, Connecticut, and others have made explicit mentions of their plans to expand PACE through RHTP. There is a timely opportunity for rural PACE initiatives to generate evidence that informs future policy, financing, and replication.
State Medicaid policy decisions, including eligibility criteria, service area design, and rate setting, play a critical role in PACE feasibility. States may leverage rural PACE as a testing ground for targeted regulatory and operational flexibilities, supporting home- and community-based services (HCBS) rebalancing goals while expanding access to care in underserved areas.
National and State Priorities Create Momentum for Rural PACE Investments
Historically, PACE programs have been concentrated in urban and suburban areas with dense population centers, where enrollment volumes and proximity to services support financial sustainability. However, in recent years, there has been increasing focus on adapting PACE for rural contexts. Policymakers and providers are recognizing PACE’s potential to offer a holistic, person-centered option for older adults to meet both healthcare and LTSS needs, particularly in rural “care deserts” with limited alternatives. This shift is occurring amid broader system pressures, including workforce shortages, nursing facility capacity challenges, and rural hospital instability. PACE offers a community-based model that supports aging in place, integrates medical and social care, and improves care coordination and outcomes, aligning well with federal and state goals to strengthen rural health systems.
Successful Rural PACE Programs Prioritize Alignment with Local Characteristics
Low population density is one of the most significant challenges for rural PACE programs, directly affecting enrollment viability and financial sustainability. Programs operating in rural areas often face tighter margins, particularly during early enrollment ramp-up. Successful rural PACE models are intentionally designed for their environment, rather than adapted directly from urban models.
Key considerations for successful rural PACE implementation include:
- Access to Capital and Adequate Rate Setting: Rural PACE programs require meaningful upfront investment to support start-up costs, infrastructure, and early operating losses. Access to sufficient capital, combined with state investment through rates and grants that appropriately reflect rural cost structures, transportation demands, and workforce realities, is critical to long-term sustainability. Successful PACE programs carefully review financial feasibility when evaluating any service area, especially in rural environments.
- Service Area Design and Growth Planning: Phased implementation strategies can help mitigate financial risk in rural settings, and plans for service area design and growth plans should be contemplated and incorporated from the start. This may include gradually expanding service areas, scaling staffing and infrastructure in line with enrollment growth, and piloting alternative PACE care delivery approaches before full implementation. Thoughtful PACE service area design is essential in rural regions where large geographies and travel times increase costs and operational complexity.
- Many rural PACE models rely on hub-and-spoke arrangements leveraging alternative care sites (ACS) to bring some services closer to participants. In some cases, existing healthcare infrastructure such as hospitals and Federally Qualified Health Centers (FQHCs) can serve as potential ACS locations, reducing start-up costs and travel burden — provided the necessary policy flexibilities are in place and local partners are engaged. Some programs are also exploring mobile models, such as mobile clinics or vans, to deliver certain services directly into communities and improve access for participants who live far from PACE centers.
- Transportation Strategies: Transportation is a major operational and cost driver for rural PACE programs. Successful models often rely heavily on in-home care to reduce travel demands on participants to the PACE Center. Alternatively, some rural PACE programs leverage their Center as the hub of care and socialization, investing in additional transportation options for their rural populations. When transportation is required, programs use a larger number of small vans equipped with emergency supplies and designed to accommodate various terrain, weather, and road conditions. PACE programs optimize their route planning and workflows so staff can perform multiple functions during visits to remote areas. Careful transportation planning is critical for participant safety, staff efficiency, and cost control.
- Workforce Flexibility and Cross-Training: Persistent workforce shortages in rural areas necessitate flexible staffing models. Rural PACE programs often depend on cross-trained staff to perform multiple roles, as well as creative recruitment and retention strategies tailored to local labor markets. PACE programs in rural areas find word-of-mouth referrals effective for recruiting staff into the integrated PACE model of care, bringing individuals with history and commitment to serving the rural area and increasing employee satisfaction and retention. Aligning staffing models with travel realities and community needs can help maintain care quality and operational sustainability.
- Community Integration, Provider Networks, and Partnerships: Successful rural PACE programs become part of the fabric of the community, understanding local provider and community dynamics intimately. Collaboration with local providers, home care agencies, hospitals, and social service organizations helps build effective networks and ensure continuity of care. Partnerships with community-based organizations, faith-based groups, and senior advocacy organizations help build trust, strengthen referral pipelines, and support long-term sustainability by aligning PACE with existing community dynamics.
Stay tuned for more ATI insights on this exciting area of opportunity, and reach out to our experts with your questions on rural PACE implementation.