Integration and coordination should address both financing and service delivery. Integration of financing involves the pooling of funding from Medicare and Medicaid into a single funding stream. Current managed care models attempt to integrate services using capitated payments to providers, which gives managed care organizations flexibility to tailor benefits to the distinct needs of each beneficiary. However, integration of funding sources alone does not ensure integration of services. Today, various managed care plans coordinate the delivery of acute and long-term care services to differing degrees.
Some plans simply facilitate patient transitions between the acute and long-term care settings.
Funds are combined into a common pool from which providers pay health care expenses. In PACE, providers receive funding from Medicare, Medicaid, and private insurance. On Lok also integrates the provision and financing of medical and long-term care services. Since the initial grant award, HCFA has supported On Lok through waivers for the past 16 years. On Lok is unique because it accepts only those ill enough to be eligible for nursing home care.