PROVIDENCE, RI — The federal government appeared to have been massively overpaying for care provided to veterans dually enrolled in VA healthcare and Medicare Advantage plans, according to a new analysis.
A research letter published in JAMA revealed that, from 2011 to 2020, the VHA spent $78 billion to care for U.S. military veterans enrolled in Medicare Advantage plans. Researchers from Brown University and the Providence, RI, VAMC raised questions about how much of that was overpayment.1
Their analysis noted that, because the insurance companies providing Medicare Advantage plans receive fixed per-patient payments for healthcare services without having payments reduced when veterans receive care through the VHA, the dual enrollment of some veterans might result in more federal spending than is necessary.
“When the federal government pays for care through the Veterans Health Administration and pays Medicare Advantage plans the full amount, it may mean the government is paying twice for the care of the same beneficiaries,” explained study author David Meyers, an assistant professor of health services, policy and practice at Brown University’s School of Public Health. “These potential overpayments could correspond to substantial additional spending by the federal government.”
Meyers pointed out in a press release that the Medicare Advantage program is the privately run arm of the Medicare program, in which private insurance plans are paid by the federal government to deliver Medicare benefits. The Medicare Advantage program, which has been heavily promoted by the insurance company contractors and the Department of Health & Human Services (HHS), is growing rapidly.
Meanwhile, the number of military veterans who used VHA services increased by 63% from 634,470 in 2011 to 1,033,643 in 2020—increasing from 14% of all VHA Medicare enrollees in 2011 to 21.2% in 2020.
The researchers used VHA enrollment data to identify all veterans who were dually covered by Medicare Advantage and the VHA and used VHA services from 2011 to 2020. They found that the VHA paid more than $78 billion for health services. They also found that, while the VHA paid for the veterans’ healthcare, the federal Medicare program simultaneously made full payments for each dually enrolled veteran to their Medicare Advantage plan.
“The Medicare Advantage plan gets paid even when it’s not necessarily delivering healthcare to the beneficiaries,” Meyers said.
In 2020, according to the analysis, total VHA spending on healthcare was $102.7 billion, with spending on VHA/MA dual enrollees totaling $12.1 billion. That indicated that 11.8% of total VHA spending was on services for beneficiaries with MA coverage who used VHA care, the authors pointed out. They wrote that spending was highest for outpatient care ($5.7 billion), followed by inpatient care ($2.8 billion), pharmacy ($2.0 billion) and community care ($1.6 billion).
The research letter also advised that total VHA spending for dual enrollees using VHA care increased from $4.5 billion in 2011 to $12.1 billion in 2020. “During these 10 years, the VHA paid $78.0 billion for care for dual enrollees,” the researchers wrote. “The largest growth in spending during this period was for community care (relative 370% increase), followed by outpatient care (220% increase), pharmacy (200% increase), and inpatient care (140% increase).”
“For dual enrollees, MA plans still receive full capitated payments, which corresponds to substantial additional federal spending and may reflect the federal government’s paying twice for the care of the same beneficiaries,” according to the study authors.
Meyers suggested two ways to address the overpayment problem: Reduce the payments the Medicare Advantage plans receive for beneficiaries who have VHA coverage, or allow the VHA to seek reimbursement from the Medicare plan. He suggested that reimbursement would be the better solution, because veterans will still be covered, regardless of where they receive their healthcare.
Under Section 1862 of the Social Security Act, care provided by VA and other governmental entities (with certain exceptions) is not covered under Medicare, and VA does not seek reimbursement from Medicare or Medicare Advantage plans. VA does bill private health insurance for certain non-service-connected medical care provided to veterans, and those funds directly support the care and services provided to veterans.
Seeking Reimbursement
“There should be an opportunity for the Veterans Health Administration to seek reimbursement from Medicare in order to be able to afford to deliver the care that veterans need and deserve,” Meyers suggested.
A limitation of the analysis was the inability to measure the magnitude of duplicate payments. Estimating the exact extent of duplicate payments would require complete information on payments made by MA plans, which is not available, according to the authors. They also said that spending before 2019 may be underestimated.
“Despite these limitations, substantial excess payments are possible, given the large and growing number of dual VHA/MA enrollees, large parallel expenses for these enrollees in both VHA and Medicare, lack of any explicit policy to address duplicate payments, and marketing of MA ‘affinity plans’ specifically for veterans,” the researchers pointed out. “This study highlights the need to understand implications of veterans’ enrollment in MA on potentially duplicative federal spending and may call for policy to expand the ability of the VHA to recoup these payments from MA insurers.”
The concerns aren’t new or unknown to federal officials, however.
In 1979, the General Accounting Office (now the Government Accountability Office) issued a report that found Medicare made duplicate payments of more than $72,000 for certain medical services provided to veterans eligible for benefits from both Medicare and the VA.
Last year, the HHS Office of the Inspector General said it performed an audit, “because duplicate payments made by Medicare and VHA have been a longstanding issue.” The audit sought to determine whether Medicare and VA paid duplicate claims for medical services from January 2017 through December 2021 (audit period) and to identify measures that could be taken to address duplicate payments.
“Our objective was to determine whether Medicare paid providers for medical services that were authorized and paid for by VA’s community care programs,” the auditors explained.
The audit covered $19.2 billion in Medicare Parts A and B payments for 36.3 million claims for individuals eligible for Medicare and VHA benefits who received services from VA’s community providers during the audit period. The $19.2 billion was associated with all claims related to those beneficiaries, irrespective of whether VHA authorized and paid for the claims. After obtaining claims data from VA, the audit team identified paid Medicare claims from the Centers for Medicare & Medicaid Services (CMS) data and performed a match to determine whether an enrollee had a paid claim in both the Medicare and VHA claim datasets.
The OIG found that Medicare paid providers for medical services that were authorized and paid for by VA’s community care programs during the audit period, resulting in duplicate payments of up to $128 million. VHA is solely responsible for paying providers for medical services that it authorized.
“These duplicate payments occurred because CMS did not implement controls to address duplicate payments for services provided to individuals with Medicare and VHA benefits,” according to the OIG. “Specifically, CMS did not establish a data-sharing agreement with VHA for the ongoing sharing of data between the two agencies and did not develop an interagency process to include VHA enrollment, claims and payment data in CMS’s data repository. Inclusion of these data, which is required by federal law, would have allowed CMS to compare VHA claims data with existing Medicare claims data to identify duplicate claims paid for by both Medicare and VHA.”
The audit report suggested that, because CMS did not develop an interagency process, CMS did not establish an internal process (such as claims processing system edits) to address duplicate payments for medical services authorized and paid for by VHA. In addition, it stated, CMS guidance to providers on VA’s responsibility to pay for medical services did not clarify that a provider should not bill Medicare for a medical service that was authorized by VHA.
The OIG recommended the following to CMS:
- establish a comprehensive data-sharing agreement with VHA for the ongoing sharing of data;
- establish an interagency process to integrate VHA enrollment, claims and payment data into the CMS Integrated Data Repository to identify potential fraud, waste and abuse under the Medicare program;
- establish an internal process (such as system edits) to address duplicate payments made by Medicare for medical services authorized and paid for by VHA, which could have saved Medicare up to $128 million during our audit period; and
- issue guidance to providers on not billing Medicare for a medical service that was authorized by VHA.
CMS concurred with all of the recommendations, according to the OIG, and “described actions that it had taken or planned to take to address our recommendations, including working to develop processes to address duplicate payments for services authorized and paid for by VHA.”
- Meyers DJ, Schwartz AL, Jiang L, Yoon J, Trivedi AN. Spending by the Veterans Health Administration for Medicare Advantage Dual Enrollees, 2011-2020. JAMA. Published online October 02, 2024. doi:10.1001/jama.2024.18073