Redundant Payments for Enrollees in Both MA and VA

Some individuals in the United States may be eligible to be enrolled simultaneously in 2 federally funded managed care systems: (1) the Medicare Advantage (MA) program, which is administered by the Centers for Medicare & Medicaid Services; and (2) the Veterans Healthcare System (VA), which is administered by the Veterans Health Administration in the US Department of Veterans Affairs. The VA may collect reimbursement for care provided to veterans enrolled in private health plans; however, Section 1862 of the Social Security Act prohibits the VA from collecting any reimbursements from the Medicare program, including MA plans.

These dual enrollments create the potential for redundant federal spending. If enrollees in MA plans simultaneously receive services covered by Medicare from another federally funded hospital or other healthcare facility, and the facility cannot be reimbursed, the government has made 2 payments for the same service. Private Medicare plans receive taxpayer-funded subsidies to insure that veterans who use another government-funded health system receive medical care.

Researchers recently conducted a retrospective analysis to identify the prevalence of dual enrollment in MA plans and the VA, which examined the concurrent use of health services in each setting, and estimated the costs of VA care provided to MA enrollees. Results were reported online in the Journal of the American Medical Association [doi:10.1001/jama.2012.7115].

The researchers merged VA enrollment records from 2004 to 2009 with the Medicare denominator file from the corresponding years to determine the number of veterans with at least 1 month of simultaneous enrollment in the VA and a MA plan. The primary outcome measures of the analysis were use of health services and inflation-adjusted estimated VA healthcare costs for this population.

Between 2004 and 2009, there were 1,245,210 adults enrolled concurrently in the VA and in MA plans. The mean and median durations of dual enrollment during the study period were 37 and 35 months, respectively. The mean and median durations of dual enrollment during the calendar year were 11 and 12 months, respectively.

Over the 6-year study period, the estimated costs of VA care (in 2009 dollars) for dual enrollees increased from $1.3 billion to $3.2 billion per year. The total estimated cost of VA care (in 2009 dollars) for dual enrollees over the 6 years was $13.0 billion.

Outpatient care was the largest component of the spending, followed by acute and post-acute inpatient care and prescription drugs. Among the dual-enrollee population, 10% exclusively used the VA for outpatient and acute inpatient services, 35% exclusively used the MA plan, 50% used both the VA and the MA plan, and 4% did not receive services during the calendar year.

The VA financed 44% (n=21,353,841) of outpatient visits, 15% (n=177,663) of acute medical and surgical admissions, and 18% (n=1,106,284) of acute medical and surgical hospital days for the dual-enrollee population. During the study period, the proportion of VA-financed outpatient visits increased (42% in 2004 to 45% in 2009; P<.001 for change). The proportion of VA-financed acute medical and surgical admissions increased from 13% in 2004 to 17% in 2009 (P<.001 for change).

In 2009, the VA submitted bills to private insurers totaling $52.3 million to reimburse care provided to MA enrollees (2% of the total cost of care for the dual-enrollee population). Of this amount, the VA collected 18% ($9.4 million; 0.3% of the total cost of care).

In conclusion, the researchers commented, “We found a substantial and an increasing amount of potentially duplicative federal spending for individuals who are dually enrolled in the VA and a MA plan. In light of the severe financial pressure facing the Medicare program, policymakers should consider measures to identify and eliminate these potentially redundant expenditures.”