The federal government may pay twice for care for veterans enrolled in Medicare Advantage plans

From 2011 to 2020, the Veterans Health Administration spent $78 billion to care for U.S. military veterans enrolled in Medicare Advantage plans, raising questions about federal overpayments to these private plans.

That is according to an analysis by researchers from Brown University and the Providence Veterans Affairs Medical Center. Published in JAMAThe study finds that because Medicare Advantage plans receive fixed per-patient payments for health care services with no reduction in payments when veterans receive care through the Veterans Health Administration, some veterans’ dual enrollment may result in more federal spending than necessary.

“When the federal government pays for care through the Veterans Health Administration and pays Medicare Advantage plans in full, it could mean the government is paying twice for the care of the same beneficiaries,” said study author David Meyers, assistant professor of health. services, policy and practice at Brown University’s School of Public Health. “These potential overpayments could equate to substantial additional spending by the federal government.”

The Medicare Advantage program is the private arm of the Medicare program, under which private insurance plans are paid by the federal government to provide Medicare benefits, Meyers said. The Medicare Advantage program is growing rapidly and the number of military veterans using Veterans Health Administration services increased 63% from 634,470 in 2011 to 1,033,643 in 2020.

The researchers used Veterans Health Administration (VHA) enrollment data to identify all veterans covered by both Medicare Advantage and the VHA who used VHA services from 2011 to 2020. They found that the VHA paid more than $78 billion for health care services. They also found that while the VHA paid for the veterans’ health care, the federal Medicare program simultaneously made full payments for each dually enrolled veteran in their Medicare Advantage plan.

“The Medicare Advantage plan is paid even if it does not necessarily provide health care to beneficiaries,” Meyers said.

Meyers proposed two ways to address the problem of overpayments: reduce the payments that Medicare Advantage plans receive for beneficiaries who have VHA coverage, or allow the VHA to seek reimbursement from the Medicare plan. Reimbursement makes the most sense, he said, because veterans will still be covered regardless of where they receive their health care.

Under Section 1862 of the Social Security Act, care provided by VA and other government agencies (with certain exceptions) is not covered by Medicare, and VA does not seek reimbursement from Medicare or Medicare Advantage plans. VA bills private health insurance plans for certain non-service related medical care provided to veterans, funds that directly support the care and services provided to veterans.

“There should be an opportunity for the Veterans Health Administration to seek reimbursement from Medicare in order to afford to provide the care that veterans need and deserve,” Meyers said.

The authors hope to conduct additional research to determine the precise amount of double-spending.

This analysis is part of a larger study led by Dr. Amal Trivedi, professor of health care policy and practice at Brown University and medicine who is also a physician at the Providence VA Medical Center.

“We are focused on Medicare Advantage enrollment growth among veterans and what that means for the Veterans Administration’s health care system,” Trivedi said. “This study highlights the need to better understand the implications of veterans’ enrollment in Medicare Advantage on potential duplicative federal spending.”