Federal government may be paying twice for care of 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 those private plans.

That’s according to an analysis by researchers from Brown University and the Providence Veterans Affairs Medical Center. Published in JAMA, the study notes that because Medicare Advantage plans receive fixed per-patient payments for health care services without having payments reduced when veterans receive care through the Veterans Health Administration, the dual enrollment of some veterans may 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,” said 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.”

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, Meyers said. The Medicare Advantage program is growing rapidly, and the number of military veterans who used Veterans Health Administration services increased by 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 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’ health care, 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 health care to the beneficiaries,” Meyers said.

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. 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 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, 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 be able to afford to deliver the care that veterans need and deserve,” Meyers said.

The authors hope to conduct additional research to reveal the precise amount of duplicate spending.

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

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