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Why are taxpayers paying Medicare Advantage plans for VA care?

Written by Diane Archer

A new study, published in JAMA network, finds that the VA delivers a significant amount of costly care received by people who are in both the VA and Medicare Advantage. But, the Centers for Medicare and Medicaid Services (CMS) still pays the same amount to Medicare Advantage plans to provide care to veterans as it pays for other enrollees, at a significant cost to taxpayers

About four percent of people in Medicare Advantage plans are also entitled to VA care. They have the choice of getting care through either program. The study was designed to see the share of costs each health plan picks up for coronary revascularization. It found that of the 18,874 enrollees in both health plans receiving this service, 22 percent relied exclusively on the VA to cover their care.

The findings suggest that the federal government duplicates spending unnecessarily for the 1.2 million veterans who are also enrolled in Medicare Advantage plans. It pays the Medicare Advantage plans as if their enrollees who are also in the VA only got care through their Medicare Advantage plans. In fact, for coronary revascularization procedures alone, Medicare Advantage plans saved $214.7 million dollars over three years because the VA picked up the cost.

The federal government should eliminate this duplicative spending. The best way to do so would be to reduce payments to MA plans with enrollees who also get their care through the VA. In 2009, an earlier study found that VA spent $3.9 billion on care for Medicare Advantage enrollees. N.B. Other evidence indicates that taxpayers have overpaid Medicare Advantage plans over $100 billion because they have claimed their enrollees are in worse health than they are.

As the law currently works, section 1862 of the Social Security Act prohibits the VA from collecting money from Medicare Advantage plans for services the VA pays for. But, the VA can and does bill private health insurers when it pays for care of veterans in non-Medicare private insurance plans. To eliminate overpayments to MA plans for their enrollees who are veterans, Congress should change the law so that the VA can bill Medicare Advantage plans for the cost of care it provides Medicare Advantage enrollees.

Alternatively, as the GAO has proposed, CMS should review VA utilization data and, based on that data, adjust its payments to Medicare Advantage plans. There is no reason for the federal government–our taxpayers dollars– to double-pay for services to the benefit of the corporate health insurance industry.

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