Duplicate Heath Coverage Costs U.S Government A Fortune

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Main Category: Medicare / Medicaid / SCHIP
Also Included In: Veterans / Ex-Servicemen;  Public Health
Article Date: 27 Jun 2012 – 12:00 PDT

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About 1.2 million veterans are covered under the Veterans Affairs health care system and the Medicare Advantage plan. An analysis, published in the Journal of the American Medical Association (JAMA) has now revealed that because these care programs are managed separately, the federal government spends a substantial and increasing amount of potentially duplicated funds in caring for the same individuals.

Background information in the articles states: “In the United States, some adults may be eligible to enroll simultaneously in 2 federally funded managed care systems: the Medicare Advantage (MA) program administered by the Centers for Medicare Medicaid Services (CMS) and the Veterans Healthcare System (VA) administered by the Veterans Health Administration in the U.S. Department of Veterans Affairs. Dual enrollment in the VA and MA presents a vexing policy problem.

The federal government’s payments to private MA plans assume that these plans are responsible for providing comprehensive care for their enrollees and are solely responsible for paying the costs of Medicare-covered services. If enrollees in MA plans simultaneously receive Medicare-covered services from another federally-funded hospital or other health care facility, and this facility cannot be reimbursed, then the government has made 2 payments for the same service.”

Amal N. Trivedi, M.D., M.P.H., of the Providence VA Medical Center and Brown University, Providence, R.I., and his team investigated incidences of dual enrollment, the use of outpatient and acute inpatient care in both VA and MA, and the costs of Medicare-covered services incurred by the VA to care for MA enrollees in a retrospective analysis of 1,245,657 veterans, who simultaneously enrolled in the VA and an MA plan between 2004-2009.

In comparison with 485,651 dual enrollees in 2004, the team noted an increase to 924,792 in 2009. They also noted that the numbers of dual enrollees who used VA services increased from 316,281 in 2004 to 557,208 in 2009. Furthermore, they discovered that 8.3% of the MA population enrolled in the VA in 2009, with 5% of MA beneficiaries being VA users.

The team discovered that in 2009, the total estimated cost of VA care for MA enrollees was $13.0 billion over 6 years. This is an increase from $1.3 billion to $3.2 billion per year.

The researchers write:

“The largest component of this spending was outpatient care, followed by acute and post-acute inpatient care, then prescription drugs. The annual costs of VA-financed fee-basis care increased by a factor of 5 during the study period (from $52 million in 2004 to $249 million in 2009), and represented approximately 8 percent of VA total spending for this population in 2009.”

The team found that 50% of the dual enrollees used both the VA and MA. In 2009, 419 MA plans participated in Medicare, of which an average of 7% of the plan’s enrollees used VA services. The VA paid for 44% of outpatient visits, 18% of acute medical and surgical hospital days and 15% of acute medical and surgical admissions for those who were dually enrolled.

The researchers write: “In 2009, the VA submitted collection requests to private insurers totaling $52.3 million on behalf of care provided to MA enrollees (amounting to 2 percent of the total cost of care for these enrollees in 2009). Of these requests, the VA collected $9.4 million for care (18 percent of the billed amount; 0.3 percent of the total cost of care).”

In order to decrease duplicate expenditure, the researchers recommend for policymakers to consider two strategies:

“First, the VA could be authorized to collect reimbursements from MA plans for covered services, just as the VA currently collects payments from private health insurers for non-Medicare patients. … A second approach may involve adjusting payments to MA plans on behalf of veterans who receive most or all of their care in the VA.”

They conclude, writing: “In light of the severe financial pressure facing the Medicare program, policymakers should consider measures to identify and eliminate these potentially redundant expenditures.”

Written by Petra Rattue

Copyright: Medical News Today

Not to be reproduced without permission of Medical News Today

  • Additional
  • References
  • Citations

“Duplicate Federal Payments for Dual Enrollees in Medicare Advantage Plans and the Veterans Affairs Health Care System”
Amal N. Trivedi, MD, MPH; Regina C. Grebla, MGA, MPH, PhD; Lan Jiang, MS; Jean Yoon, PhD; Jent Mor, PhD; Kenneth W. Kizer, MD, MPH
JAMA, June 2012, doi: 10.1001/jama.2012.7115

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