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04-07-2012 | Article

Government pays twice for some healthcare



MedWire News: The US Government is paying twice for the same healthcare for some veterans, investigators claim.

A retrospective analysis of data on more than 1.2 million veterans enrolled in both the Veterans Affairs (VA) health system and a Medicare Advantage (MA) managed-care plan found that in 2009, the VA system spent an estimated $ 52.3 million on healthcare provided to MA-plan enrollees.

However it was reimbursed for only $ 9.4 million, or 18%, of the billed amount, which is only 0.3% of the total actual cost of providing the care, say the study authors.

"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 two payments for the same service," write Amal Trivedi (Brown University, Providence, Rhode Island), and colleagues.

As reported in JAMA, Trivedi and colleagues looked at records on 1,245,657 veterans simultaneously enrolled in the VA and an MA plan between 2004 and 2009. They found that the number of dual enrollees nearly doubled from 2004 (485,651) to 2009 (924,792).

When they looked at the use of both acute inpatient and outpatient care among dual enrollees, they found that the VA spent an estimated $ 13 billion over 6 years on care for MA beneficiaries.

"The largest component of this spending was outpatient care, followed by acute and postacute 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% of VA total spending for this population in 2009," Trivedi et al write.

Half of all veterans enrolled in the VA and MA use both programs for their care, reports the team. The VA picked up the tab for 44% of outpatient visits, 15% of acute surgical and medical admissions, and 18% of acute surgical and medical hospitalizations.

The authors recommend that the governing agencies should empower the VA to collect reimbursements directly from MA plans for covered services just as it currently does for patients not enrolled in Medicare.

"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," the authors write.

By Neil Osterweil