Double Trouble: Study Shows Duplicate Payments for VA/MA Enrollees

By James Gutman - July 6, 2012

Does it seem sometimes that just when one Medicare Advantage issue gets resolved, another one is sure to flare up? Well it happened again June 26, two days before the Supreme Court upheld the health reform law. Researchers in a well-publicized article published in the Journal of the American Medical Association found the federal government paid $13 billion more than necessary between 2004 and 2009 on medical care for veterans who were enrolled in MA plans. And the authors pushed for moves that would prevent such duplicate payments, which they say are growing substantially with each passing year, including authorizing the Veterans Health Administration (VA) to collect reimbursements from MA plans for covered services by repealing a provision in a more-than-75-year-old law that bars such recoupments.

Of course, the situation is more complicated than that. When veterans access care at VA facilities rather than through civilian providers, Medicare does not pay for this care. And that lowers a county's fee-for-service costs on which MA payments are based. Those lower costs then translate into lower bids by MA plans than would be the case otherwise. Nevertheless, it is clear there are substantial duplicate payments, especially on outpatient services, and the researchers, who included former VA overseer Kenneth Kizer, M.D., noted that some MA contracts had upwards of 12% of their enrollees using VA faciilities in 2009. For one contract, that of Florida's Optimum Healthcare, the figure was a whopping 15.6%.

CMS is defending the current system, but it also is pledging to review claims and payment data from the VA that it couldn't access until the health reform law was enacted. And the pressure to find cost savings will only increase given the federal government's budget-deficit situation. What do you think will come of this? And what will be the effect on MA plans located near MA facilities? Somehow, the words of the three witches early in Shakespeare's Macbeth may give an answer: "Double, double, toil and trouble; Fire burn and caldron bubble."