By Brenda L. Mooney

PROVIDENCE, RI -- An overlap of services between the VA and some Medicare managed-care plans is costly for the federal government, which is effectively double-paying for the same services. A new study estimates the cost as $3.2 billion in 2009 alone.

The study, “Duplicate Federal Payments for Dual Enrollees in Medicare Advantage Plans and the Veterans Affairs Health Care System,” was published online last month by JAMA.¹

The authors, from the Providence, RI, VA Medical Center, and Brown University in  Providence, note that some veterans can legally enroll in both VHA and a Medicare Advantage (MA) plan, which are administered by private insurance companies and used by about one-fourth of all Medicare beneficiaries.

“This scenario produces the potential for redundant federal spending, because MA plans would receive payments to insure veterans who receive care from the VA, another taxpayer-funded health plan,” they point out.

Furthermore, the number of joint beneficiaries is increasing. From 2004 to 2009, the number of patients simultaneously enrolled increased from 485,651 to 924,792.

More than 8% of Medicare Advantage beneficiaries were enrolled at VA, and 5% used the services. The VA costs for those patients over six years totaled $13 billion, increasing from $1.3 billion in 2004 to $3.2 billion in 2009.

How Services Were Used

Here’s the breakdown of how dual enrollees used the services:

• 10% exclusively used the VA for outpatient and acute inpatient services;
• 35% exclusively used the MA plan;
• 50% used both the VA and MA; and
• 4% received no services during the calendar year.