VHA Spending for VHA-Medicare Advantage Dual Enrollee Veterans More than Doubled from 2011-2020 to $12B as Dual Enrollment Grew
BACKGROUND:
Veterans enrolled in VHA with Medicare coverage have two government sources of healthcare financing: they can receive services from VHA, which includes care provided by VHA clinicians and facilities as well as VHA-purchased community care, or they can have their care covered by Medicare. VHA finances care for Veterans in VHA facilities or when Veterans are referred by VHA to a community facility, while Medicare is billed only if a Veteran sees a clinician for a non-VHA covered service. When VHA-Medicare dual enrollees opt for Medicare Advantage (MA), private health insurers receive payments tied to enrollees' expected costs of Medicare-covered healthcare benefits. This system has raised concerns that VHA-MA dual enrollment may be a source of significant excess federal spending, as MA plans receive payments for comprehensive healthcare services, without having these payments reduced if Veterans receive care in VHA. Further, VHA is prohibited from billing MA plans for VHA-financed care. Using VHA and VHA-purchased care utilization and cost records, this study examined Veterans' dual enrollment in VHA and MA, and VHA spending on inpatient, outpatient, community care, and pharmacy services for MA enrollees from 2011-2020.
FINDINGS:
- From 2011–2020, the number of VHA-MA dual enrollees who used VHA services increased by 63%, from 14% of all VHA-Medicare enrollees in 2011 to 21% of all VHA-Medicare enrollees in 2020.
- Total VHA spending for dual enrollees using VHA care increased from $5 billion in 2011 to $12 billion in 2020. The largest growth in spending during this period was for community care (a relative 370% increase) followed by outpatient (220% increase), pharmacy (200% increase), and inpatient (140% increase).
IMPLICATIONS:
- This study highlights the need to further understand the implications of Veteran enrollment in MA on potentially duplicative federal spending.
- Policy changes might be warranted to expand VHA’s ability to recoup payments from MA insurers.
LIMITATIONS:
- The magnitude of duplicate payments cannot be measured.
AUTHOR/FUNDING INFORMATION:
This study was funded by HSR. Dr. Schwartz is supported by an HSR Career Development Award and is with HSR’s Center for Health Equity Research and Promotion. Dr. Yoon is with HSR’s Health Economics Resource Center. Dr. Trivedi is with HSR’s Transformative Health systems Research to Improve Veteran Equity and Independence (THRIVE) Center of Innovation.
Meyers DJ, Schwartz AL, Jiang L, Yoon J, Trivedi AN. Spending by the Veterans Health Administration for Medicare Advantage Dual Enrollees, 2011–2020. Research Letter. JAMA. October 2, 2024; online ahead of print.
