U.S. paid extra $13 billion for some veterans' care: study

NEW YORK Tue Jun 26, 2012 8:13am EDT

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NEW YORK (Reuters Health) - The U.S. government paid billions of dollars for the medical care of some older veterans twice, according to a new study published on Tuesday.

The study's authors say that the federal government potentially spent an additional $13 billion on veterans who received care through the Veterans Health Administration (VA) while also being enrolled in Medicare Part C - also known as Medicare Advantage - between 2004 and 2009.

The Medicare Advantage program allows those eligible for Medicare - generally everyone over 65 - to buy private insurance that may offer additional services. Basically, the authors say, if a veteran who is covered by a Medicare Advantage plan receives medical care at a VA medical center, the government pays the VA for the care while still paying the Medicare Advantage provider - typically a private company.

"What we're saying is that the government needs to find a way to fix these billing services," said Dr. Kenneth Kizer, one of the study's authors and a professor at the University of California Davis in Sacramento.

The Centers for Medicare and Medicaid Service (CMS), the agency that oversees the government funded healthcare plans, disagrees.

The study in the Journal of the American Medical Association (JAMA) "identifies overpayments that may not actually exist. Payments to Medicare Advantage plans are already lower based on how often veterans use VA facilities for treatment," a CMS spokesperson told Reuters Health by email.

PAYING TWICE

For the study, the researchers linked a series of databases together to see how many veterans were enrolled in the VA healthcare system and Medicare Advantage plans between 2004 and 2009. They were also able to estimate how much care those veterans received at a VA center.

Over that time, the amount of veterans enrolled in both plans nearly doubled from about 485,000 in 2004 to about 925,000 in 2009.

By the end of the study, 5 percent of people in the Medicare Advantage program were using VA medical centers.

The amount of money the government paid to VA centers for those veterans increased too. The government spent $1.3 billion in 2004, and that increased to $3.2 billion in 2009.

The $3.2 billion, the authors say, represents 10 percent of the VA's operating budget for medical services that year.

The government spent about an extra $13 billion over the course of the study, write the authors.

"The government is paying twice. This is just a sign of stupidity. An intelligent person would not design a program in a way these people tell us is going on," said Amitabh Chandra, a professor of public policy at Harvard University in Cambridge, Mass.

POSSIBLE SOLUTIONS

Kizer and his fellow researchers recommend two ways to prevent the overpayment.

The first is to allow the VA to bill Medicare Advantage plans for the services, but that's prohibited by the Social Security Act. The second option is for the government to cut back on how much it pays Medicare Advantage providers that take on a lot of veterans.

Kizer told Reuters Health that most of the solutions would take an act of Congress.

"This isn't about unnecessary care. It's really about the billing and the payment for the care the person receives," said Kizer.

He added that it's important to emphasize that the veterans are not doing anything wrong. "He or she has earned their benefits from both the VA and Medicare."

Chandra, who was not involved with the new study, told Reuters Health that the study is "absolutely terrific" and highlights a problem that makes no sense.

He adds, however, "Simply solving the billing problem is not enough. Our healthcare problem is a lot more than just a broken billing system."

Chandra said veterans who get care from both the VA and a private system are at risk of getting fragmented care, which means they may be at risk for complications from inconsistent care, such as duplicated medications.

He said reforming the system to give consistent care could help fix the billing problem and lead to healthier veterans.

"The money savings will be much more than the $3.2 billion (per year)… We would also be keeping people healthy and alive."

SOURCE: bit.ly/JOTmp1 Journal of the American Medical Association, online June 26, 2012.

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