Veterans’ Medicare Advantage Enrollments Drive Cost Duplication

Despite automatically receiving health care coverage through the Veterans Health Administration (VHA), many Medicare-eligible veterans continue to enroll in Medicare Advantage (MA) plans and yet continue to primarily seek care through the VHA, to the tune of $1.32 billion in potentially wasteful MA spend in 2020 alone because they did not use any Medicare services. This is up from $838 million in such spend in 2016, according to new research published in Health Affairs.¹

Unfortunately, these are not novel findings. Prior research shows that between 2004 and 2009, veterans enrolled in MA plans accounted for $13 billion in health care costs while exclusively using the VHA for outpatient and acute inpatient services.² Also, the VHA cannot ask Medicare to reimburse this superfluous spending.³

Through the present research, they were seeking a greater understanding of MA plans with a disproportionate amount of veterans enrolled and potential correlations with wasteful federal spending. For this investigation, they used data from the 2016-22 Medicare Beneficiary Summary File for VHA enrollees; the VHA Planning Systems Support Group geocoded enrollee files; on MA encounters for veterans for 2016 through 2020, which are the most recent years for which these data are available; the VA Corporate Data Warehouse for 2016 to 2020; community care claims data from the Consolidated Data Set of the VA Office of Integrated Veteran Care for 2020; and Medicare plan payment data from CMS. The authors defined plans with high veteran enrollment as more than 20% of their total enrollment corresponding with VHA enrollees.

“Specifically, when MA-enrolled veterans seek care that is paid through the VHA, the federal government effectively pays twice,” the study authors wrote. “This is because the VHA finances care at its facilities or purchases health care services from community providers, whereas CMS pays MA plans fixed per member per month capitation rates for each MA-enrolled veteran, regardless of their Medicare use.”

Study Findings

There was a 14 percentage point increase in veteran dual enrollment in MA and VHA plans during the study period, from 1,103,638 (27.6% of VHA enrollees eligible for Medicare) to 1,559,824 (41.6% of VHA enrollees); a 78.6% leap in total MA plans enrolling veterans, from 2719 in 2016 to 4855 in 2022; and 100% growth in plans with high veteran enrollment, from 147 to 294. Further, there was steady growth of VHA enrollees in the plans with high veteran enrollment, ticking upward from 10% between 2016 and 2019 to 11.3% in 2020 to 14.7% in 2021 to 18.3% in 2022.

In addition, the high-veteran MA plans comprised 6.1% of all MA plans but enrolled 18.3% of the total veteran MA population.

The investigators behind this research are calling for policies that allow VHA plans to be reimbursed for care their members receive through Medicare. | Image Credit: © mehaniq41 - stock.adobe.com

The totals of dual enrollees who did not use any MA services was shown to be high, coming in at 9.7% of VHA enrollees in 2020 alone and close to 3 times that of the overall MA population (3.7%). This rose to 21% for veterans enrolled in high-veteran MA plans vs 8.3% of veterans in other MA plans. Dual enrollees were also 10.9% (95% CI, 10.7%-11.2%) less likely to use any Medicare services vs enrollees of other MA plans.

An overwhelming majority, 96.5%, of VHA enrollees in MA plans received their health care at VHA facilities and from VHA providers vs 86.9% enrolled in other MA plans, and those in high-veteran plans were 8.6% more likely to use direct VHA care as of 2020, for an adjusted OR of 3.71 (95% CI, 3.43-4.01). As well, 34.6% of VHA enrollees in high-veteran MA plans who didn’t use any Medicare service received at least some VHA-purchased care vs 24.9% of other MA plan members, making them overall 4.4% (95% CI, 3.7%-5.0%) more likely to receive VHA community care, at an adjusted OR of 1.29 (95% CI, 1.24-1.33).

The investigators noted that even after adjusting their sensitivity analyses to the alternative totals of 15% and 25% to define high-veteran MA plans, their results went unchanged; that their data were consistent with analyses of VHA enrollee health care use when using just MA plans with high data completeness; and that no changes to their results were seen when adjusting for Medicare service use between high-veteran MA and other MA plans.

Next Steps

“Our results highlight significant inefficiencies in federal spending,” the authors wrote, “particularly among high-veteran MA plans, where MA plans are paid full capitation rates or VHA enrollees who do not use any Medicare services.”

They also hypothesize that some MA plans may be specifically targeting veterans more likely to use VHA care instead of Medicare Advantage–paid services, and they underscored how approximately 25% of enrollees in high-veteran MA plans fall into higher-priority groups and are therefore exempt from VHA-related co-pays or cost sharing.

There are several notable implications of their research: there needs to be greater efficiency of process when providing care to veterans amid this rising MA enrollment, CMS needs to refine its payment adjustment models and adjust capitation payments to MA plans based on veteran enrollment and their VHA care use, and policies should be considered that permit reimbursement of VHA plan spend from MA plans for dual enrollees who primarily use their MA coverage.

References

1. Ma Y, Phelan J, Jeong KY, et al. Medicare Advantage plans with high numbers of veterans: enrollment, utilization, and potential wasteful spending. Health Aff (Millwood). 2024;43(11):1508-1517. doi:10.1377/hlthaff.2024.00302

2. Trivedi AN, Grebla RC, Jiang L,Yoon J, Mor V, Kizer KW. Duplicate federal payments for dual enrollees in Medicare Advantage plans and the Veterans Affairs health care system. JAMA. 2012;308(1):67-72. doi:10.1001/jama.2012.7115.

3. Cohen WJ, Ball RM. Social Security Amendments of 1965, Pub. L. No. 89-97, 79 Stat. 286, Sect. 1862(a)(3). Sopcial Security Administration. July 30, 1965. Accessed November 11, 2024. https://www.ssa.gov/policy/docs/ssb/v28n9/v28n9p3.pdf