A Harvard-led study exposes inefficiencies in federal spending on Medicare Advantage plans for veterans, emphasizing the urgent need for better coordination between the CMS and VHA to eliminate wasteful payments.
A new study led by Harvard T.H. Chan School of Public Health (HSPH) has uncovered significant inefficiencies in federal spending on Medicare Advantage (MA) plans, particularly for veterans who predominantly receive their medical care through the Department of Veterans Affairs (VA).
The researchers discovered that approximately one in five veterans enrolled in high-veteran MA plans, those where 20% or more of enrollees are veterans, did not utilize any Medicare services covered by MA within a given year. Instead, these veterans received their health care entirely through VA facilities.
This revelation points to the federal government potentially overpaying for services that aren’t being used.
The Centers for Medicare and Medicaid Services (CMS) paid over $1 billion to MA plans in 2020 alone for veterans who didn’t access Medicare services. Nearly 20% of this amount went disproportionately to high-veteran MA plans. From 2016 to 2020, there was a sharp rise, approximately 60%, in CMS payments for such enrollments.
“As veterans navigate the increasing complexities of health care options, our research aims to inform policymakers and stakeholders about the urgent need to optimize the use of federal resources in veteran care. This is particularly important given the substantial budget constraints that the Veterans Affairs system is currently facing,” corresponding author Jose Figueroa, an associate professor of health policy and management at HSPH, said in a news release.
The study, published in Health Affairs, involved using extensive data from the Centers for Medicare and Medicaid Services (CMS) and Veterans Health Administration (VHA). It scrutinized veterans’ health care enrollment and utilization patterns and the resultant financial implications for the federal government.
The findings call for stronger and more effective coordination between the VA and CMS to curb wasteful duplication of payments. The study noted that while MA plans receive full capitated payments to cover comprehensive medical care, the VA can’t bill MA plans for Medicare-covered services – leading to a redundancy in spending.
According to the researchers, a considerable gap exists that needs immediate attention to ensure a more efficient allocation of federal resources, especially as more veterans increasingly enroll in MA plans.
“The growth of high-veteran MA plans underscores the necessity to mitigate potentially wasteful payments and enhance care coordination between CMS and the VHA, especially amid ongoing enrollment growth in MA plans,” first author Yanlei Ma, a research associate in the Department of Health Policy and Management at HSPH, added.
The comprehensive study provides critical insights into improving federal spending efficiency and potentially enhancing the overall quality of veteran care.