VA Health Care:

Medicare Reimbursement for Services to Veterans

HEHS-98-145R: Published: Apr 28, 1998. Publicly Released: May 14, 1998.

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Pursuant to a congressional request, GAO provided information on proposals that would give the Department of Veterans Affairs (VA) authority to collect Medicare reimbursement for care given to eligible veterans, focusing on the: (1) benefits VA's use of a Medicare health maintenance organization (HMO) demonstration may provide for veterans; (2) risks such a demonstration may pose for veterans; (3) ways potential benefits and risks could differ if VA served high-income, Medicare-eligible veterans using Medicare's fee-for-service model; and (4) ways potential benefits and risks could differ if VA used a Medicare HMO demonstration to serve low-income, Medicare-eligible veterans who are geographically remote from a medical facility.

GAO noted that: (1) a Medicare HMO demonstration could offer such potential benefits as: (a) access to VA care for high-income, Medicare-eligible veterans who would otherwise not be served; and (b) enhanced access to or quality of care for veterans not enrolled in VA's demonstration; (2) a demonstration, however, could expose users to such potential risks as delays in receiving services, denials of care, or reductions in quality of care; (3) VA's ability to maximize potential benefits and minimize risks may be greatly affected by the demonstration locations selected; (4) conversely, it is also possible that potential benefits could be reduced and risks increased if VA selects a smaller geographic area; (5) benefits or risks for veterans may be greatly affected if VA's level of effort does not accurately reflect the historical level of appropriation spending for high-income, Medicare-eligible veterans; (6) risks for veterans could be minimized by VA's efforts to establish safeguards; (7) VA safeguards include procedures to: (a) assess available operating capacity and link the number of demonstration enrollees to that level; and (b) monitor waiting times, care denials, and quality of care on an ongoing basis for veterans who use VA health care but are not enrolled in VA's demonstration; (8) a VA fee-for-service demonstration offers the same benefit opportunities as a Medicare HMO demonstration, namely increased access to VA health care for high-income veterans who would otherwise not be served, and enhanced services for current users and others; (9) under a fee-for-service demonstration, VA would have more flexibility to establish safeguards that could help ensure that high-income, Medicare-eligible veterans are served only by using VA's excess operating capacity; (10) a Medicare HMO demonstration involving geographically remote low-income veterans could offer the same benefit opportunities and expose current VA users and other veterans to risks of delayed or denied care or reduced quality of care as previously discussed for a Medicare HMO demonstration involving high-income veterans; (11) relatively low benefits and high risks could result if VA must expand capacity in remote areas or purchase care from private providers in order to meet enrolled veterans' medical needs; (12) it is uncertain whether VA can establish a network of providers that will meet veterans' medical needs at or below Medicare reimbursements in all remote areas; and (13) risks for veterans could be minimized if VA has flexibility to establish a HMO demonstration only in areas where its initial assessments indicate that Medicare reimbursements should cover costs.

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