VA, Medicare make 425,000 duplicate payments costing taxpayers $307 million: watchdog report

The Golden Horseshoe is a weekly designation from Just The News intended to highlight egregious examples of wasteful taxpayer spending by the government. The award is named for the horseshoe-shaped toilet seats for military airplanes that cost the Pentagon a whopping $640 each back in the 1980s.

The Department of Veterans' Affairs (VA) and the Centers for Medicare and Medicaid Services (CMS) paid for the same services for veterans leading to more than 425,000 duplicate payments, which cost taxpayers $307 million, according to a federal watchdog report in December. 

The VA inspector general found that the Veterans Health Administration, which oversees veterans' healthcare for the department, made the duplicate payments in conjunction with CMS, with the two agencies mutually unaware of payments made by the other due to their lack of shared healthcare claims data. 

The VHA and Medicare made payments on 140,869 duplicate claims from Jan. 1, 2017 through Sept. 30, 2019, with VHA paying over $103 million and Medicare paying over $79.8 million, according to the IG report. From October 1, 2019 to March 31, 2021, duplicate claim payments totaled 285,956, with VHA paying over $204 million and Medicare paying about $163.6 million.

When a veteran is eligible for both VA and Medicare benefits, the VHA is responsible for paying for the veteran's care even when Medicare covers the same service, which led to the duplicate payments.

The duplicate payments have been known to government auditors for more than 40 years, according to the VA inspector general, yet the issue remains unresolved.

"Potential duplicate payments by Medicare and VHA have been a long-standing issue," according to the IG report. "In 1979, the General Accounting Office reviewed a sample of Medicare-eligible veterans in Florida and California, identified duplicate claim payments, and recommended better coordination between the two agencies. However, as of May 2022, VA and the Centers for Medicare and Medicaid Services had not yet developed a data-sharing agreement or process to prevent or identify duplicate claim payments." 

The root of the double payment problem is the mutual independence of the two agencies' healthcare claims reporting systems.

"Because VHA and the Centers for Medicare and Medicaid Services do not share healthcare claims data, neither agency is aware of claims paid by the other agency," the IG report explains. "Without an interagency system, the risk of duplicate payments is increased, and it is difficult to determine which agency should pay the claim and which agency can collect overpayments."

"These problems could have been avoided if the [VHA], which receives $52.9 billion in funding, had simply implemented the accounting controls that any private sector business would have in place," wrote OpentheBooks.com Founder/CEO Adam Andrzejewsk. "Our veterans deserve better than an agency that can't bother to implement basic accounting controls."

The inspector general made three recommendations. The VA concurred entirely with two of the three and concurred in principle with one, namely the core recommendation that it work with the CMS "to establish a data-sharing agreement with VA to limit potential duplicate claim payments."

"In collaboration with VHA Office of Business Oversight and Centers for Medicare and Medicaid Services (CMS)," wrote VA undersecretary for health Dr. Shereef Elnahal, "the VHA Office of Integrated Care (IVC) intends to support efforts already in progress to establish a data-sharing agreement; however, VHA IVC does not have the authority to ensure a sharing agreement is established and therefore concurs in principle with this recommendation."