# Payment Source Shift for Surgical Care Among Veterans Enrolled in Medicare Advantage Plans

## TL;DR

High-veteran Medicare Advantage plans are more likely to shift surgical care costs to the Veterans Health Administration compared to other plans.

## Contribution

This study provides empirical evidence of cost-shifting from Medicare Advantage to the Veterans Health Administration in high-veteran plans.

## Key findings

- High-veteran MA plans were significantly less likely to use MA-paid surgeries and more likely to use VHA-paid care.
- Payment shifting was more pronounced for elective surgeries and decreased with higher surgical complexity.
- Policy reforms are needed to improve efficiency in veterans' surgical care funding.

## Abstract

Are high-veteran Medicare Advantage (MA) plans more likely than other MA plans to shift payments for inpatient surgical care to the Veterans Health Administration (VHA)?

In this cross-sectional study including 54 754 inpatient surgical episodes by VHA enrollees enrolled in MA plans in 2021, VHA enrollees enrolled in high-veteran MA plans were significantly less likely to have surgeries paid by MA and instead more likely to receive surgical care paid by the VHA compared with other MA plans with lower veteran enrollment.

These findings indicate substantial payment shifting from MA to VHA among high-veteran MA plans, underscoring the need for policy reforms to ensure more efficient allocation of federal resources when caring for veterans.

There is growing concern that Medicare Advantage (MA) plans are shifting the costs of care to the Veterans Health Administration (VHA) for veterans dually enrolled in both systems, particularly in high-veteran MA plans that disproportionately enroll veterans. However, empirical evidence evaluating the sources of payment for veterans' surgical care is lacking.

To evaluate differences in payment sources for surgical care between high-veteran MA plans and other MA plans.

This cross-sectional study used 2021 US national MA and VHA data from veterans dually enrolled in MA and VHA care for inpatient surgical episodes at VHA facilities (VHA-paid direct care), non-VHA community hospitals paid by VHA (VHA-paid community care), and community hospitals paid by MA (MA-paid community care) among veterans dually enrolled in MA and VHA care. Data were analyzed from April 1, 2024, to November 30, 2024.

Enrollment in high-veteran MA plans.

Likelihood of utilizing VHA-direct care, VHA-paid community care, and MA-paid community care. High-veteran MA plans were defined as plans with 20% or more veteran enrollees; others were categorized as other MA plans. Multinomial logistic regression was used to evaluate the association of veteran enrollment in high-veteran MA plans with the likelihood of surgical care paid by each payment source, adjusting for veteran and surgery characteristics, and state fixed effects. Stratified analyses were conducted based on surgical complexity and source of admission.

A total of 54 754 inpatient surgical episodes were analyzed, including 53 036 male (96.9%); 3133 Hispanic (5.7%), 47344 non-Hispanic Black (13.4%), 2933 non-Hispanic White (78.4%), and 1354 other or unknown race and ethnicity (2.5%); 601 (1.1%) were younger than 55 years, 3301(6.0%) aged 55 to 64 years, 22 381 (40.9%) aged 65 to 74 years, and 28471 (52%) aged 75 or older. Among these episodes, 52.1% were through MA-paid community care, 18.8% through VHA-direct care, and 29.1% through VHA-paid community care. Veteran enrollees in high-veteran MA plans were significantly less likely to have MA-paid surgeries (adjusted difference, −25.7 percentage points; 95% CI, −26.7 to 24.6 percentage points) and more likely to have surgeries paid through VHA-direct care (adjusted difference, 11.0 percentage points; 95% CI, 10.0-12.0 percentage points) and VHA-paid community care (adjusted difference, 14.7 percentage points; 95% CI, 13.6-15.8 percentage points) compared with veterans in other MA plans. As surgical complexity increased, differences in the use of VHA-paid direct care narrowed between high-veteran MA and other MA plans. Payment source differences were also less pronounced for nonelective surgeries admitted through emergency departments.

The findings of this cross-sectional study suggest substantial cost shifting in veterans’ surgical care from MA to VHA among high-veteran MA plans, underscoring the urgent need for policy reforms to improve the efficiency of veterans’ care.

This cross-sectional study evaluates differences in payment sources for surgical care between high-veteran Medicare Advantage plans and other Medicare Advantage plans.