Research - Rehabilitation - Re-Employment

Sgt. Shaft 07/15/2002

Dear Sgt. Shaft,
I am writing this letter on behalf of my Uncle Floyd, who is a disabled World War II veteran and is currently in the VA Hospital in Lebanon, Pennsylvania, where he has been an inpatient for approximately three months. Uncle Floyd will be 85 in July and has been diagnosed with acute leukemia. 

My uncle was discharged from Lebanon VA Hospital for about two days, however, after falling twice, he was quickly readmitted.

Uncle Floyd has Medicare, supplemental health insurance and is 60 percent service-connected disabled as a result of his service in World War II.. Although Uncle Floyd has all these benefits that he has earned over the years, there seems to be a glitch in the system, because VA is denying him long term health care because he is only 60 percent disabled instead of 70 percent. This is an awful way to treat a disabled veteran, "especially a disabled veteran from America's greatest generation." Uncle Floyd was there when America needed him in World War II and now its time for America to be there for him.

My uncle is requesting and rightfully deserves long-term health care from the VA. Please correct this injustice and allow my uncle to live out his remaining time in peace in the VA hospital system. It's the right thing to do.

Thank you for your efforts in support of our nation's veterans!

Richard S.
Silver Spring, MD

Dear Richard:
Your uncle’s situation cries out, “Medicare subvention within the VA medical care system.” I agree with the American Legion that Medicare subvention is the right thing to do: There are logical reasons to justify Medicare subvention of the Veterans Health Administration (VHA) for the treatment of nonservice-connected medical conditions of enrolled Medicare-eligible veterans:

The majority of enrolled Medicare-eligible veterans meet or exceed the 40 quarters standard of Medicare covered employment.

All enrolled Medicare-eligible veterans are free to choose any health care provider. Based on the quality of service provided in VHA and its pharmacy, many Medicare-eligible veterans wisely opt for VHA.

As a Federal health care provider, VHA's billing should not exceed Medicare's allowable rates.

Under current law, VHA is authorized to bill and collect third-party reimbursements. Medicare is normally the secondary payer and would meet these criteria.

VHA is an integrated health care delivery system, which could easily accommodate the Medicare+Choice option of the Centers for Medicare and Medicaid Services (CMS).

Direct billing between two Federal agencies, VA and CMS, should greatly reduce opportunities for fraud, waste, and abuse.

Priority Group 7 veterans' access is contingent upon the ability to collect both copayments and third-party reimbursements.

Medicare-eligibility is not a consideration under VHA enrollment.

VHA's quality of care compares favorably when benchmarked against Medicare providers' performance measures of quality.

Some quick information about Medicare and the Veterans Health Administration:

Generally, any person is eligible for Medicare if that person or their spouse worked for at least 10 years in a Medicare-covered employment, is 65 years of age or older, and a citizen or permanent resident of the United States. Others may qualify for coverage if they are under age 65 with severe disabilities or with end-stage renal disease (permanent kidney failure requiring dialysis or a transplant). However, nearly every working person in the United States is mandated to make monthly contributions to Medicare throughout their career. Medicare is considered an entitlement; therefore, the program receives Federal mandatory appropriations.

Medicare has two parts: Part A (Hospital Insurance), for which most people do not have to pay; and Part B (Medical Insurance), toward which most people pay monthly premiums.

Although access to VHA is an earned benefit, it is not considered an entitlement; therefore, funding is dependent upon annual discretionary appropriations. VHA is authorized to bill, collect, and retain all copayments or third-party reimbursements. Medicare is one of the Federal Health Insurance Programs VHA is prohibited from billing or collecting third-party reimbursements.

With regard to the federal budget and appropriations to Department of Veterans Affairs, mandatory funding is prominently found in allocations to the Veterans Benefit Administration (VBA) to pay for disability compensation, pension, and other entitlements. No mandatory funding appears in any VHA appropriations.

Along with The American Legion, I continue to oppose the current scoring policy of counting third-party reimbursement as an offset against VHA discretionary funding. Discretionary funding should be determined based on meeting the health care needs of enrolled veterans in Priority Groups 1-6 and VA's other mission obligations. (Third-party reimbursements for veterans in Priority Group 7 should be scored as a supplement rather than an offset.) The current budgetary practice of establishing reimbursement goals (none of which have ever been fully achieved) has resulted in severe budgetary shortfalls due to unrealistic projections. Current billing and collection by VHA is absolutely unacceptable. Without major adjustments in VHA's Medical Cost Recovery Fund third-party reimbursement goals will continue to be a liability.

Currently, VHA's budget contains no evidence that any of Medicare funds are included in VHA's annual discretionary funding. Otherwise, it would be clearly identified similar to Medicare funding in the Indian Health Service (which is successfully billing and collecting from CMS for both Medicare and Medicaid). VHA's line-item budget entries do not reflect any transfer or credit of Medicare (mandatory appropriations) funding. In essence, VHA subsidizes the Centers for Medicare and Medicaid Services when Medicare-eligible veterans are treated for nonservice-connected conditions and cannot seek reimbursement. I would support Medicare subvention just for Priority Group 7 veterans.

TRICARE for Life is DoD's newest version of Medicare subvention. Policy wonks at The American Legion tell me they are unaware of any third-party reimbursement billing and collection problems being experienced with CMS by either TRICARE or the Indian Health Service. Therefore, I believe similar success with Medicare subvention could be achieved by VHA with CMS' assistance.

Send letters to Sgt. Shaft, c/o John Fales, P.O. Box 65900, Washington, D.C. 20035-5900; fax to 301-622-3330; call 202-462-4430 or email sgtshaft@bavf.org.

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