MEDICARE 

ADVANTAGE

Action Needed to 

Ensure Appropriate 

Payments for 

Veterans and 

Nonveterans

Report to Congressional Requesters

April 2016

GAO-16-137

United States Government Accountability Office
United States Government Accountability Office

Highlights of GAO-16-137, a report to 

congressional requesters

April 2016

MEDICARE ADVANTAGE

Action Needed to Ensure Appropriate Payments for 

Veterans and Nonveterans

Why GAO Did This Study

Veterans enrolled in Medicare can also 

enroll in the VA health care system and 

may receive Medicare-covered 

services from either their Medicare 

source of coverage or VA. Payments to 

MA plans are based in part on 

Medicare FFS spending and may be 

lower than they otherwise would be if 

veterans enrolled in Medicare FFS 

receive some of their services from VA. 

Because this could result in payments 

that are too low for some MA plans, 

CMS is required to adjust payments to 

MA plans to account for VA spending, 

as appropriate. CMS determined an

adjustment was needed for 2017, but 

not for 2010 through 2016.

GAO was asked to examine how VA’s 

provision of Medicare-covered services 

to Medicare beneficiaries affects 

payments to MA plans. GAO (1) 

estimated VA spending on Medicarecovered services and how VA 

spending affects payments to MA 

plans and (2) evaluated whether CMS 

has the data it needs to adjust 

payments to MA plans, as appropriate. 

GAO used CMS and VA data to 

develop an estimate of VA spending on 

Medicare-covered services. GAO 

reviewed CMS documentation and 

interviewed CMS and VA officials.

What GAO Recommends

CMS should (1) assess the feasibility 

of revising its methodology for 

determining if an adjustment to the 

benchmark is needed by obtaining 

diagnoses and utilization data from VA 

and (2) make any additional 

adjustments to MA plan payments as 

appropriate. HHS disagreed with the 

first recommendation, but agreed with 

the second. GAO maintains that VA 

data may improve CMS's analysis.

What GAO Found

In fiscal year 2010, the Department of Veterans Affairs (VA) health care system 

provided $2.4 billion in inpatient and outpatient services to the 833,684 veterans 

enrolled in Medicare Advantage (MA), a private plan alternative to Medicare feefor-service (FFS). While the Centers for Medicare & Medicaid Services (CMS), 

an agency within the Department of Health and Human Services (HHS),

generally pays Medicare FFS providers separately for each service provided, MA 

plans receive a monthly payment from CMS to provide all services covered under 

Medicare FFS. These monthly payments are based in part on a bidding target, 

known as a benchmark, and risk scores, which are used to adjust the payment 

amount to account for beneficiary demographic characteristics and health 

conditions. Both the benchmark and risk scores are calibrated based on 

Medicare FFS spending. Therefore, VA’s provision of Medicare-covered services 

to veterans enrolled in Medicare FFS likely resulted in lower Medicare FFS 

spending and, in turn, lower overall payments to MA plans. However, the extent 

to which these payments reflect the expected utilization of services by the MA 

population remains uncertain. Specifically, payment amounts may still be too 

high or could even be too low, depending on the utilization of VA services by 

veterans enrolled in MA plans and veterans enrolled in Medicare FFS. If, for 

example, veterans enrolled in MA receive a greater proportion of their services 

from VA relative to veterans enrolled in Medicare FFS, then the benchmark may 

be too high. Conversely, payments may be too low if MA-enrolled veterans 

tended to receive fewer Medicare-covered services from VA relative to veterans 

enrolled in Medicare FFS. Assessing these possible differences would require 

data on the services veterans receive from MA. CMS began collecting these data 

in 2012 but, as of August 2015, had yet to take all the steps necessary to validate 

the accuracy of the data, as GAO has previously recommended.

CMS also lacks data on VA diagnoses and utilization that may improve its 

methodology for determining if an adjustment to the benchmark is needed to 

account for VA’s provision of Medicare-covered services to veterans enrolled in 

Medicare FFS. Federal standards for internal control call for management to 

have the operational data it needs to meet agency goals to effectively and 

efficiently use resources and to help ensure compliance with laws and 

regulations. While CMS determined that no adjustment was necessary for 2010 

through 2016 based on a 2009 study it performed, CMS’s methodology did not 

account for services provided by and diagnoses made by VA, which can only be 

identified using VA’s data. CMS officials updated the agency’s study in 2016 

using the same methodology, but with more recent data. CMS officials told GAO 

that they did not plan to incorporate VA utilization and diagnoses data into their 

analysis because (1) they do not currently have such data and (2) incorporating 

these data would introduce additional uncertainty into the analysis. However, if 

an adjustment is needed but not made or if an adjustment is too low due to 

limitations with CMS’s methodology, it could result in some plans being paid too 

much and others too little. If CMS does revise its methodology and determines 

that an adjustment to the benchmark is necessary, it may need to make 

additional adjustments to MA plan payments, as discussed in this report. View GAO-16-137. For more information, 

contact James Cosgrove at (202) 512-7114 or 

cosgrovej@gao.gov.
Page i GAO-16-137 Veterans and Medicare Advantage

Letter 1

Background 4

Overall Payments to MA Plans Likely Were Lower Due to VA’s 

Provision of $2.4 Billion in Services to MA-Enrolled Veterans, 

but Appropriateness of Resulting Payments Still Uncertain 8

CMS Does Not Have the VA Diagnosis and Utilization Data That 

May Improve Its Methodology for Calculating Adjustments to 

MA Payments 11

Conclusions 14

Recommendations for Executive Action 15

Agency Comments and Our Evaluation 15

Appendix I Scope and Methodology 18

Appendix II Comments from the Department of Health and Human Services 22

Appendix III GAO Contact and Staff Acknowledgments 25

Contents
Page ii GAO-16-137 Veterans and Medicare Advantage

Abbreviations

CMS Centers for Medicare & Medicaid Services

DOD Department of Defense

FFS fee-for-service

HHS Department of Health and Human Services

HMO health maintenance organization

MA Medicare Advantage

PFFS private fee-for-service

PMPM per member per month

PPACA Patient Protection and Affordable Care Act

PPO preferred provider organization

VA Department of Veterans Affairs

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Page 1 GAO-16-137 Veterans and Medicare Advantage

441 G St. N.W.

Washington, DC 20548

April 11, 2016

The Honorable Charles E. Grassley

Chairman

Committee on the Judiciary

United States Senate

The Honorable Ron Johnson

Chairman

Committee on Homeland Security and Governmental Affairs

United States Senate

The Honorable Richard Burr

United States Senate

The Honorable Michael B. Enzi

United States Senate

Both veterans and nonveterans may enroll in Medicare Advantage (MA), 

a private plan alternative to Medicare fee-for-service (FFS). Unlike in 

Medicare FFS, where providers are generally paid separately for each 

service provided, the Centers for Medicare & Medicaid Services (CMS) 

pays MA plans a fixed per member per month (PMPM) payment to 

provide all services covered under Medicare FFS.1 This payment does 

not vary on the basis of the individual services beneficiaries receive. 

Veterans enrolled in an MA plan can also enroll in the Department of 

Veterans Affairs (VA) health care system and may receive Medicare-

 1

CMS is the agency within the Department of Health and Human Services (HHS) that is 

responsible for administering the Medicare program.

Letter
Page 2 GAO-16-137 Veterans and Medicare Advantage

covered services from either source.2 A 2012 study estimated VA 

provided $13 billion in covered services to 1.2 million veterans who were 

also MA enrollees between 2004 and 2009.3 The authors characterized 

VA spending on Medicare-covered services as “duplicate federal 

payments,” although they stated that they were unable to quantify the 

amount of excess federal payments to MA plans on behalf of VA 

enrollees because they did not have access to data needed to determine 

how the services provided by VA affect CMS payments to MA plans. 

Information on this relationship is critical because any potential excess 

federal payments could be reduced, or eliminated, if MA payments were 

sufficiently lower as a result of MA-enrolled veterans obtaining care 

through VA instead of their MA plans.

VA’s provision of Medicare-covered services could also result in PMPM 

payments to some individual MA plans that are too low. CMS generally 

calculates the benchmark—a bidding target used in determining PMPM 

payments to MA plans—from average per capita Medicare FFS spending 

in the counties in which a plan operates and other factors. When veterans 

from those counties are enrolled in Medicare FFS but receive Medicarecovered services from VA, average per capita Medicare FFS spending is 

lower than it otherwise would have been if veterans received all of their 

services from Medicare FFS; this can lower the benchmark and 

correspondingly lower PMPM payments to MA plans. The resulting 

PMPM payment would be the same for both veterans and nonveterans. 

However, the amount may, on average, be too high for veterans and too 

low for nonveterans. As a result, individual MA plans that enroll a 

disproportionately high number of nonveterans may receive a PMPM 

payment that is too low.

 2

VA operates one of the largest health care delivery systems in the nation. We use the 

term “Medicare-covered services” to refer to the hospital and other inpatient stays covered 

under Medicare Part A and the hospital outpatient, physician, and other services covered 

under Medicare Part B. When we refer to VA providing Medicare-covered services in this 

report, we mean that VA provided services through its health care delivery system to a VA 

enrollee who was also a Medicare enrollee and who could have obtained the same 

services through Medicare FFS or an MA plan, depending on the individual’s enrollment. 

The term “veteran” in this report is synonymous with a VA enrollee who is also a Medicare 

enrollee, whereas a “nonveteran” is a Medicare enrollee who is not a VA enrollee. In 2010, 

the time period of our review, there were 833,684 individuals who met our definition of a 

“veteran” by being enrolled in both VA health care and an MA plan.

3

See Amal N. Trivedi et al., “Duplicate Federal Payments for Dual Enrollees in Medicare 

Advantage Plans and the Veterans Affairs Health Care System,” The Journal of the 

American Medical Association, 308, no. 1 (July 4, 2012): 67-72.
Page 3 GAO-16-137 Veterans and Medicare Advantage

To address the possibility that PMPM payments for nonveterans are too 

low, CMS is required to adjust payments to MA plans, as appropriate, to 

account for the effect of VA’s provision of Medicare-covered services.4 In 

2009, CMS used Medicare FFS data to develop an estimate of the effect 

of VA spending on MA plan payments.5 Based on the results of its study, 

CMS determined that no adjustment was necessary from 2010 through 

2016. In 2016, CMS updated its 2009 study using more recent data and 

determined that an adjustment would be necessary for 2017.6 Given the 

potential implications for MA plan payments, it is especially important that 

CMS’s estimate is based on reasonable data and sound methodology.

You asked us to examine how VA’s provision of Medicare-covered 

services affects payments to MA plans. In this report, we

• estimate the amount that VA spends to provide Medicare-covered 

services to veterans enrolled in MA plans and how VA spending on 

these services affects CMS payments to MA plans; and

• evaluate the extent to which CMS has the data it needs to determine 

an appropriate adjustment, if any, to MA payments to account for VA’s 

provision of Medicare-covered services to MA-enrolled veterans.

To estimate the amount that VA spends to provide Medicare-covered 

services to veterans enrolled in MA plans, we first identified all months in 

which individual veterans were enrolled in VA health care and an MA plan 

during fiscal year 2010 using enrollment data from CMS and VA. We 

conducted our analysis for fiscal year 2010 because that was the most 

 4

42 U.S.C. § 1395w-23(c)(1)(D)(i),(iii). For purposes of making an adjustment, as 

appropriate, CMS is required to estimate, on a per capita basis, the amount of additional 

Medicare FFS payments that would have been made in a county if individuals entitled to 

such benefits had not received services from the Department of Defense (DOD) or VA. 

Because our objectives were to address how VA spending may affect MA payments, we 

did not include DOD within our scope of work.

5

This estimate was determined by calculating average per capita county Medicare FFS 

spending—which is used in determining the benchmark—for nonveterans and comparing 

it to the average per capita county Medicare FFS spending for all Medicare FFS 

beneficiaries, after adjusting for beneficiaries’ health conditions and demographic 

characteristics. See Centers for Medicare & Medicaid Services, Advance Notice of 

Methodological Changes for Calendar Year (CY) 2010 for Medicare Advantage (MA) 

Capitation Rates and Part C and Part D Payment Policies (Baltimore, Md.: Feb. 20, 2009).

6

See Centers for Medicare & Medicaid Services, Advance Notice of Methodological 

Changes for Calendar Year (CY) 2017 for Medicare Advantage (MA) Capitation Rates and 

Part C and Part D Payment Policies and 2017 Call Letter (Baltimore, Md.: Feb. 19, 2016).
Page 4 GAO-16-137 Veterans and Medicare Advantage

recent analysis year for which data were available at the time we began 

our study. We then estimated VA spending on Medicare-covered inpatient 

and outpatient services using VA utilization and cost data, both for 

services provided by VA and for VA care in the community.

7 To determine 

how VA spending on these services affects CMS payments to MA plans, 

we reviewed CMS documentation and interviewed CMS officials.

To evaluate the extent to which CMS has the data it needs to determine 

an appropriate adjustment, if any, to MA payments to account for VA’s 

provision of Medicare-covered services to MA-enrolled veterans, we 

reviewed CMS documentation and interviewed CMS officials.

To assess the reliability of the data we used in our analyses, we reviewed 

related documentation, interviewed knowledgeable officials from CMS 

and VA, and performed appropriate electronic data checks. This 

assessment allowed us to determine that the data were reliable for our 

objectives. See appendix I for more details on our scope and 

methodology.

We conducted this performance audit from July 2013 to April 2016 in 

accordance with generally accepted government auditing standards. 

Those standards require that we plan and perform the audit to obtain 

sufficient, appropriate evidence to provide a reasonable basis for our 

findings and conclusions based on our audit objectives. We believe that 

the evidence obtained provides a reasonable basis for our findings and 

conclusions based on our audit objectives.

For fiscal year 2015, VA estimated it received $59.2 billion in 

appropriations, including collections, to fund health care services for 

veterans, manage and administer VA’s health care system, and operate 

 7

In certain cases, such as when VA is unable to provide specialty care services or wants 

to ensure that veterans are provided timely and accessible care, VA pays private 

providers to provide services to veterans. VA refers to these types of services as VA care 

in the community. 

We excluded prescription drug services from our analysis.

Background

VA Health Care
Page 5 GAO-16-137 Veterans and Medicare Advantage

and maintain the VA health care system’s capital infrastructure.8 VA 

estimated that in fiscal year 2015 it provided health care services—

including inpatient services, outpatient services, and prescription drugs—

to 6.7 million eligible patients.9

For calendar year 2015, the Medicare Trustees estimated that CMS paid

MA plans about $155 billion to provide coverage for 16.4 million Medicare 

beneficiaries.10 Beneficiaries of MA can enroll in one of several different 

plan types, including health maintenance organizations (HMO), private 

fee-for-service (PFFS) plans, preferred provider organizations (PPO), and 

regional PPOs.11 Medicare pays MA plans a capitated PMPM amount. 

This amount is based in part on a plan’s bid, which is its projection of the 

revenue it requires to provide a beneficiary with services that are covered 

under Medicare FFS, and a benchmark, which CMS generally calculates 

from average per capita Medicare FFS spending in the plan’s service 

area and other factors. If a plan’s bid is higher than the benchmark, 

Medicare pays the plan the amount of the benchmark, and the plan must 

charge beneficiaries a premium to collect the amount by which the bid 

exceeds the benchmark.12 If the plan’s bid is lower than the benchmark, 

 8

For example, VA’s collections include third-party payments from veterans’ private health 

care insurance for the treatment of nonservice-connected conditions and veterans’

copayments for outpatient medications. 

9

According to VA officials, this figure includes 694,000 individuals who were VA 

employees, enrollees in the Civilian Health and Medical Program of VA, enrollees in the 

Spina Bifida Healthcare Program, children of women Vietnam War veterans, caregivers of 

veterans, recipients of humanitarian care, or active duty service members.

10This amount includes payments for some non-MA plans, such as cost plans and 

Program of All-Inclusive Care for the Elderly plans. The Boards of Trustees of the Federal 

Hospital Insurance and Federal Supplementary Medical Insurance Trust Funds, 2014 

Annual Report of The Boards of Trustees of the Federal Hospital Insurance and Federal 

Supplementary Medical Insurance Trust Funds (Washington, D.C.: July 28, 2014),163 and 

167. 

11Beneficiaries in HMOs are generally restricted to seeing providers within a network. 

Beneficiaries enrolled in PFFS plans may generally see any provider that accepts the 

plan’s payment terms. However, since 2011, these plans have generally been required to 

maintain a network of contracted providers, and beneficiaries that see out-of-network 

providers may pay higher cost-sharing amounts. Beneficiaries in PPOs can see both innetwork and out-of-network providers but pay higher cost-sharing amounts if they use outof-network services. Regional PPOs serve state or multistate regions established by CMS. 

12Medicare compares a plan’s bid to the benchmark after adjusting the benchmark to 

reflect the health status of the plan’s enrollees.

Medicare Advantage
Page 6 GAO-16-137 Veterans and Medicare Advantage

Medicare pays the plan the amount of the bid and makes an additional 

payment to the plan called a rebate.13 Plans may use this rebate to fund 

benefits not covered under Medicare FFS.

CMS uses risk scores to adjust PMPM payments to MA plans to account 

for beneficiaries’ health status and other factors, a process known as risk 

adjustment. For beneficiaries enrolled in MA, risk scores are generally 

determined on the basis of diagnosis codes submitted for each 

beneficiary, among other factors, and are adjusted annually to account for 

changes in diagnoses from the previous calendar year.14 In addition, risk 

scores for beneficiaries who experience long-term stays of more than 90 

days are calculated differently to account for the differences in expected 

health expenditures. While risk scores are based on diagnoses from the 

previous year, changes to the risk score to account for long-term hospital 

stays of more than 90 days are reflected in the calendar year when the 

stay occurred.

The Patient Protection and Affordable Care Act (PPACA) changed how 

benchmarks are calculated so that they will be more closely aligned with 

Medicare FFS spending. Specifically, the benchmark changes, which are 

to be phased in from 2012 through 2017, will result in benchmarks tied to 

a percentage of per capita Medicare FFS spending in each county. In 

general, for those counties in the highest Medicare FFS spending 

quartile, benchmarks will be equal to 95 percent of county per capita 

Medicare FFS spending, and for those counties in the lowest Medicare 

FFS spending quartile, benchmarks will be equal to 115 percent of per 

 13Prior to 2012, if a plan’s bid was less than the benchmark, the plan received a rebate 

equal to 75 percent of the difference between the bid and the benchmark. Starting in 

2012, CMS began phasing in a new formula for calculating rebates that is based in part on 

measures of the quality of care provided by the MA plan. Under this new formula, rebates 

from 2014 onward can equal between 50 percent and 70 percent of the difference 

between the bid and the benchmark.

14Enrollees new to Medicare are assigned risk scores that are not based on submitted 

diagnoses.

Change to Benchmark 

Calculation
Page 7 GAO-16-137 Veterans and Medicare Advantage

capita Medicare FFS spending.15 Prior to 2012, benchmarks in all 

counties were at least as high as per capita Medicare FFS spending, but 

were often much higher. For example, while counties generally had 

benchmarks that were derived from per capita county Medicare FFS 

spending, the benchmarks were generally increased annually by a 

minimum update equal to the national growth rate percentage in Medicare 

FFS spending. In cases where the growth rate used to update the 

benchmark was greater than the rate at which per capita Medicare FFS 

spending grew within a county, it would result in a benchmark that was 

higher than the average per capita county Medicare FFS spending rate. 

In addition, some urban and rural counties had benchmarks that were 

“floor” rates, which were set above per capita county Medicare FFS 

spending rates to encourage insurers to offer plans in the areas. 

According to a CMS study reported in the 2010 MA Advance Notice, 

approximately 96 percent of counties had benchmarks that were set 

based on a minimum update or were floor rates.16

Especially in counties with a relatively high proportion of veterans, 

average per capita Medicare FFS spending may be low if many veterans 

receive health care services from VA instead of Medicare providers. 

Because benchmarks are calculated based in part on Medicare FFS 

spending, MA payments may be lower in such counties and may not 

reflect Medicare’s expected cost of caring for nonveterans. CMS is 

required to estimate, on a per capita basis, the amount of additional 

Medicare FFS payments that would have been made in a county if 

Medicare-eligible veterans had not received services from VA. If needed, 

CMS is also required to make a corresponding MA payment adjustment.17

To address these requirements, CMS reported the results of its study 

 15See 42 U.S.C. § 1395w-23(n)(2)(B),(D). If there is a change in the quartile in which an 

area is ranked compared to the previous year, the applicable percentage for the area in 

the year is the average of the applicable percentage for the previous year and the 

applicable percentage that would otherwise apply for the year. For additional information 

on how PPACA changed the way MA plan payment amounts are set, including other 

PPACA provisions that may result in benchmark increases, see GAO, Medicare 

Advantage: Comparison of Plan Bids to Fee-for-Service Spending by Plan and Market 

Characteristics, GAO-11-247R (Washington, D.C.: Feb. 4, 2011).

16See Centers for Medicare & Medicaid Services, Advance Notice of Methodological 

Changes for Calendar Year 2010.

1742 U.S.C. § 1395w-23(c)(1)(D)(iii).

Required MA Payment 

Adjustment for VA 

Spending
Page 8 GAO-16-137 Veterans and Medicare Advantage

analyzing the cost impact of removing veterans eligible to receive 

services from VA on 2009 Medicare FFS county rates in the 2010 MA 

Advance Notice.18 CMS reported that, on average, removing veterans 

from the calculation of counties’ per capita Medicare FFS spending rate 

had minimal impact on per capita spending and that the differences in 

expenditures between all Medicare beneficiaries and nonveterans were 

more attributable to normal, random variation than to distinctly different 

spending for the two populations. Based on CMS’s study results, the 

agency concluded that no adjustment for VA spending on Medicarecovered services was necessary to 2010 through 2016 MA payments. In 

2016, CMS updated its 2009 study using more recent data and 

determined that an adjustment would be necessary for 2017.19 

VA provided about $2.4 billion in Medicare-covered inpatient and 

outpatient services to the 833,684 MA-enrolled veterans in fiscal year 

2010. In total, VA provided approximately 61,000 inpatient services and 

8.2 million outpatient services to veterans enrolled in MA plans. During 

that same time period, CMS paid MA plans $8.3 billion to provide all 

Medicare-covered services to veterans enrolled in an MA plan.

VA’s provision of services to MA-enrolled veterans resulted in overall 

payments to MA plans that were likely lower than they otherwise would 

have been if veterans had obtained all of their Medicare-covered services

through Medicare FFS providers and MA plans. Specifically, because VA 

provides services to MA-enrolled veterans, the three components that 

determine payments to MA plans—benchmarks, bids, and risk scores—

are likely lower than they otherwise would be, which results in lower 

overall payments to MA plans.

• Benchmarks—Because benchmarks are generally calculated in part 

from per capita county Medicare FFS spending rates, any VA 

spending on Medicare-covered services for veterans enrolled in 

Medicare FFS would be excluded from the benchmark calculation. As 

a result, the benchmark would be lower and, in turn, payments to MA 

 18See Centers for Medicare & Medicaid Services, Advance Notice of Methodological 

Changes for Calendar Year 2010. 

19See Centers for Medicare & Medicaid Services, Advance Notice of Methodological 

Changes for Calendar Year 2017.

Overall Payments to 

MA Plans Likely Were 

Lower Due to VA’s 

Provision of $2.4 

Billion in Services to 

MA-Enrolled 

Veterans, but 

Appropriateness of 

Resulting Payments 

Still Uncertain
Page 9 GAO-16-137 Veterans and Medicare Advantage

plans would also be lower. This would be particularly true following 

the implementation of the PPACA revisions to the benchmark 

calculation—to be phased in from 2012 through 2017—as the PPACA 

revisions further strengthened the link between the benchmark and 

average per capita county Medicare FFS spending rates.

• Bids—MA payments also may be lower to the extent that MA plans 

set bids based on historical experience. MA plan bids may reflect the 

fact that in previous years enrolled veterans received some Medicarecovered services from VA instead of the MA plan. If so, MA plan bids 

would be lower and, in turn, MA payments would also be lower.

• Risk scores—VA’s provision of Medicare-covered services may result 

in lower risk scores because, like benchmarks, they are calibrated 

based on Medicare FFS spending for beneficiaries with specific 

diagnoses identified by Medicare. As a result, any VA spending on 

Medicare-covered services for veterans enrolled in Medicare FFS that 

is related to these diagnoses would be excluded when the model is 

calibrated. In addition, MA plans would generally not have access to 

diagnoses made by VA. Therefore, when VA identifies and treats a 

diagnosis not identified by the veteran’s MA plan, it would not be 

incorporated into the veteran’s risk score. Because PMPM payments 

to MA plans are risk-adjusted, a lower risk score would result in lower 

payments to MA plans.20

Although VA spending on Medicare-covered services likely results in 

lower CMS payments to MA plans, the extent to which these payments 

reflect the expected utilization of services by the MA population remains 

uncertain. Specifically, payment amounts may still be too high or could 

even be too low, depending on the utilization of VA services by veterans 

enrolled in MA plans and veterans enrolled in Medicare FFS.21 As noted 

 20VA’s provision of Medicare-covered services can also affect risk scores if VA provides 

long-term stays not identified by CMS. Because CMS has a different risk score model for 

institutionalized beneficiaries, risk scores could increase or decrease under the 

institutional model, depending on beneficiaries’ health conditions.

21Similar to how differences in the use of services between MA and Medicare FFS 

beneficiaries vary across geographic areas, differences in the use of VA services between 

MA and Medicare FFS veterans may also vary across counties. For example, while MA 

and Medicare FFS beneficiaries have similar rates of coronary artery bypass graft surgery 

in some hospital referral regions after adjusting for age, sex, and race, there are other 

hospital referral regions where Medicare FFS beneficiaries receive coronary artery bypass 

graft surgery at more than twice the rate of MA beneficiaries. See Daniel D. Matlock et al., 

“Geographic Variation in Cardiovascular Procedure Use among Medicare Fee-for-Service 

vs Medicare Advantage Beneficiaries,” The Journal of the American Medical Association

310, no. 2 (July 10, 2013): 155-162.
Page 10 GAO-16-137 Veterans and Medicare Advantage

earlier, both benchmarks and risk scores are generally calibrated based 

on veterans and nonveterans enrolled in Medicare FFS. However, 

veterans enrolled in MA plans may differ in the proportion of services they 

receive from VA compared to veterans enrolled in Medicare FFS, which 

would affect the appropriateness of payments to MA plans.

• For example, payments to MA plans may be too high if veterans 

enrolled in MA receive a greater proportion of their services from VA 

relative to veterans enrolled in Medicare FFS. Under this scenario, the 

benchmark would reflect the higher use of Medicare services by 

Medicare FFS beneficiaries who are receiving fewer of their services 

from VA than are veterans enrolled in MA. As a result, the benchmark 

may be too high and, in turn, payments to MA plans may be too 

high.22 This effect of a higher benchmark may be at least partially 

offset by a risk score that is too high.23

• In contrast, payments to MA plans may be too low if veterans enrolled 

in MA receive a lesser proportion of their services from VA relative to 

veterans enrolled in Medicare FFS. Under this scenario, the 

benchmarks may be too low and may result in MA plans being

underpaid, although the effect may be partially offset by risk scores 

that are too low.

To assess whether there are service utilization differences between the 

MA and Medicare FFS veteran populations that result in payments to MA 

plans that are too high or too low, data on the services veterans receive 

from Medicare FFS, MA, and VA would be needed. Data on veterans’ use 

of services through Medicare FFS and VA health care are available from 

CMS and VA, respectively. However, CMS does not currently have 

 22The extent to which payments to MA plans would be too high for veterans, nonveterans, 

or both, would depend on (1) differences, if any, in the number and types of Medicarecovered services that veterans and nonveterans with the same health conditions and 

demographic characteristics use, on average, annually and (2) the magnitude of the 

difference in proportion of services received from VA for veterans enrolled in Medicare 

FFS and veterans enrolled in an MA plan.

23Risk scores may be too high because, for any given diagnosis, expected Medicare 

spending will be determined based on Medicare FFS expenditures that reflect a higher 

use of Medicare services by enrolled veterans compared to that of veterans enrolled in an 

MA plan. Risk scores are used to standardize the benchmark to reflect expected per 

capita spending for the average beneficiary in a county, meaning that the Medicare per 

capita FFS county spending rate would be divided by the aggregate risk score for the 

county Medicare FFS population. Therefore, if the risk score is too high, it could at least 

partially offset the higher benchmark.
Page 11 GAO-16-137 Veterans and Medicare Advantage

validated data that could be used to determine veterans’ use of services 

through MA. CMS began collecting data from MA plans on diagnoses and 

services provided to beneficiaries starting in January 2012. We reported 

in July 2014 that CMS had taken some, but not all, appropriate actions to 

ensure that these data—known as MA encounter data—are complete and 

accurate.24 At that time, we recommended that CMS complete all the 

steps necessary to validate the data, including performing statistical 

analyses, reviewing medical records, and providing MA organizations with 

summary reports on CMS’s findings. CMS agreed with the 

recommendation, but as of August 2015, had not completed all steps 

needed to validate the encounter data.

CMS determined that no adjustment to 2010 through 2016 MA payments 

was needed to account for the provision of Medicare-covered services by 

VA, but used a methodology that had certain shortcomings that could 

have affected MA payments.25 CMS is required to estimate, on a per 

capita basis, the amount of additional payments that would have been 

made in a county if Medicare-eligible veterans had not received services 

from VA and, if needed, to make a corresponding adjustment to MA 

payments. If CMS determined that an MA payment adjustment was 

necessary, it would make the adjustment by using a modified version of 

per capita county Medicare FFS spending rates that are adjusted to 

account for the effect of VA spending on Medicare-covered services. Per 

capita county Medicare FFS spending rates serve as the basis of the 

benchmarks used in determining MA payment rates. To determine 

whether an adjustment was needed, CMS obtained data from VA 

showing veterans who are enrolled in VA health care and Medicare FFS 

(that is, enrollment data). CMS then estimated the effect of VA spending 

on Medicare FFS spending by calculating average per capita county 

Medicare FFS spending for nonveterans and comparing it to the average 

per capita county Medicare FFS spending for all Medicare FFS 

beneficiaries, after adjusting for beneficiaries’ risk. However, CMS’s 

methodology did not account for two factors that could have important 

effects on the results: (1) services provided by and diagnoses made by 

 24See GAO, Medicare Advantage: CMS Should Fully Develop Plans for Encounter Data 

and Assess Data Quality before Use, GAO-14-571 (Washington, D.C.: July 31, 2014).

25See Centers for Medicare & Medicaid Services, Advance Notice of Methodological 

Changes for Calendar Year 2010. 

CMS Does Not Have 

the VA Diagnosis and 

Utilization Data That 

May Improve Its 

Methodology for 

Calculating 

Adjustments to MA 

Payments
Page 12 GAO-16-137 Veterans and Medicare Advantage

VA but not identified by Medicare and (2) changes to the benchmark 

calculation under PPACA.

First, because CMS used only Medicare FFS utilization and diagnosis 

data in its study, the agency’s methodology did not account for services 

provided by and diagnoses made by VA—which could result in inaccurate 

estimates of how VA spending on services for Medicare FFS-enrolled 

veterans affects per capita county Medicare FFS spending. Only VA’s 

utilization and diagnosis data can account for services provided by and 

diagnoses made by VA. Without this information, CMS’s estimate of how 

VA spending affects per capita county Medicare FFS spending rates may 

be inaccurate.

• Specifically, estimates of per capita county Medicare FFS spending 

for all beneficiaries, including veterans, may be too low because 

services provided by VA would not be accounted for in Medicare FFS 

spending. Excluding those services could have the effect of deflating 

veterans’ risk-adjusted Medicare FFS spending and therefore total per 

capita county Medicare FFS spending.

• Conversely, estimates of per capita county Medicare FFS spending 

for all beneficiaries, including veterans, may be too high because 

excluding diagnoses identified only by VA could result in Medicare risk 

scores that are too low, which would have the effect of inflating 

veterans’ risk-adjusted Medicare FFS spending and therefore total per 

capita county Medicare FFS spending.

Thus, depending on the number and mix of services provided by and the 

diagnoses made by VA, risk-adjusted Medicare FFS spending for 

veterans may either be higher or lower than it would be if CMS accounted 

for VA-provided services and diagnoses.

Second, because CMS’s study was done in 2009, it did not account for 

changes to the benchmark calculation that occurred under PPACA and 

that are to be phased in from 2012 through 2017. CMS noted in 2009 that 

only 45 of the 3,127 counties nationwide would have had per capita 

county Medicare FFS spending rate increases after accounting for VA 

spending. According to CMS, the number of affected counties was as low 

as it was in part because many counties had payment rate minimums, 

which often resulted in benchmarks that were higher than per capita 

county Medicare FFS spending. However, as noted earlier in this report, 

PPACA revised the benchmark calculation to more closely align 

benchmarks with average per capita county Medicare FFS spending 

rates. As these revised benchmark calculations are implemented, 

counties will no longer have benchmarks set based on minimum updates 
Page 13 GAO-16-137 Veterans and Medicare Advantage

or floor rates. Because CMS did not update its 2009 study when 

determining whether an adjustment was necessary through 2016, the 

agency lacked accurate information on the number of additional counties 

in which VA spending on Medicare-covered services would have made a 

difference in per capita county Medicare FFS spending rates.

When CMS updated its 2009 study to determine whether an MA payment 

adjustment was needed for 2017, it used the same methodology, albeit 

with more recent data. Doing so allowed CMS to account for the revised 

benchmark calculations implemented under PPACA. However, CMS 

cannot address the other limitation we identified without additional data. 

Specifically, CMS cannot account for services provided by and diagnoses 

made by VA. Officials said that they did not intend to incorporate VA 

utilization and diagnoses data into their analysis because they did not 

currently have such data and that incorporating these data would 

introduce additional uncertainty into the analysis. For example, CMS 

officials noted that there would be challenges associated with how much 

Medicare would have spent if the covered services had been obtained 

from Medicare providers instead of VA.

We agree that CMS would face challenges incorporating VA data into its

analysis, but if an adjustment is needed and not made or if the adjustment 

made is too low, the PMPM payment may be too high for veterans and 

too low for nonveterans. Depending on the mix of veterans and 

nonveterans enrolled by individual MA plans, this could result in some 

plans being paid too much and others too little. Both CMS and VA officials 

told us that the agencies have a data use agreement in place that allows 

them to share some data, but this does not include data on services VA 

provides to Medicare beneficiaries. According to VA, as of December 

2015, CMS has not requested its utilization and diagnosis data.

Federal standards for internal control call for management to have the 

operational data it needs to meet agency goals to effectively and 

efficiently use resources and to help ensure compliance with laws and 

regulations.26 In this case, without VA data on diagnoses and utilization, 

CMS may be increasing the risk that it is not effectively meeting the 

 26GAO, Standards for Internal Control in the Federal Government, GAO/AIMD-00-21.3.1

(Washington, D.C.: November 1999). Internal control is a process effected by an entity’s 

oversight body, management, and other personnel that provides reasonable assurance 

that the objectives of an entity will be achieved.
Page 14 GAO-16-137 Veterans and Medicare Advantage

requirement to adjust payments to MA plans, as appropriate, to account 

for VA spending on services for Medicare beneficiaries.

If CMS revises its study methodology and determines that an adjustment 

to the benchmark to account for VA spending is needed, it may need to 

make additional MA payment adjustments to ensure that payments are 

equitable for individual MA plans. A benchmark adjustment would 

increase payments for nonveterans and would address the possibility that 

payments to MA plans with a high proportion of nonveterans would be too 

low. However, if CMS makes a benchmark adjustment, it would also 

increase MA payments for veterans. While the resulting higher payment 

to MA plans for nonveterans may be appropriate, higher payments for 

veterans may not be because veterans may be receiving some services 

from VA. In that case, payments to MA plans that enroll veterans would 

be too high, with the degree of overpayment increasing as the proportion 

of veterans enrolled by plans increases. To ensure that payments to MA 

plans are equitable regardless of differences in the demographic 

characteristics of the plans’ enrollees, CMS is authorized to adjust 

payments to MA plans based on such risk factors that it determines to be 

appropriate.27 Therefore, if CMS determines that an adjustment to the 

benchmark to account for VA spending is needed and the adjustment 

results in payments to MA plans that are too high for veterans, additional 

adjustments to payments to MA plans could be necessary.

Given that veterans enrolled in an MA plan and the VA health care 

system can receive Medicare-covered services from either source, it is 

important to consider how the provision of services by VA affects 

payments to MA plans. In fiscal year 2010, VA provided $2.4 billion worth 

of inpatient and outpatient services to MA-enrolled veterans, which likely 

resulted in lower overall payments to MA plans. However, the 

appropriateness of these lower payments is uncertain, given potential 

differences in the proportion of services veterans enrolled in MA plans 

and Medicare FFS receive from VA. An estimate of the differences 

between the two populations of veterans would enable CMS to determine 

if additional actions are needed to improve the accuracy of PMPM 

 27See 42 U.S.C. § 1395w-23(a)(1)(C)(i), which provides that CMS shall adjust the 

payment amount to an MA plan “for such risk factors as age, disability status, gender, 

institutional status, and such other factors as [CMS] determines to be appropriate, 

including adjustment for health status . . . , so as to ensure actuarial equivalence.” 

Conclusions
Page 15 GAO-16-137 Veterans and Medicare Advantage

payments. To this end, we recommended in July 2014 that CMS should 

validate the MA encounter data, which would be needed to determine if 

there are differences in utilization of services between veterans in MA and 

Medicare FFS.

In addition, it is important to ensure that VA spending on Medicarecovered services does not result in inequitable payments to individual MA 

plans for veterans and nonveterans. While CMS is required to adjust MA 

payments to account for VA spending on Medicare-covered services, as 

appropriate, the agency determined that no adjustment to the benchmark, 

which is based in part on per capita county Medicare FFS spending, was 

necessary for years 2010 through 2016. CMS updated the study it used 

to make this determination in 2016 and determined that an adjustment 

was necessary for 2017. However, both CMS’s 2009 study and its 2016 

study were limited because the agency did not have VA utilization and 

diagnoses data. Adjusting the study’s methodology to incorporate these 

data could change the study’s findings and result in CMS making a larger

adjustment to the benchmark in future years. Such a benchmark 

adjustment could improve the accuracy of payments for nonveterans. 

However, a benchmark adjustment could also result in or exacerbate 

payments to MA plans that are too high for veterans, so additional MA 

payment adjustments could become necessary.

We recommend that the Secretary of Health and Human Services direct 

the Administrator of CMS to take the following two actions:

• Assess the feasibility of updating the agency’s study on the effect of 

VA-provided Medicare-covered services on per capita county 

Medicare FFS spending rates by obtaining VA utilization and 

diagnosis data for veterans enrolled in Medicare FFS under its 

existing data use agreement or by other means as necessary.

• If CMS makes an adjustment to the benchmark to account for VA 

spending on Medicare-covered services, the agency should assess 

whether an additional adjustment to MA payments is needed to 

ensure that payments to MA plans are equitable for veterans and 

nonveterans.

We provided a draft of this product to VA and the Department of Health 

and Human Services (HHS). HHS provided written comments on the 

draft, which are reprinted in appendix II. Both VA and HHS provided 

technical comments, which we incorporated as appropriate.

Recommendations for 

Executive Action

Agency Comments 

and Our Evaluation
Page 16 GAO-16-137 Veterans and Medicare Advantage

In its comments, HHS concurred with one of our two recommendations. 

HHS agreed with our recommendation that if CMS makes an adjustment 

to the benchmark to account for VA spending on Medicare-covered 

services, it should assess whether an additional adjustment to MA 

payments is needed to ensure that payments to MA plans are equitable 

for veterans and nonveterans. HHS acknowledged that CMS is required 

to estimate, on an annual basis, the amount of additional Medicare FFS 

payments that would have been made in a county if Medicare-eligible 

veterans had not received services from VA and, if necessary, to make a 

corresponding MA payment adjustment. In the 2017 MA Advance Notice, 

CMS provided the results of its updated analysis, which used the same 

methodology as its 2010 analysis, but with more recent data. Based on its 

findings, CMS plans to make an adjustment to 2017 MA payment rates to 

account for VA spending on Medicare-covered services. In its comments, 

HHS stated that CMS will assess whether an additional adjustment to MA 

plan payments is needed to ensure that payments to MA plans are 

equitable for veterans and nonveterans. We encourage CMS to complete 

its assessment prior to finalizing its 2017 payments to ensure that 

payments to MA plans will be equitable when the adjustment to account 

for VA spending on Medicare-covered services is made.

HHS did not concur with our recommendation that CMS should assess 

the feasibility of updating the agency’s study on the effect of VA-provided 

Medicare-covered services on per capita county Medicare FFS spending 

rates by obtaining VA utilization and diagnosis data for veterans enrolled 

in Medicare FFS. HHS stated that CMS uses Medicare FFS spending 

rates when setting the benchmark, which excludes services provided by 

VA facilities. In addition, HHS stated that incorporating VA utilization and 

diagnosis data into CMS’s analysis may not materially improve the 

analysis and the resulting adjustment. HHS indicated that it will continue 

to review the need for incorporating additional data or for methodology 

changes in the future. As we note in the report, only VA’s utilization and 

diagnosis data can account for services provided by and diagnoses made 

by VA. Depending on the number and mix of services provided by and the 

diagnoses made by VA, risk-adjusted Medicare FFS spending for 

veterans may either be higher or lower than it would be if CMS accounted 

for VA-provided services and diagnoses. Therefore, relying exclusively on 

Medicare FFS spending to estimate the effect of VA spending on 

Medicare FFS-enrolled veterans could result in an inaccurate estimate of 

how VA spending on services for Medicare FFS-enrolled veterans affects 

per capita county Medicare FFS spending. While there may be 

challenges associated with incorporating VA utilization and diagnosis data 

into CMS’s analysis, we maintain that CMS should work to do so given 
Page 17 GAO-16-137 Veterans and Medicare Advantage

the implications that not incorporating the data may have on the accuracy 

of payment to MA plans. We continue to believe that an important first 

step would be for CMS to assess the feasibility of incorporating VA 

utilization and diagnosis data in a way that can overcome the challenges 

identified by CMS and potentially lead to a more accurate adjustment.

As agreed with your offices, unless you publicly announce the contents of 

this report earlier, we plan no further distribution until 30 days from the 

report date. At that time, we will send copies to the Secretary of Health 

and Human Services, the Administrator of CMS, and other interested 

parties. In addition, the report will be available at no charge on GAO’s 

website at http://www.gao.gov.

If you or your staffs have any questions about this report, please contact 

me at (202) 512-7114 or cosgrovej@gao.gov. Contact points for our 

Offices of Congressional Relations and Public Affairs may be found on 

the last page of this report. GAO staff who made major contributions to 

this report are listed in appendix III.

James Cosgrove

Director, Health Care
Appendix I: Scope and Methodology

Page 18 GAO-16-137 Veterans and Medicare Advantage

This appendix describes the scope and methodology used to (1) estimate 

the amount that the Department of Veterans Affairs (VA) spends to 

provide Medicare-covered services to veterans enrolled in Medicare 

Advantage (MA) plans and how VA spending on these services affects 

Centers for Medicare & Medicaid Services (CMS) payments to MA plans; 

and (2) evaluate the extent to which CMS has the data it needs to 

determine an appropriate adjustment, if any, to MA payments to account 

for VA’s provision of Medicare-covered services to MA-enrolled veterans.

To estimate the amount that VA spends to provide Medicare-covered 

services to veterans enrolled in MA plans, we first identified veterans with 

at least 1 month of overlapping enrollment in an MA plan and in VA health 

care in fiscal year 2010. VA provided us with an enrollment file that 

included veterans enrolled in VA health care for at least 1 month in fiscal 

year 2010 and whom VA had identified as having at least 1 month of 

Medicare private plan enrollment. To determine months of MA enrollment 

in fiscal year 2010, we matched the VA enrollment file to Medicare’s 

calendar year 2009 and 2010 Denominator Files based on whether 

beneficiaries had the same Social Security number and either the same 

date of birth, sex, or both. We excluded those beneficiaries who did not 

have at least 1 month of overlapping MA and VA health care enrollment. 

In addition, we excluded veterans in the VA enrollment file that did not 

have a VA enrollment start date, were listed as having died prior to fiscal 

year 2010, or were not enrolled in one of the four most common MA plan 

types.1 After all exclusions, we identified 833,684 veterans with at least 1 

month of overlapping enrollment in an MA plan and VA health care in 

fiscal year 2010.

We identified all inpatient and outpatient services provided by VA to those 

veterans in our population during fiscal year 2010. VA can provide 

inpatient and outpatient services directly at one of its medical facilities or 

it can contract for care, known as VA care in the community; we received 

inpatient and outpatient utilization files for both types of VA-provided care. 

We excluded prescription drug services from our analysis, as payments to 

 1

The four most common MA plan types are health maintenance organizations (HMO), 

local preferred provider organizations (PPO), regional PPOs, and private fee-for-service 

(PFFS) plans. In calendar year 2010, approximately 96 percent of MA beneficiaries were 

enrolled in one of these four plan types. See Marsha Gold et al., Medicare Advantage 

2010 Data Spotlight: Plan Enrollment Patterns and Trends (Menlo Park, Calif.: The Henry 

J. Kaiser Family Foundation, 2010).

Appendix I: Scope and Methodology
Appendix I: Scope and Methodology

Page 19 GAO-16-137 Veterans and Medicare Advantage

MA plans for coverage of Part D services are determined differently than 

are payments for other Medicare-covered services. We also excluded 

services that were received during a month when the veteran was not 

enrolled in both VA health care and an MA plan. We considered an 

inpatient stay, which can last multiple days, to be during a month when 

the veteran was enrolled in both VA health care and an MA plan if 1 or 

more days of the stay occurred during a month in which the veteran was 

enrolled in VA health care and an MA plan. In some instances, hospital 

stays had an admittance date prior to fiscal year 2010 or a discharge date 

after it, and in those cases, we included only the portion of the stay that 

occurred during fiscal year 2010.

We excluded those inpatient and outpatient services that were provided 

by VA but were not covered by Medicare. For inpatient services directly 

provided by VA, we used the category of care assigned to each service 

by VA to exclude service categories not covered by Medicare, such as 

intermediate and domiciliary care. In addition, we excluded services 

provided by VA that went beyond Medicare benefit limits. Because MA 

plans may have different benefit limits than Medicare fee-for-service 

(FFS), we analyzed the benefits offered by a sample of 45 MA plans for 

2014 for services covered by Medicare FFS that have benefit limits.2 We 

identified the most common benefit limits for those services and used 

those as our benefit limits for VA services. In cases where some or all MA 

plans had service categories with lifetime reserve days (e.g., inpatient 

days beyond the 90 days Medicare covers per benefit period, up to an 

additional 60 days per lifetime), we made the assumption that 

beneficiaries had 25 percent of their lifetime reserve days remaining.3 For 

inpatient services provided through VA care in the community, we 

excluded hospice services; services with cancelled payments; and 

services with a classification of dental, contract halfway house, pharmacy, 

reimbursement, or travel. For outpatient services directly provided by VA, 

 2

Specifically, we analyzed MA plans’ benefit limits for inpatient stays, inpatient mental 

health stays, skilled nursing facility stays, physical therapy, speech therapy, and 

occupational therapy. 

3

We also developed an alternative estimate of VA spending on Medicare-covered services 

using the same data. For cases where service categories had lifetime reserve days, we 

assumed that veterans had 100 percent of their lifetime reserve days remaining. In 

addition, we made the same inpatient and outpatient exclusions as our reported estimate 

except that we included outpatient services that had restricted coverage or were excluded 

from the Medicare physician fee schedule by regulation. The results of this alternative 

estimate were similar to our reported results.
Appendix I: Scope and Methodology

Page 20 GAO-16-137 Veterans and Medicare Advantage

we excluded services that were not included in the Medicare physician 

fee schedule; ambulance fee schedule; clinical lab fee schedule; durable 

medical equipment, prosthetics/orthotics, and supplies fee schedule; 

anesthesiology fee schedule; or ambulatory surgical center fee schedule. 

We also excluded services that had a Medicare physician fee schedule 

status code indicating they were a deleted code, a noncovered service, 

had restricted coverage, or were excluded from the physician fee 

schedule by regulation. For outpatient services provided through VA care

in the community, we made the same exclusions as for outpatient 

services provided by VA and also excluded hospice care services and 

services with cancelled payments.

We calculated total VA spending and CMS payments to MA plans for 

beneficiaries for months in which they were enrolled in both VA health 

care and an MA plan in fiscal year 2010 and evaluated how, if at all, VA 

spending on these services affects CMS payments to MA plans. To 

calculate VA’s estimated spending, we assigned all Medicare-covered 

services directly provided by VA a cost, using VA’s average cost data; 

and for services provided through VA care in the community, we used the 

amount that VA disbursed to the service provider. We calculated total MA 

spending for veterans enrolled in MA and VA using actual CMS payments 

to MA plans for our population in fiscal year 2010. To evaluate how VA 

spending on Medicare-covered services affects CMS payments to MA 

plans, we reviewed CMS documentation and interviewed CMS officials.

To evaluate the extent to which CMS has the data it needs to determine 

an appropriate adjustment, we reviewed CMS documentation and 

interviewed CMS officials. As part of this effort, we also evaluated CMS’s 

methodology for a study it used as the basis of its decision to not adjust 

county per capita Medicare FFS spending rates for VA spending on 

Medicare-covered services. Our evaluation was based on a review of 

CMS documentation and an interview with CMS officials.

To assess the reliability of the data we used in our analyses, we reviewed 

related documentation, interviewed knowledgeable officials from CMS 

and VA, and performed appropriate electronic data checks. This 

assessment allowed us to determine that the data were reliable for our 

objectives.

We conducted this performance audit from July 2013 to April 2016 in 

accordance with generally accepted government auditing standards. 

Those standards require that we plan and perform the audit to obtain 

sufficient, appropriate evidence to provide a reasonable basis for our 
Appendix I: Scope and Methodology

Page 21 GAO-16-137 Veterans and Medicare Advantage

findings and conclusions based on our audit objectives. We believe that 

the evidence obtained provides a reasonable basis for our findings and 

conclusions based on our audit objectives.
Appendix II: Comments from the Department 

of Health and Human Services

Page 22 GAO-16-137 Veterans and Medicare Advantage

Appendix II: Comments from the Department 

of Health and Human Services
Appendix II: Comments from the Department 

of Health and Human Services

Page 23 GAO-16-137 Veterans and Medicare Advantage
Appendix II: Comments from the Department 

of Health and Human Services

Page 24 GAO-16-137 Veterans and Medicare Advantage
Appendix III: GAO Contact and Staff 

Acknowledgments

Page 25 GAO-16-137 Veterans and Medicare Advantage

James Cosgrove, (202) 512-7114 or cosgrovej@gao.gov

In addition to the contact named above, Gregory Giusto, Assistant 

Director; Christine Brudevold; Christine Davis; Jacquelyn N. Hamilton; 

Dan Lee; Elizabeth T. Morrison; Christina C. Serna; and Luis Serna made 

key contributions to this report.

Appendix III: GAO Contact and Staff 

Acknowledgments

GAO Contact

Staff 

Acknowledgments

(291152)
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