Who Pays When VA Users Are Hospitalized in the Private Sector?

BACKGROUND: Older veterans enrolled in VA healthcare receive much of their medical care in the private sector, through Medicare. Less is known about younger VA enrollees' use of the private sector, or its funding. We compare payers for younger and older enrollees' private sector use in 3 hospitalization datasets. RESEARCH DESIGN: From 1998 to 2000, using private sector discharge data for VA enrollees in New York State, we categorized hospitalizations according to payer (self/family, private insurance, Medicare, Medicaid, other sources). We compared this payer distribution to population-weighted national Medical Expenditure Panel Survey (MEPS) data from 1996-2003 for veterans in VA healthcare. We also compared Medicare utilization in either dataset to hospitalizations for New York veterans from 1998-2000 in the VA-Medicare dataset. Analyses separated patients younger than age 65 from those age 65 or older. RESULTS: VA enrollees under age 65 obtain roughly half their hospitalizations in the private sector; older enrollees use the private sector at least twice as often as the VA. Datasets generally agree on payer distributions. Although older enrollees rely heavily on Medicare, they also use commercial insurance and self/family payments substantially. Half of younger enrollees' non-VA hospitalizations are paid by private insurance, but Medicare, Medicaid, and self/family each pay for one-quarter to one-third of admissions. CONCLUSIONS: VA enrollees use the private sector for most of their inpatient care, which is funded by multiple sources. Developing a national UB-92/VA dataset would be critical to understanding veterans' use of the private sector for specific diagnoses and procedures, particularly for the fast growing population of younger veterans.