Effect of VA Payments on Medicare Deductible and Utilization

50.1.3 - Effect of VA Payments on Medicare Deductible and Utilization (Rev. 1, 10-01-03) A3-3153.1.D, HO-260.3.B Where an authorization issued by the VA binds the VA to pay in full for the items and services, no payment may be made under Medicare. When the VA pays in full, the services do not count against benefit maximums, e.g., the 90 days of inpatient hospital services or the 60-day lifetime reserve. Charges which would be reimbursable by Medicare except for the fact that the VA paid in full for authorized services may be credited to the Medicare deductibles. When the VA authorizes fewer days than the total number of covered days in the stay, Medicare utilization is determined as follows: • Divide the actual Medicare payment by the amount Medicare would have paid for covered charges as primary payer (i.e., the gross amount payable by Medicare for all covered days in the stay reduced by applicable Medicare deductible and coinsurance). • Multiply this percentage by the number of covered days in the stay. A partial day resulting from this calculation is not charged as a full day if it is less than .5 of a day, but is charged as a full day if it is .5 or more of a day. EXAMPLE: The following is the same facts as presented in example in §50.1.2. The amount Medicare would pay, as a primary payer, is $2,538 ($3,350 - $812 deductible). Utilization is determined as follows: $1,000 ÷ $2,538 =. 39 X 7 days = 2.75, rounded to 3 days. When the VA pays an amount for Medicare covered services that is equal to, or less than, the deductible and coinsurance that would apply if Medicare were the primary payer, utilization is not reduced.