YELLOW SHEET Office of the State Auditor of Missouri Claire McCaskill

Report No. 2004-81

September 29, 2004

Missouri could potentially save millions of dollars of state funds by assisting low-income veterans to obtain their medical services from the U.S. Department of Veterans Affairs (VA) rather than through the state Medicaid program

Many veterans of the United States Armed Forces are eligible to receive free medical benefits through the VA health care system.  However, the VA can only assist veterans who have registered with it.  Using a Department of Social Services' (DSS) database which showed whether any individuals receiving Medicaid benefits were also receiving compensation from the VA, we determined 6,144 Medicaid recipients were also receiving some form of compensation from the VA.  Nearly half of these recipients received $14.1 million in prescription drug and durable medical equipment from Medicaid between January 2003 and March 2004--$5.5 million of this amount was state funds.  These recipients may have been eligible to receive free medical services through the VA, either with their original prescription or after seeing a VA doctor, thereby saving state funds.  To identify Medicaid recipients who were receiving VA compensation and benefits, we requested DSS to send a copy of the state's Medicaid recipient file to VA, which had never been performed by DSS.

Missouri may be missing out on savings for prescription drugs for veterans residing in nursing homes

Our analysis showed 879 of the 2,731 veterans who obtained prescription drugs through Medicaid resided in nursing homes during some or all of the period examined.  These veterans may be entitled to free drugs from the VA; however, most nursing homes require prescription drugs be packaged in blister packs, and the VA only dispenses drugs in bottles.  A potential solution would be for the Division of Medical Services to pay the cost of blister packing medications from the VA for residents of nursing homes, provided that these costs do not exceed the state's current cost of providing these drugs through the Medicaid program. 

Missouri should change its Medicaid application form to identify veterans who may be eligible for assistance from the federal government for their health care costs

The current form for applicants seeking Medicaid only asks if the person is receiving any compensation from the VA.  This question fails to identify those persons who may be eligible for VA benefits but have not applied for them.  Revising the form to identify those persons who might be eligible for benefits from the federal government through the VA would save the state money that would have otherwise been spent in the Medicaid program.  This would also help ensure the agency complies with state law, which requires that all Medicaid applicants cooperate in obtaining any third party resources available to them.

Better cooperation among state agencies could save substantial state funds

In response to our audit, state agencies agree that a greater level of cooperation among agencies would likely lead to substantial savings for the state.  The Medicaid application form will be amended to ask applicants if they are veterans, thereby identifying persons who may be eligible for free medical care from the federal government through the VA.  The State Veterans Commission agrees identifying such individuals, and helping them access federal VA benefits, could benefit the veterans, in addition to saving state General Revenue funds, and this result can be achieved through a cooperative agreement with DSS.  DSS, however, believes existing laws and regulations prevent it from working collaboratively with the Commission to save state funds.  The Department of Health and Senior Services indicated it was in agreement that it would be beneficial to explore options to provide veterans in nursing homes with medications from the VA, should a solution to the dilemma that medications generally must be distributed in blister packs be solved.

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