VA Demands Reimbursement from Medicare Advantage, Imposes Strict Penalties on Insurers for Veteran Care

The “Guarantee Utilization of All Reimbursements for Delivery of Veterans’ Health Care Act,” or the GUARD Veterans Health Care Act, is a push by the VA to get paid for care they provide. This bill has two major parts: one aimed at private Medicare plans and one aimed at liability insurers and other third parties.

The VA’s New Billing Strategy

Starting in 2026, the VA is going to start sending bills to private Medicare Advantage (Part C) and Medicare prescription drug (Part D) plans whenever a veteran enrolled in one of those plans receives care at a VA facility. Currently, the VA often absorbs these costs or navigates complex billing procedures. This bill essentially mandates that if the VA provides a service—say, a prescription refill or an outpatient visit—the private Medicare plan must reimburse the VA for that cost, regardless of the plan’s usual internal rules or paperwork hurdles (Sec. 2). All the money collected from these plans goes directly into the VA Medical Care Collections Fund. The goal here is simple: stop leaving money on the table and bolster the VA’s budget for veteran care.

Cracking Down on Insurance Companies

The second, and arguably more impactful, part of the bill deals with cost recovery when a veteran receives care for a non-service-connected disability—like if they're injured in a car accident or a workplace incident and the VA pays for the treatment. The bill significantly strengthens the government's right to recover those costs from the third party responsible (like the at-fault driver's insurance company or workers’ comp) (Sec. 3).

If you're an insurance carrier or a third-party payer, this section introduces some serious new compliance hurdles. You now have a strict 45-day window to respond to a VA recovery claim. Within that time, you must either pay the claim, state why you refuse to pay, or ask for more specific information. If you miss that deadline on a “clean claim” (one that has all the necessary information), you start accruing interest, calculated monthly (Sec. 3).

The Real-World Friction Points

This bill introduces major friction for third-party payers, and that friction could affect veterans waiting for settlements. The bill requires third parties to report to the VA if a veteran has received benefits for an injury. Crucially, it states that the third party cannot give out settlement money, judgment proceeds, or any other payment to the veteran until the VA’s claim for reimbursement has been satisfied (Sec. 3). For a veteran relying on a settlement to cover lost wages or other damages, this provision could significantly delay when they actually receive their funds, as the VA’s claim must be resolved first.

Furthermore, the penalties for non-compliance are steep. If a third party willfully refuses to pay a clean claim, they could face a penalty of the higher of triple the claim amount or up to $50,000 per violation. This is a clear signal that the VA is serious about getting paid and is willing to use heavy financial leverage to enforce these new rules (Sec. 3). While the intent is to ensure the VA is reimbursed, the strict 45-day deadlines and the threat of triple damages could lead to increased administrative costs for insurers, which often get passed on to consumers in the long run.