Overcoming financial barriers to vaccination of children and adolescents: Recent recommendations from NVAC

Issue: February 2010

The widespread use of vaccines has led to the reduction in incidence of many infectious diseases and is one of the great successes of medical science.

Vaccinations have led to dramatic effects such as the elimination of smallpox worldwide, the elimination of polio in the many parts of the world, and the near elimination of traditional childhood scourges like invasive disease due to Haemophilus influenzae type b and other diseases.

Robert A. Bednarczyk

Guthrie S. Birkhead

The development and licensure of new vaccines for use in children and adolescents has accelerated at the beginning of the 21st century, increasing the number of diseases for which effective control through vaccination is now possible. However, the successful integration of these new vaccines into the vaccination schedule and the achievement of high coverage levels are threatened by the high cost of many of these newer vaccines and by inefficient or ineffective administrative and health care financing systems. For example, from 1995 to 2008, the cost to fully vaccinate a child up to age 19 years has increased sevenfold for boys and ninefold for girls.

In September, 2008, the National Vaccine Advisory Committee (NVAC) of the U.S. Department of Health and Human Services adopted a report with a comprehensive set of recommendations to address the financing of vaccinations for children and adolescents. A December 2009 supplement to the journal Pediatrics summarizes the NVAC’s report and recommendations, brings together 10 original research articles that informed the NVAC’s work, and includes commentaries from a number of the stakeholder groups that participated on the NVAC working group that developed the report (December 2009 supplement). This supplement also contains a list of vaccine finance resources for physicians (list).

This was not the first time that vaccine finance issues were addressed by the NVAC. Following widespread measles outbreaks in 1989-1990, the NVAC issued a report and series of recommendations that ultimately led to the creation of the Vaccines for Children program. However, additional NVAC reports and recommendations issued in 1999, and 2005, along with reports from the Institute of Medicine in 2000 and 2004, were not issued during major vaccine-preventable disease resurgences, and did not result in major changes in the financing of childhood and adolescent vaccines, a situation highlighted by the number of new, expensive vaccines recommended for use by 2006.

What is different about this report and set of recommendations?

First, the NVAC working group had access to a number of newly available studies on the magnitude and nature of the vaccine financing challenge. Some of the studies were carried out at the suggestion of the working group. In particular, the two studies by Freed et al represent the first systematic look at vaccine financing attitudes and practices in a sample of pediatric and family physician offices. One in five practices felt that reimbursement for vaccines and vaccine administration was inadequate, and one in 10 practices had seriously considered stopping offering vaccines to their patients, something that the fragile vaccine delivery infrastructure could ill afford. These papers also highlighted that, on average, physicians in practice are reimbursed for vaccines more than they pay, but a surprising number of physicians are paying more to purchase vaccines than they are reimbursed.

Other papers in the supplement highlight the challenges in both public and private sector-funded vaccination efforts. For example, major gaps were identified in the funding of vaccinations for under-insured children served in public programs in other than federally qualified health centers. Funding for vaccines for these children comes from the federal Section 317 funding to states, which has not kept pace with the number of newly recommended vaccines. In addition, public sector reimbursement for the administration of vaccines is available only for children and adolescents in the Medicaid program, not for uninsured and other children eligible for the federal Vaccines For Children (VFC) program. And even reimbursement for vaccine administration is inadequate in many states. These data formed the impetus for a number of the NVAC’s conclusions and recommendations.

The NVAC working group also was unique in the emphasis it placed on the involvement of stakeholders to whom the recommendations would be applicable. In addition to representation on the working group of physician professional organizations, state and local public health agencies, vaccine manufacturers and insurers, the working group included members from large and small employers, consumers, state legislators and state Medicaid directors among others. This stakeholder engagement broadened the number of views that were brought to the table. In addition, the fact that the process focused on developing a consensus may mean that the recommendations have a greater chance of broad support among the various involved constituencies.

Finally, the NVAC tried to avoid relying on repeating recommendations from past reports that by themselves had not resulted in significant changes. A good example of this is the standard recommendation from past reports to increase federal Section 317 funding to states, which had met with limited success. The NVAC also shied away from recommendations that would require action by many actors, for example asking all states to increase their reimbursement of vaccine administration in the Medicaid program, in favor of changing the funding formula at the federal level to achieve the same end. The NVAC recommendations target almost all stakeholder groups, including physicians themselves, acknowledging the conclusion that change is required in many sectors to address the financing of vaccine delivery; there is no magic bullet.

Four recommendations are directly targeted to providers and provider groups, while nine other recommendations that are targeted to other entities, if enacted, would decrease a substantial amount of the burden on providers.

The four recommendations targeted to providers and provider groups are summarized below.

Professional medical organizations should provide technical assistance to their members on efficient business practices associated with providing immunizations; best practices should be identified both for vaccine use and vaccine billing codes. (Recommendation #8)
Medical providers should utilize vaccine purchaser pools (eg, purchasing collaboratives, regional purchasing contracts) to obtain volume ordering discounts. (Recommendation #9)
CDC, professional medical organizations and other stakeholders should develop and support employer health education programs, in part to communicate the value of preventive care and vaccination. (Recommendation #10)
Government agencies and professional organizations should reach out to health care providers who do not participate in VFC but serve VFC-eligible children and adolescents, to encourage participation in VFC. A key focus of this recommendation is providers who may not have routinely provided vaccinations in the past (eg, obstetrician/gynecologists). (Recommendation #21)

The nine recommendations that directly affect provider practices are:

Expand VFC to cover vaccine administration for all VFC-eligible children and adolescents, including children on Medicaid. (Recommendation #2). (Note that if NVAC Recommendation #2 is enacted, Recommendations #3-5 will not be needed).
CDC and Centers for Medicare and Medicaid Services (CMS) should annually publish and distribute state-by-state Medicaid vaccine administration reimbursement rates. (Recommendation #3)
In coordination with the American Medical Association’s review of Relative Value Unit (RVU) coding, CMS should update the maximum allowable state-by-state Medicaid vaccine administration reimbursement rates and should include all appropriate non-vaccine related costs, as determined by current studies. (Recommendation #4)
The federal match for Medicaid vaccine administration reimbursement levels should be increased to levels for other services of public health importance. (Recommendation #5)
RVU coding should be reviewed to ensure it accurately reflects the non-vaccine costs of vaccination including the potential costs and savings from the use of combination vaccines. (Recommendation #6)
Vaccine manufacturers and third-party distributors should work with providers on an individual basis to reduce the financial burden for starting and maintaining vaccine inventories, particularly for new vaccines. (Recommendation #7)
Health insurers and private health care purchasers should adopt contract benefit language flexible to permit coverage and reimbursement for new or recently altered ACIP recommendations as well as vaccine price changes occurring in the middle of a contract period. (Recommendation #11)
All public and private health insurance plans should voluntarily provide first-dollar coverage for all ACIP- recommended vaccines and their administration for children and adolescents. (Recommendation #12)
Insurers and health care purchasers should develop vaccination reimbursement policies based on methodologically-sound cost studies of efficient practices, taking into account all costs associated with vaccine administration. (Recommendation #13).

The remainder of the recommendations target state and federal actions. These recommendations include:

Expanding VFC to include VFC-eligible underinsured children and adolescents receiving immunization in public health departments (Recommendation #1);
Congress requesting an annual report from CDC on the size and scope of the Section 317 appropriation needed, with funding provided at specified levels, including funding for improving the public health infrastructure for providing vaccinations to children and adolescents (Recommendations #14, #19);
Initiating or continuing cost and cost-benefit studies on multiple aspects of childhood and adolescent immunization should be initiated or continued (Recommendations #15, #16, #17, #20);
Decreasing the time from creation to publication of ACIP recommendations (Recommendation #18);
Developing mechanisms for billing insured children and adolescents served in the public sector (Recommendation #22);
Ensuring adequate funding to cover all costs arising from assuring compliance with immunization requirements for school attendance. (Recommendation #23); and
Promoting shared public and private sector approaches to help fund school-based and other complementary-venue childhood and adolescent immunization efforts. (Recommendation #24)

It is hoped that the process of engaging and seeing consensus from stakeholders throughout the process will provide dividends in the form of greater willingness and support to move forward on enacting these recommendations as well as being open to accountability for what has or has not been done towards meeting these recommendations. These recommendations may also be timely in that they coincided with the start of a new federal administration and accelerated discussion of health reform. The NVAC is placing additional emphasis on them by revisiting the recommendations in their meeting this month. This will include asking for stakeholder groups to relate steps they have taken to implement these recommendations in the year and a half since they were approved.

The successful implementation of vaccination programs will require the actions of all the stakeholder groups but particularly practicing physicians. It is hoped that the NVAC vaccine finance recommendations provide a course to fully achieve the promise of childhood and adolescent vaccines.

Robert A. Bednarczyk, MS is a research analyst in the Office of Public Health, New York State Department of Health, Albany NY; and a graduate student in Department of Epidemiology and Biostatistics, School of Public Health, University at Albany, Albany NY.

Guthrie S. Birkhead, MD, MPH, is Deputy Commissioner, Office of Public Health, New York State Department of Health, Albany NY; Professor, Department of Epidemiology and Biostatistics at the School of Public Health, University at Albany, Albany NY; and Chair of the National Vaccine Advisory Committee.

For more information:

Freed GL, Cowan AE, Gregory S, Clark SJ. Variation in Provider Vaccine Purchase Prices and Payer Reimbursement. Pediatrics. 2009;124(Supplement_5):S459-465.

Freed GL, Cowan AE, Clark SJ. Primary Care Physician Perspectives on Reimbursement for Childhood Immunizations. Pediatrics. 2009;124(Supplement_5):S466-471.

Hinman AR. Addressing the vaccine financing conundrum. Health Aff (Millwood). May-Jun 2005;24(3):701-704.

Hinman AR. Financing vaccines in the 21st century: recommendations from the National Vaccine Advisory Committee. Am J Prev Med. Jul 2005;29(1):71-75.

IOM. Calling the Shots: Immunization Finance Policies and Practices.Washington, DC: National Academy Press; 2000.

IOM. Financing Vaccines in the 21st Century: Assuring Access and Availability. Washington, DC: National Academy Press; 2004.

Lindley MC, et al. Assuring vaccination of children and adolescents without financial barriers: Recommendations from the National Vaccine Advisory Committee (NVAC). US Department of Health and Human Services. March 18, 2009. Available at: http://www.hhs.gov/nvpo/nvac/nvacfwgreport.pdf.

Lindley MC, et al. Financing the Delivery of Vaccines to Children and Adolescents: Challenges to the Current System. Pediatrics. 2009;124(Supplement_5):S548-557.

NVAC. The Measles Epidemic: The Problems, barriers, and recommendations. JAMA. 1991;266(11):1547-1552.

National Vaccine Advisory Committee. Strategies to sustain success in childhood immunizations. The National Vaccine Advisory Committee. JAMA. Jul 28 1999;282(4):363-370.

Roush SW, Murphy TV, and the Vaccine-Preventable Disease Table Working Group. Historical Comparisons of Morbidity and Mortality for Vaccine-Preventable Diseases in the United States. JAMA. 2007 2007;298(18):2155-2163.

VFC/CDC Vaccine Price List. Centers for Disease Control and Prevention. December 1, 2009. Available at: http://www.cdc.gov/vaccines/programs/vfc/cdc-vac-price-list.htm. Accessed Jan. 5, 2010.