Practical Challenges for Private Providers

With private providers now delivering most immunization services, it is important to understand the financial and operational challenges that are connected with those services.

CHALLENGES FOR THE PRIVATE PROVIDER IN CALIFORNIA

Quynh Kieu, a pediatrician in solo practice in Orange County and chair of the Vaccine Issues Task Force for the California chapter of the American Academy of Pediatrics (AAP), reviewed several financial and administrative problems facing the state’s private providers.

Vaccine Costs and Reimbursement Rates

Immunization has become a financial liability for many physicians. In 2000, the addition of four doses of the pediatric pneumococcal conjugate vaccine (Prevnar) to the recommended immunization schedule drew attention to the problem. As a recommended vaccine, providers were required to offer it to some children, such as those covered by Medicaid and some managed care plans, and were being asked to administer it to other children. A federal contract to purchase the vaccine for children who were eligible under the Vaccines for Children (VFC) program did not exist for many months even though the vaccine had been added to the recommended schedule for Medicaid children. As a result, providers had



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Practical Challenges for Private Providers With private providers now delivering most immunization services, it is important to understand the financial and operational challenges that are connected with those services. CHALLENGES FOR THE PRIVATE PROVIDER IN CALIFORNIA Quynh Kieu, a pediatrician in solo practice in Orange County and chair of the Vaccine Issues Task Force for the California chapter of the American Academy of Pediatrics (AAP), reviewed several financial and administrative problems facing the state’s private providers. Vaccine Costs and Reimbursement Rates Immunization has become a financial liability for many physicians. In 2000, the addition of four doses of the pediatric pneumococcal conjugate vaccine (Prevnar) to the recommended immunization schedule drew attention to the problem. As a recommended vaccine, providers were required to offer it to some children, such as those covered by Medicaid and some managed care plans, and were being asked to administer it to other children. A federal contract to purchase the vaccine for children who were eligible under the Vaccines for Children (VFC) program did not exist for many months even though the vaccine had been added to the recommended schedule for Medicaid children. As a result, providers had

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to purchase the vaccine at a retail cost of nearly $60 per dose without provisions for reimbursement or additional capitation payments under their existing health plan contracts. This financial liability sometimes leads providers to refer children to the health department to obtain immunizations that their health plan is supposed to cover. Both increasing vaccine costs and inadequate reimbursement from public and private insurers are contributing factors. Dr. Kieu noted that the cost per child of the vaccines in the recommended pediatric immunization schedule has risen from $36 in 1982 to $628 in 2001. The current shortage of some vaccines is also helping to increase prices. She also reported that for fall 2001, she had to purchase influenza vaccine at $12.50 per dose because a distributor that had offered the vaccine at a lower price had no vaccine available. The AAP has estimated that the cost of administering each vaccine dose is about $15. Although vaccine can be obtained through VFC for children enrolled in Medicaid, providers must bear the cost of purchasing vaccine for other children and then seek reimbursement. Under the Healthy Families Program, for which VFC vaccine cannot be used, providers are reimbursed at Medicaid rates for the cost of the vaccine, but receive no payment for vaccine administration costs. For children with private insurance, providers must purchase vaccine at retail rates. Reimbursements may not cover the full cost of vaccine, and some private insurance plans may have limited or no coverage for immunizations. Furthermore, business failures among managed care plans and provider organizations can leave the individual provider with unrecoverable claims for vaccine that already has been administered. Costs related to immunization services are adding to a general increase in the financial burden for providers (see Box 1). Since 1990, the average capitation payment by managed care plans to cover the cost of all pediatric care has declined by 35 percent in California. Dr. Kieu noted that such payments are less than those in many other states. With the current costs and capitation payments, physicians face a loss of about $270 per year for each child to whom they provide care. Dr. Kieu also suggested that the growing prominence of concerns about vaccine safety—reflected in a scheduled California State Senate hearing on the subject—contributes to the financial challenges for providers. The additional time needed to address parents’ concerns is not reflected in reimbursement rates for immunization services. Administrative Burdens Offering immunization services includes a substantial administrative overhead for physicians and their office staff. To support the clinical task

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of administering an injection, a practice must also see to ordering and managing separate inventories of VFC and non-VFC vaccine, monitoring refrigeration temperatures each day, maintaining and reviewing patient records on immunizations, following up missed immunization appointments, and submitting claims and reports to multiple health plans and to the immunization registry. Periodic reviews of medical records by the health department and health plans also place demands on physician and staff time. Dr. Kieu estimated that medical practices face at least one such review each month. The burdens of participating in an immunization registry are a particular concern. Data that must be entered in patient records and insurance claims must be entered again for a registry. Dr. Kieu suggested that the development of more efficient data entry techniques would help encourage registry participation by private providers. She mentioned possibilities such as bar code scanning to capture vaccine dose and lot information and web-based data entry systems. Reducing Financial Burdens and Risks Dr. Kieu took the position that in delivering immunization services, private providers should not face financial risk for performing a public health function. She outlined several steps that might be taken to reduce this risk for California physicians. A statewide registry would provide more accurate information about children’s immunization status, but providers will need assistance in the form of new technology or financial support for administrative costs to meet the data entry demands. California has already responded to the financial problems that can be created when new vaccines are added to the immunization schedule, as happened with the addition of the pneumococcal conjugate vaccine. Legislation passed in January 2001 protects providers from financial hardship when new vaccines are introduced, but Dr. Kieu noted that some health plans were slow to provide the compensation called for by the new legislation. Public purchase of vaccine for all publicly insured children or the establishment of reimbursements or billing ceilings that are adequate to cover vaccine costs would also aid providers. The California AAP chapter has proposed the creation of a VFC-like system for ordering and distributing vaccine for children enrolled in the state’s Healthy Families Program. Dr. Kieu cited an estimate that such a system would result in a cost savings to the state of $200 per child. With the differences in private insurance benefits, she also suggested that the state might mandate that the private insurers provide full coverage for immunization services.

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BOX 1 Partial List of Necessary Procedures to Immunize a Child PROCEDURES RESPONSIBLE PERSON 1. Be ever alert of the changing vaccine events. M.D.     2. Sit down to order from vaccine representative. M.D. Mgr 3. Negotiate for best price. M.D. Mgr 4. Order substantial amount for best price break.   Mgr 5. Lay out cash $10,000-$25,000 each month or so (no interest income).     6. Receive shipment and inventory. R.N. Mgr 7. Store properly.   R.N. 8. Refrigerate cost.   office 9. Monitor temperature and log entries several times a day.   R.N. 10. Maintain proper disposal standards. office R.N. 11. May be audited at any time. M.D. Mgr R.N. 12. Discuss with each patient his immunization needs. M.D. R.N.   13. Call nurse to prepare immunization. M.D.   14. Prepare immunization with proper technique.   R.N. OFFICE OPERATIONS AND DELIVERY OF IMMUNIZATION SERVICES John Fontanesi, from the University of California at San Diego, presented findings on immunization services from work flow and time management studies of the delivery of well-child care. Immunization serves as a useful proxy for preventive care in general. The analyses of Dr. Fontanesi and his colleagues suggest that operational factors in clinics

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PROCEDURES RESPONSIBLE PERSON 15. Give immunization after mother signs for injection and child is restrained properly by nurse, occasionally with help from parent.   R.N. 16. Smooth child with bandaid. office R.N. 17. Record immunization with all data in record. M.D. R.N. 18. Record immunization in parent’s/child’s permanent immunization card (yellow card).   R.N. 19. Cost of syringe, needle, cotton ball, alcohol, and gloves for nurse.   office 20. Proper disposal of syringe and sharps containers.   office 21. Proper coding of bill for immunization. office   22. Receive multiple payments and post to proper accounts.   Mgr 23. Malpractice insurance. M.D.   Other Miscellaneous Costs: wasted vaccine, accidental or decided not to give on prepared date. more time is required by the physician to convince parent that immunization is necessary. time is spent several times a year to get an increase in immunization payment reimbursement. and provider offices may do more to influence whether immunizations are delivered than factors such as family attitudes toward immunization or socioeconomic status. For example, lack of documentation on immunization status proved to be an important contributing factor to missed opportunities to provide hepatitis B immunizations to adolescents. Since the mid-1960s, the length of the average well-child visit has increased from 12 minutes to 20 minutes. Among the factors contributing to the longer visits are providers’ efforts to comply with an increasing

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array of clinical practice guidelines as well as an increase in reporting forms. Immunization must compete for time with the other services called for by those guidelines. Dr. Fontanesi’s studies have found that the time required to administer an immunization is about 3.5 minutes and has remained constant. Although the time required for a single immunization is not great, the total number of required immunizations creates a more substantial demand on national health resources. For example, the national birth cohort included 3,959,417 live births in 1999. Providing a single immunization for each of these children will require 230,965 person hours. Completing the recommended 4:3:1:3:3 series7 will require 2,540,610 person hours for an entire national birth cohort of about 4 million children. Dr. Fontanesi suggested that additional provider and staff time could be made available to meet immunization and other health care needs by reducing redundancies in administrative tasks. For example, his studies found that a group of 9 clinics used about 200 different forms to record or report information on children under the age of 3 years. Of these forms, 72 required information about immunizations, and many of them were required by federal programs. However, less than 85 percent of immunizations administered were recorded in patient records, leading to underestimates of immunization coverage. Having contracts with many managed care plans also added to the administrative burden for clinics and provider practices. Each plan had a separate process for credentialing providers, required a separate Health Plan Employer Data and Information Set (HEDIS) audit for immunization coverage (along with other HEDIS measures), and expected different quality improvement activities. Better methods for managing patient flow and office procedures may also help ensure that children receive necessary immunizations. Observation has shown variation among clinics in the length of the average visit and in the time spent at each stage of the visit (e.g., registration, waiting, examination). Furthermore, at a single clinic, those times vary from patient to patient. However, the differences are not related to whether a child received an immunization during the visit. Dr. Fontanesi observed that it is necessary to reduce such variability to improve the overall quality of service delivery. Work flow is affected by factors such as differences between scheduled and unscheduled visits or between pa- 7   The 4:3:1:3:3 series refers to four or more doses of diphtheria and tetanus toxoids and whole-cell or acellular pertussis vaccine (DTP or DTaP); three or more doses of poliovirus vaccine; one or more doses of any measles-containing vaccine; three or more doses of Haemophilus influenzae type b (Hib) vaccine; and three or more doses of hepatitis B vaccine.

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tients who arrive on time or late. For example, immunization cards are reviewed more often during unscheduled visits, but patient charts are more likely to be available for scheduled visits. Dr. Fontanesi also emphasized the importance of reducing inefficiencies in office procedures to gain time for other tasks. Providers and staff may need to ask for more information from families to ensure that office records are accurate. He noted that parents are more likely to bring a child’s immunization record to a visit if they are specifically asked to do so. Dr. Fontanesi’s observations also showed that because of a lack of time or effective mechanisms, most practices missed the opportunity to assess when a child’s next immunizations were due. Improving the delivery of immunizations and other well-child care will require an adequate investment in the assessment of current office procedures and in tools and training to achieve greater efficiency and effectiveness.