and the requirement that Medicaid funds be used only for Medicaid clients impeded the ability of most states to control and use revenue streams efficiently to support their multiple immunization roles. In general, the few states that housed their Medicaid program and department of health within the same agency had greater success in capturing VFC savings and applying this revenue directly to their immunization programs.

The creation of the VFC program did not eliminate the need for state-purchased vaccines. States continued to rely on Section 317 grants to meet the vaccination needs of children who did not qualify for federal assistance, which in some cases accounted for almost half of the state’s total vaccine purchases. For example, a recent CDC study of 12 states2 indicated that the proportion of total state vaccine purchases allocated to VFC ranged from 42 percent (Washington) to 87 percent (California) (CDC, 1998d). Similarly, the proportion of vaccine purchases allocated to Section 317 ranged from 5 percent (Florida) to 48 percent (Utah).

States continued to rely on Section 317 vaccine purchase funds for two reasons: (1) VFC eligibility requirements excluded many thousands of children (e.g., those enrolled in health plans that did not include immunization coverage) whom many states felt obligated to serve through a universal purchase program or an enhanced vaccine purchase policy, and (2) new vaccines (including rotavirus and varicella) were approved for children and adolescents during this period that were not automatically included within the VFC contract. As a result, Medicaid providers (which were bound by the Advisory Committee on Immunization Practices [ACIP] recommendations) were obligated to provide these vaccines, and states sought to make them available in public health clinics through their Section 317 purchases when they experienced delays in obtaining vaccines from the VFC program. In many cases, state Medicaid programs were also faced with reimbursing private providers for the private-sector purchase and administration to Medicaid clients of these very expensive vaccines.

In addition, despite the implementation of VFC throughout the United States, some states, particularly those with universal purchase programs, continue to allocate sizeable amounts of their own funds for vaccine purchase. Connecticut’s vaccine purchases under the federal contract, for example, amount to half of all publicly purchased vaccine in that state (information provided by CDC). Other states, such as Alabama, Michigan, and Pennsylvania, rely primarily on federal funds for vaccine purchase.

Many states have reported that the administrative burden associated with VFC has increased considerably in the past several years, both for participating providers and for the states. This increased administrative burden raises the cost of state operations and oversight efforts, since states

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