BOX 3–2 New Jersey: Carving the Vaccine Administration Fee Out of Capitation Rates
New Jersey has designed “NJ KidCare,” its mixed-model SCHIP, to be as seamless as possible, from both the providers’ and the patients’ point of view, across its Medicaid expansion program and three additional freestanding plans. Immunization payment policy is the same for all children in either Medicaid or NJ KidCare. Children in Medicaid receive vaccines from VFC. The state uses a portion of its state SCHIP contribution to purchase vaccines at the CDC contract price for distribution to all physicians in the three freestanding SCHIP plans. Thus physicians receive vaccines up front for all children in state-sponsored insurance programs.
Physicians in New Jersey participate in Medicaid/SCHIP largely through the six managed care organizations (MCOs) with which the state contracts. Instead of allowing these MCOs to capitate primary care providers for the provision of immunizations to their pediatric patients, New Jersey has negotiated with them to “pass through” the state’s vaccine administration fee of $11.50, which the state built into the MCOs’ actuarially-based capitation payments. To receive this fee, providers must send the MCO a notice of the immunization, essentially a bill for rendering the service. Not only does the payment encourage providers to immunize, but it also improves the reporting and documentation of immunizations delivered for the MCOs, which can build their HEDIS reports from these notices.