AAP 2011: Are Physicians Paying Too Much for Vaccines?

“It’s so important to be financially viable to help your patients.”

- Jeffrey Couchman, MD, FAAP

“We have a vaccine problem.”

- Couchman

How much do you spend on vaccines every year? Jeffrey Couchman, MD, FAAP, addressed this very question during Sunday’s session “Vaccinate Your Patients Without Losing You Shirt PLUS Is Bar-Coding in Your Future,” at the AAP 2011.The fact that incomes are declining and pediatricians are making less money, purchasing vaccines is becoming a problem. According to a survey conducted by Dr. Gary Freed, University of Michigan Health System, 49% of the pediatricians and family physicians who responded delayed purchasing new vaccines because they cannot afford it. There are many instances where insurance companies pay physicians less than the purchasing price of vaccines; 26% of practices are paid less for hepatitis A vaccines. “Every time you give a chicken pox vaccine, you lose $29,” said Couchman. This is becoming such a big problem that 7% of pediatric practice decision makers have seriously considered stopping the buying of vaccines all together; 34% of family physician practice decision makers have considered the same thing. “We don’t get reimbursed for what we do,” he said.

What contributes to vaccine-related overhead?

1) Direct cost

2) Vaccine product-related costs

3) Vaccine administration

The CDC has an established vaccine price list, but the insurance companies do not pay attention to the costs because those costs are “what we want them to pay us,” Couchman said.

Direct cost — To avoid the high cost of vaccines, it is a good idea for physicians to be on the lookout for distributor rebates or participate in group purchasing where multiple practice join together for lower vaccination costs.

Vaccine product-related costs — There are costs associated with the ordering of vaccines and conducting inventory so that a practice does not run out. It would be embarrassing if a patient was to come into the office to have a vaccine administered only to find out that it is unavailable. There are some practices that use a billing service. Couchman said that his practice gets back exactly what they paid for the vaccine from insurance companies, but 7% of that is taken out to pay for billing collection costs; thereby vaccine reimbursement is less than the initial purchasing price. Additional costs include storage equipment and insuring the vaccination inventory.

“Physicians” taxes; “Some places actually charge extra taxes because we’re all rich doctors and can afford it.”

- Couchman

Administration costs — Survey results found that 8.6% of practice appointments are for vaccine administration only, and the practice is only paid through the vaccine administration code and actual product cost. Couchman believes that every service provide should contribute to the practice’s bottom line. When nurses are spending the time to administer the vaccines and then fielding phone calls by parents who have questions, the costs definitely can add up. There are additional costs such as purchasing supplies, gloves, EHRs, computer systems, unpaid claims, and liability insurance at the cost of $0.34 per vaccine component.

Couchman said one of the best things that could have happened was when the new vaccine administration codes were adopted and implemented last year. Prior to the adoption, practices were being paid an average of $17 per vaccine, but this year it is up to $34 for each vaccine. “Not getting paid based on the new vaccine administration codes?” asked Couchman. “Fight for it.”