Doctors knock Medicare vaccination payments as too low

CMS' refusal to increase immunization pay rates may hurt chances of reaching Healthy People 2010 goals.

By Markian Hawryluk, amednews staff. Aug. 5, 2002.

Washington -- Physicians hoping for a shot in the arm from the Centers for Medicare & Medicaid Services in the push to boost immunization rates among the elderly have come away smarting.

In its recent proposed rule on the Medicare physician fee schedule for 2003, CMS increased payment rates for most immunizations but not for influenza, pneumococcal and hepatitis B vaccine administration. Physician practices may not be able to continue to absorb those losses along with increases in costs.

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"When you consider the fact that physicians are facing financial pressure from so many sources, such as the reduction in Medicare payment for physician services and increasing medical liability insurance premiums, it's very difficult to handle inadequate reimbursement for individual services such as this one," said Ronald M. Davis, MD, a preventive medicine physician from East Lansing, Mich., and an AMA trustee.

While private plans rely on current procedural terminology codes for immunization claims, CMS requires doctors to use special "G codes" when billing for flu, pneumonia or hepatitis B vaccination. But the G codes are linked to CPT codes for therapeutic injections, which will pay only $3.80 in 2003. Other vaccinations are paid according to the CPT code for vaccine administration, or $7.61 in 2003.

Physicians have complained that the G codes represent an additional hassle required only by Medicare. CMS has indicated it needs the G codes because immunization claims cannot be counted in sustainable growth rate expenditures when calculating the physician payment update. If the G codes cannot be eliminated, physician groups say, CMS should at least reimburse practices at the vaccine administration rate.

Physician groups fear that if the low rates persist, doctors will begin to refer patients to other venues for vaccination. But that decreases the likelihood that a patient will actually get the immunization. The patient may forget to go or be discouraged by a long line at a community health center, Dr. Davis said.

Every dollar spent on immunization saves the health care system about $10.

"A basic tenet of good public health practice is to immunize the patient whenever you can," he said. "Whenever that person is in the doctor's office or in your clinic or in your emergency department and they need a vaccine, give it right then and there. Don't take a risk of the patient being lost to follow-up and not getting the recommended service."

There's some evidence that doctors might already be retreating from providing immunizations. A study by the American College of Physicians--American Society of Internal Medicine's Adult Immunization Initiative found that 85% of general internists think that reimbursement for immunizations is inadequate and poses a barrier for their practices to continue to provide the service.

"We're already seeing that physicians are not providing the service," said Scott Jauch, practice management associate for ACP-ASIM.

Jeopardizing immunization goals

Although CMS' reimbursement policy may have roots in the current budgetary environment, its reluctance to boost pay for some vaccinations likely will make it more difficult to achieve target immunization rates under the federal government's Healthy People 2010 initiative.

That program set a number of quality indicator goals for the health care system, including providing annual flu shots to 90% of high-risk individuals by the year 2010. People older than 65 are considered high-risk because they account for the vast majority of hospitalizations and deaths associated with the flu. As of 1998, only 64% of seniors received a flu shot even though the service is fully covered by Medicare.

"The vaccines are drastically underutilized right now," Jauch said. "We're all trying to achieve the Healthy People 2010 goals for immunization, and with the current reimbursement the way it is, we view it as a barrier to reaching that level of immunization coverage."

Physicians have historically been the primary source for flu vaccinations. Some 80% of Medicare claims using the influenza G code came from three groups: primary care physicians, internists and community health centers. Community health centers have seen more patients seeking flu shots in recent years as physicians were unable to get adequate supplies of the vaccine due to production shortages.

"It's particularly unfortunate that we have this problem for immunizations because that's one of the most cost-beneficial preventive services that we have available," Dr. Davis said. Extensive research has documented that the health care system saves about $10 for every dollar spent on immunization, he added.