AAP Vaccine Financing AAP Vaccine Financing Strategies and Resources Strategies and Resources

for Physiciansfor Physicians

AAP Vaccine Financing AAP Vaccine Financing Strategies and Resources Strategies and Resources

for Physiciansfor Physiciansfor Physiciansfor Physiciansfor Physiciansfor PhysiciansKathleen Cain, M.D., F.A.A.P.Kathleen Cain, M.D., F.A.A.P.

Member, Private Payer Advocacy Advisory Member, Private Payer Advocacy Advisory CommitteeCommittee

CoCo--Chair of the AMA AAP Task Force on Public and Chair of the AMA AAP Task Force on Public and Private Payer IssuesPrivate Payer Issues

Practicing Pediatrician, Topeka Pediatrics, P.A.Practicing Pediatrician, Topeka Pediatrics, P.A.

Objectives• Understand the AAP resources available to help you manage your vaccines

• Contracting/Negotiating• Contracting/Negotiating

• Purchasing

• Inventory control

• Coding

• Payment

Vaccines are BIG Business!!

Consume lots of MoneyConsume lots of TimeConsume lots of EnergyConsume lots of Energy

Why is this so important?

• 85% of all pediatric vaccines are given in private offices given in private offices

• Only 15% of given in public health clinics.

Explosion in Vaccine Cost

• 1985: 10 vaccines with cost of $45 to $115.

• 2008: 32-35 vaccines with cost of $900 to $1700 (excluding flu)

Vaccine Purchase

• 45% vaccines purchased in the private sector

• 55% purchased with public funds

Vaccines are Cost Effective and Life Saving

• Yearly save $10 Billion direct and $43 Billion in societal costs

• For each birth cohort, prevent 14 • For each birth cohort, prevent 14 million cases of vaccine preventable diseases and 33,000 vaccine-preventable disease related deaths

Vaccines and Business• Explosion of vaccines has put increased burdens on primary care physicians, primarily pediatricians.

• Payments for vaccines and their • Payments for vaccines and their administration are not adequate to cover the costs of providing vaccines.

The AAP• Dedicated to the health of all children

• Realization that survival of pediatrician is paramount to the

• Realization that survival of pediatrician is paramount to the health of the children

• Evolution of P team to PPAAC

• Every year payment concerns are in the top 10 resolutions of the ALF

The Alphabet Soup of the Business of Pediatrics

• SOAPM- The Section on Administration and Practice Management –practicing pediatrician members of the AAP, dedicated to members of the AAP, dedicated to the sustainability of their practice

• PMO- Practice Management Online (practice.aap.org) is the baby of SOAPM

ABC’s cont• PPAAC- The Private Payer Advocacy Advisory Committee works with managed care on payment and coverage issuescoverage issues

• TFOI – The Task Force on Immunizations-

• Contact Elizabeth Sobczyk

• esobczyk@aap.org

Section on Administration and Practice Management (SOAPM)

• “Home” to pediatricians interested or involved with the management or administration of pediatric practices.

• Provides both basic and cutting edge administration and practice management information to its members.

• Benefits:• Benefits:– SOAPM LISTSERV® discussions– SOAPM’s newsletter soapmnews (bi-annual)– Pediatric Practice Managers Association– SOAPM NCE programs

• Open to all FAAPs, Resident Fellows, and eligible Affiliate Members with an interest or active in practice management.

• Applications for Fellows and Affiliate Members are available on the AAP Member Center at: http://www.aap.org/member/SectionMbrreq.htm.

Practice Management Online (PMO)

• A Centralized, Online Pediatric Practice Management Resource that supports Pediatricians and practice managers in running a practice that is fiscally sound and efficient and provides quality health care to children and families.

• 5 key areas: Practice Basics, Payment and Finance, Office Operations, Quality Improvement, Patient Management that include the following:– Tools and resources- address hot topic issues (e.g Retail based Clinics, – Tools and resources- address hot topic issues (e.g Retail based Clinics,

vaccine payment, private payer negotiations)– Sample office documents- can be modified and used at your practice– Handbooks- Starting in Practice, Payment for Telephone Care– Personnel- sample job descriptions

• The PMO “button” on the AAP Member Center or the main AAP Web site (www.aap.org) or can be accessed directly at http://practice.aap.org.

Private Payer Advocacy-Accomplishments

• Vaccine Addendum to Contracts

• Advocated for CDC Private Sector Cost as the basis for contract negotiations Cost as the basis for contract negotiations

• Business Case for Pricing Vaccines

Private Payer Advocacy-Accomplishments

• Vaccine product price increase notification to payers for timely inclusion

• Hassle factor form (http://www.aap.org/moc/reimburse/hassl

• Hassle factor form (http://www.aap.org/moc/reimburse/hasslefactor/)

• AAP Endorsed Principles on Benefit Plan Coverage and Payment

Private Payer Advocacy• Advocate for separate and appropriate payment for admin codes

• Pediatric Council Toolkit: www.aap.org/moc/reimburse

• Pediatric Council Toolkit: www.aap.org/moc/reimburse

• National Carrier Meetings

• Contact Lou Terranova at lterranova@aap.org , PPAAC staff

Managing Vaccines• Read your contract! Get help.

• Use the Vaccine Addendum (http://www.aap.org/securemoc/reimburse/VaccineAddendumtoPayerCont(http://www.aap.org/securemoc/reimburse/VaccineAddendumtoPayerContracts.pdf)

• CDC Private Sector Pricing (http://www.cdc.gov/vaccines/progra ms/vfc/cdc-vac-price-list.htm)

More on Contracting• Checklist to Assess Carrier Contracts (http://www.aap.org/securemoc/reimburse/Carriercontractschecklist.pdf)

• Pedialink Module on Negotiating • Pedialink Module on Negotiating (http://practice.aap.org/content.aspx?aid=1924&nodeID=1074)

• Due out soon! Immunizations Best Business Practices Pedialink Module

What are your costs?• Understand the Business Case for Pricing Vaccines (http://www.cispimmunize.org/pro/pdf/The%20Business%20Case%20for%20Pricinge%20Business%20Case%20for%20Pricing%20New%20Vaccines.pdf)

• Lost Opportunity, wastage/unpaid , inventory mgmt, insurance, refrigerator & monitors

• What is a profit? Contribution to overhead?

Vaccine Product – The Bottom Line

• Expenses to provide vaccines are 15 –25% over the purchase price of vaccines. (16% by AZ Chapter)

• Expenses to provide public vaccines • Expenses to provide public vaccines less but include ordering, inventory, storage requirements.

• Insurers do NOT recognize these expenses currently.

•

How can you calculate the costs?

• Vaccine Survival Guide (calculate components costs your practice: http://www.cispimmunize.org/pro/pdf/Vacc_survival_insert.pdf. f/Vacc_survival_insert.pdf.

Lost Opportunity Costs• Large inventory:$10 K to $15 per FTE provider ($100 – 150 K/year)

• Delay between purchase and receipt of payment- ins prob, bad debt, HSA

• Delay between purchase and receipt of payment- ins prob, bad debt, HSA

• Lost use of capital: Approx $3-5K per FTE provider.

Vaccine Administration Code Includes:

• Informed consent (provider time)

• Nursing Time (prep, administration, recording, recall)

• Table paper/exam table/alcohol pads• Table paper/exam table/alcohol pads

• OHSA needle/syringe

• CDC information sheet(VIS)

Administration Fees• Private Insurers: $0 to $24 but most less than $15

• Medicaid: $2 to $17.63 but most less than $9

• Medicaid: $2 to $17.63 but most less than $9

• Medicare: $18.57

• VFC/Uninsured: Priceless!

Admin Code Additions for 2009

• Clinical staff time for vaccine registry, monitoring temperatures and monitoring alarms

• Dedicated full size refrigerator with • Dedicated full size refrigerator with alarm/lock

• Refrigerator/freezer vaccine temperature monitor and alarm

• Include counseling time

Universal Purchase Pros • All patients covered; don’t need to worry about type of insurance

• Eases problems with capital outlay and product loss

• Eases problems with capital outlay and product loss

• State buy in and support of vaccine education (storage, admin, public)

•

Universal Purchase Cons• Cost to State…

• Eliminate profit on vaccines. (Admin fees only revenue)fees only revenue)

• Insurers may stop covering- the worst crowd out!

• Manufacturers fight for profit/R and D.

• Limited option in vaccines.

• Delays in coverage

Underpayment for Vaccine Administration

• Public: Medicaid $2 to $17.63 (most less than $9)

• Private: 0 to $24 (most less than $15)

• Private: 0 to $24 (most less than $15)

• In aggregate, NOT COVERING COSTS!!!!

• Grandma is worth more!

Public Sector Efforts• Work toward Medicaid programs paying at maximum allowable level.

• Increasing the max. allowable VFC level

• Increasing the max. allowable VFC level

• Possible expansion of 317 funds to cover administration for uninsured or underinsured.

Buying and Coding• Use PMO for list of Group Purchasing Organizations (http://practice.aap.org/content.aspx?aid=2072)x?aid=2072)

• Review and understand coding for vaccines(http://www.cispimmunize.org/pro/coding.htm)

Coding• Subscribe to the Pediatric Coding Newsletter (http://coding.aap.org/)

• Review yearly RBRVS Brochure• Review yearly RBRVS Brochure

• Use the Coding Hotline (http://www.aap.org/moc/reimburse/codinghotlineform.htm)

Other Resources for Practices

• Promoting the Value of Pediatrics: (www.aap.org/moc/reimburse)Pediatrics: (www.aap.org/moc/reimburse)

• CISP Web site Financing Section: (www.cispimmunize.org/pro/finance.html)

National Vaccine Advisory Committee (NVAC)

• Study and recommend ways to encourage the availability of an adequate supply of safe and effective vaccination products effective vaccination products

• White Paper with new recommendations due out 12/08

Other AAP Efforts• Working with manufacturers on ways to pay for vaccines: consignment model.

• Working with manufacturers for • Working with manufacturers for timely notification of price increases to insurers and customers

• Working on vaccine education and promotion to the public.

• Bar coding

We are Part of the Problem!

• Gary Freed’s study showed huge variability in what physicians pay for vaccines. Also what physicians are paid for vaccines. paid for vaccines.

• We are our own worst enemy!

• Pediatricians are reluctant to stop giving immunizations. FP’s aren’t!

The Nice Guys and the Crisis

• Pediatricians are committed to protecting America’s children.

• Pediatricians will immunize even when losing money.

• Pediatricians will immunize even when losing money.

• Long term, the loss of vaccines is unsustainable and a huge public health risk.

The Future• Communicate the importance of vaccines for our children’s health.

• Advocate for appropriate payment for vaccines and administration to assure access.and administration to assure access.

• Research ongoing costs/systems to deliver vaccines efficiently.

• Educate our members about the realities of vaccine finance.