9Funding and Payment Issues

Publication Details

The federal government purchased the vaccine from manufacturers so it could be provided to the public free of cost. Federal funding also paid for the vaccine distribution. Despite this investment, all the stakeholders involved in the vaccination campaign encountered additional costs associated with planning, vaccine storage and administration, communications, data collection, and associated staffing needs. Some funding and payment issues raised by workshop participants are discussed in this section.

Sanchez of Blue Cross Blue Shield noted that although each stakeholder group knows about its own costs and funding requirements, there is a gap when it comes to the overall picture of the cost of the 2009 H1N1 response. He suggested that evaluating the 2009 H1N1 response is important to better understand the full cost of the response and what portion each stakeholder bore (e.g., taxpayers, physicians, patients, health plans, employers).

Public Health

Public health participants at the workshops noted that the free vaccine allowed jurisdictions to focus resources on distribution and administration. Nevertheless, distribution and administration still had a substantial cost—for staff, facilities, supplies, and communications, among other things. Many jurisdictions were able to use federal grant money to help fund their 2009 H1N1 vaccination campaigns, but participants noted the significant administrative process associated with the grants. Several participants also noted that the grant requirements did not always line up with the specific needs of individual health departments. “One size does not fit all when you are pushing money down for grants,” said Jackson of Georgetown, Texas. “Not every health department is the same.” Several participants urged the development of a simpler, more effective way to get money quickly when needed for an emergency response, while still retaining the necessary transparency and accountability.

State and local public health authorities were highly concerned, however, about how to sustain and capitalize on the infrastructure improvements, partnerships, and other capacities built, once federal funding for the emergency response was no longer available, particularly in light of the erosion of funding for public health infrastructure (NACCHO, 2010a; Trust for America’s Health, 2010). “How do you sustain the momentum and get people vaccinated, but do it in a system that you have been using all along?” asked Cooper of the Tennessee Department of Health.

Several participants said public health funding for emergency responses is a critical area for future work. As NACCHO’s Herrmann noted, “We can’t continue to rely on this big bolster of money [from the federal government] when an event happens in order to carry out our public health responsibilities and priorities. It is just a dangerous way to live, and we see that from event to event.”

Healthcare Providers and Pharmacies

Healthcare providers and pharmacies also encountered costs during the vaccination campaign, but unlike public health authorities, they did not have access to federal grant money. Costs associated with vaccine administration included staff time to administer the shots and the administrative activities associated with large-scale vaccinations: scheduling, data entry, and managing supplies. Pharmacies incurred costs transporting vaccine from a central location to their stores. Some, but not all, healthcare providers and pharmacies required copayment or administration fees to help cover these costs.

Challenges also arose with claiming reimbursement from insurers, especially during the initial months of the vaccination campaign. In the beginning no Current Procedural Terminology (CPT) codes were available for 2009 H1N1 vaccine administration. By the end of the event, two 2009 H1N1 codes were available: a CPT code and a Centers for Medicare & Medicaid Services (CMS) Healthcare Common Procedure Coding System (HCPCS) code. This in itself caused some problems because physicians did not know which code to use. In addition, some health plans do not recognize pharmacists as immunizers and did not reimburse for administration fees.

Washington State’s Yu noted that although community physicians had the resources to provide vaccination services, they incurred costs in terms of staff time and supplies. If public health is counting on the resources of community physicians being available in the future, then a way should be found to acknowledge the real costs associated with this type of event and provide a way of reimbursing and incentivizing participation. Scott Needle, a pediatrician from Florida and a representative of the American Academy of Pediatrics, noted, “Ninety percent of the health care in this country is delivered through private offices, and of those, many of them are small offices, with one, two, four doctors at a time. I think there does have to be some recognition that these practices are still small businesses.” Needle also emphasized that funding would help offices engage in planning and preparedness activities.

Health Plans

Toby Merlin, deputy director of the CDC Influenza Coordination Unit, noted, “It is worth pursuing with insurers the issues of compensation and assuring that people who perform services are adequately compensated.” Participants noted that health insurers had worked with other stakeholders to develop the CPT code for 2009 H1N1 vaccine administration. Health insurers also developed a roster billing system for use in mass vaccination clinics, through which lists of people receiving the vaccine and their insurance information were collected and submitted to the insurer. Several participants noted, however, that there were problems with getting reimbursement using this method because of the potential for errors when information is recorded. As discussed above in the section on vaccine methods and administration, Sanchez of Blue Cross Blue Shield of Texas urged public health authorities to convene a national meeting for large health plans that, among other topics, would address issues such as reimbursement, funding, and information sharing so that health plans can be more fully integrated into the response system during future public health emergencies.

Health plan representatives at the workshop also discussed challenges they faced in reimbursing administration of 2009 H1N1 vaccine. One of the major issues, noted UnitedHealth Group’s Justman, revolved around employers that self-insure. Like most health insurers, he said, employers that offer health insurance to employees through UnitedHealth Group fall into two categories. In the first, UnitedHealth Group fully insures those employees. In the second, however, the employer self-insures, which means it insures its own employees but contracts with UnitedHealth Group to provide administration services. Justman noted that employers who self-insure decide what services are covered for their employees and what copays are required. This distinction caused confusion during the 2009 H1N1 campaign because UnitedHealth Group decided to cover 2009 H1N1 administration costs for all people insured through UnitedHealth Group. However, some self-insuring employers did not cover vaccine administration and refused to cover 2009 H1N1 vaccine administration because it created a benefit that would need to be negotiated with unions and employee groups. This resulted in the confusing situation where employees of employers fully insured through UnitedHealth Group were covered for 2009 H1N1 vaccine administration, whereas some employees of self-insuring employers administered through United-Health Group were not covered. Similar situations occurred with other health plans, and because most people are unaware of the distinction between regular and self-insuring employer-based insurance, they did not understand why some were covered when others were not.

Several participants said public health authorities, medical associations and healthcare providers, pharmacies, the insurance industry, and other stakeholders should hold a broad conversation about funding and payment in a public health emergency response. This should involve a strategic conversation exploring all aspects of the response, they noted, not just looking for ways to cover existing practices and procedures.

Opportunities for Addressing Funding and Payment Issues

Numerous individual suggestions were made about opportunities to address funding and payment issues for future emergency vaccination programs. These suggestions are compiled here as part of the factual summary of the workshops and should not be construed as reflecting consensus or endorsement by the workshops, the Preparedness Forum, or The National Academies. They are as follows:

  • Evaluate the 2009 H1N1 response to develop a better understanding of the full cost of the response and what portion is borne by each stakeholder (e.g., taxpayers, physicians, patients, health plans, pharmacies, employers).
  • Public health authorities should recognize and address the time and financial costs for private practitioners.
  • Public health authorities should engage with health systems, retail pharmacies, and healthcare insurers to address reimbursement issues. What lessons were learned during this event, and what systems can be put in place to simplify and streamline reimbursement processes in the future?
  • The federal government should evaluate funding mechanisms that enable public health to respond to emergencies. For example, can grant application processes be streamlined? Can funding requirements be more flexible to enable public health authorities to tailor funding to their areas of need?