Who Gets Stuck?
Doctors, Patients Want Insurers to Pay More for Vaccine

By Sandra G. Boodman
Washington Post Staff Writer
Tuesday, May 1, 2007

When Merck launched a multimillion-dollar marketing campaign last year to promote Gardasil, its new vaccine to prevent cervical cancer, company officials probably did not anticipate that its signature phrase -- "one less" -- would apply not just to malignancies but also to physicians. Yet that slogan has come to symbolize the response of doctors locally and around the country.

Pincered by rising costs and eroding reimbursements, and resentful of what they regard as a long-standing and unfair financial burden, some doctors, especially pediatricians and gynecologists who are most likely to be asked for the vaccine, are refusing to buy it or restricting who receives the shots.

Discontent over the price of the vaccine -- the most expensive ever approved -- highlights a long-simmering dispute over reimbursement for immunizations, traditionally regarded as bedrock medicine. It is a dispute, experts say, with significant public health implications that has accelerated as the number of costly new vaccines has proliferated.

"This is a national issue that is affecting lots of people," said Benjamin Gitterman, president of the D.C. chapter of the American Academy of Pediatrics. "It's a matter of cash flow," Gitterman added. Some insurance companies are paying doctors $122 per shot -- just $2 more than the price doctors pay for a dose of Gardasil -- an amount not sufficient to cover the cost of stocking and administering the vaccine, doctors say. The problem is disproportionately affecting pediatricians, experts say, because they administer the majority of immunizations and are among the lowest-paid specialists.

"Some plans are saying I'll give you $90 -- and not a penny more," said Washington pediatrician Promise Ahlstrom.

Instead of routinely immunizing females between the ages of 9 and 26, the population for which the three-dose vaccine is approved, some doctors are handing patients a prescription to be filled at a pharmacy. Patients who do this, however, may be stuck with the tab: Many insurers, including CareFirst and Aetna, pay only for vaccines supplied by a doctor.

Other physicians are reserving Gardasil for patients whose insurers have agreed to pay what the doctor deems a "reasonable" fee -- usually a minimum of about $140. Still others are requiring payment from patients upfront.

The spotty availability of Gardasil is likely to complicate efforts by parents to comply with new laws in Virginia and the District. Both jurisdictions will require the vaccine for school entry with certain exceptions. (Maryland officials are studying whether to require the vaccine.) Doctors report a brisk demand for the vaccine, which prevents some strains of the ubiquitous human papillomavirus (HPV), linked to the development of cervical cancer.

Merck executives have said that the price of Gardasil is justified by its development costs and its value. Insurance company officials agree that the vaccine is expensive, but add that physicians are adequately compensated for providing it.

Many pediatricians see things differently.

"We shouldn't be expected to subsidize the public health system and perform our jobs at a loss," said Jon R. Almquist, chairman of the pediatrics academy task force on immunization, in a statement released last week. "We've carried this burden long enough."

Herschel R. Lessin, medical director of a large pediatric practice in Poughkeepsie, N.Y., that participates with 50 health plans, wholeheartedly agrees.

"I have to pay for nursing time, supplies, syringes, alcohol pads, dropped doses and time to explain it," Lessin said of the ancillary costs of providing vaccines. "And when insurance companies decide to pay me $122 per dose and take three months to pay, I can't afford to do it. For insurance companies that are paying me $140 or $150 a dose, I'll give it." In other cases, Lessin said, he is giving patients a prescription to be filled at a pharmacy and administering the vaccine for a $25 fee.

His patients, Lessin added, "understand this."

Ahlstrom said her partners have agreed to give Gardasil to patients who belong to NCPPO, the only plan in which her practice participates. The remaining two-thirds of her patients must pay for Gardasil shots upfront.

"I feel it's a really unfair situation to put pediatricians in," she said, adding that her partners decided they would not give Gardasil at a loss. Most parents, she added, are unaware that "doctors all the time give vaccines we lose money on."

Christina Sprague of Northwest Washington said she has spent several hours on the phone in recent months trying to find a doctor who will immunize her daughter, who attends an out-of-state college.

"It's been pretty frustrating," Sprague said. "This should be straightforward."

Linda Woolley, a lawyer who lives in Chevy Chase, said she called four doctors' offices in the District and Maryland recently seeking one that had the vaccine, which officials at CareFirst BlueCross BlueShield told her was covered under her plan.

None did, but a doctor in the office of Woolley's OB-GYN, Mark Reiter, wrote a prescription and agreed to give the shot to Woolley's teenage daughter. But after Woolley spent $181.99 for the first dose of the vaccine from CVS, CareFirst rejected the claim, saying it wasn't covered because the vaccine had not been supplied by a physician.

Reiter said his practice, one of the city's largest, doesn't buy Gardasil because the $2 reimbursement rate quoted by insurance companies "isn't worth it."

Woolley regards her situation as a Catch-22: "I find it curious that states are mandating this" but consumers have trouble getting the vaccine.

CareFirst spokesman Jeff Valentine said the company has received several similar complaints from subscribers and is looking into them.

"We are in the process of examining our rates," said Valentine, adding that several physicians have complained about low reimbursements. But he said that CareFirst, one of the largest insurers in the metropolitan area, is "competitive with what other insurers are paying," although he declined to discuss fees. Recently Cigna and UnitedHealthcare announced they were raising reimbursement rates for Gardasil.

Walt Cherniak, a spokesman for Aetna, said the company pays doctors $120 plus a 5 percent markup -- $6 -- and an administrative fee of $8 to $15. In some cases doctors can also bill for the office visit, he said.

"We believe our reimbursement is reasonable and sufficient" to cover doctors' costs, Cherniak said. "And we encourage members to ask physicians for the vaccine."

The economics of providing vaccines has changed dramatically in the past two decades, noted Anne Francis, an associate clinical professor of pediatrics at the University of Rochester School of Medicine. Twenty years ago it cost $150 to fully immunize a child with nine vaccines, she said. The current cost is $1,500, and the number of vaccines has jumped to about 35. These days, she said, there is little room to recoup the cost of a dropped syringe of vaccine, a child who pulls away, a patient who changes her mind at the last minute or refrigerated doses that must be discarded after a power failure.

"If I was a single practitioner, I would need to come up with $36,000 just to buy [the full three doses] of Gardasil for 100 patients," she said. "That's a lot of cash to put out," especially for small practices.

Some doctors say the benefits outweigh the problems.

"For the first six to 12 months [after a new vaccine is introduced], the insurance companies don't know what they're doing," said Northern Virginia pediatrician Gary Bergman. His large practice, he said, "probably breaks even" providing vaccines, which he regards as a core mission of pediatrics.

"Pediatricians are nickel-and-dimers," Bergman added.

Until recently, he and his partners were giving Gardasil shots to former patients over 21 -- until their risk management firm warned that doing so would result in an increase in liability premiums. "That's a shame, because a lot of patients said their [gynecologists] didn't carry it," Bergman said.

Officials at the American College of Obstetricians and Gynecologists say they are hearing about inadequate reimbursement from members who are reluctant to buy Gardasil.

"We need to make our members understand that [vaccines] are part of their practice," said Gregory Moore, director of student health services at the University of Kentucky and chairman of the ACOG's committee on gynecologic practice. Moore attributes some of the resistance to his specialty's lack of experience using vaccines.

April Rubin, one of the city's few remaining solo OB-GYNs, already understands this. Rubin, who practices on Capitol Hill, bought Gardasil and is giving it to current patients. She said about a dozen so far have requested it.

"My business manager doesn't think I should be doing it," Rubin said. "I lose money, but I do it as a service to my patients." ·

Comments:boodmans@washpost.com.