Coding, careful planning can reduce vaccine-associated losses

October 11, 2016
Rachael Zimlich, RN, BSN
Rachael Zimlich, RN, BSN

Ms Zimlich is a freelance writer in Cleveland, Ohio. She writes regularly for Contemporary Pediatrics, Managed Healthcare Executive, and Medical Economics.

Practices that scrutinize vaccine costs and plan ahead may not make much off of vaccinations, but could cut some of their losses.

Vaccine administration is an important element of primary care practice, and a critical contribution to preventive care public health.

But as vaccine and overhead costs continue to rise-particularly for private practices-physicians can have a difficult time aligning expenses with revenues.

A decade-old paper published in Vaccine sought to estimate the expense practices face from administering seasonal influenza vaccinations and found that the per-shot costs given during the course of a scheduled visit ranged from $21.34 for a corporate practice to $50.43 for a private practice. For a walk-in clinic, those costs ranged from $15.12 for a corporate practice to $40.36 for a private practice. The costs are no doubt higher today, and Medicare payments don’t always cover the entire vaccine cost, often resulting in losses of at least 5% of the average wholesale price for the vaccine alone.

The transition to ICD-10 may have been an administrative burden for practices, but it did offer some relief in aligning vaccination reimbursement with actual costs. Practices still have some work to do, though, to ensure they are making the most of their reimbursement, Michael L. Munger, MD, FAAFP, president-elect of the American Academy of Family Physicians told Medical Economics. Munger has been in practice for 30 and currently practices and serves as vice president of medical affairs for primary care at Saint Luke’s Medical Group in Overland Park, Kansas.

Compared to the previous coding system, ICD-10 recognizes the type of vaccine provided by the CPT or HCPCS code entered, negating the need for individual diagnosis codes. Instead, practices report code Z23 for immunization encounters plus the actual vaccine code and National Drug Code, Munger said.

Code correctly

AAFP offers specific coding guidance for practice billing patients covered by Medicare Part B and Medicare Part D. The Centers for Medicare & Medicaid Services (CMS) also offers guidance on choosing the right code for adult vaccinations, including the seasonal flu shot.

For face-to-face encounters with counseling, such as when a vaccine is administered in the context of an office visit, practitioners should enter code 90460 and 90461. For vaccines administered in a walk-in or flu clinic, practices can use codes 90471 and 90474.

Next: Cost concerns

 

“There are now administration codes which are meant to cover the cost of the vaccine plus the cost of the overhead to give the vaccine,” Munger said. “But that’s still dependent on several things.

Cost concerns

Paying too much for the vaccine itself can result in huge losses, since reimbursements are based on an average cost. Practices should take steps to compare prices on all vaccines from several manufacturers, and may end up having to order different vaccines from different sources to get the best price, he said.

“You now have to go vaccine by vaccine, line by line, to see where best price is going to be. You may order your entire complement of vaccines from three different manufacturers,” Munger said, cautioning that it’s an ongoing process. “Just like you would hopefully be a savvy shopper if you’re out looking for a large appliance for your home, it’s the same for your practice. Don’t just decide which manufacturer supplied the best price last year. This is an every year process to make sure you’re tracking what the current costs are going to be.”

Ordering vaccines directly from manufacturers can also sometimes come with a discount, but may not be an option for smaller practices, as most manufacturers require a large order to avoid a surcharge.

Practices can also avoid extra administrative costs by making sure that their electronic medical records systems populate the appropriate codes at the time of administration, so that as a vaccine bar code is scanned, the system automatically adds the complementary administration codes.

Even with the best-laid plans, Munger said practices aren’t going to make much on vaccines, but the reward is still worthwhile.

“At the end of the day, the margin on a vaccine is not huge. Most of us in primary care view it in a way that, as long as we don’t lose money and we make a little bit, it’s a service you have to provide,” Munger said. “It’s such an important preventive care and primary health service you’re almost willing to not make as much to make sure it gets done.”