COMMENTARY |
Reimbursement for Prevnar: A Modern-Day Version of Hercules and the Hydra
Child Health Evaluation and Research Unit
Division of General Pediatrics
University of Michigan
Ann Arbor, MI 48109-0456
Integrated Health Associates
Ann Arbor, MI 48109-0456
Abbreviations: FDA, Food and Drug Administration • CPT, Current Procedural Terminology • HCFA, Health Care Financing Administration • MMWR, Morbidity and Mortality Weekly Report • VFC, Vaccines for Children
Hercules, a hero of Greek mythology, was ordered by King Eurystheus of Mycenae to perform 12 tasks, known as "the labors of Hercules." Each of these tasks was thought to be all but impossible. One of these tasks—to go to Lerna and slay a creature, the Hydra—is in many ways similar to the task faced by primary care physicians in their efforts to capture payment for the provision of the new pneumococcal conjugate vaccine (Prevnar, Wyeth, Collegeville, PA).
The Hydra was a creature with 9 heads who lived in a swamp. One of the heads was immortal, and each of the other heads, if destroyed, would grow 2 new ones in its place. Each time Hercules would achieve a small measure of success in his battle against the Hydra, the creature would retaliate by sprouting more heads, making his task even more difficult. For the primary care physician, receiving appropriate reimbursement for the pneumococcal vaccine could be seen as similar to the experience of Hercules with the Hydra in that each time progress was made toward removing the barriers to reimbursement, new obstacles (heads) would emerge.
In a contemporary version of this story, the modern-day hero is a primary care pediatrician in a group practice. Each of the heads of the Hydra represents a different insurance carrier (identified anonymously below, but each represents a real carrier), with the immortal head being that of the federal government.
Our story begins back in October 1999, when the Advisory Committee on Immunization Practices first voted to recommend the conjugate pneumococcal vaccine (contingent on licensure) for administration to children (the king’s order). This was followed by enticing articles in Pediatric News in November and December of that year, tempting our Herculean physician to learn more about the task. The confrontationbegan in December 1999, when Wyeth Laboratories, the company that produces the vaccine, sent a letter to providers stating that they anticipated approval and licensure of the vaccine (Prevnar) by the Food and Drug Administration (FDA) in the first quarter of 2000. The letter also stated that the average wholesale price was set at $72.50 per dose and the Current Procedural Terminology (CPT) code had been established as 90669 as opposed to 90732, the code for the already existing 23-valent pneumococcal polysaccharide vaccines for older children and adults (Pneumovax 23, Merck, White House Station, NJ). This important distinction would later prove confusing for health plans and problematic for our hero because the reimbursement for Pneumovax is less than $10. Our hero lays low, continuing to learn more while planning his first move.
On Valentine’s day 2000, a letter arrives from Wyeth stating FDA approval is anticipated in March. Also enclosed are preliminary recommendations for the vaccine and confirmation of the previously provided pricing information. In a surprise move, Prevnar is approved by the FDA 3 days later, taking our hero off guard and forcing him into action. Adding to the urgency of his task is the announcement on February 18, 2000, that a special introductory price will be offered by Wyeth for orders made from March 1 to April 28, 2000.
The first realization by our hero that this may not be just any ordinary task occurs in late February, when a medical management representative from Insurer A (one of the heads of the monster) states that their payment for " polyvalent vaccine (90669)" is between $25 and $26. Earlier communication from this head of the monster stated their reimbursement was $18 per dose. Our hero cries foul at this news. This payment is less than the average wholesale price paid by our hero for the vaccine. The confusion is referred to the Insurer A director of provider financial analysis.
Seeking to overcome another barrier, our hero now turns to face the governmental head called Health Care Financing Administration (HCFA). However, strange things continue to happen. In March 2000, our hero realizes HCFA has inappropriately linked the new CPT code with Pneumovax (the existing polyvalent pneumococcal vaccine) for the past year. This is despite the fact that Wyeth had applied for a CPT code for Prevnar (the new conjugate vaccine) well in advance. This led to reimbursement levels for Prevnar being set well below its wholesale price as most insurers set their fees in relation to Medicare’s fee schedule.
Following HCFA’s lead, the head of Insurer B now swings out to attack. Our hero strikes back by posing new pricing questions which are referred to Insurer B’s finance department. On March 8, 2000, Insurer B reacts by growing another head which croons that its fee schedule has CPT code 90669 loaded as Pneumovax with a payment of $3.12. Still another head grows as the monster states that this will be looked into by upper management.
The battle is now growing in complexity. The head representing Insurer C (our hero’s largest carrier) rises again to state that it will consider covering Prevnar at $67 per dose but with no administration fee allowed. Insurer A swings back to attack with the news from their pharmacy director that payment for 90669 is $12. Insurers D and E approve payment for Prevnar on March 20, 2000. On March 26, 2000, Insurer C attacks again and fumes that it will not approve payment for Prevnar until the recommendations are published in the Morbidity and Mortality Weekly Report (MMWR), scheduled for October 2000. On May 1, 2000, Insurer F approves reimbursement for Prevnar at $73.
Just as Hercules learned to singe the neck of each head he conquered to prevent new heads from growing, our hero begins to have some measures of success against the enemy. However, some new heads seem to work in coordination. The government head turns back to aid the efforts of Insurer C with a May 4, 2000, reminder notice that Medicaid will not cover Prevnar nor will the Vaccines for Children (VFC) head supply the vaccine until the Advisory Committee on Immunization Practices recommendations are published in MMWR.
On May 31, 2000, the Insurer B head screeches that its "fee screen" for 90669 is $65.25, effective retroactive to March 1, 2000. In June, the American Academy of Pediatrics recommends Prevnar for children under 2 years old. Recommendations for children 24 to 59 months are less clear, as is reimbursement for pneumococcal vaccine provision to this age group. At the same time, the government head still mocks our hero and will not provide the vaccine for Medicaid-eligible and uninsured patients in the practice.
Luckily, the tide of battle begins to turn. On June 21, 2000, the VFC contract for the federal purchase of Prevnar is signed, ensuring that VFC will indeed pay for the vaccine beginning in the next few months. However, another setback occurs on June 30. Insurer A, in a death swoon, injures our hero by stating that the new CPT codes were not yet loaded into their computerized billing system and that claims would have to be refiled. Our hero will also need proof of timely filing of claim to refile, meaning that claims cannot just be held awaiting loading of the codes. Not giving up, our hero recovers to finally conquer Insurer A on August 8, 2000, as it announces that it will reimburse retroactively to June 1, 2000, at the rate of $72.50.
The battle rages on with fewer heads remaining. Despite the VFC contract being signed in June, the state in which our hero resides does not begin ordering Prevnar for Medicaid patients until September 1, 2000. This forces our hero into the uncomfortable position for several months of providing the vaccine for privately insured children in the practice but not those enrolled with public insurance programs. Although this government head appears to be beaten, our hero fears it may rise again at some time in the future (the immortal head).
Another victory is achieved when on September 1, 2000, Insurer C begins to pay at their stated fee schedule. In 1 last strike before its defeat, in December 2000 the Hydra rages on with Insurer B, who realizes the fee loaded for their Medicaid product was too high and demands a $7 refund on every dose delivered.
Our hero is finally victorious in defeating the many heads of the Hydra, but only after significant frustration and tremendous utilization of staff time and resources. Although appropriate reimbursement for future Prevnar use was won in the battle, our hero’s initial financial investment was never fully regained. Over the course of the ordeal, the primary care physician had to contend not only with the aggravation of the mistakes related to the CPT code and other financial issues, but also with the de facto establishment of a 2-tier system of care for those patients with private insurance and those covered by public sources. The long delay in signing the VFC contract and the further delay in publishing the recommendation in MMWR placed added burdens on our hero.
As did Hercules, we must learn lessons from every experience to help us in the future. Adoption of new immunization recommendations are complex for a myriad of reasons. Those in policy-making positions should take note of ways in which we can make every new addition to the nation’s immunization schedule less than a Herculean task for our primary care physicians.
Epilogue: In the story above, our "hero" is actually the medical director of a group practice on which this tale is based, chair of the state advisory committee on immunizations, board chair of insurer C, and a long-time consultant to Insurer B on immunization issues. The group practice has dedicated staff assigned to resolve insurance issues like these. The above experiences were not a result of information deficit or naiveté. As such, other practices may have experienced even greater difficulties.
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FOOTNOTES |
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Received for publication Feb 8, 2002; Accepted Apr 11, 2002.
Address correspondence to Gary L. Freed, MD, MPH, Division of General Pediatrics, 300 NIB 6E08, Ann Arbor, MI 48109-0456. E-mail: gfreed{at}med.umich.edu
PEDIATRICS (ISSN 1098-4275). ©2002 by the American Academy of Pediatrics
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