In addition to the vaccine product, offices should be appropriately paid for vaccine administration. The components covered by vaccine administration codes are separate from the product and overhead costs. Proper coding can also help to optimize payment.
Payment for Vaccine Product
Appropriate payment for vaccine product expenses for the total direct and indirect costs must:
- Be free of any discounts and based on a transparent and verifiable data source, such as the CDC vaccine price list for the private sector.
- Cover the vaccine product purchase price as well as all related office expenses as noted above and a return on the investment for the dollars invested in vaccine inventory.
- Be at least 125% of the current CDC vaccine price list for the private sector.
Payment for Vaccine Administration
Codes for the vaccine should be paired with a Current Procedural Terminology (CPT®) administration code to cover vaccine administration costs. These are also offered on the table of Commonly Administered Pediatric Vaccines. Login may be required.
Negotiating for Payment
The AAP offers tips on negotiating strategies that may be helpful when contracting with payers.
For new vaccines on the market that have not yet had average prices calculated, pediatricians need to check with their carrier(s) to see how vaccine payments will be calculated. Some carriers may base payment on a percentage of billed charges. The AAP has developed "Vaccine Addendum to Payer Contracts" to address this situation and provide guidance when negotiating for vaccine payments. This document is available on the AAP Practice Transformation site. (Login may be required).
- The AAP Managed Care Contract Issues may help pediatric offices understand issues with entering into a managed care contract. It offers tips on how pediatricians can negotiate payment for vaccinating within managed care contracts.
Some insurers may recognize CPT code 99211 for immunization-only visits by a nurse. However, there are specific rules on the appropriate use of this code. The AAP has a Position Paper (login required) on using 99211 with vaccine administration from which you can learn more.
Average Sales Price and Average Wholesale Price
Two methods of pricing vaccines include average sales price (ASP) or average wholesale price (AWP). AWP is the national average price assigned to a vaccine or drug by its manufacturer and is compiled by various vendors, such as Thomson Reuters' Red Book (which is different from the AAP Red Book®), First Databank, and Medi-Span, for use by carriers. In general, AWP is the cost of the vaccine plus (depending on the vendor) a 20% to 25% markup and excise tax. Carriers will purchase AWP calculations from one of these vendors.
ASP is based on quarterly sales reports by manufacturers to the Centers for Medicare & Medicaid Services (CMS) on the sale prices of vaccines sold for that period. For Medicare, vaccine payments are made at 106% of the ASP. In general, ASP is usually less than AWP because it reflects all sales of the vaccine, including volume discounts. Many pediatric vaccines do not have an ASP determined; therefore, any insurance companies that use ASP for determining payments for vaccines must have another method to calculate how much to pay for vaccines pediatricians administer. ASP data are updated quarterly. Depending on the vendor, AWP data are updated monthly or quarterly. In addition, there is a time lag (ranging from 1 to 3 months) for carriers to update their claims systems, and not all carriers update their systems quarterly. Because of vendor licensing agreements, there are restrictions on how AWP data can be exchanged (eg, posting lists of AWPs on Web sites). Unlike ASP, which is collected by the federal government through the CMS, AWP is proprietary data of vendors. In lieu of purchasing AWP listings from vendors, vaccine manufacturers have established payment support programs that physician practices can call.
- Sanofi Pasteur: 800/822-2463
- GlaxoSmithKline: 866/475-8222
- Merck: 800/734-6282
- MedImmune: 800/949-3789
- Pfizer: 800/666-7248
Obtain current ASP data here.
CDC Vaccine Price List
The CDC also maintains a Pediatric VFC Vaccine Price List that includes their current vaccine contract prices and the private sector vaccine prices for general information. Contract prices are those for CDC vaccine contracts that are established for the purchase of vaccines by immunization programs that receive CDC immunization grant funds (i.e., state health departments, certain large city immunization projects, and certain current and former U.S. territories). Private providers and private citizens cannot directly purchase vaccines through CDC contracts. The AAP believes that the CDC private payer vaccine price list should be used as a transparent methodologic basis for vaccine acquisition and invoice cost as part of the total cost of the vaccine.