Our Curious Medicare Vaccine Reimbursement System

By George Maliha, Harvard Health Law Society

As flu season begins, we are bombarded by ubiquitous reminders to get our flu shot. So, it is a good opportunity to reflect on how we provide vaccines to our fellow citizens 65 and older. By law, Medicare Part B covers 4 preventive vaccines (flu, two pneumococcal, and hepatitis B for medium-to high-risk patients). Part D picks up the rest, namely shingles, TDaP, and any other commercially available vaccine. But, that’s where the trouble begins.

When Congress passed Part D, the vaccines recommended for those 65 or older were basically covered by Part B. Now, they aren’t. In 2006, the zoster (or shingles) vaccine came onto the market. In 2010, the recommendations for the TDaP (the P for pertussis or whooping cough being the most relevant here) changed to include the elderly.

But, so what, they’re still covered, right?

They are, but the devil is in the details. Part D was designed to provide beneficiaries with prescription drugs at pharmacies. With few exceptions, vaccines are administered in physician offices—and Part D doesn’t pay for physician services.

So, one way to get around this problem is for a beneficiary to pay out-of-pocket and then submit a reimbursement request for some or all the cost to his or her Part D plan administrator. On paper, that works, but for some on fixed income, the $200 can be a hardship. To be fair, there are other methods to make this easier, but they often require substantial paperwork from already overburdened physician practices.

As of the end of 2011, the GAO found that only 5% of beneficiaries had received their shingles vaccine with Part D coverage. An equal number, 6%, obtained the vaccine without getting reimbursed under their insurance. The Td or TDaP vaccine was even more dramatic with analogous statistics of 1% and 53%, respectively.

Shingles and pertussis are not trivial diseases. Shingles is an incredibly painful, potentially-disfiguring chronic disease. Pertussis is different. While adults do not tend to become too sick with it, they can transmit the infection to infants who are quite vulnerable.

However, fixing this problem would not be cost-neutral. Adding coverage to Part B would probably require Congress to take action. On the other hand, switching all vaccines to Part D might make it cumbersome for seniors to obtain all of their essential vaccines. At this point, coordination among physician offices and pharmacies and patient education on costs might be the best solution.

But, as you feel the pinch of your flu shot, it might be worth thinking about how we’ve decided to provide vaccines to 50 million of our fellow citizens.

One thought to “Our Curious Medicare Vaccine Reimbursement System”

  1. What a nightmare, or, better, what? another nightmare? Thanks for tracing out the strands in this article. No surprise that life expectancy is leveling off in the U.S. and disparities continue. Speaking just as a senior, my insurance add-on to Medicare covered the shingles vaccine, but I had to order it from their distribution center in Florida and carefully schedule an appointment in MA, where I reside, so that the refrigeration would be continuous. When I scheduled here, my health care provider said we already have it, refrigerated, here. When I explained to insurer the reluctance of my health care provider to accept the delivery because it seemed pointless and a waste of admin time and money to ship the vaccine from FL, the insurer was adamant. Everything finally got scheduled, but on the day I was to be vaccinated, my health care provider discovered that the shipment had not been refrigerated and I had to start all over again. Fortunately, I have negotiating skills, am a native English speaker and have my wits about me. For the populations most at risk, low income, low literacy level, possibly not English language fluent, this is, going back to the beginning, the nightmare we all face with the present stumbling and dysfunctional system.

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