American College of Physicians: Internal Medicine — Doctors for Adults ®

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Clearing up confusion over Medicare coverage for vaccines

From the March ACP Internist, copyright © 2008 by the American College of Physicians.

By Brian Whitman

Vaccines are covered in a variety of ways under Medicare, which can cause some significant confusion for both patients and physicians. This month’s column clarifies that by considering a variety of scenarios.

Q: How are vaccines paid for under Medicare Part B?

A: Medicare Part B, which covers physician services and other medical services outside of hospitalization, did not typically provide for preventive services. But over the years, laws were passed that allow for the provision of three preventive vaccines under Medicare: pneumococcal, influenza and hepatitis B for high risk beneficiaries.

No other preventive vaccines are covered under Medicare Part B. However, vaccines that are provided in response to an injury or illness, such as a tetanus vaccine provided to patient who stepped on a nail, are covered.

Part B vaccines provided by a physician are billed using the standard claims process that is familiar to physicians.

Q: How are vaccines paid for under Medicare Part D?

A: In 2006, a prescription drug benefit was added to Medicare. This benefit, often referred to as Medicare Part D, added coverage for prescription drugs for the first time.

Medicare Part D is administered by various private contractors that are required to meet certain requirements for their formularies. One of these requirements is that they provide coverage for vaccines that are not covered under Medicare Part B as these vaccines become licensed by the Food and Drug Administration (FDA).

The most prominent vaccine to be covered under Medicare Part D is the herpes zoster vaccine that the FDA approved in 2006. Although most Medicare patients would not be eligible to receive this vaccine, the human papilloma virus vaccine that was also approved in 2006 would be on this list as well. As other vaccines are approved by the FDA and introduced into the market, Medicare Part D plans must cover them. But, Medicare Part D plans are not required to cover every brand of drug if there are multiple options available.

Q: Can a physician be paid for providing a vaccine covered under Part D?

A: Physicians may purchase their Part D vaccines from manufacturers or suppliers much like they do with other drugs that they administer.

Medicare Part D works like a preferred provider organization, in which there is a participating network as well as out-of-network providers. In this case, the participating providers would generally be pharmacies that contract with these private plans to provide drugs to patients at a certain cost, part of which may be covered by the patients. Although patients may receive services from out-of-network providers, they have a significant financial incentive to receive them from in-network providers.

The problem is that physicians are not pharmacies and do not generally enroll as participating providers with Medicare Part D plans. Therefore, when a physician provides a vaccine to a patient, it is an out-of-network service. If a patient sees an out-of-network provider, that patient will have to pay cash and file paperwork with his or her Part D drug plan in order to be reimbursed.

Q: Are there any other options for providing a Part D vaccine?

A: Physicians have a couple of other options for providing Part D vaccines, although none of them are perfect. A physician may ask a patient to purchase a Part D vaccine from a network pharmacy and transport the vaccine to the physician for administration. Unfortunately, vaccines often have specific storage requirements, such as freezing, that may make it unfeasible to rely on patients to transport the vaccine.

There are also specialty pharmacies in some areas that will deliver physicians a single dose of a vaccine and charge the patient directly. This may lead to a delay in the administration of the vaccine, however.

A potentially more promising solution is being developed. A third party company can use a Web portal to allow the physician to submit a claim directly to Part D contractor without becoming a network provider. A potential disadvantage of this system is that the physician would essentially agree to accept the payment from the Part D contractor as payment in full, even if that does not cover the cost of acquiring the vaccine for a physician practice. Some Part D contractors have announced that they will participate with a service like this, but not all have.

Q: Is there a payment for the administration of Part D vaccines?

A: For vaccines that are covered under Medicare Part B, physicians receive payments for both the vaccine product and the administration of the vaccine. When the prescription drug benefit was first enacted in 2006, there was no payment for the administration of vaccines covered under Medicare Part D. A law passed at the end of 2006 created a process for payment for the administration of a Part D vaccine.

In 2007, the payment for the administration was made under Medicare Part B using the HCPCS code G0377. That code has been deleted from the fee schedule for 2008 and the payment for administration will now be considered to be bundled into the payment for the vaccine product. By law, the payment for the administration should now be included in the payment for the vaccine. Because payments for drugs are determined by the private plans, it is unknown how much of an increase, if any, there would be in the payment for a Part D vaccine from 2007 to 2008.

Follow-up on smoking cessation

Q: I read about the new codes for smoking cessation counseling and substance abuse screening and brief intervention services in the February 2008 ACP Internist. Can I report these services on the same day as an evaluation and management service? If so, do I need to use a modifier?

A: The new codes for smoking cessation counseling (99406-99407) and substance abuse screening and brief intervention services (99408-99409) describe work that is distinct from the typical evaluation and management (E/M) services. According to CPT guidelines, both an E/M service and one of these codes may be reported on the same day, but the E/M service should be appended with modifier 25 to indicate that the E/M service was separate and distinct from the counseling services provided. Physician documentation should reflect both the work associated with the smoking cessation or substance abuse intervention in addition to the E/M service.

Brian Whitman is Senior Analyst for Regulatory and Insurer Affairs in ACP’s Washington, D.C. office.

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Watch your mail for the Physician Practice Information survey
.

ACP and more than 70 other organizations are conducting a comprehensive, multi-specialty survey of America’s physician practices. The results will be used to positively influence national decision makers to ensure accurate and fair representation for all physicians and patients, and to articulate the challenges of running a practice that provides expert patient care while operating a business that is sustainable.

Of particular importance is the section of the study pertaining to practice expenses and the amounts that are attributable to practices. The Centers for Medicare & Medicaid Services has indicated it will use the results of this study to help determine physician payment. The survey firm, dmrkynetec, will contact randomly selected physicians and practice managers to collect responses.

Internists should encourage their staff to make this information available, as the survey’s success depends on accurate and complete data. All responses will remain confidential.

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