Do Increases in Reimbursement Fees Improve Vaccination Rates for Medicaid-Eligible Children?

While the United States’ national vaccine program has made tremendous progress in reducing the burden of vaccine-preventable disease, gains in coverage have been uneven – across vaccines, across geographic regions, and across populations – leaving significant gaps. Ameliorating socioeconomic disparities in pediatric immunization will require identifying risk factors of low vaccination coverage as well as protective factors that enable some children to stay up-to-date on vaccination, despite their disadvantage. We consider one such policy response: increasing Medicaid reimbursement for pediatric vaccine administration.

Our research question is motivated by growing concern that payments, especially public-sector payments, have failed to keep pace with the significant costs of administering childhood vaccines. If practices provide child and adolescent vaccines at a financial loss, policies that raise Medicaid payments could reasonably be expected to increase vaccine coverage as providers become more willing to participate in the VFC and Medicaid programs. If, however, a general dissatisfaction with payment does little to dissuade physicians from providing essential health services, such policies may result in little to no change in immunization rates among low-income and Medicaid-eligible children.

Whereas contemporaneous associations between Medicaid payments and vaccination rates are likely biased produce biased estimates, we pursue a quasi-experimental approach. By exploiting a temporary “bump” in Medicaid payments for certain primary care services during calendar years 2013 and 2014, we are able to estimate the effect of provider reimbursement on vaccination rates among low-income children.

Our analysis combines the 2009-2015 National Immunization Surveys (NIS) with state-level data on Medicaid vaccine administration fees over the same period. The NIS are sponsored and directed by the CDC to monitor vaccination coverage among two-year-old children in the United States. Up-to-date immunization status, subject to receipt of all ACIP-recommended doses, is recorded for individual vaccines as well as combined vaccine series.

While all states were required to increase vaccine administration fees in 2013, our study design exploits the significant variation in “treatment intensity”. Our approach compares the vaccination status of children (1) within a given year across “high reimbursement” and “low reimbursement” states and (2) within a given state across “high reimbursement” and “low reimbursement” years. Regressions controlled for state, year, age, sex, and a number of family characteristics.

Among the population most likely to be affected by the Medicaid payment bump (poor children from households below the federal poverty level), we find that higher physician reimbursement for vaccine administration has no effect on coverage rates for universally recommended vaccines in the 4:3:1:1:3:3:1 series.

While it appeals to common sense that realigning provider financial incentives might increase vaccination levels by encouraging providers to implement more aggressive vaccination efforts, our results indicate that policy changes aimed at increasing physician compensation (in isolation) will prove insufficient to meet national goals of increased vaccination coverage.