Patients lose when insurers cut reimbursement for immunizations

I recently received a declaration of war from one of the major healthcare insurers.  Not happy with its current record profits, this insurer has decided to reduce its reimbursement on immunizations and injectable medications by 40%.  I do not have a 40% margin on immunizations and injectable medications.  My margin is at most 10%.  This means that with a 40% reduction, I will have to pay at least 30% of the cost of your immunization and injectable medications.

Yes, you read that correctly.  I will have to pay for your shots.   Every time I give a child an immunization that costs me $50 dollars, I will pay $15.  This is not a joke!  Giving a typical series of four vaccines could result in a loss of $100 on the vaccines and a net loss on the entire well care visit.  No doc can afford to pay to see patients!

Your doc and I have three choices.

  1. We can stay in plan and lose more money than we make.
  2. We can simply treat patients unfortunate enough to have this insurance as second class citizens, sending them to the county health department for immunizations and to the ER for intramuscular antibiotics/pain medications.
  3. We can abandon this contract altogether.  This means that we either stop seeing patients with this insurance or continue to see them only if they can afford to pay cash.

There are no good options.  Losing more money than you make is unsustainable.  Treating anyone as a second class citizen is wrong.  Losing some of my most favorite patients will be painful.

With those options on the table, physicians must decide that it is time to get back to work treating patients as individuals and not according to the edicts of their insurance companies.  It is time to stop being a PCP and return to my roots as a family doc, free to keep my patient’s information confidential, free to advise my patients as I see fit, free to prescribe what is necessary regardless of formulary constraints, and free to provide the best care anywhere in the world.  Yes, patients will have to pay for what they get.  Freedom has a price!  Yes, I will lose patients.  That will be my cost of freedom.

Insurance contracts that doctors sign have a gag clause in them.  I am gagging on that clause at this very minute.  I have written a letter of protest to this Goliath of the corporate world, stating my patients’ and my own case.  Should they fail to relent in their efforts to further engorge their pockets with our (yours and mine) cash, I will withdraw from this contract and notify those patients affected by this new (insane) policy that I have done so.  I suggest that all of you contact your insurance companies and ask whether they have instituted this kind of ridiculous policy.  If they have and if you want to continue seeing your current doctor, lodge your complaint – make your voice heard.  Maybe together we can avoid this catastrophe.

Stewart Segal is a family physician who blogs at

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  • Rob Lindeman

    I disagree with your characterization of people who receive vaccinations at departments of public health as ‘second-class citizens’.  I practice in Massachusetts, where vaccines are purchased by the state.  I am paid only to administer them.  But I can easily envision a system in which children receive required vaccines in the several local departments of public health or even in the schools.  AND they would remain the first-class citizens that they are.

    • ninguem

      Same in my state. I’m hardly a fan of socialized anything, but it sure seems to me, this really is the sort of thing that should be treated as a public utility. Insurance for vaccines is like car insurance for oil changes. This is a predictable expense.

      Buy it and distribute it on a bulk purchase contract, pay the docs an administration fee and be done with it.

      I remember being lined up for oral polio vaccine in city public health projects when the polio vaccine was fairly new. The schools lined us up for tine testing and for the MMR vaccine.

      My state much like Massachusetts, buys the recommended vaccines for kids. We order them from the state. We get paid an administration fee, that’s it. Everyone under age 19, rich or poor, no charge.

      I’ve been in states where they made the distinction between insured kids and uninsured/Medicaid kids. I had to keep two vaccine supplies. Vaccines I paid for would outdate, I’d lose tons of money. Vaccines are expensive to buy, especially in low quantities like an independent doc. The state would actually audit me to make sure a state tetanus shot didn’t make it’s way into a Blue Shield kid, heaven forfend the fraud and abuse.

      Finally I said to hell with it and sent all my kids to the health department, it was too much of a hassle.

      Patients were offended when the family doc told them to go to the health department. In that same state I found PEDIATRICIANS so sick and tired of the hassle, THEY sent all their kids to the Health Department for vaccines.

      It never ceases to amaze me how many places take something so simple and make it so complicated.

      • kumud

        yes ny city practices are the same way, with doh “reps” bringing pens and trinkets like drug reps, and giving out flu vaccines in large quantities for medicaid kids (and adults).  These were to be kept physically separate from the identical vaccines bought by the practice for privately-insured patients.

        ridiculous.  if a practice was 50% medicaid and 50% private, i’d imagine the state would save a whole ton of money not hiring reps and doling out pens and junk, and just send each practice the equivalent of a free dose per patient, paying the doctor an additional small administration fee, completely separate from whatever E&M service the doc is seeing the patient for.  Maybe some would view that as socialism, but mass vaccination is in the interest of the PUBLIC health, not just the individual vaccinee.

  • Anonymous

    The insurance company has every right to make maximize profits.  Good thing the government can step in and provide the needed vaccinations.

    • Kevin Windisch

      When the PEOPLE who are the government in this democracy finally have had enough then they can enact insurance reform that is meaningful.  Until that time the people will continue to pay tax money to pick up the slack where for-profit companies don’t do their part.

  • Kevin Windisch

    It happens to me as pediatrician every day.  I have yet to see an insurer bow to any negotiating tactic I’ve tried.  Best of luck to you.

  • Anonymous

    I can understand why you’re upset, but I hope you take a step back from this and reconsider. Given the shortage of family physicians, if you stop taking one type of insurance, you are doing a huge disservice to your patients and pushing them out on the market to find someone else. Most of them are going to be less than sympathetic when they discover the small amount of money for which you’re willing to throw them under the bus. I realize it adds up over hundreds of patients, so I’m not suggesting you just eat the loss.  But you can send folks to public health (which is NOT a second class option) or do what my doctor does (assuming your insurance contract allows it):  charge an extra fee for vaccinations. I gladly pay this to stay with my doc, and I think you’d be surprised to find out how many of your patients would be willing to do so.

    • Kevin Windisch

      charging the extra fee is against most insurance contracts.  Your physician could wind up fined for hundreds of thousands of dollars if your insurer ever found out.

      • Anonymous

        Maybe I should clarify.  He doesn’t do vaccinations at all in conjunction with insurance, and he gives all his patients a written statement that specifies that when they choose him as their PCP. He never bills the insurance companies for vaccines.  Patients have the option of either going to public health (which I do for my flu shots because they are cheaper than he is) or paying directly for the vaccinations at his cost plus a small dispensing fee for the supplies and labor. I got my tetanus booster from him because he was cheaper than public health for that one.

        • ninguem

          Sounds to me like the doc is asking for trouble with that policy. But if your doc can remain contracted with private insurances, do that “carve-out”, and survive legal challenge, I’d like to know about it. Sooner or later, a disgruntled patient will complain to the insurance company that the vaccine wasn’t “free” and the doc will face a retroactive payment demand.

          If he’s structured the “carve-out” to survive such a challenge, I’d like to know how he did it.

    • kumud

      why do you view that as their doctor ” throwing them under the bus” rather than their insurance company screwing them AND the doctor?

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