I have submitted a fuller written statement for the record. However, in the interest of time, I will briefly summarize my testimony today. My testimony emphasizes three points:

1. Immunizations should be a priority on the federal agenda.

2. There is a need to strengthen and improve the nation's immunization system and to protect all of our children from preventable disease.

Congress should give attention to recently released plans and recommendations for action.

Specifically, the Senate Finance Committee should give attention to recommendations related to immunization services financed through the Medicaid program.

1. IMMUNIZATIONS SHOULD BE A PRIORITY ON THE FEDERAL AGENDA

Vaccines are the most basic tool in preventive health care. Immunizations are one of the nation's most cost-effective health services-saving on average $10 for every $1 invested. The effectiveness of reducing death and disability with vaccines is a great achievement. Vaccines have saved billions of health care dollars and have saved the lives of millions of children. In the future, new vaccine technology has the potential to prevent other diseases and save millions more children in the United States and worldwide.

However, to protect public health and prevent disease, high levels of immunization be achieved and maintained. Failure to vaccinate inevitably leads to disease outbreaks. An outbreak of contagious disease among children anywhere in this country is a threat to all. In 1990, the National Vaccine Advisory Committee reported on a measles epidemic in which more than 27,000 cases of measles and over 70 deaths were reported for 1990-a figure higher than any year in the 1980s. The Committee concluded that: "The principal cause for the epidemic is failure to deliver vaccine to vulnerable preschool children on schedule."

Each year, the nation's immunization system misses the opportunity to fully protect hundreds of thousands of children from eight vaccine preventable diseases (measles, mumps, polio, rubella, diphtheria, pertussis, tetanus, and meningitis). While about 95 percent of children catch up on their vaccinations by the time they enter school, preschoolers often are behind schedule and unprotected. Our national goal is to have 90 percent of two-year-olds complete the basic series. Yet, only 50 to 80 percent of two-year-olds are adequately immunized. Less than half of poor and minority preschoolers in our nation's cities are fully protected, with some cities rates measured as low as 14 percent immunized by the second birthday.

Our failure to vaccinate children on time has led to outbreaks of preventable disease. The measles epidemic of 1989 and 1990 is the most dramatic evidence of what happens when immunization rates are low and a disease sweeps through a community. Pertussis (whooping cough), rubella, and mumps also have been on the rise in recent years. In order to protect all Americans, particularly the most vulnerable very young and very old, immunization rates must be high enough to prevent disease outbreaks and epidemics.

Key barriers to immunization have been identified and the nation should move quickly to remedy these problems. The National Vaccine Advisory Committee report on The Measles Epidemic identified the following barriers: inadequate access to health care; shortfalls in the health care delivery system; missed opportunities to vaccinate children; and provider policies and practices that reduce access to immunization.

2. THERE IS NEED TO STRENGTHEN AND IMPROVE THE NATION'S HEALTH CARE FINANCING SYSTEM IN ORDER TO PROTECT ALL OF OUR CHILDREN FROM PREVENTABLE DISEASE

Evidence indicates that many of the children who do not receive vaccines on schedule: are eligible for Medicaid; use a Title V funded clinic as their regular source of preventive care; and have missed opportunities to be vaccinated when they do not have health insurance to pay for services through a private physician.

The financing of immunization services has become particularly important to access as the cost of health care and the cost of vaccines has risen. A more efficient child health financing system can improve access to immunization services. It is clear that the nation needs: more efficient structures for distribution of vaccine; support for private and public providers who give vaccination (including adequate and timely payment); activities to increase demand; and adequate funds to purchase vaccines.

A growing debate over the financing and access questions in the U.S. health care system, makes decisions on how to finance the nation's immunization system timely

and important. For regardless of whether health insurance is public or private, ensuring that vaccines to prevent communicable disease are available must continue to be a national priority.

3. CONGRESS SHOULD GIVE ATTENTION TO RECENTLY RELEASED PLANS AND RECOMMENDATIONS FOR ACTION. SPECIFICALLY, THE SENATE FINANCE COMMITTEE SHOULD GIVE ATTENTION TO RECOMMENDATIONS RELATED TO IMMUNIZATION SERVICES FINANCED THROUGH THE MEDICAID PROGRAM

A. Medicaid and Childhood Immunization Reforms

As Members of the Finance Committee know well, since 1984, both Medicaid and its child health component, the Early and Periodic Screening, Diagnosis, and Treatment (EPSDT) program have been substantially restructured through Congressional action. As a result, at least one-third of preschool age children now are entitled to Medicaid, and national statistics indicate that about one-quarter of all preschool age children are enrolled in Medicaid in a year. This makes Medicaid agencies' vaccine policies, reimbursement practices for childhood immunizations, and interactions with state health agencies of critical importance.

You have heard today about several recent studies1 undertaken to determine more precisely how states' Medicaid programs currently reimburse providers for vaccine acquisition and administration costs. Certain conclusions can be drawn from the available evidence. There are three basic problems: (1) failure to reimburse for recommended vaccines; (2) failure to pay adequately for immunizations as a service; and (3) inadequate mechanisms for providing lowest priced vaccines to Medicaid providers.

To improve the delivery of immunization services through Medicaid and EPSDT, action should be taken in five areas.

1. Federal law should require establishment of Medicaid provider vaccine distribution programs. It is clear that Medicaid dollars are being wasted whenever Medicaid providers purchase vaccine at the private sector price and states are pressured to reimburse these higher vaccine costs. Medicaid providers, particularly private providers, in every state should be able to purchase vaccine at the public sector price. This can be done through the state heath department or through direct arrangements with vaccine companies. We know these programs can work—the Centers for Disease Control and National Vaccine Program have studied state models with an eye toward replication.

2. In order for Medicaid immunization policy to be well implemented in every state, federal law and regulation will need to be clarified. To eliminate confusion regarding the extent of states' obligations to cover childhood vaccines as a Medicaid service, EPSDT program guidance on immunization should be strengthened. Sound guidance would:

• Underscore states' obligations to cover all medically necessary vaccines as a mandatory service for children under age 21 as part of the EPSDT program; • Emphasize the standard immunization schedule in setting periodic visit schedules states are obligated to provide coverage of vaccines and their administration both under the EPSDT periodic exam schedule 2 and as an "interperiodic” service (i.e. in the event that children not appropriately vaccinated are identified at times outside of the periodic visit schedule, they are nonetheless entitled to coverage for needed immunizations);

Clarify that state EPSDT vaccine programs will not be considered in compliance with federal requirements regarding the amount, duration, and scope of mandatory Medicaid services unless state vaccine coverage policies include all officially recommended vaccines;

• Clarify states' obligations to reimburse Medicaid and EPSDT providers for both the cost of purchasing vaccine and the cost of administration; and

• Clarify the obligation of state agencies to assure that all managed care and continuing care providers are vaccinating enrolled children as necessary and appropriate.

1 For example: Medicaid and Childhood Immunizations: A National Study, Children's Defense Fund; Access to Childhood Immunizations: Recommendations and Strategies for Action, National Vaccine Advisory Committee; and the Medicaid and immunizations report being prepared by the General Accounting Office.

2 Federal law (Pub. L. 101-329) specifies that EPSDT schedule standards be based on the American Academy of Pediatrics "Guidelines for Health Supervision." In the case of immunization services, states may also wish to consult the recommendations of the U.S. Public Health Service Immunization Practices Advisory Committee (ACIP).

3. To ensure the adequacy of provider reimbursements for immunization services, a regular, comprehensive review of state Medicaid programs' vaccine coverage and reimbursement policies should be conducted. In particular, the Secretary of the Department of Health and Human Services (DHHS) should be required to:

• Examine reimbursement levels for immunization as a part of the review of pediatric payment rates submitted annually in state plan amendments; and

• Study the immunization patterns of managed care and/or prepaid health plans (Section 1915 and 1903(m)).

4. Outreach and enrollment initiatives are essential if Medicaid is intended to reach that one-third of all preschool children entitled to preventive and therapeutic health services under the program. These actions are particularly important to DHHS Secretary's Program Directive No. 8 (see Appendix B). The Secretary

should be authorized to:

• Conduct a major nationwide campaign to encourage poor families to apply for Medicaid coverage for their children. Such a campaign would increase public perception of Medicaid as a program now intended to reach working poor families and should aim to increase awareness of the value of preventive health services such as immunizations;

• Provide incentives states to aggressively enroll infants in the EPSDT program and to keep infants enrolled throughout the first year without interruption.3 Incentives could be in the form of enhanced federal matching for immunization services (at 75 or 90 percent).

5. More data should be made available regarding: the immunization status of Medicaid recipient children; the vaccines covered by each state's Medicaid program; and the amount of Medicaid expenditures being used by pay for vaccine acquisition and administration. Currently, these data are not routinely available at the state or federal level. To improve program monitoring authorization should be given to: • Conduct demonstration projects designed to test techniques for using Medicaid Management Information Systems (MMIS) to provide immunization status data on individual children.

B. Other Reforms of Interest to the Finance Committee

1. Any health care reform plan should include mechanisms to finance sufficient quantities for all recommended vaccines to ensure immunization of all children. This is a recommendation of the National Vaccine Advisory Committees' report on Access to Childhood immunizations, which also recommends including immunization services as a basic benefit in any health care reform plan and exploring federal purchase of all childhood vaccine.

2. Increase federal support for programs that ensure the availability of pediatric providers in medically underserved communities. In particular, the Title V Maternal and Child Health Block Grant program forms the basic infrastructure for ensuring that immunization services are readily available to low income families. Without adequate funding for the program clinics and health personnel will not be available in areas where private providers are in short supply.

3. Coordination among public assistance programs should be encouraged, but no child should be denied nutrition, health, or other supports based on immunization status. Congress should reject any proposal which would link AFDC or Medicaid eligibility to immunization status. At a time when Medicaid is seeking to reduce barriers to enrollment, such a proposal moves in exactly the opposite direction. The interagency Committee on Childhood Immunizations has developed a plan which identifies ways by which immunization can be promoted or delivered through AFDC, Medicaid, and other public programs-without penalizing poor families.

Special attention should be given to the use of federal funds supporting child care through the Tale IV (A) AFDC/Family Support and similar programs. Federal funds should not be used to finance child care in settings that do not require children to be adequately immunized at the time of enrollment.

4. Planning for a more efficient system to track immunization status should begin in FY 1992. Several other nations now have a central, national registration system for immunizations. The technology to create such a system now is available, but a plan to apply our tools is needed (see Appendix D).

OBRA 1989 strengthened Medicaid's automatic and continuous enrollment provisions for infants up to one year of age.

5. Ensuring the safety, efficacy, and availability of vaccines is essential, and the nation must lead with a vision of the future potential of vaccines. This is the mission of the National Vaccine Program. Without a coordinating agency, the nation's immunization system has stalled. The National Vaccine Program has been the source of funding for special vaccine research at the time of outbreaks or to improve vaccine safety, as well as the leadership for the Interagency Committee on Childhood immunization and its recently released plan (see Appendix E).

6. The integrity of the National Vaccine Injury Compensation Program should be protected. Similar to the workers compensation program, the National Vaccine injury Compensation Program is a no-fault approach to compensation for adverse events occurring as a result of immunization with recommended vaccines. It is funded through an excise tax that is pooled in a trust fund. This taxing mechanism and fund should be protected to ensure that vaccine manufacturers and providers are free of excessive fear of liability for vaccines and that families have just compensation for vaccine-related injuries.

APPENDIX A

National Vaccine Advisory Committee Report Access to Childhood Immunizations: Recommendations and Strategies for Action

"Recommendation: Medicaid programs should be improved through: adequate provider reimbursement; inclusion of all recommended vaccines in the benefit package; and distribution of public sector vaccine to providers serving children on Medicaid" "Strategies:

• Encourage states and vaccine companies to create vaccine purchase and distribution systems that serve private providers who administer vaccines to Medicaid recipient children.

• Encourage state Medicaid programs to set adequate reimbursement rates for vaccine purchase and administration costs.

• Examine provider reimbursement levels set for immunization as a part of the HCFA review of pediatric payment rates submitted annually in state Medicaid plans.

• Provide an enhance federal matching rate for immunization services. A matching rate of 75 or 90 percent would provide an incentive for states to enhance immunization reimbursement.

4

• Issue HCFA/Medicaid guidance that would clarify the current immunization schedule, American Academy of Pediatrics (AAP) Guidelines, and Standards for Immunization Practice to be used by states in structuring EPSDT programs. in the future, new recommendations of the AAP and the U.S. Public Health Services Immunization Practice Advisory Committee (ACIP) should be routinely incorporated into guidance with immediate notification of state Medicaid agencies. • Provide technical assistance to HCFA regarding immunization issues through placement of a National Vaccine Program Coordinator or public health advisor." National Vaccine Advisory Committee Report The Measles Epidemic: The Problems, Barriers, and Recommendations

"Medicaid, and its child health component, the Early and Periodic Screening, Diagnosis, and Treatment (EPSDT) program, should be integrally involved in tracking children in need of immunizations and providing adequate reimbursement for the service. Thus, Medicaid should assess immunization levels of clients served by individual providers as a measure of quality and to assure compliance with Federal EPSDT requirements. Medicaid providers should either be given vaccine through the public sector or should be adequately reimbursed for the cost of purchasing vaccine and its administration. To reduce these costs, vaccine used by Medicaid providers should be purchased at low Federal contract prices.

State EPSDT programs should better comply with federal guidance to make aggressive efforts to enroll families; recruit and retain health care providers; provide appointment scheduling and transportation assistance; and establish a recommended well-child visit schedule that follows the guidelines of the American Academy of Pediatrics."

Federal law (Pub. L. 101-29) specifies that EPSDT schedule standards be based on the American Academy of Pediatrics "Guidelines for Health Supervision." In the case of immunization services, states may also wish to consult the recommendations of the U.S. Public Health Service Immunization Practices Advisory Committee (ACIP).

APPENDIX B

Department of Health and Human Services Secretary's Program Directions

The Secretary of DHHS has issued a Program Directions Plan which calls for improved coordination of Medicaid activities directed through the Health Care Financing Administration (HCFA) and immunization activities supported through the CDC and the Hearth Services and Resources Administration (HRS). This focus is stated in:

Direction No. 4: to improve the health and well being of individuals through improved preventive health care and promotion of personal responsibility;

Objective 3: Examine cost-effectiveness of Medicaid and Medicare reimbursement for preventive services.

Direction No. 8: to improve access of young children and their families living in poverty to a wide array of developmental, support services, and income assistance, including nutrition, foster care, hearth, mental health, and social and child protective services.

Objective 1: increase access of children in families living in poverty to health services; includes efforts to increase access to immunization services for children.

APPENDIX C

1. Coverage of Immunization Services under EPSDT

The federal Medicaid statute requires that states provide EPSDT services to all categorically needy individuals under age 21.42 USC Section 1396a(a)(10) (C) and (E). Categorically needy individuals include persons under age 21 whose Medicaid eligibility is a function of either their receipt cash assistance under the Aid to Families with Dependent Children (AFDC) or Supplemental Security income (SSI) programs or their poverty status (i.e., all children ages one to six with family incomes under 133% of the federal poverty level; infants under age one with family incomes below 185% of poverty in states that extend such coverage; and financially needy children ages six to 21).

Immunizations constitute a required EPSDT services, since the statute defines the screening component of EPSDT to include "appropriate immunizations according to age and health history." 42 USC Section 1396d(r)(i)(B)(iii).

Moreover immunization services can be provided during either a periodic EPSDT exam (i.e., a full health 'screen' provided in accordance with the state's EPSDT periodic visit schedule) or on an "interperiodic" basis (i.e., in between regularly scheduled health exams). The 1989 amendments to the EPSDT program clarify that states may not restrict EPSDT services to the routine periodic visit schedule but must allow children access to such services any time that a health problem (e.g. lack of appropriate immunizations) is suspected. 42 USC Section 1396d (r)(i)(A)(i) and (ii). Thus, for children who are otherwise up-to-date on routine health exams but who need an additional “medically necessary" vaccination, immunizations can be provided and billed as an interperiodic EPSDT service.

2. Coverage of All Medically Appropriate Immunization Services

The standard for coverage of immunization is appropriateness. States must cover immunizations which are "appropriate (for) . . . age and health history." 42 USC Section 1396d(r)(i)(B)(iii). HCFA guidelines for immunizations under EPSDT are as follows: "C. Appropriate immunizations-assess whether the child has been immunized against diphtheria, pertussis, tetanus, polio, measles, rubella and mumps, and whether booster shots are needed. . . Provide immunizations as recommended by the American Academy of Pediatrics or the local health departments." State Medicaid Manual Part 5-Early and Periodic Screening, Diagnosis and Treatment (EPSDT) Transmittal Number 3 (April 1990) at p.5-14.

Therefore, AAP and/or ACIP recommendations should be followed, and immunizations provided according to the standard schedules. Note: no Hib vaccine appears in guidance.

APPENDIX D

Proposal for a National Immunization Registry

Computerized systems of tracking immunization status from birth now have been operationalized in several countries, including Great Britain and the Netherlands. In Taiwan, a national registry enables public health officials to identify unvaccinated children. Such systems aid in providing reminders to parents when