State Fines HMO for Discouraging Vaccinations

A state agency, taking strong action, has fined PacifiCare of California for discouraging chickenpox vaccinations and has required the health maintenance organization to notify members that the immunization is available.

The HMO, a unit of PacifiCare Health Systems Inc., agreed to abide by the provisions of the state Department of Corporations order, which includes a requirement to notify the HMO’s 850,000 members that the shots are now recommended.

The company will pay $40 per shot to immunize children who missed out on “varicella” vaccinations during the last year when the company failed to recommend use of the widely accepted preventive measure.

The company also must reimburse physician groups for shots they provided to children. The total extent of the fine, levied April 23, is unknown.

The state agency doesn’t know how many children missed out or how many parents will demand the shots for their children, said agency spokesman Damian Jones.

One consumer advocate estimated that the number of children involved could run into the tens of thousands but that families likely to come forward will probably number in the thousands.

Industry observers said the agency’s action is unprecedented and could have wider implications. Doctors suggested that the agency, if it chose, might find cause for broader concern about how the HMO industry in general administers immunization policies.

However, other HMOs will view PacifiCare’s penalty as a slap on the hand, said Jamie Court, director of Consumers for Quality Health Care. He contends that the agency has never been a tough regulator.

PacifiCare, though it didn’t recommend the vaccine, had provided the benefit to members. By simply requiring the company to pay for what it technically covered anyway, the agency sends a message that HMOs “aren’t being policed at all,” Court said.

PacifiCare drew fire from the state agency last month after Court’s consumer advocacy group criticized the HMO for failing to promote varicella shots.

The agency subsequently raised a related issue about whether the company adequately promoted shots for the liver ailment hepatitis B. In 1994, the American Academy of Pediatrics began recommending routine immunizations for teenagers.

Ben Singer, a company spokesman, insisted that the company readily advised physicians that it supported the academy’s recommendations on the hepatitis B vaccine. In a January 1995 letter that Singer provided, PacifiCare’s medical director, William Osheroff, alerted one medical group about the HMO’s policy.

Jones said the agency is still reviewing the hepatitis B issue.

Doctors said PacifiCare wasn’t alone in its failure to support varicella vaccinations, which were first sold last year. While the vaccine was readily endorsed by leading medical groups, doctors said many HMOs operating across the state refused to adjust their contracts to provide some reimbursement for the shots.

Bart Asner, a pediatrician and president of Monarch Healthcare in Mission Viejo, said the medical group sent letters last year to many HMOs it contracts with, requesting that it be compensated for the shots. All declined, he says.

Dr. Asner estimates that his medical group absorbed about $50,000 in costs for about 1,000 chickenpox shots its doctors administered in the last year.

“Health plans should be encouraged to compensate physician groups for new vaccinations,” he said.

PacifiCare’s agreement with the state applies to members who have called doctors’ offices since April 1, 1995, to have their children vaccinated. It also applies to those whose children had appointments at a time when they could have been vaccinated.

The company will notify members in its next quarterly mailing of its HealthBeat newsletter this summer that it is recommending the shots.

Singer said he doubts the payment will amount to much because the issue has stirred little interest among PacifiCare members. “We believe many people made up their minds on whether to vaccinate or not 15 months ago, when the drug first came on the market,” he said.