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Providers get greater reimbursement for COVID-19 vaccine

The move is to support actions by hospitals and other entities to expand vaccination efforts.

Susan Morse, Managing Editor

Medicare is now paying higher reimbursement rates for hospitals, physicians, pharmacies and others to administer the COVID-19 vaccine.

Starting immediately, the Centers for Medicare and Medicaid Services is increasing the Medicare payment amount to $40 to administer each dose of a COVID-19 vaccine. This represents an increase from approximately $28 to $40 to administer a single dose, and an increase from approximately $45 to $80 for the administration of vaccines requiring two doses. 

The exact payment rate for administration of each dose of a COVID-19 vaccine will depend on the type of entity that furnishes the service and will be geographically adjusted based on where the service is furnished, CMS said.

At a time when vaccine supply is growing, CMS said it is supporting provider efforts to expand capacity and ensure that all Americans can be vaccinated as soon as possible.

The payment rates reflect new information about the costs involved in administering the vaccine for different types of providers and suppliers and the additional resources necessary to ensure the vaccine is administered safely and appropriately.

The higher payment rate will support actions taken by providers, such as growing existing vaccination sites, conducting patient outreach and education, and hiring additional staff, CMS said. 


No beneficiary, whether covered by private insurance, Medicare or Medicaid, should pay cost-sharing for the administration of the COVID-19 vaccine, CMS reiterated. 

As a condition of receiving free COVID-19 vaccines from the federal government, vaccine providers are prohibited from charging patients any amount for administration of the vaccine. 

Beneficiaries with Medicare pay nothing for COVID-19 vaccines and there is no applicable copayment, coinsurance or deductible.

Medicare Advantage plans are not responsible for paying providers to administer the COVID-19 vaccine to their enrollees at this time.

For calendar years 2020 and 2021, Medicare will pay providers directly for the COVID-19 vaccine (if they do not receive it for free) and its administration for beneficiaries enrolled in MA plans. Like beneficiaries in original Medicare, Medicare Advantage enrollees pay no cost sharing.

Medicaid: State Medicaid and CHIP agencies must provide vaccine administration with no cost sharing for nearly all beneficiaries during the public health emergency and for at least one year after it ends.

Through the American Rescue Plan Act, signed by President Biden on March 11, the COVID vaccine administration will be fully federally funded. The law also provides an expansion of individuals eligible for vaccine administration coverage. There will be more information provided in upcoming updates.
Private Plans: CMS, along with the Departments of Labor and Treasury, is requiring that most private health plans and issuers cover the COVID-19 vaccine and its administration, both in-network and out-of-network, with no cost sharing during the public health emergency.

Current regulations provide that out-of-network rates must be reasonable, as compared to prevailing market rates, and reference the Medicare reimbursement rates as a potential guideline for insurance companies. In light of CMS's increased Medicare payment rates, CMS will expect commercial carriers to continue to ensure that their rates are reasonable in comparison to prevailing market rates.

Most health plans are paying the administration cost of about $45 per dose, according to Eileen Flick, director of Health Technical Services at Segal, an employee benefits consulting firm.

Uninsured: For individuals who are uninsured, providers may submit claims for reimbursement through the Provider Relief Fund administered by the Health Resources and Services Administration.

Health insurers have information from 2020 about the cost of COVID-19 treatment. However, there is still uncertainty regarding 2021 costs due to the unknowable severity of a mutated virus and new treatments that may become available. 

The cost of testing and what insurers will be required to cover are also uncertain. These uncertainties, along with an expected influx of claims from deferred care, make pricing 2022 premiums a challenge.


Dr. Susan R. Bailey,  president, American Medical Association said, "The American Medical Association and the AMA/Specialty Society RVS Update Committee (RUC) met early with the Biden transition team, Congress, and the Centers for Medicare and Medicaid Services and advocated for an increased payment for the administration of these life-saving vaccines for Medicare patients, while ensuring there were no out-of-pocket costs for patients.  

"The additional resources will increase the number of clinicians who can administer the vaccine. This has been a trying time for physician practices, and we thank the administration for acknowledging the challenges of practicing medicine during a pandemic." 

Twitter: @SusanJMorse
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