CMS Boosts Medicare Reimbursement for COVID-19 Vaccinations

UPDATED 03/16/21 CMS has significantly increased Medicare reimbursements rates for the administration of new COVID-19 vaccines in an effort to accelerate rollout, according to a new announcement.

The announcement emailed to journalists earlier today states that the national average payment rate for physicians, hospitals, pharmacies, and other immunizers has risen from approximately $28 to $40 for the administration of single-dose vaccines and from approximately $45 to $80 for the administration of COVID-19 vaccines requiring two doses.

Although, the exact reimbursement rate for each dose of a COVID-19 vaccine will depend on the type of entity that administers the vaccine and where the vaccination is furnished.

The new rates will apply to vaccinations given on and March 15, 2021.

“This new and higher payment rate will support important actions taken by providers that are designed to increase the number of vaccines they can furnish each day, including establishing new or growing existing vaccination sites, conducting patient outreach and education, and hiring additional staff,” CMS said in the email.

“At a time when vaccine supply is growing, CMS is supporting provider efforts to expand capacity and ensure that all Americans can be vaccinated against COVID-19 as soon as possible,” the agency continued in the announcement.

More than 107 million doses of COVID-19 vaccines have been administered since distribution began in the US on Dec. 14, 2020, data from the Centers for Disease Control and Prevention (CDC) shows at the time of this article’s publication.

But still, approximately 90 percent of the country has yet to be fully vaccinated, indicating many more months of vaccine rollout.

Healthcare providers have been calling on public and private payers to support their vaccination efforts by providing adequate reimbursement for administration of the vaccines. Providers, including hospitals and pharmacies, have shouldered the cost of identifying patients eligible for vaccination, communicating and coordinating with the community, and setting up safe vaccination sites.

States, such as Massachusetts, have increased Medicaid reimbursement rates for COVID-19 vaccinations to support vaccine distribution and rollout in their states. Massachusetts Governor Charlie Baker even required private payers in the state to match the new Medicaid reimbursement rate, which was twice the amount Medicare used to pay for vaccine administration.

The news in Massachusetts came as a pleasant surprise for hospitals in the state, which had been urging Governor Baker to act on the current payment rates.

“We fully support the vaccine administration rates set by the state, which will ensure these hospital vaccination initiatives are sustainable and accessible to residents for as long as possible,” Steve Walsh, president of the Massachusetts Health & Hospital Association, told local news source The Boston Globe.

The latest move from CMS paves the way for more state Medicaid programs and private payers to increase reimbursement rates to accelerate COVID-19 vaccine rollout since Medicare typically sets the standard for prices in healthcare.

In fact, CMS stated in the announcement earlier today that, in light of the new Medicare reimbursement rates, it expects private payers “to continue to ensure that their rates are reasonable in comparison to prevailing market rates.”

The federal agency said that the new 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.”

Vaccination will still be free for patients as long as providers and other immunizers receive their supply of vaccines from the federal government. Providers can also still seek reimbursement for vaccinating uninsured patients through the Provider Relief Fund.

UPDATE 03/16/21: American Medical Association (AMA) has provided a statement on the new Medicare reimbursement rates for COVID-19 vaccinations. In the statement emailed to journalists, Susan R. Bailey, MD, president of AMA, said that the "updated rate reflects 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 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 & Medicaid Services and advocated for an increase 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," continued Bailey. “This has been a trying time for physician practices, and we thank the administration for acknowledging the challenges of practicing medicine during a pandemic.”