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CMS Increases Medicare Payment to Providers Administering COVID-19 Vaccines

On March 15, 2021, the Centers for Medicare & Medicaid Services (CMS) announced it will increase the amount Medicare pays providers for administering the COVID-19 vaccine. For vaccines administered on or after March 15, 2021, the new national average payment rate for physicians, pharmacies, hospitals, and other providers who administer the vaccine of $40 per single-dose vaccine and $80 per two-dose vaccine. The exact payment rates will be based on the type of provider offering the vaccine and will be adjusted based on the location of the provider. For vaccines administered prior to March 15, 2021, Medicare rates will remain $28.39 per single-dose vaccine and $45.33 for both doses of a two-dose vaccine.

These changes in Medicare payment rates are based on new information regarding the costs of vaccine administration for different types of providers and more resources needed to safely administer the vaccine. The goal of CMS is to increase the number of providers offering the vaccine and further emphasize that no beneficiary, whether a beneficiary with private insurance, Medicare, or Medicaid, should pay cost-sharing to receive the COVID-19 vaccine. The new payment rate is effective for COVID-19 vaccines given on or after March 15, 2021.

In order to receive COVID-19 vaccines at no cost from the federal government, providers cannot charge patients for administration of the vaccine. Providers that receive federally purchased vaccines during the public health emergency must contractually agree to administer COVID-19 vaccines to patients regardless of their ability to pay; Providers are therefore prohibited from charging a patient any amount for administration of the vaccine, including a copay, coinsurance, or deductible, including seeking reimbursement from patients, such as balance billing. CMS provides payment information for various programs, to ensure consistent coverage across payers, such as:

  • Medicare: Medicare beneficiaries do not pay anything for COVID-19 vaccines. There is no copayment, coinsurance, or deductible. Providers are prohibited from charging beneficiaries for COVID-19 vaccine administration and must seek reimbursement through Medicare.
  • Medicare Advantage (MA): During 2020 and 2021, Medicare will pay providers directly for the vaccine (assuming the provider did not receive the vaccine for free) and its administration to individuals enrolled in MA plans. Reimbursement will not be handled by the MA plans. Similar to Medicare, MA beneficiaries pay no cost-sharing for the COVID-19 vaccine, as providers cannot charge patients for administration as a condition of receiving federally purchased vaccines.
  • Medicaid: State Medicaid and CHIP programs are required to offer vaccine administration at no cost for almost all beneficiaries during the COVID-19 public health emergency and at least one year after. According to the American Rescue Plan, COVID-19 vaccine administration will be fully federally funded and expands the individuals who are eligible for vaccine coverage.
  • Private Plans: CMS and the Departments of Labor and Treasury are requiring a majority of private plans to cover the cost of COVID-19 vaccine administration, including in- and out-of-network, with no cost sharing during the declared public health emergency. Out-of-network rates are required to be reasonable compared to typical market rates, and CMS expects commercial carriers to ensure their rates are reasonable compared to market rates.
  • Uninsured: Providers can submit reimbursement claims for uninsured individuals, if the COVID-19 vaccine is administered to them without insurance. The providers will be reimbursed through the Provider Relief Fund, as administered by the Health Resources and Services Administration (HRSA).

This increased payment rate may allow providers and increase the number of vaccines they can administer per day, create or expand vaccination sites, perform more patient outreach and education, and employ more healthcare staff.

For over 35 years, Wachler & Associates has represented healthcare providers and suppliers nationwide in a variety of health law matters, and our attorneys can assist providers and suppliers in billing federal healthcare programs for COVID-19 vaccine reimbursement. If you or your healthcare entity has any questions pertaining to healthcare compliance, please contact an experienced healthcare attorney  at 248-544-0888 or


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