New Federal Program Reimburses Vaccine Administration Fees for Underinsured Patients

Ken Terry

May 05, 2021

A new federal program will cover physicians' costs of administering COVID-19 vaccines to patients enrolled in health plans that either do not cover vaccination fees or cover them with patient cost-sharing. Physicians will be compensated for vaccine administration at national Medicare rates, which were raised in March.

The new COVID-19 Coverage Assistance Fund (CAF), which the Department of Health and Human Services (HHS) announced on Monday, is designed to cover these costs for underinsured patients. The Health Resources and Services Administration (HRSA), the HHS unit that administers CAF, also has a program to reimburse providers for vaccine administration associated with uninsured individuals. 

"On top of increasing reimbursement rates tied to administering the shots, we are closing the final payment gap that resulted as vaccines were administered to underinsured individuals," said HHS Secretary Javier Beccera in the department's press release. "No healthcare provider should hesitate to deliver these critical vaccines to patients over reimbursement cost concerns."

The biggest barrier to vaccination in physician offices so far has been the lack of vaccine availability to practices. There has been less emphasis on getting the vaccines to doctor's offices than to other vaccination sites in part because the pharmaceutical companies ship their vaccines in large units that are difficult for practices to store and use, The New York Times recently reported.

"We want to get practices included in vaccine distribution, and we're seeing some more of that, but it's still not being coordinated on the federal level," Anders Gilberg, MGA, senior vice president of government affairs for the Medical Group Management Association (MGMA), told Medscape Medical News.

Ada Stewart, MD, president of the American Academy of Family Physicians (AAFP), told Medscape that she and her colleagues in the AAFP are seeing considerably more practices receive COVID-19 vaccines than in the past. Stewart's community health center in Columbia, South Carolina, has the vaccine, she said, and is administering it to patients.

Stewart praised HRSA and HHS for creating the CAF program. "We want to remove any barriers to vaccination," she said. "So I was really excited to see this. Our clinic has patients who are insured, underinsured, and not insured. We want to make sure we grab those folks who are underinsured or whose insurance may not fully cover the cost of administration, so there won't be any cost issues. Then we can address issues such as hesitancy and some of the questions people may have about the vaccine."

She added that some physicians may find it difficult to fund the administrative costs of a vaccination clinic, including vaccine storage and staff training. Because the pandemic has had a negative financial impact on many practices, she said, "there probably are practices that have cost concerns" about vaccinating patients.

How to Get Reimbursed

CAF is funded through the Provider Relief Program, which has been providing grants to eligible practices since last spring. HRSA will accept claims from providers for service dates on or after December 14, 2020, when COVID-19 vaccine distribution began in the United States.

Before sending claims to HRSA, practices must first submit vaccine administration claims to a patient's health plan. Only claims that are partly or wholly denied or for which the patient's insurer assesses charges to the patient are eligible for coverage through CAF.

There is no cost to healthcare providers for COVID-19 vaccines received from the federal government. Therefore, physician practices can only submit a claim for vaccine administration to a patient's health plan.

If the claim is denied by the insurer, the practice can send a claim to HRSA through its claims clearinghouse or can go on the CAF web portal and submit the claim manually. Reimbursement will vary, depending on the date of service.

For vaccinations performed before March 15, 2021, the practice will be reimbursed $16.94 for the first dose, $28.39 for the second dose, or $28.39 for a one-dose vaccine. For dates of service on or after March 15, the administration fee per dose of any vaccine is $40.

"Grandfathered" Plans

The 2020 CARES Act requires the majority of health insurers to cover COVID-19 vaccinations as well as physicians' administrative fees and prohibits them from imposing cost sharing on patients for the inoculations. However, "grandfathered" plans, short-term plans, and certain "excepted benefit" plans are exempt from these mandates.

The grandfathered plans are those that existed when the Affordable Care Act became law on March 23, 2010 and have been continuously offered since then without certain changes, according to Health Affairs. They don't have to comply with ACA reforms, such as covering essential health benefits or preventive services without cost-sharing. Short-term plans, which are designed to cover people between jobs, don't have to meet these requirements either. Thus, neither type of plan has to comply with the CARES Act requirements on COVID-19 vaccinations.

Neither Gilberg nor Stewart could say how many of these plans exist today or what percentage of patients they account for in the average practice. One sign that the grandfathered plans, at least, have some market impact is that the Trump Administration last December issued a final rule to adjust the requirements that group plans and insurers have to follow to maintain their status as grandfathered plans.

In any case, Stewart said, "I truly feel that [the CAF program] is much needed. We don't know how many folks will be truly impacted. But this is another opportunity to make sure we remove barriers so we have equitable access to the vaccines."

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