Washington, DC—Community pharmacists applauded the decision to substantially increase Medicare reimbursement for administering COVID-19 vaccines.

The Centers for Medicare & Medicaid Services (CMS) announced that, as of March 15, it is updating the Medicare payment rates for COVID-19 vaccine administration. Effective for services furnished on or after that date, the new Medicare payment rate for administering a COVID-19 vaccine is about $40 to administer each dose of a COVID-19 vaccine or about twice that among for the two-dose series.

“The COVID-19 vaccine is only as effective as the distribution system,” points out National Community Pharmacist Association Chief Executive Officer B. Douglas Hoey. “There are more than 21,000 small business community and long-term care pharmacies in the country. Many are administering the vaccine now, but some would lose money at the current reimbursement rate.

Increasing the Medicare rate from an average of $23 per vaccination to $40 per vaccination allows community pharmacists to recoup the additional personnel, administrative, and capital expenses associated with immunizing their patients.

Hoey also suggests the decision “will accelerate the vaccine administration program and get shots in arms more quickly. We would like to see it replicated for Medicaid and private plans to maximize the number of patients immunized as soon as possible.”

White House COVID-19 advisers announced the decision at a press briefing.

According to CMS, the rate “reflects updated information about the costs involved in administering the COVID-19 vaccine for different types of providers and suppliers, and the additional resources necessary to ensure the vaccine is administered safely and appropriately. The rate will be geographically adjusted based on where the service is furnished.”

A press release also explains that, while CMS usually implements changes to Medicare payment rates for specific services through notice-and-comment rulemaking, the payment rate changes for these specific services are being put into place to respond quickly to new information during the COVID-19 public health emergency.

Prior to March 15, COVID-19 vaccine administration services were reimbursed by Medicare for a single-dose vaccine or for the final dose in a series at the rate of $28.39. For a COVID-19 vaccine requiring a series of two or more doses, the payment rate was $16.94 for the initial dose(s) in the series and $28.39 for the final dose in the series. Those rate were also geographically adjusted.

CMS emphasizes that the new rates do not apply for entities that are paid for preventive vaccines and their administration at reasonable cost, nor are they binding on other government programs or private insurance.

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