CMS: Medicare to cover COVID-19 vaccine at no cost to beneficiaries

Novavax vaccine
CMS announced that it will cover any approved COVID-19 vaccine at no cost to patients. (Novavax)

The Trump administration announced it will cover a vaccine for COVID-19 at no cost to Medicare beneficiaries when it gets approved.

The Centers for Medicare & Medicaid Services released an interim rule on Wednesday that aims to remove regulatory barriers for seniors to get the vaccine, which is expected to be approved by early next year.

The agency also released toolkits for providers, states and payers to “have the information and direction they need to ensure broad vaccine access and coverage for all Americans,” CMS Administrator Seema Verma said in a statement.

The toolkits have information on how to ensure vaccine coverage among other types of payers.

For Medicare Advantage plans, Medicare will pay directly for the vaccine and its administration for such beneficiaries for 2020 and 2021.

The plans would not be responsible for reimbursing providers to administer the vaccine during this time, CMS said.

The agency is also requiring that most private health plans cover a recommended vaccine and its administration with no cost-sharing. The rule said that plans can use Medicare's payment rates as a guideline.

CMS also released new Medicare payment rates for vaccine administration. The rates will be $28.39 to administer a single-dose vaccine.

For a vaccine that requires two shots, the payment rate will be $16.94 for the first dose and $28.39 for the second.

Verma estimates the overall cost of providing the vaccine to every senior on Medicare would be around $2.6 billion, which would be covered by the federal government.

CMS will also cover the vaccine for any uninsured individuals by using money from a $175 billion provider relief fund passed as part of the CARES Act.

The agency also issued an interim final rule that specifies any vaccine getting emergency authorization from the Food and Drug Administration will be covered by Medicare Part D as a preventive vaccine at no cost for the beneficiary.

The interim rule also implements provisions in the CARES Act that enable swift coverage of a vaccine by most private plans without cost sharing for both in-and-out-of-network providers through the course of the COVID-19 public health emergency.

Hospitals would also get a Medicare add-on payment to help ensure access to COVID-19 therapies.

“Under current rules, hospitals may qualify for additional "outlier payments," but only when their costs for a particular patient exceed a certain threshold,” a CMS release said.

A hospital can get the add-on payment for treatment patients with “innovative new products approved or authorized to treat COVID-19 to mitigate any losses they may experience from making these therapies available, even if they do not reach the current outlier threshold,” CMS said.

The rule comes a few weeks after the FDA granted emergency approval for a new antibody cocktail manufactured by Regeneron to combat COVID-19.

Normally it takes a year for new technology to qualify for the add-on payments, but CMS gave an exception for any new technology or treatments to combat COVID-19.

But the rule also has new steps for price transparency for providers. It requires any provider who performs a COVID-19 diagnostic test to post their cash prices online.

"The rule gives CMS discretion to take additional enforcement actions to ensure compliance and that includes fining providers up to $300 a day," Verma said on a call with reporters Wednesday. 

CMS and the hospital industry is in a pitched legal battle over a rule that requires hospitals to post payer-negotiated rates. That rule goes into effect on Jan. 1.

CMS also added that the final rule includes an extension of Performance Year 5 for the joint replacement bundled payment model.