After garnering national attention for its decision to pay unusually high rates to health care providers for administering COVID vaccines, Massachusetts is no longer an outlier.
Governor Charlie Baker’s administration in January decided to reimburse providers about $90 for each two-dose vaccination they gave to people covered by MassHealth, the state Medicaid program for low-income individuals. It also required private insurers to pay at least that amount — which was twice what federal officials were paying for vaccines in the national Medicare program.
But in March, federal officials significantly raised Medicare payments to almost the same high rate Massachusetts had set. Baker administration officials then tweaked their own rates to match the updated national payments.
As of Thursday, hospitals, health centers, pharmacies, and other health care providers in Massachusetts are set to receive the same amount for every shot of COVID vaccine they administer to people covered by Medicare, MassHealth, and private insurers.
They will be paid $45.87 per shot: a total of $91.74 for the two-dose Pfizer-BioNTech and Moderna vaccines, and $45.87 for the one-shot Johnson & Johnson formula.
“Massachusetts was the first state to establish a comprehensive provider reimbursement rate for the COVID-19 vaccine to ensure that cost was not a barrier to broad vaccination, and in recognition of the complexity of the two dose vaccine, storage, and distribution,” said Brooke Karanovich, spokeswoman for the Executive Office of Health and Human Services.
She said the new federal and state reimbursement rates “will continue to support providers administering the vaccine in communities across the Commonwealth.”
COVID vaccines are free to people getting shots, and the federal government is covering the cost of the vaccines themselves. But insurers pay health care providers a fee for putting shots in arms. Such administration fees are common, but they typically amount to much less for common vaccines such as the flu shot, which are more routine and less complicated to deliver.
When the Baker administration set its COVID vaccine payment rates in January, the decision to pay twice the Medicare rate came as a surprise. Hospitals had been asking for higher payments and applauded the move, while insurers quietly grumbled. Some critics wondered whether the payments really needed to be so high.
Baker administration officials justified the rates by saying they would encourage health care providers to vaccinate large numbers of people quickly.
Federal officials apparently feel the same way. On March 15, they said they increased Medicare rates after learning “new information about the costs involved in administering the vaccine,” including the expenses of establishing vaccination clinics and educating patients.
Biden administration officials said they are “supporting provider efforts to expand capacity and ensure that all Americans can be vaccinated against COVID-19 as soon as possible.”
The boost in payments reflects the unanticipated challenges of the unprecedented mission to vaccinate millions of people against the coronavirus in a matter of months.
In Massachusetts, health care providers have been reaching out to patients, sometimes in different languages, to help them schedule vaccination appointments. They’ve opened scores of vaccination clinics, and in some cases, they’re bringing vaccines to patients’ neighborhoods or even their homes.
Health systems and health care providers have become critical to the state’s vaccination effort, receiving 133,210 new doses to administer from the Baker administration this week, followed by mass vaccination sites, which got 106,300 new doses.
“The updated vaccine administration rates set by the federal government reflect the immense resources that providers have devoted to delivering vaccines within their communities,” said Steve Walsh, president of the Massachusetts Health & Hospital Association. “These rates are intended to remove barriers to vaccine access, as they empower providers to open up new sites, conduct patient outreach, and maintain staff to administer doses.”
Health insurers are not fighting the reimbursement rates but warn that the costs of vaccination will become part of future health care premiums.
“The vaccine administration fees will add to premium increases for employers and consumers,” said Lora Pellegrini, president of the Massachusetts Association of Health Plans.