COVID-19 Vaccine Reimbursement Delays Impact to Community Health Centers

Fiscal shortfall translates to concerning issues for safety-net and community health centers.

During the assorted phases of COVID, safety-net clinics stepped up; community health centers, Federally Qualified Health Centers (FQHCs), and clinics provided first and second dosages of the vaccine to patients. Extra unused dosages were often made available to members of the public, rather than being wasted. However, it seems that public health has again gotten the short end of the reimbursement stick. Tens of millions of dollars, at minimum, are owed to clinics for shots provided since the vaccines received emergency authorization.

Clinics are struggling; reimbursement for well over a million COVID-19 vaccines is due in California alone. Countless other states have also filed their claims. Some of the struggle is due to the complex Medicaid reimbursement systems for FQHCs. Under federal law, such health centers are paid a set rate for patient visits, each potentially costing upwards of $500 or more, including practitioner evaluation and intervention, lab work, and other diagnostics. Many state Medicaid agencies have indicated that if patients received their COVID shot with other care, the clinic’s cost to give the vaccine was covered as part of its normal payment rate.

Yet, bigger losses were incurred when the vaccination was the only service provided, as with a mass immunization clinic. Some states have tried to bill Medicaid separately for dosages, as in the $40 rate per shot charged under Medicare. However, the wait for reimbursement has been excessive, related to the Centers for Medicare & Medicaid Services’ (CMS’s) inability to finalize a payment formula for exactly how much it costs a clinic to give a shot. It is no surprise that costs vary across the states, contributing to the delays and confusion: Michigan is just below the $40 mark, yet California provided a rate of $67.

Larger factors are at issue for the community health centers. In many cases, extra staffing for supplies, immunization clinics, and dosages were addressed by grant funding, which is now exhausted. A high percentage of the population served by these centers lack health insurance; over half of the half of shots were administered to the community without collecting insurance information.

States are stepping up to provide payment proposals, although they continue to play a game of “hurry up and wait.” The question remains, how much longer can they play? The American Rescue Plan Act provided $7.6 billion to clinics for covid vaccination, testing, and treatment, yet this did not come close to covering every frontline clinic effort. Many have tapped small-business loans, as well as state monies, to maintain operations.

In the meantime, the fiscal shortfall translates to concerning issues for safety-net and community health centers, such as overall service and treatment delays, staff retention, and other obstacles to offering preventative and continuing care. These issues imperil the safety net relied on by much of the population, especially healthcare organizations. Our most recent Monitor Mondays survey focused on how many hospitals or agencies refer their patients to safety-net clinics or community health centers, and the quick answer is “a great deal;” full survey results appear here.