On October 28, 2020, CMS released an interim final rule with comment period (IFC) that implements several CARES Act requirements to prepare for the availability of a COVID-19 vaccine. Among other changes, the IFC establishes that COVID-19 vaccines that are authorized or approved by the FDA will be covered by Medicare Part B without co-pays or deductible. The IFC also implements CARES Act provisions that require most private health plans to cover a COVID-19 vaccine without cost-sharing requirements. The IFC also establishes that Medicare will provide enhanced payment to hospitals for new products authorized or approved to treat COVID-19 in the inpatient and outpatient settings.

Medicare beneficiaries will not pay cost-sharing amounts for COVID-19 vaccines. The CARES Act provides for coverage of a COVID-19 vaccine and its administration under Medicare Part B without any beneficiary cost sharing, beginning on the date that such vaccine is licensed pursuant to a Biologics License Application (BLA) under section 351 of the Public Health Service (PHS) Act (42 U.S.C. § 262). As explained in the IFC, CMS is considering any vaccine for which the FDA has issued an Emergency Use Authorization (EUA) during the Public Health Emergency (PHE), when furnished consistent with the terms of the EUA, to be eligible for Medicare coverage and payment. In other words, any vaccine that receives FDA authorization or approval, either through an EUA or a BLA, will be covered under Medicare Part B as a preventive vaccine with no beneficiary cost sharing.

As permitted by the CARES Act, CMS intends to announce coding and payment for FDA authorized or approved vaccines and administration by issuing program instructions to providers and suppliers.

Members of most private health plans will not pay cost-sharing amounts for COVID-19 vaccines. The CARES Act requires non-grandfathered group health plans and health insurance issuers offering non-grandfathered group or individual health insurance to cover, without cost sharing, qualifying coronavirus preventive services, including COVID-19 immunizations. The IFC amends existing regulations to implement requirements intended to ensure rapid coverage of qualifying coronavirus preventive services. Specifically, these plans and issuers are required to cover:

• Qualifying coronavirus preventive services, without cost-sharing, regardless of whether an in-network or out-of-network provider delivers such services;
• COVID-19 immunizations that have in effect a recommendation of the CDC’s Advisory Committee on Immunization Practices (ACIP) with respect to the individual involved; and
• Items and services that are integral to the furnishing of recommended preventive services, without cost-sharing, including the administration of COVID-19 immunizations.

Covered plans and issuers must provide this coverage within 15 business days after the date on which the United States Preventive Services Task Force or the ACIP makes an applicable recommendation.

IFC establishes enhanced Medicare payment for hospital services involving new products used to treat COVID-19. The IFC establishes a new technology add-on payment under the Inpatient Prospective Payment System (IPPS) for eligible COVID-19 cases that involve the use of new products authorized or approved to treat COVID-19. The add-on payment (which will be excluded from the calculation of the operating outlier payments) will be equal to the lesser of the following amounts:

• 65 percent of the operating outlier threshold for the claim; or
• 65 percent of the amount by which the costs of the case exceed the standard DRG payment (including the 20 percent add-on payment under the CARES Act) for eligible cases.

CMS will issue operational instructions on how eligible cases of COVID-19 will be identified. CMS also warns hospitals not to seek additional payment on claims for drugs or biologicals procured or provided by the government to a provider at no cost to the provider to diagnose or treat patients with known or suspected cases of COVID-19.

Under the Outpatient Prospective Payment System (OPPS), CMS is excluding drugs and biologicals (including blood products) that have been approved or authorized by the FDA to treat or prevent COVID-19 from being included in the Comprehensive Ambulatory Payment Classification (C-APC) payment when billed on the same claim as a primary C-APC service. Medicare will pay for these drugs and biologicals separately throughout the remainder of the PHE. This separate payment will result in an additional copay of 20 percent of the cost of the new COVID-19 treatment.

The interim final rule is available here, and the CMS fact sheet is available here.