Disaster Discourse: The Hagerty Blog

COVID-19 Vaccinations Are Coming! How to Proactively Plan for Federal Reimbursement of Vaccine Distribution, Management, and Administration Costs

In response to the growing threat of the COVID-19 virus, on March 12, 2020, the President declared a national emergency under the Stafford Act and, and subsequently, Major Disaster Declarations in all fifty states and some of the U.S. territories. In the months since, COVID-19 cases have continued to climb nationwide and state, local, tribal, and territorial (SLTT) governments, as well as certain private nonprofits (PNPs) (e.g., hospitals), have engaged in numerous emergency response activities. Many of these entities have begun planning for pandemic response and Emergency Protective Measure (EPM) cost recovery, while simultaneously facing another important financial question – who will pay for the significant costs associated with the distribution and administration of the COVID-19 vaccine?

The federal government, through Operation Warp Speed, has stated that the cost of the vaccine itself plus a standard vaccine administration personal protective equipment (PPE) kit will be covered directly by the federal government; however, many SLTT governments and health care providers must still determine how the costs for distribution and administration of the COVID-19 vaccine will be managed. Last week, the Federal Emergency Management Agency (FEMA) became one of the first federal agencies to specifically address how it will reimburse for COVID-19 vaccine-related costs. In this post, we will examine FEMA’s guidelines and offer suggestions to begin planning for your longer-term cost recovery now.

Spotlight: FEMA’s Role in COVID-19 Vaccine Cost Reimbursement

As previously outlined, FEMA offers reimbursement for certain eligible costs related to COVID-19 emergency activities under the FEMA Public Assistance (PA) Program to provide relief to SLTTs and PNPs. The FEMA PA Program is complex, and PA policies have evolved over the course of the pandemic. Many eligibility issues remain unclear and the role that different federal agencies will play in vaccine-related cost recovery has yet to be fully determined. However, FEMA’s recent COVID-19 Pandemic: Vaccination Eligibility FAQ sheds some light on how SLTTs and healthcare providers can plan for the eventual vaccine distribution and what activities may be eligible for FEMA PA reimbursement specifically. Here is what you should know about what may be eligible for FEMA PA reimbursement:

  1. PPE, other equipment, and supplies for storing, handling, distributing/transporting, and administering COVID-19 vaccinations:
  • PPE includes items necessary for proper handling and administration of vaccines as well as handling dry ice for storage and transportation needs;
  • Equipment includes, coolers, freezers, temperature monitoring devices, and portable vaccine storage units for transportation;
  • Supplies include emergency medical supplies (for emergency medical care needs that may arise in the administration of the vaccine), sharps containers (for medical waste), and supplies necessary for proper storage like cannisters of liquid nitrogen or dry ice; and
  • Transportation support includes refrigerated trucks and transport security when reasonable and necessary.

2. Facility support costs, including leasing space for storage and/or administration of vaccines, utilities, maintenance, and security.

3. Additional staff if necessary, including medical and support staff not paid for by another funding source, consistent with FEMA PA labor policies.

4. Onsite infection control measures including PPE for staff as well as cloth face coverings for patients, temperature scanners, physical barriers (e.g., plexiglass dividers), and disinfection of the facility in accordance with the Centers for Disease Control and Prevention (CDC) guidance.

5. Emergency medical care associated with vaccine administration (e.g., to address allergic reactions to the vaccine or other emergency medical needs that arise in the administration of the vaccine).

6. Medical waste disposal.

7. Communications to disseminate public information regarding vaccinations.

Considerations for Your COVID-19 Vaccine Cost Recovery Efforts

Although some federal agencies are still determining how vaccine-related distribution and administration (and the related costs) will be finalized, there are steps that SLTTs can take now to set up for a more successful cost recovery in the future. As with many recovery efforts, tracking all costs and procedures related to the COVID-19 vaccine distribution and administration separately from other COVID-19-related costs that have been or will be incurred will be critical to maximize cost recovery. More specifically, we recommend SLTT government agencies consider these five key costs, activities, and practices now as part of your COVID-19 vaccination planning efforts to maximize your cost recovery outcomes in the future:

  • Staffing: Utilizing budgeted labor (i.e., existing force account staff) versus unbudgeted labor (i.e., hiring temporary workers or contract employees) can have significantly different cost recovery implications. Some federal programs, such as FEMA PA, will generally only reimburse overtime for budgeted labor, but may reimburse straight-time and overtime for unbudgeted labor. It is important to consider your staffing options and how that may impact your long-term cost recovery.
  • Procurement and Contracting: Improper procurement is one of the primary reasons that federal funding – particularly funding provided through programs like FEMA PA – may be clawed back or deobligated. Ensuring that the costs your State agency is incurring related to COVID-19 vaccinations follow procurement procedures and contracting practices that are incompliance with federal regulations and guidance will maximize your chances for federal cost recovery later.
  • Documentation: Documentation of decision points and rationale related to COVID-19 vaccine storage, administration, staffing, and distribution can be critical to some of the eligibility of your COVID-19 vaccine cost recovery. In addition to documenting key decisions, it is critical to maintain all cost-related documentation including, but not limited to:
    • Equipment and supplies related to storage, distribution, or administration of the COVID-19 vaccine; and
    • Communications or dissemination of public information regarding COVID-19 vaccination.
    • Gloves and other PPE not provisioned directly by the federal government in the administration of COVID-19 vaccines.
  • Duplication of Benefits: Federal agencies are legally prohibited from duplicating benefits from other sources (such as services or awards granted by the Department of Health and Human Services (HHS), including CDC, or other federal agencies, other federal awards or insurance). If your agency receives funding from another source for the same work or activities, FEMA reduces the Applicant’s amount of eligible costs by the other funding source’s amount.
  • Unmet Financial Needs: Keep in mind, if you are seeking FEMA PA for reimbursement for COVID-19 vaccine-related costs, barring any possible legislative changes, the Coronavirus Relief Fund (CRF) will not be available to cover a portion of the cost-share. In many states, CRF dollars have been critical for either offsetting the local cost-share that is part of the FEMA PA program. Without this federal funding source to help offset this local cost share, state agencies should consider other potential programs and funding streams to offset this financial burden.

The complexity of the pandemic response and recovery will continue to increase as the virus continues to spread, the timeline stretches, and funding programs continue to change or be added. Plans and organization enacted now will prevent the need to untangle information after the fact and increase the chances of maximizing reimbursement.

Hagerty Can Help!

Our professionals have supported state and local governments and over 100 hospitals and healthcare systems nationwide in their response to the ongoing COVID-19 pandemic. Over the past several months, our professionals have assisted our clients as they address immediate treatment needs and medical surge requirements; implement important community and facility mitigation measures; and establish vaccine distribution, management, and administration plans. We are also ensuring our clients have access to immediate resources to facilitate the ongoing response, short-term financial recovery, as well as long-term cost-recovery to ensure future readiness. Contact us to discuss how we can help you meet your preparedness, response, and recovery needs.

Hagerty Consulting (Hagerty) is an emergency management consulting firm that helps clients prepare for, respond to, and recover from disasters. For over twenty years, we have supported our clients in their preparations for, response to, and recovery from some of the nation’s largest disaster response and recovery missions including 9/11, Hurricane Katrina, Hurricane Sandy, Hurricane Irma, Hurricane Michael, the Camp Fire, as well as the COVID-19 pandemic, amongst others.