Local governments are planning for pandemic response and emergency protective measure 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?

Through Operation Warp Speed, the federal government 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 of the logistical decisions involving distribution and administration of the COVID-19 vaccine will be made at the state or territory level. Each state was required to submit an Interim COVID-19 Vaccination Plan to the Centers for Disease Control and Prevention (CDC) by October 16, 2020. Local governments should review their state’s interim vaccination plans and work directly with their state agencies to forecast the types and magnitude of costs they will likely incur. This is critical given the impending December 30, 2020, deadline for Coronavirus Relief Funding (CRF) expenditures and the necessity for vaccine administration funding well into 2021.

Recently, the Federal Emergency Management Agency (FEMA) became one of the first federal agencies to specifically address reimbursement for COVID-19 vaccine-related costs. We examine FEMA’s guidelines and offer these suggestions to help you plan for your longer-term cost recovery now.

FEMA’s Role in COVID-19 Vaccine Cost Reimbursement

FEMA offers reimbursement for certain eligible costs related to COVID-19 emergency activities under the FEMA Public Assistance (PA) Program to provide relief to local governments. 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 Planning FAQ sheds some light on how local governments can plan for the eventual vaccine administration and distribution, as well as what specific activities may be eligible for FEMA PA reimbursement. Per FEMA’s guidance, here is what you should know about what may be eligible for FEMA PA reimbursement:

• 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.
  • Transportation support includes refrigerated trucks and transport security, when reasonable and necessary.
• Facility support costs, including leasing space for storage and/or administration of vaccines, utilities, maintenance, and security.
• Additional staff, if necessary, including medical and support staff not paid for by another funding source, consistent with FEMA PA labor policies.
• Onsite infection control measures, including PPE for staff, as well as cloth face coverings for patients, temperature scanners, physical barriers (i.e., plexiglass dividers), and disinfection of the facility in accordance with CDC guidance.
• Emergency medical care associated with vaccine administration (i.e., to address allergic reactions to the vaccine or other emergency medical needs that arise in the administration of the vaccine).
• Medical waste disposal.
• Communications to disseminate public information regarding vaccinations.

Considerations for Your COVID-19 Vaccine Cost Recovery Efforts

There are steps that local governments can take now to prepare 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 that local governments consider these five key costs, activities, and practices now as part of their COVID-19 vaccination planning efforts to maximize future cost recovery:

• Staffing: Utilizing budgeted labor (i.e., existing force account staff) versus unbudgeted labor (i.e., hiring temporary workers or contract workers) 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 de-obligated. Ensuring costs your local government incurs related to COVID-19 vaccinations follow procurement procedures and contracting practices that comply with federal regulations and guidance will maximize your chances for subsequent federal reimbursement.
• Documentation: Documentation of decision points and rationale related to COVID-19 vaccine storage, administration, staffing, and distribution can be critical to 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:
  • Equipment and supplies related to storage, distribution, or administration of the COVID-19 vaccine.
  • 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, including the Centers for Disease Control and Prevention, or other federal agencies, other federal awards, and/or insurance). If your local government receives funding from another source for the same work or activities, FEMA reduces the amount of eligible costs by the other funding source’s amount.
• Unmet Financial Needs: Keep in mind, if you are seeking FEMA Public Assistance 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. Currently, CRF funding must be applied to costs incurred by December 30, 2020. For many applicants, CRF dollars have been critical for 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, local governments 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 spreads, the timeline stretches, and funding programs are changed or added. Planning and organizing now will prevent the need to untangle information after the fact and will increase the chances of reimbursement.

Mark O’Mara is director of recovery at Hagerty Consulting
Meghan Tosto is deputy director of recovery at Hagerty Consulting
Julia Metzger is a recovery associate at Hagerty Consulting