California To Pay Up To $15M For Vaccines Under Blue Shield Contract

Feb. 15—California's could pay insurance company Blue Shield up to $15 million for expenses as it helps the state increase and accelerate COVID-19 vaccinations under a contract the Newsom administration released Monday afternoon.

Blue Shield's work officially begins Monday as the state's "third party administrator" for vaccine distribution.

The company will be able to bill the state up to $15 million in third-party costs and non-staff costs. That doesn't include staff time, which Blue Shield will provide for free, according to the contract.

California's 55-page contract with Blue Shield sets the following goals for vaccine distribution:

— 95% of urban residents should have to travel no more than half an hour to reach a distribution site. That increases to an hour in rural areas.

— Vaccines should also be made available to people who can't leave their homes in all 58 counties.

— Vaccine providers should administer 95% of vaccine doses within a week of receiving them.

— California should be able to distribute 3 million vaccines per week by March 1, and 4 million per week by April 30, assuming supply is available.

Yolanda Richardson, a top administration official whom Newsom has called his "vaccination czar," told lawmakers last week that the state is turning to Blue Shield because it needs to centralize vaccine distribution.

"We identified a need to scale up quickly and determined that using a trusted health plan partner would be the best approach," she said during a legislative oversight hearing. "Going forward, using a single statewide network gives us the insights we need to ensure that we have an eye on equity."

As part of its efforts to increase vaccinations, California is also contracting with Kaiser Permanente, but the administration has not yet released that contract.

The new vaccine agreements come months after Blue Shield and Kaiser provided free help to Newsom on his COVID-19 testing task force.

The health care companies are not supposed to profit from their new roles helping lead the state's vaccination campaign, according to intent letters signed by Richardson and company executives.

Experts, however, say the contracts could still benefit Blue Shield and Kaiser in the long run by deepening their relationships with the governor.

Under its contract, Blue Shield will develop an algorithm to guide vaccine distribution across the state. The Newsom administration will have final say on where vaccines are distributed and what the criteria are for determining how many vaccines go to each site, but it will use information from Blue Shield to make those determinations.

Blue Shield will devise a system of incentive payments for providers distributing vaccines quickly and equitably. It will also send the Newsom administration daily reports on areas and providers with low vaccination rates, coronavirus hot spots and equity gaps.

The $15 million outlined in Blue Shield's contract doesn't include money California will send directly to providers for startup costs, incentive payments and other expenses. Those include costs to transport patients to vaccination sites, or to allow vaccinators to travel to administer shots to homebound Californians.

Most vaccination costs will be covered by health insurance, including Medicare and private health insurers, according to the California Department of Public Health. The federal government is footing the bill for uninsured people.

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