Use of Vaccination Metrics in Physician Payment Programs Discouraged by CMS

• by Amber Baker

• Published January 15, 2026
• Vaccines
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• A new State Health Official (SHO) letter from the Centers for Medicare & Medicaid Services (CMS)—the federal agency that oversees Medicaid and sets quality and payment standards for state health programs nationwide—provides new federal guidance that challenges a long-standing federal policy financially incentivizing physicians to vaccinate their patients, particularly children.¹

  CMS announced on Dec. 30, 2025 that it is removing childhood and prenatal vaccination measures from the Medicaid and CHIP Core Quality Measure Sets—a federal quality reporting framework used by states to evaluate the quality of care delivered to publicly insured populations. CHIP, or the Children’s Health Insurance Program, provides government-funded coverage for children whose families earn too much to qualify for Medicaid but cannot afford private health insurance.¹

  <>CMS “Strongly Discourages” States From Using Vaccination Metrics in Payment, Bonus Arrangements

  According to CMS, “strongly discourages” states from using vaccination metrics in payment or financial bonus arrangements, and signals a shift toward measures that reflect informed consent, parental choice, and shared clinical decision-making, rather than compliance with vaccine use alone. The agency said:

  CMS does not tie payment to performance on immunization quality measures in Medicaid and CHIP at the federal level. While states have flexibility and discretion to use quality measures in state developed value-based purchasing and payment incentive fee-for-service or managed care programs, CMS strongly discourages states from using immunization measures in payment arrangements.¹

  The agency’s new guidance makes clear that vaccination  quality measures have been used in state-level payment and financial incentive structures within Medicaid and CHIP programs, and that CMS now discourages this approach.¹

  Internal Documents Detail Performance-Based Incentives for Childhood Vaccination Rates

  Prior to CMS announcement, childhood and prenatal vaccination measures were embedded in the Medicaid and CHIP Core Quality Measure Sets. States were required to report whether children and pregnant women participating in the programs were “up to date” on recommended vaccines, and these metrics were widely used to evaluate and reward health provider performance.

  While CMS did not pay physicians on a per-vaccine basis, states and managed care organizations were permitted to incorporate vaccination quality measures into value-based purchasing programs and managed care contracts—formal agreements between states and private insurers governing care delivery and reimbursement. In practice, this meant that health systems and physician groups could receive financial bonuses, higher reimbursement tiers, or other performance-based incentives when vaccination benchmarks were met.

  Internal health system documents confirm this structure. For example, a prior communication from Kaiser Permanente shows that physicians were eligible for financial bonuses tied to achieving full vaccination rates among children before age two—demonstrating that vaccination metrics were not just for tracking purposes, but physicians were financially rewarded.²

  A news report by Newsweek noted that studies have identified the inclusion of vaccination measures in quality-based payment programs as an integral factor in increasing vaccine uptake—a dynamic critics say risked eroding public trust and created the appearance of a conflict of interest.³

  Estimated Pediatrician Incentives for Fully Vaccinated Patient Rosters Can Exceed $300,000

  To illustrate the scale of such incentives, pediatricians typically manage patient panels of approximately 1,200 to 1,500 children. If 63 percent of a 1,200-patient panel met the criteria for full vaccination before age two at an incentive rate of $400 per child, the resulting bonus would exceed $300,000.²

  Critics argue that this type of incentive structure helps explain why some pediatric practices decline to accommodate delayed vaccination schedules, since children who complete vaccines after the age-two cutoff may no longer count toward performance benchmarks tied to physician compensation.

  CMS Changes Represent “Meaningful Course Correction,” “Protecting Informed Consent”

  Welcoming the new CMS changes in a Dec. 31 post on X, HHS Secretary Robert F. Kennedy, Jr. said:

  Government bureaucracies should never coerce doctors or families into accepting vaccines or penalize physicians for respecting patient choice. That practice ends now. HHS will protect informed consent, respect religious liberty, and uphold medical freedom.⁴

  Supporters of the policy change believe it represents a meaningful course correction. Pediatrician Michelle Perro, MD said the change may help restore trust in the patient-doctor relationship by removing financial considerations from vaccination discussions in clinical settings. She added that with vaccination metrics no longer tied to performance benchmarks, physicians are less likely to face conflicts between clinical judgment and administrative criteria.⁵

  Dr. Perro said:

  Any time a clinician’s compensation is tied to a specific medical decision—especially one involving children—families reasonably ask, ‘Is this recommendation for my child, or for a metric?’ Even the appearance of a conflict can erode trust, and trust is the foundation of pediatric care and informed consent.⁵

  According to CMS data cited by journalist Yudi Sherman of America’s Frontline News, physician payments for administering pediatric COVID-19 shots reached approximately $45 per dose under Medicare reimbursement programs.⁵

  Immunization Decisions Should Neither Be Rewarded Nor Penalized

  The policy change does not eliminate all financial incentives overnight, nor does it prohibit states from tracking vaccination rates.  However, it recalibrates federal expectations and sends a clear message—one that informed-consent advocates have emphasized for years: immunization decisions should not be financially rewarded or penalized.

  While CMS’s action is limited to Medicaid and CHIP quality measures, those programs do cover a significant portion of children in the U.S., and policies governing them often shape broader pediatric practice standards. The policy change reflects a wider shift away from compliance-driven frameworks toward patient-centered decision-making across federal health agencies, including the U.S. Centers for Disease Control and Prevention (CDC) and other regulatory bodies.

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