CMS Pulls the Plug on Vaccine Bonuses

Parents complain that vaccine bonuses distort medical judgment and result in high-pressure sales tactics around childhood vaccinations

Doctors will no longer get extra cash for vaccinating children—at least not from the federal government.

In a quiet but significant policy shift, the Centers for Medicare and Medicaid Services (CMS) announced it is retiring a long-criticized system that paid physicians bonuses for administering childhood vaccines. The change was communicated in a December 30 letter to medical providers.

Until now, vaccinating kids could be surprisingly lucrative. In 2025, CMS paid doctors about $45 per dose of the COVID-19 vaccine given to a child through Medicare. Administer the shot at home, and that came with another $40. All told, a doctor could earn around $85 for a single COVID-19 shot, with the shot itself supplied at no cost by the federal government. And that figure doesn’t account for additional financial incentives from insurers, which often tie large quality bonuses to vaccination rates.

But in Tuesday’s letter, CMS told providers it will no longer cover vaccination bonuses at the federal level. States technically still have the option to offer their own incentives through Medicaid—but CMS made clear it doesn’t like the idea.

“CMS does not tie payment to performance on immunization quality measures in Medicaid and CHIP at the federal level,” the agency wrote. While acknowledging that states have some flexibility, CMS said it “strongly discourages” using immunization rates as a basis for financial rewards.

The bonus system has long been controversial. Parents have complained for years that financial incentives distort medical judgment, leading to high-pressure tactics around childhood vaccinations. Some say doctors push shots parents believe are unnecessary or unsafe. Others report being dismissed from pediatric practices altogether if they decline vaccines.

Health and Human Services Secretary Robert F. Kennedy Jr. has argued that the money explains the behavior. He has said that up to 50 percent of revenue for many pediatricians comes from vaccines, a figure that includes not just per-shot payments but also broader insurance arrangements.

Those arrangements—known as value-based contracts—are held by roughly half of doctors. They reward physicians with lump-sum payments for hitting specific metrics, such as vaccination rates. Because those rates are calculated as percentages, doctors who want to keep their numbers high sometimes avoid seeing unvaccinated children altogether.

The CMS letter hints at more changes ahead. The agency said it will “explore options” to ensure parents are fully informed about vaccines, including possible side effects, alternative schedules, and available exemptions. CMS also said it will work to ensure that religious exemptions are respected.

“Government bureaucracies should never coerce doctors or families into accepting vaccines or penalize physicians for respecting patient choice. That practice ends now,” Secretary Kennedy wrote in a post on X. “Under the Trump administration, HHS will protect informed consent, respect religious liberty, and uphold medical freedom.”