(Reuters) - Medicare and Medicaid will cover the cost of infusion associated with Dendreon Corp's prostate cancer vaccine Provenge, the company said on Monday.

The ruling by the Centers for Medicare and Medicaid Services sent Dendreon shares up as much as 9 percent.

The Seattle-based company said that under the updated coverage policy, the costs associated with administering Provenge can now be billed separately.

Provenge costs about $93,000 for a standard course of treatment. Physicians are reimbursed $125 per infusion, on average, for biologic drugs, depending on geographic location and the length of the infusion, said Katherine Stueland, a spokeswoman for Dendreon.

The CMS decision covers claims for infusion costs of Provenge retroactive to June 30.

Provenge is a new type of cancer treatment that uses cells from a patient's own body to treat the disease.