A Preliminary Estimate of 2018 Medicare Rates In this blog, I will provide a preliminary estimate of the Ambulance Inflation Factor (AIF) for calendar year 2018.  The AIF is main factor that determines the increase (or decrease) in Medicare’s payment for ambulance services. Calculating the 2018 AIF The AIF is calculated by measuring the increase in the consumer price index for all urban consumers (CPI-U) for the 12-month period ending with June of the previous year. For 2018, this means the 12-month period ending on June 30, 2017. Starting in calendar year 2011, the change in the CPI-U is reduced by a so-called “productivity adjustment”, which is equal to the 10-year moving average of changes in the economy-wide private nonfarm business multi-factor productivity index (MFP). The resulting AIF is then applied to the conversion factor used to calculate Medicare payments under the Ambulance Fee Schedule. The formula used to calculate the change in the CPI-U is limited to positive increases. Therefore, even if the change in the CPI-U was negative over a 12-month period (a rarity in the post-war era), the change in the CPI-U cannot be negative. However, when the MFP reduction is applied, the statute does permit a…

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