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AAA Releases 2022 Medicare Rate Calculator
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Save With Savvik Buying Group!
Hear from American Ambulance Association CEO Maria Bianchi and state association leaders why it is essential for EMS agencies to take advantage of the Savvik Buying Group discounts available as part of their AAA memberships.
EMS Week Featured Service Application
EMS Week will take place from May 16–22, 2021. To celebrate the extraordinary contributions of ambulance services to the communities they serve, we will be featuring specific services throughout EMS week on AAA’s website and social media.
If you would like to apply to have your service featured, please complete and submit all fields below by May 12. Thank you for your service to your community!
2021 Medicare Rate Calculator Released
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AAA Sends Letter to CMS on COVID-19 Response
The AAA has sent a letter to CMS on how the agency can most help ground ambulance service providers and suppliers be better prepared to respond to potential cases of COVID-19. The AAA has requested priority access to personal protection equipment for EMS personnel and COVID-19 test kits and results, as well as easing Medicare and Medicaid policies on alternative destinations and treatment in place. The letter was also sent to the National Highway Traffic Safety Administration (NHTSA) and the Assistant Secretary for Preparedness and Response (ASPR). Read the letter HERE.
President signs law providing funds to combat Corona Virus
President Donald Trump today signed H.R. H.R. 6074 into law, approving $8.3 billion in supplemental appropriations to fund programs in response to the COVID-19 illness. The bill would bolster vaccine development, research, equipment stockpiles, and state and local health budgets as government officials and health workers fight to contain the outbreak, which has claimed 11 lives in the U.S. and sickened more than 160 people across more than a dozen states.
The AAA advocated to negotiators of the bill that first responders needed to be included in the funding package and that all communities be eligible for the funding. Due in part to our outreach, the emergency funding provides a transfer of no less than $10 million to the National Institute of Environmental Health Sciences for worker-based training aimed at preventing exposure of the virus to emergency first responders, and others at risk of exposure (i.e., hospital employees).
The supplemental also appropriates $1 billion for state and local preparedness, which will allow state and local governments to carry out preparedness and response activities, with each State receiving a minimum of $4 million. Of the $1 billion, $300 million is allocated for global disease detection and emergency response, and FY 2019 Public Health Emergency Preparedness grantees.
Member Advisory: CMMI Releases Initial List of ET3 Participants
The Centers for Medicare and Medicaid Services (CMMI) has released its initial list of applicants selected to participate in the ET3 pilot program. CMMI notes that the list is not final as it still needs to execute participation agreements with the applicants. CMMI will issue a final list once it completes the process.
Applicants from 36 states and the District of Columbia were selected to participate in the program. Approximately 200 applicants were approved with instances in which the same ambulance service organization submitted applications for multiple counties as well as more than one organization submitting an application for the same county. CMMI has sent notifications to each of the applicants letting them know to expect a follow up email with the partnership agreement, program guidance and additional details.
The ET3 program is a five-year voluntary pilot program designed to test the potential benefit to the Medicare program and patients of ambulance service providers and suppliers furnishing treatment in place as well as transport to alternative destinations. For more information about the ET3 program, please go the ET3 website.
House Committees Consider Balance Billing Proposals
This past Tuesday and Wednesday, respectively, the House Ways & Means and Education & Labor Committees marked up their proposals on balance or “surprise” billing. As we reported on Monday of this week, the Ways & Means Committee proposal, the Consumer Protections Against Surprise Medical Bills Act (H.R. 5826), did not include a provision on ground ambulance services. The House Education & Labor proposal, The Ban Surprise Billing Act (H.R. 5800), however, included a provision to create a federal advisory committee to recommend restrictions on the ability of ground ambulance service providers and suppliers to balance bill.
The Ways & Means Committee reported out H.R 5826 favorably by voice vote. While the Education & Labor Committee also reported out H.R. 5800 favorably, the vote was 30 to 13 as a block of its Committee members preferred the approach of the Ways & Means proposal on how to address balance billing for other providers. It is now up to House leadership to determine next steps on how the chamber will approach a final package on balance billing.
While H.R. 5800 as reported out by the Education & Labor Committee still includes the provision on ground ambulance services, Chairman Scott (D-VA) and Ranking Member Foxx (R-NC) prior to mark up had removed the most problematic language in the bill. As introduced, H.R. 5800 would have given the Department of Health and Human Services the authority to issue regulations to restrict balance billing based on the findings of the advisory committee. This would have eliminated federal lawmakers from being able to evaluate the recommendations prior to the changes being implemented. The language was removed in the chairman’s mark of the bill, and thus the Congress would now have an opportunity to debate and craft legislation on the recommendations.
The AAA along with the International Association of Fire Chiefs (IAFC), International Association of Firefighters (IAFF) and National Association of EMTs (NAEMT) had advocated against the ground ambulance provision. We thank Chairman Scott, Ranking Member Foxx and members of the Committee for listening to our concerns and removing the regulation authority language.
Only one of the four pieces of legislation on balance billing reported out by congressional committees includes a provision on ground ambulance services. We will continue to advocate to preserve the ability of local governments to determine the rates and standards for their EMS systems and against the inclusion of a ground ambulance provision in a final package on balance billing.
We will keep you apprised of new developments on the issue.
Balance Billing Update
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CMS Posts 2020 Public Use File
On December 2, 2019, CMS posted the 2020 Ambulance Fee Schedule Public Use Files. These files contain the amounts that will be allowed by Medicare in calendar year 2020 for the various levels of ambulance service and mileage. These allowables reflect a 0.9% inflation adjustment over the 2018 rates.
The 2020 Ambulance Fee Schedule Public Use File can be downloaded from the CMS website by clicking here.
Unfortunately, CMS has elected in recent years to release its Public Use Files without state and payment locality headings. As a result, in order to look up the rates in your service area, you would need to know the CMS contract number assigned to your state. This is not something the typical ambulance service would necessarily have on hand. For this reason, the AAA has created a reformatted version of the CMS Medicare Ambulance Fee Schedule, which includes the state and payment locality headings. AAA members can access this reformatted fee schedule at the link below.
Cost Data Collection: So You’ve Been Selected—Now What?
It’s finally here! For almost a decade the American Ambulance Association has been preparing for this moment: collecting cost data in order to justify the reimbursement inadequacies of our current payment system. As Benjamin Franklin stated, “By failing to prepare, you are preparing to fail.” So prepare we did!
Our research indicated that due to industry capacity, a provider sample and survey approach would be preferable to a mandatory cost reporting structure. Congress agreed! Our research indicated that different organizational structures made us unique healthcare providers and as such, EMS’s special nature should be considered in the collection tool developed. Congress agreed! No one knows our industry better than we do and the final rule from the Centers for Medicare and Medicaid Services indicates they listened!
So your ambulance service was selected for the 2020 reporting period—now what? Here is your 10 STEP PLAN.
STEP 1: Sign up for the latest information on ambulance cost data collection.
Subscribe to email updates from the American Ambulance Association’s Ambulance Cost Education page, www.ambulancereports.org. Not only will we make sure you get the latest information disclosed from the Centers for Medicare & Medicaid Services, but we will also provide you with quick tutorials on how to fill out the cost data collection instrument. Most importantly, you can purchase AMBER! This software provides an easy, quick solution for you to input your data, with built-in tutorials to walk you through the data collection process.
STEP 2: Know what is included in your National Provider Identification (NPI) number.
It is important that you review the information in the Provider Enrollment, Chain, and Ownership System (PECOS) which supports the Medicare Provider and Supplier enrollment process. You will want to make sure the information that you provide in the cost data collection tool, at a minimum, matches what is in this system or on your CMS 855B Medicare enrollment application. Pay close attention to the following:
- Practice location(s)
- Vehicle Information
- Ownership
STEP 3: “Tele” a Friend!
More than 2,600 ambulance suppliers and providers were selected for the 2020 reporting period (Zip file download of services selected for 2020). Please reach out to your colleagues. Now is not the time to let competition or friendly rivalries stop us from communicating best practices. Call your fellow mobile healthcare providers!
STEP 4: Know your accounting “status.”
How you recognize cost and revenue will be extremely important in determining how you report. Cash accounting recognizes revenue and expenses only when money actually exchanges hands. Accrual accounting recognizes revenue and expenses when billed, not when money exchanges hands. This status will be key in determining how you report costs and revenues.
STEP 5: Know your mileage.
For every ambulance and non-ambulance vehicle that you use related to patient care, you will need to know the odometer readings at the beginning and end of 2020. Make sure you have a system to record the odometer readings accurately.
For example, you have a 2016 ambulance where the odometer reading on 1/1/2020 is 10,212. If on 12/31/2020 the odometer reading is 74,112, you will have the option of recording the full mileage of 63,900 in the data collection tool. This is another window into the “cost of readiness.”
STEP 6: Set up and Identify payer categories.
As identified by the Medicare Ground Ambulance Data Collection System (PDF download), there are nine payer type categories for billing ambulance transportation. Know these categories and set them up in your system now, prior to billing for ambulance transports in 2020. If you use a billing agency, seek confirmation that they have a way to identify these nine payer types. You may not have select reports to identify the numbers yet within these categories but that can be set up later in the reporting year.
Setting up your system NOW to identify these payer categories is critical as it will be too administratively burdensome to fix this retroactively.
STEP 7: Know if you share support services or stand alone.
Support services are services such as maintenance, dispatch, billing, materials management, human resources and other services that support patient care. You will need to know if you share these services with other entities such as fire, police, air ambulance, hospital or other entity not related to ground ambulance care.
If you share, then you will have to work out an allocation model to assign the costs and revenue appropriately. If you do not share support services, then you do not need to work about any of the questions related to allocation.
STEP 8: Identify sources of revenue and cost categories.
Check your systems. Now is the time to make sure you can identify all sources of revenue you receive whether from billing for an ambulance transport or from a grant or local tax. Understand your costs, especially those related to salary, vehicles, facilities and medical supplies. That is the first step in the ability to categorize appropriately.
STEP 9: Don’t panic!
Take a deep breath—It is not as complicated as it may seem. There are resources available and assistance for you and your ambulance services as outlined in STEP 1.
STEP 10: Repeat Step 1!
See, that wasn’t too bad, was it? Now you have a 10 Step Plan!
In all seriousness, while it may seem a bit daunting at first, breaking down the cost data collection process into small steps will ensure that our industry is prepared and the figures we enter into this cost data collection tool will glean useful information. It is imperative that we get this right the first time to avoid any unintended consequences, such as decreased reimbursements and other impactful changes that could harm the patients we serve.
As the saying goes, “the rising tide lifts all boats.” More than ever, we need to help and assist our colleagues as we navigate this new world of ambulance reimbursement.
So, what’s next? Cost data collection, my friend! Jump on board.
CMS Cost Collection Call – December 5th
The Centers for Medicare and Medicaid Services has scheduled a call for Thursday, December 5 from 1:30-3:00 PM Eastern to review the new Ambulance Cost Data Collection System. If you plan to attend, register here.
CMS Ambulance Cost Data Collection
2018 National and State-Specific Medicare Data
The American Ambulance Association is pleased to announce the publication of its 2018 Medicare Payment Data Report. This report is based on the “Early Edition” of the 2018 Part B National Summary Data File (previously known as the Bess Report). The report consists of an overview of total Medicare spending nationwide, and then a separate breakdown of Medicare spending in each of the 50 states, the District of Columbia, and the various other U.S. Territories.
For each jurisdiction, the report contains two charts: the first reflects data for all ambulance services, with the second limited to dialysis transports. Each chart is further broken down by HCPCS code. The charts provide information on the total number of allows services and the total Medicare payments for CYs 2017 and 2018. Percentage changes will allow members to view payment trends over the past year.
2018 National & State-Specific Medicare Data
Questions? Contact Brian Werfel at bwerfel@aol.com.
CMS Announces 2020 Ambulance Inflation Factor
On October 4, 2019, CMS issued Transmittal 4407 (Change Request 11497), which announced the Medicare Ambulance Inflation Factor (AIF) for calendar year 2020.
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. Starting in calendar year 2011, the change in the CPI-U is now 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 MFP reduction may result in a negative AIF for any calendar year. The resulting AIF is then added to the conversion factor used to calculate Medicare payments under the Ambulance Fee Schedule.
For the 12-month period ending in June 2018, the federal Bureau of Labor Statistics (BLS) has calculated that the CPI-U has increased 1.6%. CMS further indicated that the CY 2020 MFP will be 0.7%. Accordingly, CMS indicated that the Ambulance Inflation Factor for calendar year 2019 will be 0.9%.
CMS Announces Comment Period for National Expansion of Prior Authorization Process
On October 29, 2019, the Centers for Medicare and Medicaid Services (CMS) posted a notice in the Federal Register announcing an opportunity for the public to provide comments on the proposed national expansion of the prior authorization process for repetitive, scheduled non-emergent ground ambulance transportation. CMS refers to this process as its “RSNAT Prior Authorization Model.” The CMS Notice can be viewed in its entirety at: https://www.govinfo.gov/content/pkg/FR-2019-10-29/pdf/2019-23584.pdf.
Under the Paperwork Reduction Act of 1995, federal agencies are required to publish a notice in the Federal Register concerning each proposed collection of information, and to allow 60 days for the public to comment on the proposed action. Interested parties are encouraged to provide comments regarding the agency’s burden estimates and other aspects of the proposed collection of information, including the necessity and utility of the proposed information for the proper performance of the agency’s functions, and ways in which the collection of such information can be enhanced.
In this instance, CMS is indicating that it is pursuing approval to potentially expand the existing RSNAT Prior Authorization Model nationwide. Currently, the RSNAT Prior Authorization Model is in place in 8 states (DE, MD, NJ, NC, PA, SC, VA, and WV) and the District of Columbia. National expansion is contingent upon CMS’ determination that certain expansion criteria have been met. CMS is indicating that if the decision is made to expand the program, such expansion may occur in multiple phases. CMS intends to use the information collected pursuant to this notice to determine the proper payment for repetitive scheduled non-emergent ambulance transportation.
In plain English, CMS is soliciting comments from stakeholders as to the efficacy of the current process, including whether the existing paperwork requirements are sufficient to ensure that approved patients meet the medical necessity requirements for an ambulance. CMS is also seeking suggestions for how to best expand the program nationally, e.g., whether it makes sense to expand the program in phases, etc.
The AAA Medicare Regulatory Committee has been monitoring the current model for several years. As a result, the AAA is in a good position to provide constructive feedback to CMS regarding the potential national expansion of the RSNAT Prior Authorization Model. These suggestions will be included in the AAA’s comment letter. The AAA also encourages members to offer their own comments. The AAA anticipates providing members with a sample comment letter in early December that members can use to submit their own comments.
To be considered, comments must be submitted no later than 5 p.m. on December 30, 2019. Comments may be submitted electronically by going to: http://www.regulations.gov. Commenters would then need to click the link for “Comment or Submission,” and follow the instructions from there. Comments may also be submitted by regular mail to the following address: CMS, Office of Strategic Operations and Regulatory Affairs, Division of Regulations Development, Attention: Document Identifier: CMS-10708, Room C4-26-05, 7500 Security Boulevard, Baltimore, Maryland 21244-1850.
HHS OIG Issues Proposed AKS Safe Harbor Rule
On Thursday, October 17, 2019, the HHS Office of the Inspector General (OIG) issued a proposed rule titled “Medicare and State Health Care Programs: Fraud and Abuse; Revisions to Safe Harbors Under the Anti-Kickback Statute, and Civil Monetary Penalties Regarding Beneficiary Inducements.” The proposed rule would amend the existing safe harbors to the Federal Anti-Kickback Statute (AKS) and the civil monetary penalty rules (CMPs). These changes are part of HHS’ Regulatory Sprint to Coordinated Care. The stated purpose of these changes is to reduce the regulatory barriers and accelerate the transformation of the healthcare system away from the traditional fee-for-service payment model, and towards a value-based system that rewards healthcare providers for better outcomes. The proposed rule can be viewed in its entirety at: https://www.govinfo.gov/content/pkg/FR-2019-10-17/pdf/2019-22027.pdf.
The proposed rule makes nearly a dozen major changes to the safe harbors under the AKS and the rules related to CMPs. Among these are revisions to the recently created safe harbor for local transportation. The proposed change to the safe harbor for free or discounted local transportation is discussed in greater detail below.
The OIG is soliciting comments on a wide range of topics raised in the proposed rule. The AAA is not taking any formal position with respect to the proposed changes or the requests for additional information set forth in this proposed rule. However, we encourage any member that wishes to comment to do so.
To be considered, comments must be submitted no later than 5 p.m. on December 31, 2019. Comments may be submitted electronically by going to: http://www.regulations.gov. Commenters would then need to click the link for “Submit a comment” and follow the instructions from there. Comments may also be submitted by courier or by regular, express, or overnight mail to the following address: Office of Inspector General, Department of Health and Human Services, Attention: OIG-0936-AA10-P, Room 5521, Cohen Building, 330 Independence Avenue SW, Washington, DC 20201.
Revisions to Safe Harbor for Free or Local Transportation
In 2014, the OIG created a new safe harbor for free or discounted local transportation provided to Federal health care program beneficiaries. This safe harbor applied to non-ambulance transportation (e.g., wheelchair van, bus and shuttle services, taxis, etc.) provided under the following conditions:
- The free or discounted transportation was provided by an “Eligible Entity.” For these purposes, an “Eligible Entity” is any individual or entity, other than individuals or entities (or family members or others acting on their behalf) that primarily supply health care items;
- The free or discounted transportation was provided pursuant to an existing policy of the Eligible Entity, and which is applied in a uniform and consistent manner;
- The transportation services are not air, luxury, or ambulance transportation;
- The Eligible Entity does not publicly market or advertise the free or discounted local transportation services, and no cross-marketing of other health care services occurs during the course of transportation, or at any time by the drivers providing such transportation. In addition, the drivers and anyone arranging the transportation cannot be paid on a per-beneficiary-transported basis;
- The transportation services are limited only to “established patients” of the Eligible Entity; and
- The transportation is limited to 25 miles in urban areas, or 50 miles in rural areas.
The safe harbor also permitted the use of “shuttle services” (i.e., a vehicle that runs on a set route, on a set schedule) if the following conditions are met:
- The shuttle service is not air, luxury, or ambulance-level transportation;
- The shuttle service is not marketed or advertised, and no cross-marketing occurs during the transportation, or at any time by the driver providing such transportation. In addition, the driver and anyone else arranging the transportation cannot be paid on a per-beneficiary-transported basis;
- The shuttle services has no stop that is more than 25 miles from any stop on the route where health care items or services are provided, except that this mileage restriction is expanded to 50 miles in rural areas.
In either situation, the safe harbor also requires the Eligible Entity to bear all costs of furnishing such transportation, i.e., they cannot shift that cost onto any Federal health care program, any other payer, or the individual.
In the current proposed rule, the OIG indicated that it received numerous comments from stakeholders that suggested that the 50-mile limit for residents of rural areas was insufficient, as many rural residents might need to routinely travel more than 50 miles to obtain certain medical services. As a result, the OIG is proposing to expand this limit to 75 miles.
The OIG is also soliciting comments on whether the proposed 75-mile is sufficient, or whether an even larger expansion is warranted. To the extent you intend to submit comments arguing for a greater mileage limit, the OIG is asking that you submit data or other evidence to support a more appropriate mileage limitation for the safe harbor. The OIG is also specifically requesting information on how an Eligible Entity would provide transportation over distances in excess of 50 miles (e.g., shuttle services, bus or taxi fare, ride-sharing programs, mileage reimbursement programs, etc.).
Expansion of Safe Harbor for Transportation of Patients Being Discharged After an Inpatient Stay
The OIG is also proposing to eliminate any mileage restriction on transportation of patients back to their residence after being discharged from a facility where that patient had been admitted as an inpatient, regardless of whether the patient resides in an urban or rural area. The OIG is also proposing to eliminate the mileage restrictions on discharges to another residence of the patient’s choice (such as a friend or relative who will care for the patient post-discharge).
The OIG further indicated that it is considering protecting transportation to other locations of the patient’s choice, including another health care facility. The OIG is soliciting comments on the potential fraud and abuse risks associated with permitting free or discounted transportation to other health care facilities, and whether transportation should be protected (and, if so, under what circumstances) when the patient has not previously been admitted to an inpatient facility (e.g., where the patient had been seen as an outpatient in a hospital emergency department). Finally, the OIG is soliciting comments on whether the transportation of patients being discharged beyond the applicable safe harbor mileage limitations should be limited to patients with demonstrated financial or transportation needs, and, if so, what standards should apply to such demonstration of need.
Possible Expansion to Include Transportation to Non-Medical Services
In the 2014 final rule creating the new safe harbor for local transportation, the OIG declined to extend the safe harbor protections to transportation for purposes other than obtaining medically necessary services or items (although they permitted a qualifying shuttle service to make stops at locations that do not relate to a particular patient’s medical needs). The OIG has since received numerous comments suggesting that the safe harbor should protect transportation for non-medical purposes that may nevertheless improve or maintain health, e.g., transportation to food banks, social services, exercise facilities, support groups, etc. The OIG indicated that it considering a further expansion of the safe harbor to include such non-medical needs, and is therefore seeking comments on how the safe harbor could be expanded to such needs without creating an unacceptable risk of fraud and abuse.
Clarification of Policy Regarding the Use of Ride-Sharing Services
Finally, the OIG is clarifying its interpretation of the applicability of the existing safe harbor to the use of ride-sharing services. In the preamble to the 2014 final rule, the OIG discussed the possibility that patient transportation might be provided via taxi. In the proposed rule, the OIG indicates that, while it did not explicitly reference ride-sharing services, it views these services are being similar to taxi services for the purposes of the safe harbor. Specifically, the OIG noted that nothing in the language of the safe harbor expressly precludes their use (or the use of self-driving cars or other similar technology that may become available at some point in the future). The OIG is inviting anyone that disagrees with this approach to explain the possible basis for exclusion of ride-sharing services.
The OIG did reiterate that the prohibition of the marketing of such free or discounted transportation would still apply. The OIG indicated that it would be permissible for ride-sharing services to advertise that they provide transportation to medical appointments, and to recommend that patients contact their medical providers to determine if they qualified for free or discounted transportation. By contrast, the OIG indicated that it would not be appropriate for the ride-sharing service to advertise that it provided free or discounted transportation to particular health care providers.
Other Changes in the Proposed Rule
In addition to the revisions to the existing safe harbor for free or discounted transportation, the OIG is proposing:
- The creation of three new safe harbors for participants in value-based arrangements that promote better coordinated and managed patient care. These include: (i) a safe harbor for Care Coordination Arrangements to Improve Quality, Health Outcomes, and Efficiency, (ii) Value-Based Arrangements with Substantial Downside Financial Risk, and (iii) Value-Based Arrangements with Full Financial Risk.
- The creation of a new safe harbor for certain tools and support furnished to patients to improve quality, health outcomes, and efficiency.
- The creation of a new safe harbor for remuneration provided in connection with CMS-sponsored models. The purpose of this new safe harbor is to eliminate the need for the OIG and CMS to issue model-specific waivers.
- The creation of a new safe harbor for donations of cybersecurity technology and services.
- Proposed modifications to the existing safe harbor for electronic health records items and services.
- Proposed modifications to the existing safe harbor for personal services and management contractors, in order to add flexibility with respect to outcomes-based payments and part-time arrangements.
- Proposed modifications to the existing safe harbor for warranties, to better address bundled warranties covering multiple health care items or services.
- The codification of the existing statutory exception for ACO Beneficiary Incentive Programs under the Medicare Shared Savings Program.
- A proposed amendment to the definition of “remuneration” under the CMP rules for certain telehealth technologies furnished to in-home dialysis patients.
CMS Announces Extension of Prior Authorization Program
On September 16, 2019, CMS published a notice in the Federal Register that it would be extending the prior authorization demonstration project for another year. The extension is limited to those states where prior authorization was in effect for calendar year 2019. The affected states are Delaware, Maryland, New Jersey, North Carolina, Pennsylvania, South Carolina, Virginia and West Virginia, as well as the District of Columbia. The extension will run through December 1, 2020.
In its notice, CMS indicated that the prior authorization demonstration project is being extended “while we continue to work towards nationwide expansion.” This strongly suggests that CMS believes the program has met the statutory requirements for nationwide expansion under the Medicare Access and CHIP Reauthorization Act of 2015. However, CMS indicated that it would use the additional year to continue to test whether prior authorization helps reduce expenditures, while maintaining or improving the quality of care offered to Medicare beneficiaries.
CMS has also updated its CMS Ambulance Prior Authorization webpage to reflect the expansion of prior authorization in the existing states through December 1, 2020.
Preliminary Calculation of 2020 Ambulance Inflation Update
Section 1834(l)(3)(B) of the Social Security Act mandates that the Medicare Ambulance Fee Schedule be updated each year to reflect inflation. This update is referred to as the “Ambulance Inflation Factor” or “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. Starting in calendar year 2011, the change in the CPI-U is now 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 MFP reduction may result in a negative AIF for any calendar year. The resulting AIF is then added to the conversion factor used to calculate Medicare payments under the Ambulance Fee Schedule.
For the 12-month period ending in June 2019, the federal Bureau of Labor Statistics (BLS) has calculated that the CPI-U has increased by 1.65%.
CMS has yet to release its estimate for the MFP in calendar year 2020. However, assuming CMS’ projections for the MFP are similar to last year’s projections, the number is likely to be in the 0.6% range.
Accordingly, the AAA is currently projecting that the 2020 Ambulance Inflation Factor will be approximately 1.1%.
Cautionary Note Regarding these Estimates
Members should be advised that the BLS’ calculations of the CPI-U are preliminary, and may be subject to later adjustment. The AAA further cautions members that CMS has not officially announced the MFP for CY 2020. Therefore, it is possible that these numbers may change. The AAA will notify members once CMS issues a transmittal setting forth the official 2020 Ambulance Inflation Factor.