CMS Announces 2019 Ambulance Inflation Factor

On November 30, 2018, CMS issued Transmittal 4172 (Change Request 11031), which announced the Medicare Ambulance Inflation Factor (AIF) for calendar year 2019. 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 2.9%. CMS further indicated that the CY 2019 MFP will be 0.6%. Accordingly, CMS indicated that the Ambulance Inflation Factor for calendar year 2019 will be 2.3%....

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Preliminary Calculation of 2019 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 2018, the federal Bureau of Labor Statistics (BLS) has calculated that the CPI-U has increased by 2.87%. CMS has yet to release its estimate for the MFP in calendar year 2019. However, assuming CMS’ projections for the MFP are similar to last year’s projections, the number is likely to be in the 0.5% range. Accordingly, the AAA is currently projecting (more…)

Summary of December 2017 Ambulance Open Door Forum

On December 14, 2017, CMS held its latest Open Door Forum. As usual, it started with a few announcements, as follows: Ambulance Inflation Factor – CMS announced that it had published Transmittal 3893 on October 27, 2017, which sets forth the Ambulance Inflation Factor (AIF) for calendar year 2018. In that Transmittal, CMS indicated that the CY 2018 AIF would be 1.1%. This is based on an increase in the CPI-U of 1.6%, and a multi-factor productivity adjustment of 0.5%. Expiration of Temporary Adjustments – CMS indicated that the current temporary adjustments for urban (2%), rural (3%) and super rural ground ambulance transports are set to expire on December 31, 2017. CMS also indicated that they were aware of proposed legislation that would extend these adjustments for 2018 and beyond, but that they have yet to be enacted into law. CY 2018 Public Use File – CMS indicated that the Public Use File on its website has been updated to include Medicare allowables for 2018. CMS made a point of noting that the 2018 rates do not include the temporary adjustments, as they are set to expire on December 31, 2017. Prior Authorization Demonstration Project – CMS indicated that it...

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CMS Announces Ambulance Inflation Update for 2018

CMS Announces Ambulance Inflation Update for 2018 On October 27, 2017, CMS issued Transmittal 3893 (Change Request 10323), which announced the Medicare Ambulance Inflation Factor (AIF) for calendar year 2018. 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 2017, the federal Bureau of Labor Statistics (BLS) has calculated that the CPI-U has increased 1.6%. In Transmittal 3893, CMS indicated the CY 2018 MFP will be 0.5%. Accordingly, CMS indicated that the Ambulance Inflation Factor for calendar year 2018 will be 1.1%. Transmittal 3893 can be downloaded from the CMS website....

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Preliminary Estimate of 2018 Medicare Rates

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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CMS Announces 2017 Inflation Factor

The Centers for Medicare and Medicare Services (CMS) issued Transmittal 3625 officially announcing that the inflation factor for payments under the Medicare ambulance fee schedule for 2017 will be 0.7%. The calculation for determining the Medicare ambulance inflation factor is as follows: Consumer Price Index – Urban (which is the change in the CPI-U from June to June) minus the non-farm business multi-factor productivity adjustment (MFP) as projected by the Secretary of HHS (10-year average). The CPI-Urban for 2017 is 1.0% with a MFP of 0.3% which equals the 0.7% inflation factor. As part of the Affordable Care Act, a productivity adjustment is subtracted from the CPI-Urban for the final inflation update....

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2016 AIF: A Step Backward

By Brian S. Werfel, AAA Medicare Consultant | Updated November 25, 2015 Each year, the Centers for Medicare and Medicaid Services (CMS) determine the following year’s Ambulance Inflation Factor (AIF), a figure that has deep revenue implications for ambulance services of all sizes. CMS recently announced that the 2016 AIF will be a disappointing – 0.4%. In this inaugural edition of the Talking Medicare blog, I explore the ins and outs of the AIF, including the impact of the Multi-Factor Productivity Index on our industry’s Medicare payments. Background First, some background. The Affordable Care Act revised the formula by which CMS calculates the annual adjustment to Medicare’s reimbursement rates for ambulance services. Prior to 2011, Medicare’s payment for ambulance services increased each year by an amount equal to the percentage increase in the consumer price index for all urban consumers (CPI-U) for the 12-month period ending in June of the previous year (i.e., for 2016, the 12-month period ending on June 30, 2015). Starting in 2011, the CPI-U increase is reduced by the so-called Multi-Factor Productivity Index (MFP). What to Expect Next Year For 2016, the change in the CPI-U was equal to 0.1%. In a transmittal issued November 17,...

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Preliminary Calculation of 2016 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 2015, the federal Bureau of Labor Statistics (BLS) has calculated that the CPI-U has increased by 0.12%. CMS has yet to release its estimate for the MFP in calendar year 2016. 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...

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