Wednesday, October 12, 2011

Ambulance Inflation Factor to increase by 2.4% in 2012- Part I

Determining the adjustment…
The Centers for Medicare & Medicaid Services (CMS) has announced that the Ambulance Inflation Factor (AIF) for 2012 will be set at +2.4% beginning on January 1, 2012.

The AIF is arrived at by combining two economic indicators.  The Medicare ambulance fee schedule is annually adjusted by changes in economy-wide productivity.  Federal law defines the productivity adjustment to be equal to the 10-year moving average of changes in annual economy-wide private nonfarm business multi-factor productivity (MFP).

The MFP for calendar year 2012 is 1.2 percent.

The MFP is then combined with the urban consumer price index (CPI-U), for the 12-month period ending with June of the prior year.  This year the CPI-U is 3.6 percent.

According to the Affordable Care Act, passed last year, the CPI-U is reduced by the MFP and the result is a 2.4% increase (CPI-U – MFP = AIF or 3.6 – 1.2 = 2.4).

Feel free to check out our detailed explanation of these calculations by checking out the November 30, 2010 post on the same subject. [Edit: corrected the link to the previous blog post.]

This would signal a Medicare increase, but…
Normally a positive increase in the AIF would signal that ambulance service providers and suppliers would be looking forward to a 2.4% increase in the Medicare Fee Schedule approval amounts beginning in 2012.

However, since there has been no signal from Congress as to whether or not they will extend the Medicare Ambulance Bonus Payments beyond December 31, 2011, the end result could be that ambulance providers and suppliers will actually see another decrease in the New Year.


Stay tuned…
We’ll give you time to digest all of the formulas and calculations.  Watch this Blog for Part II where we’ll explain in detail the potential affect all this will have on your Medicare Ambulance reimbursement dollars.

In the meantime, if you have a comment or a question send it out to us.  If your billing contractor isn’t keeping you posted on these matters, we’d like to hear from you too.
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