« Back to

AAA Estimates 2014 Ambulance Inflation Factor

August 23, 2013
AAA Member Advisory
TO: AAA Membership
FROM: David M. Werfel, Esq.
RE: AAA Estimates 2014 Ambulance Inflation Factor

Each year, the Medicare Ambulance Fee Schedule is updated to reflect inflation. The inflation adjustment factor is called the “Ambulance Inflation Factor” or “AIF”. The AIF was historically calculated based on the increase to the Consumer Price Index – All Urban Consumers (CPI-U) over the twelve month period ending on June 30 of the prior year. The Bureau of Labor Statistics recently released its calculation of the increase in the CPI-U for the month of June 2013. Based on that number, the AAA has calculated that the increase in the CPI-U over the 12 month period ended on June 30, 2012 was 1.8%.
 
Section 3401 of the Affordable Care Act mandated that the AIF be reduced by the change in the 10-year moving average of the private nonfarm business multi-factor productivity index (MFP) for calendar years 2011 and beyond.  Based on available information, the AAA is estimating that the MFP for 2014 will be 0.4%.   
 
Accordingly, the AAA is estimating that the AIF for 2013 will be approximately 1.4%.  Assuming no changes, the AIF will be added to the conversion factor used to calculate 2014 rates for the various levels of ambulance service under the Medicare Ambulance Fee Schedule.
 
Please note that this is only the AAA’s projection of the AIF, based on the information available to us at this time. It is possible that the Bureau of Labor Statistics may subsequently revise these indexes, which could change the final AIF. CMS is expected to publish the final AIF in September.
 
In addition to the AIF, there are a number of other scheduled changes that will affect Medicare reimbursement for ambulance services in 2014. This includes:

  1. The expiration of the temporary adjustments for ground ambulance transport (urban – 2%, rural – 3%, super-rural – 22.6%). These adjustments were extended through the end of 2013 as part of the American Taxpayer Relief Act of 2012. Further legislation is required to extend these adjustments into 2014.
  2. The expiration of the temporary adjustment for air ambulance transports provided in newly classified urban areas. This adjustment continues to treat the point of pickup as “rural” to the extent it was considered rural on December 31, 2006. This adjustment was extended through the end of 2013 as part of the American Taxpayer Relief Act of 2012. Further legislation is required to extend these adjustments into 2014.
  3. Medicare payments will continue to be subject to a 2% “sequestration”, as required by the Budget Control Act of 2011. Further legislation would be required to avoid sequestration in 2014.
  4. Payments for non-emergency BLS transports to and from dialysis will be subject to a permanent 10% reduction in Medicare’s payment, effective for transports on or after October 1, 2013. This reduction is the result of Section 637 of the American Taxpayer Relief Act of 2012.

Guaranteed cash flow during transition.