Author: Kyrstyn Paulat
On October 14, 2022, Centers for Medicare and Medicaid Services (CMS) issued Transmittal 11642 (Change Request 12948), which announced the Medicare Ambulance Inflation Factor (AIF) for the calendar year 2023. 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 in June of the previous year. Once that is calculated, the CPI-U is reduced by the “productivity adjustment”, which is equal to the 10-year moving average of changes in the economy-wide private non-farm business multi-factor productivity index (MFP). These two factors combined (CPI-U – MFP) create the AIF, which is then added to the conversion factor used to calculate Medicare payments under the Ambulance Fee Schedule.
What does that mean for this year?
The Federal Bureau of Labor Statistics (BLS) has calculated that the CPI-U increased by 9.1%. CMS further indicated that the MFP would be 0.4%. Accordingly, CMS indicated that the AIF will be 8.7% effective January 1, 2023! This is the highest the AIF has been in history since the implementation of the current Medicare Ambulance Fee Schedule. This increased rate will equal more paid dollars for the services provided.
How is this increase combating inflation?
We all have felt, personally and professionally, the record inflation in our economy over the last few years. CMS and others have realized the need for an increase as this boost is again the largest inflation update. This is also shown with what was experienced with the increase from last year’s to 5.1%. As the increase results in more revenue for emergency medical services (EMS) agencies now, this does not counteract the loss of income while still providing services during this high inflation period. For example, all EMS agencies have endured the cost of equipment and supplies increasing by over 10% in just the last three years (and that’s not including the need for an increase in personnel salaries and benefits!).
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