In a new Medicare Learning Network article, the Center for Medicare & Medicaid Services has announced that the Ambulance Inflation Factor (AIF) for2013 will be 0.8%. The AIF is designed to provide a basis for CMS Medicare Administrative Contractors (MAC) and Fiscal Intermediaries (FI) to adjust payment limits.
The Affordable Care Act has made changes to the way the AIF is calculated. Specifically, instead of just considering the rate of inflation, as designated by the Urban Consumer Price Index (CPI-U), the AIF also takes into account general increases in “productivity.” Specifically, the AIF used to be tied directly to the CPI-U, but now is REDUCED by a productivity factor tied to non-farm business productivity (MFP). The calculation is thus:
CPI-U (1.7%) – MFP (0.9%) = AIF of 0.8%
What does this mean? Likely that your costs are going up that much more than your level of reimbursement. And if it is not clear, if the MFP is greater than the CPI-U, your reimbursement would go down in real dollars, not just down relative to inflation!