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Ambulance Inflation Factor

October 14, 2019

Recently, the Centers for Medicare and Medicaid Services (CMS) announced the ambulance inflation factor (AIF) for payments under the Medicare ambulance fee schedule for 2020 is 0.9%.

Section 1834(I)(3)(B) of the Social Security Act (SSA) provides the basis for updates to payment limits for ambulance services, which is 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.

Section 3401 of the Affordable Care Act later amended the SSA to require that a productivity adjustment be applied to any update of the Prospective Payment System and Fee Schedule. This adjustment factor is equal to the 10-year moving average of changes in annual economy-wide private nonfarm business multi-factor productivity (MFP).

The MFP for 2020 is 0.7%, and the Consumer Price Index-Urban (CPI-U) for 2020 is 1.6%. Pursuant to ACA instructions, the CPI-U is reduced by the MFP, even if this reduction results in a negative AIF.

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