2022 Ambulance Inflation Factor

Ambulance
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The Centers for Medicare and Medicaid Services (CMS) recently announced the Ambulance Inflation Factor (AIF) for 2022 is 5.1%.

The AIF is updated each year and is calculated by measuring the increase in the consumer price index for urban consumers (CPI-U) for the 12-month period ending with June of the previous year.

This figure is then reduced by a productivity adjustment, which is itself based on the change in the 10-year moving average of the multi-factor productivity index (MFP).  Depending on the year, the MFP reduction may result in a negative AIF.

For the 12-month period ending June 2021, the CPI-U increased by 5.4%.  Meanwhile, the calendar year MFP will be 0.3%.  When we subtract the MFP from the CPI-U, we arrive at the AIF.  This value is then added to the conversion factor used to calculate Medicare payments under the Ambulance Fee Schedule.

Of course, it is important to remember that the current suspension of sequestration (a 2% reduction applied to the 80% allowed charge) is due to expire at the end of the year.  Sequestration came into effect in 2013, but the current suspension was prompted by the financial hardship created by the pandemic.

Unless Congress extends the suspension, sequestration will return, thus eating into the 5.1% gain promised by the AIF.

What Your Agency Needs to Prepare for Medicare Ground Ambulance Data Collection

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What is Medicare Ground Ambulance Data Collection?

The ground ambulance cost data collection system requires you to collect and report cost, revenue, utilization, and other information. Beginning in 2022, every ground ambulance service will be required to participate. Failure to comply will result in a 10% reduction to Medicare payments for a calendar year following the date which the Centers for Medicare and Medicaid Services (CMS) determines your agency failed to report.

A list of ground ambulance providers and suppliers selected to submit data in Year 1 and 2 are available here.

The Basics of the Program

  1. CMS will send notification via mail/email to the correspondence address listed in your PECOS record and associated with your National Provider Identifier (NPI), addressed to the Authorized Official on file.
  2. You have 30 days to respond, indicating if you will collect data according to calendar year or fiscal year. Failure to respond automatically enrolls you in the calendar year
  3. Once the collection period begins, you will need to track the data points relevant to your agency, in a way that enables you to then report those data points in the manner dictated by CMS.
  4. Once your collection year is complete, a period will start in which your agency will have up to 5-months to report. To do this, CMS will provide an online survey-type tool.
  5. If an agency fails to report within the 5-month reporting period, or if the data provided is deemed insufficient, CMS will take no longer than 3 months after the close of the reporting period to decide if the 10% penalty is warranted. This penalty would be assessed on Medicare payments for dates of service (DOS) in the calendar year that follows the decision to impose the penalty.

What Information is Needed?

To report data correctly, the data must be tracked according to the definitions and rules laid out by CMS.  This means assessing your current accounting and data management practices to ensure you are able to track the data as required.

Data required includes:

  • Organizational Characteristics
  • Service Area
  • Emergency Response Time
  • Ground Ambulance Service Volume
  • Service Mix
  • Labor Costs
  • Facilities Costs
  • Vehicle Costs
  • Equipment, Consumables & Supplies
  • Other Costs
  • Total Cost
  • Revenues

CMS will provide an online survey-type tool called the data collection instrument for the actual reporting component of the program.  Importantly, the instrument uses skip logic, which means the selections you make in the early part of the survey dictate what questions you will see later in the process.  In other words, not every data element will apply to your agency.  With this in mind, we recommend you apply the following questions as you review what is required of your agency:

  • Does this data element apply to my agency?
  • If so, is it currently being tracked?
  • If yes, am I tracking it in a way that conforms to the program?
  • If not, what do I need to do to track it in the required way?

Likewise, there are agencies that are part of a parent organization that uses multiple NPIs to bill Medicare for ground ambulance services.  In such cases, those agencies would need to track and allocate the portion of costs and revenues incurred at the level of the parent organization based on their existing organizational approach for allocating costs to specific NPIs.

For more information on preparing for the Medicare Ground Ambulance Data Collection System check out available resources provided by CMS. For our client partners, we have a user guide and instructional videos available in our secure client portal, CornerSource.

Be Prepared

As your billing partner, we will work with you to make sure you have the needed information as it relates to billing and billing generated revenue when the time comes to report. We strongly encourage our partners to visit the Medicare Ground Ambulance Data Collection System website to familiarize yourself with the tools available to assist in reporting and data collection.

Cornerstone Adminisystems is an employee-owned provider of billing, compliance, and revenue cycle management services to the EMS and medical transport community. Contact us for help improving your revenue cycle.