The Centers for Medicare and Medicaid Services (“CMS”) has sent to the Federal Register its notice of the annual update to the Ambulance Fee Schedule conversion factor (“CF”), which will be published on or before November 15, 2004.  The update will take effect on January 1, 2005.

In addition to implementing the statutorily required inflation adjustment factor, which will be 3.3 percent for 2005, the notice informs the public that CMS has performed an annual review of the CF, as it promised to do when the Fee Schedule regulation was published in February of 2002.  The AAA had insisted that CMS perform such an analysis because of our concern that the CF was originally set too low.

Using the latest period for which actual data is available under the fee schedule (April – December of 2002), CMS analyzed whether actual experience under the fee schedule differed from the assumptions used to set the original CF.  To accomplish this analysis, CMS counted the number of actual trips at each service level during that period and determined the percentage utilization of each service level of the total number of trips.  These percentages were compared to the percentages used to set the original CF as a means of evaluating the accuracy of those original assumptions.  CMS also examined the degree to which ambulance charges were less than the fee schedule amounts to check their assumptions regarding “low billers.”  They then calculated a CF based on this actual data and determined it to be 0.8 percent lower than the CF that was actually used.  CMS performed a similar analysis of air ambulance rates and determined that rates based on the actual data from 2002 would have been 2.8 percent lower than the original air rates.  Because CMS determined that these differences were not significant, they have decided to make no adjustment to the original CF.

Pasted below is the link to the CMS Website page that contains the notice.