For each of the various HCPCS codes, the Medicare Part B allowable charge for EMS Providers is generally based on the lowest of these four: Œthe actual charge, the Provider’s customary, Žthe area prevailing, and the inflation indexed charge (IIC), as d

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Appendix B - Medicare Reimbursement Rate Determination
Fee Screens

The intent of this section of your EMS Fast Cash instruction manual is to familiarize you with the general scheme of how your Medicare rates are determined rather than dote on specific technicalities.

Fee Screens
The Medicare "Allowed" amounts on EOMBs (sometimes called EOBs, etc.) are based on numbers in fee screens. Fee Screens may be called differently from state to state, Fee Schedule, e.g., but are tables of three columns of numbers with one row for each (HCPCS) charge code (see figures 1 and 2 below). There is a specific and possibly unique fee screen for each provider (figure 1), based partially on the provider’s charge history. The second fee screen is the state prevailing, and is based on what all providers in the state billed the past year.

Referring to figures 1 and 2, the Medicare "Allowed" amounts for a particular code is the lower of 5 numbers, Œ what is billed, provider customary, Ž prevailing 75th percentile, provider IIC, and prevailing IIC.

Code	Customary	Prevailing	IIC
A0010	115.00	165.00	90.35
A0020	4.00	4.00	1.83
A0070	30.00	40.00	14.28
A0150	115.00	165.00	90.06
A0215	30.00	35.00	25.75
A0220	300.00	295.00	165.38
A0221	5.00	5.00	2.12
A0222	115.00	165.00	90.35

Figure 1 -- Provider Fee Screen
How are fee screen numbers determined?

Code	50th%	75th%	IIC
A0010	150.00	165.00	116.41
A0020	3.00	4.00	2.33
A0070	35.00	40.00	25.68
A0150	150.00	165.00	116.41
A0215	25.00	35.00	21.75
A0220	275.00	295.00	221.18
A0221	4.50	5.00	2.33
A0222	150.00	165.00	93.13

Figure 2 -- State Prevailing Fee Screen

Provider Screen Customary -- What you charged most of the time between July 1, 1993 until June 30, 1994, and became your new customary on January 1, 1995. For this period of time, all of your A0010 (for example) charges for the entire period are arrayed with your lowest charge on top and your highest charge on the bottom. The middle of the stack contains the amount used as your customary charge. In other words, if you physically stacked (arrayed) each claim with A0010 charges, and pulled the middle sheet out of the stack, then the amount charged on that claim would be your customary ($115.00 per figure 1 above).

Provider Screen Prevailing -- (75th percentile) 75% of the state providers charged this amount or less between July 1, 1993 until June 30, 1994, and became effective on January 1, 1995; i.e. this number represents the high 25%. Similar to the provider screen customary, each charge for each code for all providers in the state are arrayed. Three fourths (75%) down into the array the charge becomes the Prevailing in the provider fee screen (figure 1) ane alos the 75^th percentile (75^th%) in the state prevailing fee screen (figure 2 above).

Provider Screen IIC – Nationwide, all IICs are adjusted upward once per year by a small percentage called the CPI-U Consumer Price Index - Urban. Your "Medicare Allowed" amounts on each HCPCS code on your EOMBs on October 1^st are adjusted up by this amount and this becomes effective the following January 1^st. Additionally, each January 1^st all state prevailing IICs are also increased by this same CPI-U. Previous CPI-U increases are as follows: Jan 1st 1994 -- 3%; Jan 1st 1995 -- 2.5%; Jan 1^st 1996 -- 3%; Jan 1^st 1997 -- 2.8%. This means that all IICs for 1995 were increased 2.5% by multiplying the 1994 values by 1.025. All IICs means all provider customary IICs as well as all state prevailing IICs. Thus, your "Medicare Allowed" maximum amount (beginning Jan 1st 1995) was increased by 2.5%, assuming your billed amounts and customaries are higher than your IICs, otherwise one of these may be your maximum. From this, it can be seen that if you ever developed a low IIC based on low billing, the best you can expect is a 2-3 percent each year. You may be in an "IIC CRACK" from which you will never emerge, no matter what you charge, since this will be the low limiting factor in your reimbursements, and will not change (except for a few percent each year) regardless of the amounts you bill. The only amounts that you can change are your customaries(what you charge), and these (usually) do not affect your reimbursements.

State Prevailing 50th Percentile -- Analogous to the provider customary, but related to what at least 50% of the providers billed most of the time between July 1, 1993 until June 30, 1994, and became effective on January 1, 1995

State Prevailing Screen 75th Percentile (also called Prevailing) -- same as Prevailing in the Provider screen.

State Prevailing Screen IIC -- Established some time ago, and updated each January first by the same percent, and similarly to the Customary IIC in each provider’s fee screen -- All IICs in all screens are updated each year according to the CPI-U that is related to the Consumer Price Index. This figure usually is the limiting factor for any provider.
Why New Providers are reimbursed more than old established providers

New providers do not have a charge history from which to establish fee screens, and thus are defaulted to the state prevailing fee screen, which usually max’es out reimbursements. Old providers are in an "IIC CRACK" because at some time in past history they are being penalized (and will continue to be penalized) for billing low and establishing low IICs.

These are terms used when rates are unusually low, whereupon via a proper application to Medicare, you may get your rates increased. In some cases, these type applications have been made on behalf of all providers in the state, with an across-the-board increase for all providers. Compare your fee screen with the Prevailing screen. If your "Medicare Allowed" amounts on your EOMBs are lower that the prevailing IICs, you are a candidate for an application (CES will either apply for you or give you sample applications as a guide).