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CMS-1403-FC 4. The measures of productivity, average hourly earnings, Employment Cost Indexes, as well as the various Producer and CPIs can be found on the BLS Web site at http://stats.bls.gov . 5. Derived from data collected from several major insurers (the latest available historical percent change data are for the period ending second quarter of 2008) 948

CMS-1403-FC C. The Update Adjustment Factor (UAF) Section 1848(d) of the Act provides that the PFS update is equal to the product of the percentage change in the MEI and the update adjustment factor (UAF). The UAF is applied to make actual and target expenditures (referred to in the statute as “allowed expenditures”) equal. Allowed expenditures are equal to actual expenditures in a base period updated each year by the sustainable growth rate (SGR). The SGR sets the annual rate of growth in allowed expenditures and is determined by a formula specified in section 1848(f) of the Act. The PFS update is set under a formula specified in section 1848(d)(4) of the Act. Section 101 of the MIEA-TRHCA provided a 1-year increase in the CY 2007 CF and specified that the CF for CY 2008 must be computed as if the 1-year increase had never applied. Section 101 of the MMSEA provided a 6-month increase in the CY 2008 CF, from January 1, 2008, through June 30, 2008, and specified that the CF for the remaining portion of 2008 and the CFs for CY 2009 and subsequent years must be computed as if the 6-month increase had never applied. Section 131 of the MIPPA extended the increase in the CY 2008 CF that was applicable for the first half of the year to the entire year, provided for a 1.1 percent increase to the CY 2009 949

<strong>CMS</strong>-1403-FC<br />

4. The measures of productivity, average hourly earnings, Employment Cost Indexes, as well as the various Producer and CPIs can be found on the BLS<br />

Web site at http://stats.bls.gov .<br />

5. Derived from data collected from several major insurers (the latest available historical percent change data are for the period ending second quarter of<br />

2008)<br />

948

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