How California EMS Agencies are Navigating a Changing Reimbursement Landscape

Digitech’s inaugural Frontlines and Bottom Lines summit in Costa Mesa, California featured a session on The California Reimbursement Landscape. Below are insights from what was a valuable and interactive discussion.

As in many states across the U.S., agencies in California are facing a complex reimbursement environment shaped by federal budget fluctuations, evolving Medicaid structures, and rising concerns about underinsured populations. These challenges aren’t isolated policy shifts; they’re increasingly defining the operational realities for EMS and Fire Service leaders. 

At Digitech’s inaugural Frontlines and Bottom Lines EMS Innovation & Monetization Summit, presented in partnership with First Due and Bound Tree, the California reimbursement landscape emerged as a dominant theme. Lively interactions between our industry expert speakers and attendees whose agencies are living the realities underscored a clear narrative: California EMS is bracing for structural changes in how ambulance services are funded, and the strategies they deploy now may determine their financial stability for years to come. 

Cost Reporting and the Medicaid Gap 

Central to the discussion was California’s approach to closing the Medicaid reimbursement gap. For public providers, Medi-Cal transports often reimburse far below the actual cost of service, shifting financial responsibility to local taxpayers. As such, cost reporting programs like California’s Ground Emergency Medical Transportation (GEMT) model remain one of the state’s most important tools for recovering these losses. 

The GEMT program’s evolution has tracked significant shifts in Medicaid’s structure. At the same time, managed care has overtaken fee-for-service models; California’s adoption of a “Rogers rate” methodology has helped standardize reimbursement expectations across regions and provider types. More importantly, it has streamlined cost reporting, reducing the administrative burden on agencies while preserving access to federal matching funds. 

These developments signal a larger trend: Reimbursement reform that once depended on fee-for-service frameworks is rapidly adapting to the dominance of managed care, forcing EMS leaders to rethink long-standing financial assumptions. 

ACA Subsidy Changes and the “Underinsured” Patient 

Another emerging pressure point is the shifting landscape of the Affordable Care Act (ACA) subsidies. While projections suggest thousands of Californians may lose insurance altogether if federal subsidies are reduced or expire, analysts argue that the more pressing concern may be the rise of the “functionally uninsured” patients; those who carry coverage but face deductibles so high that they cannot meaningfully use it. 

For EMS agencies, this distinction matters. High-deductible plans often translate to unpaid balances and increased collections burdens. As more individuals turn to lower-tier ACA plans to manage rising costs, agencies may see a growing segment of transported patients responsible for 100% of their ambulance bill, an outcome that destabilizes revenue while negatively impacting the patient care experience and placing the financial burden on vulnerable households. 

Federal Changes and GEMT Stability 

Federal policy provisions in the One Big Beautiful Bill have raised questions about the future of supplemental payment programs in many states, including California. However, early assessments suggest that the GEMT structure in California is less likely to face immediate disruption. 

This is because GEMT funds flow exclusively to public providers and are designed to offset the gap between Medi-Cal reimbursement and the true cost of service. As such, the program relies on a long-standing federal commitment to match state expenditures for Medicaid-covered care. Unless that underlying commitment changes, the supplemental funding mechanism should remain intact. For many local agencies, this assurance offers rare stability in an otherwise unpredictable financial climate. 

A Sector Preparing for Structural Shifts 

Overall, the themes emerging from California’s EMS leadership conversations reflect deeper national trends. Cost pressures tied to Medicaid, the growth of high-deductible plans, and fluctuating federal priorities are reshaping how agencies plan, budget, and deliver care. For public EMS systems already operating at the crossroads of essential public health functions and financial constraints, the ability to adapt will be essential. California’s evolving reimbursement strategies, particularly through programs like GEMT, may serve as a roadmap for other states confronting similar gaps.