Widespread layoffs. Looming budget cuts. Federal funding freezes. Tariff uncertainty. Behind the attention-grabbing headlines are critical questions from EMS agencies that need answers:
- Will government payers continue to reimburse ambulance claims amid funding freezes?
- How will federal cuts to Medicaid affect reimbursement?
- Will Medicare payments take a hit?
- Are Medicaid Supplemental Payment programs like GEMT at risk?
- How can you navigate through tariffs?
The Rapidly Evolving Landscape
First, a Civics 101 lesson. Congress is the legislative branch of the federal government and holds the power of the purse, meaning it has authority over government spending. For substantial changes to occur, such as cuts in Medicaid or Medicare spending, Congress must pass legislation or budgets. Early signs in the current administration point to Congress creating a framework for sizeable spending cuts, but specifics are lacking at this point.
In the meantime, the Executive Branch has been issuing spending freezes through executive orders. There is no doubt that many government entities and individuals have been substantially impacted by those freezes, but major spending changes need to pass through Congress. Additionally, the courts have challenged many of these freezes, resulting in judicial orders for spending to continue.
At the time of this writing, the House budget resolution under consideration aims to cut at least $880 billion in costs over the next ten years. Experts say a substantial portion will need to come from Medicaid spending. Dissention is already rising; public sentiment indicates that not enough money is spent on Medicaid. According to a Kaiser Family Foundation Poll conducted February 14-19, only about 20% of respondents felt that too much was being spent on Medicaid and that it should be cut. Even among voters who supported Trump in the election, only 34% felt that too much was being spent on Medicaid. Around 19% of the U.S. population relies on Medicaid for health coverage[1], so Congresspersons’ constituents would be undoubtedly affected by cuts.
Medicaid is jointly funded by states and the federal government. Contributions vary state to state, but range from over 50% to 80%. What would happen if the federal government reduced its portion of the contribution? With roughly 19% of EMS patients covered by Medicaid in a time where Medicaid already under-reimburses providers for the costs of emergency ambulance transports, it’s not a stretch to say that EMS providers would be impacted.
States Backed Into a Corner
If federal Medicaid funding was reduced, the states would be put in a difficult situation. In the short term, states could cover the shortfall, but most are not in a financial position to do this for very long. Other options include reducing the amount reimbursed for services (e.g., announcing a 50% cut in reimbursement rates, which are already very low to start with for most Medicaid programs) or reducing the number of covered individuals. These options could start a domino effect of negative consequences for EMS providers, as the number of uninsured individuals would grow while the Medicaid-insured population would decline. Uninsured patients rarely pay their EMS bills in full (or at all).
Similarly, with Medicare, reduced payments are unlikely to occur quickly. Medicare add-on payments were just extended through the end of the federal fiscal year, leaving long-term and higher levels of extension uncertain. The budget extension has not addressed the longer-term, substantial cuts that Congress and the Presidential administration are considering. The 4% PAYGO sequestration[2], deferred for several years as part of funding the Infrastructure Recovery Act, is also up in the air.
And then there’s the Ground Data Ambulances Collection System (GADCS). The Medicare Payment Advisory Commission (MedPAC), tasked with advising Congress on Medicare issues, analyzed the initial dataset resulting from the GADCS that all EMS agencies were required to participate in. We were hopeful that the data and MedPAC’s final report, due in June 2026, would result in a substantive increase in Medicare allowance amounts for ambulance transports. But given the various staffing cuts and focus on spending reductions, it would not be surprising to see a delay or end to the current efforts to seek increased/fair reimbursements from Medicare.
It’s also unlikely that a consensus will be easily obtained on how to apply the recommendations that the Advisory Committee on Ground Ambulance and Patient Billing (GAPB) made regarding ground ambulance services vis-à-vis the federal No Surprises Act. With that said, addressing surprise medical bills is a topic that the current administration has said is a priority; hopefully that is not done without some thought and review of the GAPB report.
Major Unknowns
In addition to the various areas already covered, substantial changes to the global tariff structure appear to be likely. On the surface, EMS agencies are service providers and thus would not be substantially impacted by a change in the tariff structure. However, depending on how things play out, supply costs could rise depending on from where required items (ambulances, equipment, supplies) are sourced. Additionally, there are concerns that new tariff structures will cause inflation to rise, which would put pressure on agencies to increase wages, the largest expense item for EMS systems by far.
At this point, there are many more questions than answers. One thing that appears to be certain: uncertainty.
In this industry, we react to the unexpected. From 9/11 to the opioid epidemic to Covid-19, emergency responders have adapted and moved forward during plenty of “unprecedented times.” EMS providers will undoubtedly find ways to overcome any new challenge. But it shouldn’t have to be this way. We encourage all involved in the EMS industry to get involved:
- Build relationships with local, state, and federal legislators. Regular meetings, phone calls, and emails can build strong working relationships, allowing EMS providers to educate them on the challenges faced by the EMS community and the need for improved funding. A good start is to write to your Congressional leaders and let them know how critical federal funds are for your organizations and communities.
- Join established organizations and advocacy groups. This list of EMS Associations hosted by NHTSA’s Office of EMS (OEMS) shows organizations with which the OEMS collaborates most frequently, giving them a voice on the federal level. A unified voice has more impact when lobbying for legislative changes.
- Utilize digital and media outreach. EMS professionals can use social media platforms to raise awareness about funding issues, or even work with local news outlets highlight the challenges of EMS underfunding. Op-eds and opinion pieces for local newspapers or online publications can also have impact. Bringing public attention to the issues can pressure lawmakers to act.
Even small efforts and actions can make a big difference. EMS personnel and their supporters have the power to advocate for both preservation of and increases in reimbursement and funding, paving the way for more sustainable, efficient, and effective emergency medical services.
[1] Source: US Census Bureau, Health Insurance Coverage in the United States: 2023, September 2024.
[2] The 5% PAYGO sequestration refers to a mandatory spending reduction triggered by the PAYGO (Pay-As-You-Go) rules, which require offsets for new federal spending. For several years, this sequestration was deferred to support funding for the Infrastructure Recovery Act. For EMS, this sequestration could potentially reduce Medicare payments to providers, impacting their funding. However, the deferral allowed EMS services along with other federally funded services to avoid these reductions during the period when the infrastructure act was funded.
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