By Matt Zavadsky and Doug Wolfberg
On Dec, 19, 2024, CMS released the first report on the Medicare Ground Ambulance Data Collection System (GADCS). The report, prepared for CMS by the RAND Corporation, summarized data collected from 3,694 ambulance agencies that completed and submitted their reports for the years 2022 and 2023, representing 85% of the agencies selected to provide this data.
This high response rate is likely due to the excellent engagement process used by RAND, in partnership with numerous national associations, such as the American Ambulance Association (AAA), Academy of International Mobile Healthcare Integration (AIMHI), National Association of Emergency Medical Technicians (NAEMT) and the International Association of Fire Chiefs (IAFC).
On Jan. 21, 2025, PWW Advisory Group (PWW|AG) conducted a national webinar highlighting the most important findings from the report, including an analysis conducted by PWW|AG summarizing the cost and revenue data contained in the GADCS report. Joining PWW|AG on the webinar was Dr. Andrew Mulcahy, RAND Health Care’s lead author of the GADCS Report.
Here are the top findings from the report that EMS and policy makers need to know — and do something about.
Cost per ambulance transport
- Finding: Across all provider types, the average cost to the agency for an ambulance transport is $2,673.
- Discussion: The GADCS report calculated that across all respondents, the mean cost to complete an ambulance transport was $2,673. For governmental agencies, the mean cost is $3,127 and for private-for-profit agencies, the mean cost is $1,778.
- Action: It’s important for agencies to quantify and share their service delivery costs on a per-transport, per-response and even per-staffed-ambulance-hour (unit-hour) basis. This information will help you articulate funding needs and ensure you are billing fees are established at a level that helps cover as much of your costs as possible.
Under-reimbursement per ambulance transport
- Finding: Across all provider and payer types, the mean reimbursement per ambulance transport is $1,147.
- Discussion: This means that across all payer classifications, Medicare, Medicaid, commercial insurance, self-pay, etc., on average, ambulance agencies are under-reimbursed $1,526 per transport. We should find ways to maximize revenue by billing fees that attempt to result in a net reimbursement that is close to our cost per transport.
- Action: Ambulance agencies should know how to calculate their revenue per transport and implement strategies to enhance their reimbursement.
Medicare under-reimbursement for ambulance transports
- Finding: On average, across all provider types, Medicare under-reimburses ambulance service by $2,344.
- Discussion: Using Medicare payment data, the average Medicare reimbursement across all billing codes is $328.89. This means that on average, Medicare is under-reimbursing ambulance services by $2,334 per transport. The difference between the overall reimbursement and the Medicare reimbursement articulates the “revenue” shift in ambulance services, with commercial insurers reimbursing EMS at a higher rate (it should also be noted that Federal law allows CMS to deduct 10% from the Medicare reimbursement paid to a supplier that fails to submit its data, which likely also contributed to the high participation rate).
- Action: Indications are that CMS may not be motivated by the data in this report to change the Medicare allowable fee to a level that more fairly compensates EMS for the costs of services provided. It is likely that any change in the Medicare Ambulance Fee Schedule (AFS) will require legislative action. Ambulance agencies should support national EMS organizations that advocate for enhanced reimbursement from Medicare for services provided.
BLS vs. ALS transport breakdown
- Finding: 56% of all ambulance transports were at the BLS level and 44% were at the ALS level.
- Discussion: Recent peer-reviewed, evidence-based research seems to support this finding that more than half the patients treated by ambulance agencies received BLS level care.
- Action: With many systems considering tiered deployment models using both BLS and ALS ambulances to more closely align resources with patient acuity levels, agencies should thoroughly evaluate both the cost and revenue impact when implementing a tiered deployment strategy.
Payment for non-transport, treatment in place
- F0inding: 11.5% of participating agencies reported receiving revenue from payers for non-transport EMS/medical services.
- Discussion: Under current CMS rules, Medicare does not reimburse for ambulance response, treatment and no transport services (HCPCS Code A0998). However, other payers are reimbursing for this service. A recent analysis of revenue data from a large public utility model revealed that 74% of billed charges for treatment in place (TIP) were paid by commercial insurers and 58% were paid by Managed Medicare payers. Of 5,317 TIP bills sent, the agency received $759,268.
- Action: As the EMS economic crisis continues, ambulance agencies should review policies related to billing for TIP services. The cost for an agency to respond to a call in which a patient was treated, but not transported are similar to the costs for a transport.
| More: A billion dollars of savings — The legacy of ET3: Matt Zavadsky discusses the CMS disclosure and the latest in the move to fund treatment in place.
Ambulance payer mix
- Finding: 26% of ambulance services cannot break out their payer mix.
- Discussion: EMS is healthcare, and analytics related to revenue cycle is crucial for making informed decisions. Payer mix (the percentage of patients treated by payer classification or percentage of revenues received) is vital to this analysis. Many communities across the country are facing growing financial challenges and are beginning to closely evaluate the costs and revenues related to EMS delivery.
- Action: EMS leaders should have information available to help local public officials make informed decisions about costs and revenues related to ambulance service delivery.
Practical takeaways for EMS
The results from the GADCS provide significant opportunities for the EMS profession. The representative data, from over 3,000 diverse agencies, quantifies the large gap between the costs of providing ambulance service and the revenue generated from that service. Here are several overall actions we should take to improve service delivery sustainability.
1. Advocate for change
Use the information contained in this report to advocate for improved reimbursement from Medicare, Medicaid and commercial insurance payers. This could be done through lobbying members of Congress to require CMS to change the Medicare Ambulance Fee Schedule, including payments for TIP services, and ensuring commercial insurers adequately reimburse for EMS. The same could be done at the state level with state Medicaid fee schedules and state-level commercial insurance regulations. Be active in state and national EMS associations that are working for change.
2. Diversify revenues
The GADCS report provides strong evidence, externally evaluated by a respected research and data analytics firm, that expenses outpace revenues for ambulance services in the United States. Whether the federal or state governments will use this data to change ambulance reimbursement remains to be seen. However, instead of waiting for reimbursement increases, ambulance services should address economic sustainability within their own service model. This should include billing for TIP services; or contracting with payers, facilities or other potential customers to provide mobile integrated healthcare (MIH) services.
3. Innovate for sustainability
Transformative agencies are dramatically changing their EMS systems to enhance sustainability. Changing from all ALS to tiered deployment models using BLS ambulances, using local data and evidence-based research to change response time expectations, implementing pre-dispatch disposition modalities, and reducing ambulance patient offload times (APOT) can enhance service levels and reduce costs of service delivery.
To view a recording of the PWW|AG GADCS webinar, and get a copy of the handouts, click here.
