On May 20, 2026, the Centers for Medicare & Medicaid Services (CMS) released a proposed rule (CMS-2449-P) that could trigger a massive structural shift for EMS agencies relying on Ground Emergency Medical Transportation (GEMT) supplemental payments.
If finalized, this ruling will change how publicly owned or non-profit ambulance services recover the uncompensated costs of caring for Medicaid patients. As a dedicated Revenue Cycle Management partner, Kovo RCM is breaking down exactly what this proposed rule means, how it differs from the existing system, and what EMS companies should know in advance of such a change.
How It Works Now
EMS reimbursement for Medicaid patients falls vastly short of the actual overhead and labor costs of readiness and transport. To bridge this gap, states utilized Ground Emergency Medical Transportation (GEMT) programs.
Under the existing GEMT framework, eligible EMS providers submit annual cost reports detailing the actual uncompensated costs of providing care to Medicaid beneficiaries. Through mechanisms like State Directed Payments (SDPs) and intergovernmental transfers, Medicaid supplemental payments allowed EMS agencies to recoup funds up to the actual cost of providing service or based on an Average Commercial Rate (ACR).
Because actual EMS operational costs often far exceed Medicare rates, this has been a vital lifeline for public safety budgets.
The Potential New Reality: Hard Caps Tied to Medicare
CMS’ new proposed rule (CMS-2449-P) targets these supplemental payments and explicitly names GEMT and air ambulance providers. To rein in federal spending and increase oversight, CMS is capping how much providers can receive. This effort stems from the administration’s mandate for CMS to aggressively target waste, fraud, and abuse.
Instead of the actual, documented overhead costs incurred by transport agencies, the new rule limits targeted Medicaid supplemental payments to the equivalent Medicare Ambulance Fee Schedule (AFS) payment rates for comparable services.
Here is what the cap looks like under the proposal:
- Expansion States: Capped at 100% of the published Medicare AFS rate.
- Non-Expansion States: Capped at 110% of the published Medicare AFS rate.
The practical impact: If the Medicare AFS amount is $450 for an ALS emergency in a specific geographic area, $450 is the absolute maximum total reimbursement an agency will receive per transport under a GEMT program—even if the actual cost report proves the true cost is $800.
Timeline and Next Steps
This rule is currently in a proposed state and is accepting public comments. If the rule is finalized as is, the changes to GEMT would most effectively hit in 2028-2029.
What EMS Providers Should Do Now
Knowledge is power. EMS agencies have a window of time to adapt, and Kovo RCM is available to empower that transition. Here is what experts advise EMS providers to look out for:
- Run the Numbers: Agencies should not wait until 2028; they should use existing data to evaluate risk. Identify and isolate Medicaid transport volume and compare the current per-transport GEMT yield against the specific Medicare AFS rate (inclusive of base rates, mileage, and rural add-ons).
- Optimize Existing Workflows: Because the ceiling on Medicaid is lowering, agencies must maximize revenue capture elsewhere. It is crucial to ensure documentation is pristine, coding captures every appropriate modifier, and denial rates are near zero on commercial and traditional Medicare claims. Evaluate current billing processes and billing partner. Determine if all transport claims – regardless of payer – are being submitted efficiently and denied or underpaid EMS claims are appealed rigorously.
- Evaluate Local Funding: If GEMT funds dry up, municipal subsidies or local tax structures may need to be re-evaluated to maintain EMS readiness.
Navigating this transition requires preparation. Changes in CMS regulations are daunting, but EMS leaders do not have to figure out the financial modeling alone. Kovo RCM is available to assist today. With dedicated EMS billing expertise, Kovo RCM can audit current revenue streams, forecast revenue cycle risks, and build a strategy that protects an agency’s long-term sustainability.