As the United States continues to grapple with rising healthcare costs and access inequities, Medicaid ambulance supplemental payment programs—typically called ground emergency medical transport (GEMT) programs—have emerged as a vital supplemental funding source.

However, these programs, initially designed to ensure that ambulance providers receive adequate reimbursement for providing medical care to Medicaid beneficiaries, are increasingly drawing scrutiny for inconsistency of design, implementation, concerns regarding cost allocation, and questions about long-term sustainability.

Further, changes to the Medicaid program proposed in the One Big Beautiful Bill Act are raising concerns that GEMT programs may undergo dramatic funding reductions in the near future. In some cases, it appears the changes may have already begun.

State and local leaders should keep a close eye on the looming changes to these programs as it could have a significant financial impact on public EMS systems.

The Origins of GEMT Supplemental Payments

GEMT supplemental payment programs were created to address a basic financial problem: state Medicaid programs often reimburse ambulance providers at rates significantly below the actual cost of service. With a significant proportion of ambulance patients covered by Medicaid, this under-reimbursement often results in communities using local taxes to subsidize ambulance providers to meet local service delivery expectations. GEMT programs are typically funded through intergovernmental transfers (IGTs), certified public expenditures (CPEs), or provider assessments to allow states to draw down additional federal Medicaid funds, a portion of which are distributed to public ambulance providers to help close this reimbursement gap.

More than a dozen states, including California, Washington, and Texas, currently participate in GEMT programs in some form. At their best, these programs help stabilize emergency medical systems, keeping ambulances on the road in communities that might otherwise lose access to urgent care transport. But the structure and oversight of these programs vary widely, and their expansion has raised red flags for regulators and budget watchers alike.

A Patchwork of Provider Access to GEMT Funding

Another challenge is the limited participation allowed in some GEMT programs. In many cases, only publicly operated or government-affiliated ambulance providers are eligible. This exclusion of private providers—who often serve significant portions of the Medicaid population—creates a bifurcated system where similar services receive vastly different levels of support based purely on organizational structure. Non-governmental ambulance agencies argue that this creates an uneven playing field and may ultimately reduce competition and innovation in the EMS sector. Meanwhile, public providers warn that without these supplements, their budgets would collapse, necessitating additional local tax funding or service realignments to match available funding.

Uneven Oversight and Risk of Abuse

One of the central issues facing GEMT programs is a lack of uniform oversight. Because these programs rely on a mix of federal, state, and sometimes local regulatory oversight, accountability is diffused. The Centers for Medicare and Medicaid Services (CMS) provides general guidelines but leaves much of the implementation to the states. States submit their own state plan amendments (SPAs) that outline how the GEMT program will be uniquely implemented in their state. This may lead to significant variations with how eligible GEMT reimbursements are determined, how costs are calculated, and what qualifies as a reimbursable expense.

Recent Federal Scrutiny and Reform Prospects

CMS has begun to take a closer look at GEMT programs, proposing tighter cost-reporting requirements and clearer guidance on allowable expenses. In an August 2022 letter to state Medicaid directors, CMS’s Center for Medicaid articulated their concern regarding potentially non-allowable costs being included in GEMT cost reports, specifically, the inclusion of costs related to non-transport first response services, which CMS stated is not a covered Medicaid benefit. The potential inclusion of these unallowable costs may be leading to overpayments by CMS to states for GEMT programs. In July 2023, the CMS Office of the Inspector General (OIG) announced they were launching audits of Medicaid GEMT cost reports. The OIG findings from these audits are expected in 2025.

While most stakeholders agree that greater transparency is needed, many states and local governments worry that increased scrutiny could jeopardize critical funding streams. Some states are now reevaluating their programs, seeking to better align them with federal expectations while preserving local EMS capacity.

Change Is Already Happening

Recent SPA approvals from CMS may signal changes occurring to GEMT reimbursements. In Texas, the state recommended and CMS approved a change in cost reporting guidelines, as well as a change in the calculation for GEMT reimbursements from simply service delivery cost to a calculation that includes the difference between the Medicaid reimbursement and the average reimbursement from commercial insurers. This resulted in a reduction in the amount of federal GEMT reimbursement to providers from $56.8 million in federal fiscal year (FFY) 2022 to $29.2 million for FFY 2023—a 48.6% reduction in GEMT funding.

A Call for Strategic Reform

As GEMT supplemental payment programs undergo increased scrutiny and uncertainty, policymakers must navigate a delicate balance: ensuring financial viability for EMS systems while safeguarding taxpayer dollars and preventing abuse. Reform efforts should focus on four key areas:

1. Standardization of Cost Reporting

States should adopt uniform methodologies to calculate actual ambulance service costs, reducing variability and potential for inflation.

2. Expanded Provider Eligibility

Programs should consider including private providers under similar terms, or structure EMS systems to be able to use GEMT programs for what they were initially intended: reducing local taxpayer burden due to Medicaid under reimbursements, ensuring broader access and fairness.

3. Increased Transparency

Public reporting of program expenditures and outcomes can build trust and inform better policy decisions.

4. Shift Toward Value-Based Models

Tying supplemental payments to measurable patient outcomes and quality metrics to promote both fiscal responsibility and better patient care.

In the current EMS financial and staffing crisis, ensuring the financial sustainability of EMS delivery must be a policy priority. It’s likely that GEMT funding at its current level will be dramatically reduced, if not eliminated altogether. Local, state, and federal officials should carefully analyze what a loss of federal GEMT funding will mean to local EMS agencies and the communities and patients they serve.

TOM WIECZOREK is the director of the Center for Public Safety Management.