Skip to main content

EMS 3.0: A Road Map to Payment Reform


Emergency care has made important advances in recent decades: emergency 9-1-1 service now links virtually all ill and injured Americans to immediate medical response; organized trauma systems transport patients to advanced, lifesaving care within minutes; and advances in resuscitation and lifesaving procedures yield outcomes unheard of just two decades ago.” —Emergency Medical Services at the Crossroads

The evolution of EMS has continued since the above was published in 2006, but the payment system, especially in the Medicare program, has remained stagnant.

Ambulance services have been virtually ignored as federal and state policy-makers seek to drive healthcare providers toward more innovative models.

Overall, ambulance services account for a tiny amount of Medicare’s expenditures, but they offer the promise of improved care transitions and patient outcomes.

Before this promise can be achieved, however, it is necessary to address three immediate barriers in the current Medicare payment system: 1) economic instability; 2) a focus on medical transportation rather than the provision of healthcare services; and 3) the designation of ambulance services as suppliers rather than providers of healthcare.

This concept was reinforced by the National Academy of Sciences in its June 2016 report A National Trauma Care System: Integrating Military and Civilian Trauma Systems to Achieve Zero Preventable Deaths After Injury.1 The report contains a significant recommendation for enhancing the economic model for EMS. The authors of the report, chaired by Donald Berwick, MD, recommend: Congress, in consultation with the U.S. Department of Health and Human Services, should identify, evaluate and implement mechanisms that ensure the inclusion of prehospital care (e.g., emergency medical services) as a seamless component of healthcare delivery rather than merely a transport mechanism.

Possible mechanisms that might be considered in this process include, but are not limited to amendment of the Social Security Act such that emergency medical services is identified as a provider type, enabling the establishment of conditions of participation and health and safety standards.

Additionally, modifying the Social Security Act to define EMS as a provider type could prompt CMS to develop a trauma- or emergency care-based shared savings model with relevant metrics that could be used to measure the value of prehospital care delivered, including patient outcomes and the appropriateness of the facilities receiving patients.

The American Ambulance Association (AAA) continues to lead the effort to develop forward-thinking yet practical payment reform efforts nationally. As part of this effort and in coordination with the National Association of EMS Physicians (NAEMSP), National Association of EMTs (NAEMT) and National Association of State EMS Officials (NASEMSO), the AAA has identified three short-term policy reforms that would set the stage for future innovative payment models.

The immediate priority is to obtain federal reimbursement levels for EMS that are more closely aligned to the costs of delivering the service. The short-term reform includes:

  • Building the temporary ambulance add-ons into the base rate, consistent with findings from the Governmental Accountability Office that current Medicare rates are below the cost of providing services;
  • Establishing a cost data collection system, tailored to the unique nature of ambulance services, consistent with the report issued by CMS under the American Taxpayer Relief Act; and
  • Designating ambulance services as providers of service so that the healthcare services they deliver as outlined in a 2006 report by the then-Institute of Medicine (now the Health and Medicine Division of the National Academies of Sciences, Engineering, and Medicine) are eligible for reimbursement based on the services they provide (healthcare) as opposed to a supplier of transportation.

These policies would not only create the economic stability to innovate, but also establish the foundation necessary to reform the payment system by providing meaningful and reliable cost information to promote improving reimbursements and paying for services apart from transportation as a way for EMS to deliver high-value services. If the policies are not implemented, then the industry risks being relegated to harsh competitive bidding rates, such as those imposed on durable medical equipment, and/or becoming subcontractors to larger provider systems and subject to an ever-shrinking pie.

While some agencies have been able to work with local non-Medicare payers to develop and test new economic models for EMS delivery, federal government support and reimbursement for such models will depend on achieving comprehensive, accurate and reliable cost data and having ambulance services designated as healthcare providers. These intermediate-term reform policies would allow Medicare to leverage the unique aspects of ambulance services, reduce unnecessary emergency room visits and eliminate fraud and abuse in the area of nonemergency services. These policies include:

  • Coverage and payment for transport to alternative destinations;
  • Establishing coverage and payment for response, assessment and referral at the scene without transport; and
  • More specifically defining nonemergency services.

As these new payment models are developed and implemented, the AAA, NAEMT, NAEMSP and NASEMSO urge the industry to continue efforts to build consensus and support for longer-term reform efforts that will allow for even greater innovation. Such models could include:

  • Seeking coverage and reimbursement for triage services;
  • Seeking coverage and reimbursement for community paramedicine (including efforts to better manage and coordinate individual and population care); and
  • Seeking more comprehensive payment reform related to the ambulance fee schedule, including refining payment categories, addressing high-cost items and considering patient characteristic and/or ambulance provider adjusters.

The challenge with any of these longer-term reforms is how to establish a sustainable payment rate for providing the services, especially if these services are not related to traditional EMS care provided at a scene. While demonstration projects have shown progress, the federal government has yet to agree to reimburse for these services directly. If these services are to help increase the federal funding for ambulance services, it will be imperative to have valid and reliable cost data for providing such services, as well as valid and reliable outcomes data showing the value of these services in reducing overall Medicare costs.

Finally, the AAA has long acknowledged the importance of establishing a data-driven paradigm for EMS. However, the first step is not to implement a value-based purchasing (VBP) program. CMS does not believe VBP is necessary to drive quality in EMS. However, valid and reliable quality metrics are important for internal quality assessment and quality improvement activities, as well as research. Thus, while not a component of payment reform, developing a core set of measures for QA/QI and evidence-based practices will be an important part of the future of EMS.

Ed's Note: This article is reprinted from EMS 3.0: The Future of Service Delivery, Reimbursement, Education, Dispatch, Medical Direction, Technology and Regulation.


1. National Academies of Sciences, Engineering, and Medicine. A National Trauma Care System: Integrating Military and Civilian Trauma Systems to Achieve Zero Preventable Deaths After Injury. Washington, DC: The National Academies Press, 2016.

Kathy Lester, MPH, JD, is a Washington, DC-based healthcare consultant for the American Ambulance Association.

Back to Top