Are We Paying for the Wrong Thing?
Written By: Asbel Montes, Co-Founder & Managing Partner of Solutions Group
Three Reports, Seven Months, and a Question Nobody Has Fully Answered
What Does an Ambulance Ride Actually Cost, and Why Are We Still Only Paying for the Ones That End at a Hospital?
Between December 2025 and July 2026, three organizations published three different pieces of the same puzzle, without ever citing one another.
The CMS/RAND Ground Ambulance Data Collection System (GADCS) report, covering cost and revenue data from more than 7,400 organizations, came out in December 2025.
MedPAC delivered its June 2026 report to Congress, built on that same GADCS data, assessing whether Medicare's ambulance payments are adequate.
And Elevance Health's Public Policy Institute released a claims-based analysis of commercial ambulance billing from 2012 to 2025 in July 2026.
None of the three reference one another. Read together anyway, they provide the most complete factual picture the industry has ever had of what an ambulance ride costs, what it's billed for, and what ultimately gets paid.
What Elevance Found
From commercial claims data:
Billed charges for emergency ground ambulance rides rose 30% above medical inflation from 2012 to 2025.
Allowed costs (what insurers actually paid) increased only 3–6% during the same period.
In-network allowed costs averaged 161% of Medicare.
Out-of-network charges averaged 272% of Medicare.
Elevance's recommendation: Anchor out-of-network payment to in-network allowed costs—roughly 160% of Medicare.
What MedPAC Found
Using GADCS cost data, MedPAC found that the cost of running an ambulance service varies dramatically from one organization to the next.
The lowest-cost organizations spend about $367 to produce a transport.
The highest-cost organizations spend more than $4,100.
Volume is the biggest reason why. Run more calls and your cost per transport falls, because the truck, the crew, and readiness costs are already being paid whether the unit runs one call or several.
Run twice as many transports and your total costs don't double—they increase by roughly two-thirds, meaning the cost of each individual transport decreases as volume rises.
The Financial Reality
For-profit organizations generate approximately $1.11 in revenue for every $1.00 of cost.
Government-owned organizations generate about $0.98 for every $1.00 of cost.
Lowest-volume providers generate only $0.77 for every $1.00 spent, losing roughly 23 cents on every dollar of cost.
Those lowest-volume organizations are disproportionately the agencies serving rural and isolated communities.
MedPAC also stated plainly that the Medicare Ambulance Fee Schedule was established in 2002 largely without cost data and has not been meaningfully updated since.
What the GADCS Data Adds
At the primary data level, GADCS provides several additional insights.
Labor accounts for 70.7% of total ground ambulance costs.
Response personnel represent approximately 85% of all labor spending.
The top 10% of organizations by transport volume perform 66% of all reported transports.
Perhaps the most significant finding:
Twenty-four percent of all ground ambulance responses did not result in a transport.
No transport means no bill under either Medicare or commercial reimbursement—even though the truck, crew, equipment, and readiness costs were fully incurred.
The Bigger Question
That last number is where I think this conversation needs to go, and it's bigger than a billing technicality.
Every ambulance payment system in this country—Medicare's fee schedule, commercial contracts, and the state laws now being written around charges and Medicare multiples—still pays almost exclusively for one outcome:
A completed transport to a facility.
That payment model was built when 911 essentially meant "send an ambulance, take the patient to the hospital."
It has not kept pace with what EMS actually does today.
EMS Has Already Changed
ESO's national data, drawn from one of the country's largest prehospital datasets, has shown non-transport dispositions accounting for between 16% and 22% of all 911 encounters in recent years.
A study published this month, based on more than 9.5 million EMS encounters, found that:
Only 6% to 12% of 911 calls involve genuinely time-sensitive interventions.
Roughly 3% of patients account for 16% of all EMS responses.
ESO leadership has also stated plainly that reimbursement needs to expand beyond transport to the emergency department if EMS is going to meaningfully serve patients instead of defaulting every call to the same pathway.
Some agencies are already demonstrating what that looks like.
EMSA in Oklahoma responds to nearly 40,000 calls every year where clinicians evaluate and treat patients on scene without transporting them.
Those responses cost approximately $15 million annually and currently generate no reimbursement.
EMSA has proposed a dedicated treatment-in-place payment to begin addressing that gap.
The Honest Version of This Conversation
Patient care and hospital transport are not the same thing.
Everyone in this field already knows it.
A crew that arrives, assesses a diabetic patient, corrects a dangerously low blood sugar, and safely leaves that patient at home has delivered real clinical value.
Under every payment model in use today, that encounter is worth zero dollars.
Meanwhile, a transport for a twisted ankle is fully reimbursed.
That is not a system organized around what's best for the patient.
It's a system organized around the one deliverable that happens to generate a bill.
The Question We Should Be Asking
If our industry wants to be taken seriously in the conversations Elevance and MedPAC are now shaping, we need to lead with that reality instead of waiting for a payer or a commission to point it out.
The right question isn't whether charges are too high or allowed costs are too low.
The real question is whether we're willing to advocate for a payment model built around the care a patient actually needs—wherever and however it's delivered—instead of continuing to defend a transport-only reimbursement structure that was never designed with the patient's best interest as its first principle.
