Why Is Medicaid Paying So Much For The Same Ambulance Ride?

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In California, a private ambulance transporting a Medi-Cal patient receives $339 per emergency transport. A public ambulance making the same trip, serving the same patient, received $1,168 in 2024 — more than triple the private rate. California has a pending proposal to push that figure to $1,597, which would mean nearly five times the reimbursement for the same ride, depending on who owns the vehicle.

That disparity is not an accident. It is the product of a financing structure that has grown quietly for decades inside Medicaid — and that the Centers for Medicare & Medicaid Services (CMS) is now moving to address. (RELATED: Banning ‘Anti-Competitive’ Hospital Contracts May Lower Healthcare Costs Across US, New Report Says)

CMS published a proposed rule on May 20, 2026 targeting state-directed payments and related supplemental payment arrangements. The agency’s goal is straightforward: restore accountability and ensure Medicaid payments reflect the actual cost of delivering care rather than the way financing is structured.

The scale of what CMS is taking on is significant. State-directed payments grew from two states using them in 2016 to 41 by 2026, and the agency now estimates they account for more than a quarter of Medicaid........

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