Sonoma County public ambulance providers brace for possible federal funding cut

The Sonoma County Fire District and other local, public ambulance providers could face a significant blow to their revenue under a new federal proposal put forward by the Trump administration.

The proposed change would slash reimbursements public ambulance providers receive through Medicaid and could mean a loss of hundreds of dollars per transport.

The shift, outlined in May by the federal Centers for Medicare and Medicaid, would align Medicaid reimbursements with lower Medicare rates.

"It's going to impact everybody differently, but definitely it's going to impact everybody substantively," said John Poland, legislative chair for the Emergency Medical Services Administrators' Association of California.

The affected program, known as the Public Provider Ground Emergency Medical Transport Program, or PP-GEMT, was implemented three years ago to help public ambulance providers cover the operational costs.

It effectively increases the amount public agencies receive for treating patients covered by Medi-Cal, the state's version of Medicaid, by providing an add-on payment that comes in addition to a baseline Medicaid fee-for-service payment.

A Centers for Medicare and Medicaid spokesperson in an email said the rule change is aimed at reining in Medicaid spending.

"The proposal is grounded in a federal requirement that Medicaid payments be consistent with stewardship of public funds and aligns with a recent Presidential directive instructing the administration to ensure Medicaid rates do not exceed Medicare rates where possible," the spokesperson said.

The current rate for Medicaid payments is about $1,400, while the average Medicare payment is between $600 to $800 per transport, Poland said.

Ambulance agencies make payments to the Department of California Health Services, which leverages those funds to secure more federal dollars. The state then returns funds to agencies based on their Medicaid transports.

The state health department has been using supplemental add-on payments through the GEMPT for more than 15 years to help public and private ambulance providers cover the cost of uncompensated care. Three years ago, the state created the PP-GEMT to provide increased reimbursements to public providers, such as fire districts.

"It's supposed to make the ambulance provider whole for the cost that it cost them to provide services," Poland said

For the Petaluma Fire Department, the cost of an ambulance run ranges from $3,283 to $4,204 depending on staffing and the type of medical care provided, said David Catalinotto, senior management analyst for the Petaluma Fire Department.

While private health insurance pays for most of that cost, Medicare and Medi-Cal only pays a fraction, Catalinotto said. In total the department brings in $7 million annually, across the payor mix of private health insurance, Medicare and Medicaid.

In fiscal year 2024-25, the department paid $500,000 to the supplemental Medi-Cal program and received $1.7 million back, for a net of $1.2 million, Catalinotto said. Without those add-on payments the department gets just $200,000 a year in baseline Medi-Cal service payments.

Local agencies and industry experts are still assessing just how much the reimbursements will shrink under the proposed federal rule change, but there appears to be gathering consensus that any reduction will serve a blow to public operators.

The city of Sonoma, which contracts the Sonoma Valley Fire District for ambulance services, received $658,416 in net Medi-Cal reimbursements last year, said Chief Steve Akre. He estimated that dollar amount covers four full-time firefighter medics.

"It's a deep concern because these programs allow us to provide the best level of service to our communities and even a reduction in those reimbursement programs could have an adverse affect on our service delivery models," Akre said.

The Press Democrat also reached out to Sonoma County Fire District Chief Ron Busch for an interview about the potential impacts. Busch, in an email, said it was still too early to comment specifically.

"This is an evolving CMS process that we are watching closely, and that we do not want to speculate on any potential effect it may or may not have on reimbursement tools available to our operations," Busch said.

He did not respond to a follow-up request for the district's Medicaid reimbursement totals.

The district is the largest ambulance provider in Sonoma County and holds the government contract to provide exclusive ambulance services in the county's urban core.

The proposed rule change would also impact public hospitals and healthcare providers that use similar Medicaid financing to leverage federal dollars.

Katie Rodriguez, interim president and CEO of the California Association of Public Hospitals and Health Systems, said current Medicaid dollars have played a critical role in funding the medical safety net across California and the rest of the country.

The proposed reduction would exacerbate the cuts already outlined in HR1, President Donald Trump's spending bill passed last year.

"We're already starting to see some public hospitals needing to close clinics, reduce services, some have proposed layoffs as part of that," Rodriguez said. "We are expecting that will get worse. We could very well see closures in the form of clinics and very likely some hospital closures as the cuts continue to compound."

The proposed rule change has been added to the federal register. Stakeholders have until July 21 to comment. In the meantime, emergency medical care leaders are digging into the 174-page proposal to assess its full potential impact.

"It's only in the last, I believe, 15 years that we've gotten these supplemental payments. Whatever the reality is, it's not going to mean that we won't provide the service, but it means that we're likely to get a little bit less," Catalinotto said. "We just have to figure out a way to make that work."

You can reach Staff Writer Emma Murphy at 707-521-5228 or emma.murphy@pressdemocrat.com. On Twitter @MurphReports.

You can reach Staff Writer Martin Espinoza at 707-521-5213 or martin.espinoza@pressdemocrat.com. On Twitter @pressreno.

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