Ambulances contribute to urgent lifesaving and life-enhancing medical care, but the unplanned nature of this essential service can lead to high unexpected costs to patients. This HCCI data brief focuses on ground ambulances, which make up 98% of all ambulance trips, and builds upon earlier work that explored 10-year trends in ambulance prices, utilization, spending, and the frequency of out-of-network billing for people with employer-sponsored insurance (ESI). In addition, we compare commercial prices and Medicare reimbursement rates for ground ambulance trips from 2016 to 2022.
For the same number of miles, ESI paid 2.0 times Medicare reimbursement rate in 2022.
Reimbursement of ground ambulance services is made up of three components:
- Base Rate. The price for an ambulance trip regardless of distance travelled. The base rate is determined by the level of life support required (advance or basic) and if the transport is emergency or non-emergency.
- Mileage Rate. The price per mile for an ambulance trip.
- Number of Miles. The distance traveled from patient pick up to drop off for the ambulance trip. This analysis holds the number of miles per trip constant at 5 miles, the average distance of an ambulance trip for ESI patients.
Holding the number of miles constant, ESI payment for a one-way ambulance trip was 2.0 times Medicare reimbursement, on average, in 2022. In 2016, ESI payments were 1.8 times Medicare, suggesting that commercial prices grew faster than Medicare over that period. As shown in Figure 1 the difference is driven by higher ESI prices for both base rate and mileage rate.
ESI payment for ground ambulance base rate was 2.0 times Medicare in 2022
In 2016, the median ESI base rate price ($574) was 1.8 times the Medicare rate ($315). In 2022, the ESI base rate price ($718) was 2.0 times the Medicare rate ($365). Ground ambulance trips for people with commercial insurance were more likely to be advanced life support and less likely to be non-emergency transport than the Medicare population. The differences in the mix of the types of ground ambulance trips used by the ESI and Medicare populations were consistent over time.
ESI payment for mileage rate was 2.1 times Medicare in 2022
The median price per mile paid by ESI ($13) was 1.8 times the Medicare rate ($7). In 2022, the ESI price per mile ($17) was 2.1 times the Medicare rate ($8). Assuming a 5-mile one-way trip, the mileage cost, price per mile times number of miles, accounts for around 10 percent of the overall cost of an ambulance trip.
Medicare ground ambulance rides consistently longer than ESI
The median number of miles billed among Medicare one-way ambulance trips stayed around 7 from 2016 to 2022. Over the same period, the median ESI one-way ground ambulance trip stayed about 5 during the same period.
Geographic variation in ESI to Medicare ambulance price mark-up suggests opportunities for state policymakers
Some states have enacted laws that tie ground ambulance reimbursement to Medicare payment rates. For example, Colorado requires state-regulated health plans to reimburse out-of-network ambulance trips at 325% of Medicare payment rates. Figure 2 illustrates the ratio of ESI to Medicare ground ambulance reimbursement rates by state in 2022. The ratio assumes a standard distance of 5 miles for all ESI and Medicare trips. The median reimbursement ratio of ESI to Medicare for total one-way ambulance trips for some states (Ohio, Kentucky, Maryland, and Maine) is close to 1, meaning the median reimbursed amounts are about the same for both payers. Other states (Minnesota, California, Illinois, and New Jersey) had ESI prices that were more than 3 times the Medicare reimbursement rate.
Consistent with earlier HCCI analysis, the national price of one-way ground ambulance trips for ESI has increased from 2012 to 2022 (see downloadable data). Our analysis has found wide and diverging variation in ESI reimbursement rates. Not only are ESI rates increasing, they also are multiples larger than Medicare payments for the same service. Additionally, ESI rates are increasing faster than Medicare reimbursement rates over the same period. The ratio of ESI payments to Medicare reimbursement for ground ambulance trips increased by 9% from 2016 to 2022. These costs have substantial implications for patients often during urgent and critical interactions with the health care system.