A proposed federal rule governing Medicaid payments has prompted a bipartisan response from Oregon lawmakers, who say the measure could significantly affect how emergency medical services are funded throughout the state and potentially place additional financial strain on ambulance providers serving both urban and rural communities.
The proposal, issued by the Centers for Medicare & Medicaid Services (CMS) as Rule CMS-2449-P, would establish new limits on certain Medicaid supplemental payment programs that states use to help support healthcare providers, including emergency medical service agencies. Federal officials say the proposal is intended to strengthen oversight of Medicaid funding, improve financial accountability, and create greater consistency in how supplemental payments are administered nationwide.
Oregon legislators, however, argue the proposal could have unintended consequences for ambulance providers that rely on supplemental Medicaid funding to help offset the high costs of maintaining emergency response systems.
Thirty-five members of the Oregon Legislature, representing both political parties and both legislative chambers, have formally urged CMS to reconsider portions of the proposal affecting emergency medical services. Their letter asks the agency to preserve supplemental Medicaid payment programs that have operated in Oregon for years and have helped support ambulance providers responsible for delivering emergency care in communities across the state.
Representative Dacia Grayber, a firefighter, paramedic and state legislator representing portions of Southwest Portland and East Beaverton, said emergency medical providers depend on the supplemental funding to help keep ambulances staffed and available for emergency response. She noted that Congress excluded EMS supplemental payment programs from similar funding restrictions included in federal budget legislation approved in 2025 and urged CMS to maintain that distinction as the rulemaking process continues.
Emergency medical services occupy a unique position within Oregon’s healthcare system. Ambulance agencies must remain prepared to respond around the clock, regardless of call volume or reimbursement levels. Maintaining that readiness requires substantial investment in personnel, specialized medical equipment, emergency vehicles, communications systems, medications, training, fuel, insurance and ongoing maintenance.
Unlike hospitals or physician offices, ambulance providers cannot reduce staffing during slower periods or schedule emergency calls. Crews, vehicles and equipment must remain ready at all times, creating fixed operational costs that continue whether agencies respond to dozens of emergencies in a day or only a handful.
The financial challenges are often greatest in rural Oregon, where ambulance districts frequently cover expansive geographic areas with relatively small populations. Longer travel distances, fewer healthcare facilities and lower call volumes can make it more difficult for providers to generate sufficient revenue while still maintaining emergency coverage across large service areas.
According to Oregon lawmakers, every one of the state’s 36 counties contains areas classified as ambulance deserts, where residents are located at least 25 minutes from the nearest ambulance station. While many local providers work to minimize response times through strategic station placement and mutual aid agreements, those geographic realities highlight the challenges of delivering emergency medical care across diverse landscapes that include mountains, forests, agricultural communities and remote highways.
The Medicaid supplemental payment programs at the center of the debate have operated in Oregon with federal approval for several years. Participating providers are required to meet accountability standards governing how the funding is used, with investments directed toward workforce recruitment, employee retention, wages, benefits and other improvements designed to strengthen emergency medical services.
Those workforce investments have become increasingly important as ambulance providers nationwide continue to face shortages of paramedics and emergency medical technicians while competing with hospitals and other healthcare employers for qualified personnel.
CMS has stated that the proposed rule is designed to improve transparency and financial integrity within the Medicaid program by establishing clearer payment standards and limiting supplemental payments that exceed federal guidelines. The agency maintains the proposal is part of a broader effort to ensure Medicaid funding is distributed consistently while protecting taxpayer resources.
The proposal remains under federal review and has not been finalized. CMS will evaluate public comments before issuing a final rule, leaving open the possibility that revisions could be made before any changes take effect.
For Oregon’s emergency medical providers, lawmakers say the outcome could have lasting implications for how ambulance services are funded and sustained. As federal officials continue reviewing the proposal, state leaders are urging CMS to preserve the supplemental Medicaid programs they believe play a critical role in supporting emergency medical response and ensuring Oregonians have access to timely lifesaving care when emergencies occur.