By Ryan Smith • Updated: September 2026 • 8 Min Read
Quick answer: CMS’s proposed ambulance fee schedule rule, released in July 2026, continues the temporary ground ambulance add-ons of 2% for urban, 3% for rural, and 22.6% for super-rural transports. It also proposes updating the ZIP codes that define urban and rural areas using 2020 Census data, with the new designations proposed to take effect beginning in 2027.
Medicare is the largest single payer for most ground ambulance agencies, so every fee schedule update deserves a close read. This guide covers how Medicare calculates ground ambulance payment, what the July 2026 proposed rule changes, and what your billing operation should do before the final rule arrives.
How Medicare pays for a ground ambulance transport
Medicare pays ground ambulance claims under Part B using two pieces: a base rate for the level of service and a separate mileage payment for loaded miles.
- Base rate: Each level of service has a relative value unit (RVU): 1.00 for BLS non-emergency, 1.60 for BLS emergency, 1.20 for ALS1 non-emergency, 1.90 for ALS1 emergency, 2.75 for ALS2, and 3.25 for specialty care transport. The RVU is multiplied by a national conversion factor that CMS updates each year, and part of the result is adjusted for local costs using a geographic index.
- Mileage: Loaded miles are billed with HCPCS code A0425. For transports that originate in rural areas, Medicare pays an increased rate for the first 17 loaded miles.
- Beneficiary share: After the Part B deductible, the patient is generally responsible for 20% coinsurance.
Because rural and super-rural payment depends on where the patient is picked up, the ZIP code of the point of pickup matters for every single claim.
The ground ambulance add-ons continue
The proposed rule extends the ground ambulance add-on payments: 2% for transports originating in urban areas, 3% for rural areas, and 22.6% for super-rural areas, consistent with the most recent congressional extension. These add-ons have been extended repeatedly rather than made permanent, so agencies should treat them as subject to change with each extension cycle instead of a fixed baseline in long-term budgets.
ZIP code designations are proposed to change in 2027
CMS proposed updating the geographic designations used to decide which transports qualify for rural and super-rural add-ons, based on 2020 Census data and Rural-Urban Commuting Area (RUCA) codes. Under the proposal, census tracts at or above RUCA level 4.0 would be treated as rural for ambulance fee schedule purposes, beginning in calendar year 2027.
According to the American Ambulance Association’s summary of the proposal, most ZIP codes would keep their current designation, but 1,172 ZIP codes would shift from urban to rural, and some would move from rural to urban. The AAA also noted that the proposal’s preamble does not address ZIP codes shifting to super-rural, which matters because super-rural transports carry the largest add-on. CMS accepted comments through September 14, 2026, and will respond in the final rule.
For agencies near urban and rural boundaries, the change could raise or lower Medicare revenue on specific routes. Once CMS publishes its final ZIP code file, compare it against your transport origins from the past year to estimate the effect before January.
Data collection obligations are not going away
The Ground Ambulance Data Collection System (GADCS) gathers cost, revenue, and utilization data from a random sample of ground ambulance organizations each year. CMS stated in the proposed rule that it will address future data collection in next year’s rulemaking, and MedPAC recommended continuing GADCS in its June 2026 report. Organizations that are selected and fail to report can face a 10% reduction in Medicare ambulance payments for a year, so documentation and cost-reporting readiness should be treated as an ongoing compliance task.
What this means for your billing operation
- Reconcile your claims software’s rate and locality tables against the current CMS files at the start of each calendar year, not only when a denial or underpayment pattern appears.
- Track add-on eligibility at the transport level, since urban, rural, and super-rural status comes from each transport’s pickup ZIP code, not a single designation for the whole agency.
- Model the 2027 ZIP code changes against your own transport history as soon as the final file is published.
- Build a compliance calendar around CMS’s usual cycle: proposed rules arrive mid-year, and final rules are typically published in the fall.
Fee schedule and geographic updates are exactly the kind of detail that gets missed inside a general medical billing workflow. Our EMS revenue cycle management team updates payer tables every year, and our ambulance claims billing service applies the correct base code, modifiers, and mileage on every claim. Rate errors also show up as underpayments rather than denials, which our guide to common ambulance billing denials explains how to catch.
Frequently asked questions
What are the Medicare ground ambulance add-on payments?
They are temporary percentage increases to Medicare ground ambulance payments based on where the patient is picked up: 2% for urban areas, 3% for rural areas, and 22.6% for super-rural areas. Congress has extended them several times, and the July 2026 proposed rule continues them.
When would the new rural ZIP code designations take effect?
CMS proposed that the updated designations, based on 2020 Census data and RUCA codes, take effect beginning in calendar year 2027. The comment period closed on September 14, 2026, and the details will be confirmed in the final rule.
How does Medicare decide whether a transport is rural?
Medicare uses the ZIP code of the point of pickup. If that ZIP code is designated rural, the transport receives the rural base rate add-on and increased mileage payment for the first 17 loaded miles. Super-rural ZIP codes receive a larger base rate increase.
What happens if an agency is selected for GADCS and does not report?
A ground ambulance organization that is selected for data collection and does not report complete data can be subject to a 10% reduction in its Medicare ambulance payments for a year, unless CMS grants a hardship exemption.
Want to see how your current claims are coded and reimbursed against the latest CMS rules? Request a free billing audit and we’ll walk through it with you.
Sources: CMS Ambulance News and Announcements; CMS Ambulance Fee Schedule and ZIP Code Files; American Ambulance Association, July 2026; 42 CFR Part 414 Subpart H. Regulatory details change, so confirm current requirements with CMS and your compliance team before acting on them.