The Centers for Medicare & Medicaid Servies (CMS) issued the CY 2026 Ambulance Fee Schedule (AFS) proposed rule as part of the annual Physician Fee Schedule rule. It includes three of the American Ambulance Association’s policy priorities germane to the AFS.

First, the Proposed Rule extends the ground ambulance add-ons for urban (2%), rural (3%), and super-rural (22.6%) transports consistent with the statutory mandate. CMS’ Office of the Actuary estimates the extension will provided $260 million over the 10-year budget window to ground ambulance service organizations. CBO had calculated the increase to be $197 million over the same period. 

Second, CMS states that it will address future data collection under the Ground Ambulance Data Collection System (GADCS) in next year’s rulemaking. This recognition of future rounds aligns with the AAA’s ongoing efforts for CMS to continue the data collection, which included securing language in the FY26 appropriations report calling on CMS to continue the program. It is also consistent with our work with MedPAC, which included a  recommendation to continue GADCS in its June 2026 report.

Third, the AAA has been steadfast in its call for CMS to update the geographic designations used to apply the rural and super rural add-on payments. We worked closely with Congressional champions in the House and Senate to echo our request through letters, phone calls, and questions raised during Congressional hearings to administration officials to support the update.

In the Proposed Rule, CMS has finally proposed updating the ZIP codes based on the most recent 2020 U.S. Census and other relevant data. Under the proposal, the vast majority of ZIP codes will remain the same. However,

• 1,172 ZIP codes would shift from urban to rural; and
• 602 ZIP codes would shift from rural to urban.

The preamble does not mention ZIP codes shifting to super-rural. CMS indicates that the detailed results will be available on its website at: https://www.cms.gov/medicare/coverage/ambulances-services-center. 

The AAA is reviewing these materials and will provide a detailed analysis with the membership shortly. Based on an analysis by Health Management Associates at the request of the AAA, the latest Census data would result in a net change of 1,490 zip codes changing from rural to super rural – which CMS did not address in the Proposed Rule. Also, HMA had estimated that 119 zip codes would change from rural to urban as opposed to 602 zip codes cited in the document.

In addition to working to ensure the appropriate application of the data to the AFS geographic designations, the AAA will encourage CMS to deem an area designated as a rural or super-rural that would otherwise no longer receive such designation to retain its previous designated status if there are 1,000 or fewer individuals per square mile in the area.  We will also urge CMS to establish an administrative appeals process to allow ambulance services providers and suppliers to seek reconsideration of a change in a ZIP code’s status as a rural or qualified rural area during the first 12 months after the Secretary finalizes a change in the designation.