CARE Act of 2025

The CARE Act of 2025, S.3145, requires the Center for Medicare and Medicaid Innovation (CMMI) to implement a "Comprehensive Alternative Response for Emergencies Model" under Medicare Part B. This model mandates payment for ground ambulance services dispatched for emergencies, even when no patient transport occurs. This is a significant shift, as current Medicare policy primarily reimburses ambulance services only when transport to a medical facility takes place. The bill specifies that this model must begin within two years of the Act's enactment. This legislation opens a new revenue channel for ground ambulance service providers. Historically, non-transport calls have been a cost center or unreimbursed service. The bill directs the Secretary of Health and Human Services to set payment rates that generally align with payments for transport services, indicating a substantial new funding source. The mechanism is direct payment under Medicare Part B, meaning providers will bill Medicare for these services. Historically, legislative efforts to expand Medicare coverage for specific services have led to increased revenue for the providers of those services. For example, when the Medicare Access and CHIP Reauthorization Act (MACRA) of 2015 reformed physician payment, it stabilized and increased certain reimbursement rates, benefiting large physician groups and healthcare systems. While not directly comparable in scope, the principle of expanding reimbursable services under Medicare consistently translates to financial gains for providers. There is no direct historical precedent for Medicare paying for non-transport ambulance services, making this a novel expansion. Specific winners include publicly traded ground ambulance service providers. (Amedisys, Inc.) and $EVH (Envision Healthcare Corporation) operate significant ambulance service divisions. While $LH (Labcorp) is primarily a diagnostics company, it has a substantial presence in medical transportation services through its various subsidiaries. These companies stand to gain from the new revenue stream for non-transport emergency responses. There are no clear losers, as this bill expands, rather than restricts, services. This bill has been read twice and referred to the Committee on Finance. Senator Collins, a Republican, is the sponsor, indicating bipartisan support with a Democratic co-sponsor. If it passes the committee, it will move to a Senate vote. If enacted, the CMMI must implement the model within two years, meaning new payment streams for providers will begin by late 2027.