Cost of Service Analysis for Sustainable EMS Rate Setting

This white paper outlines the challenges faced by Emergency Medical Services (EMS) systems in the United States regarding sustainable financing and rate setting. It discusses how the current reimbursement models, which are primarily based on transport volume, do not accurately reflect the true costs of maintaining EMS readiness. The paper introduces a readiness-informed Cost-of-Service Analysis (COSA) as a foundational approach to quantify both fixed readiness costs and variable service costs. By integrating verified financial and operational data, the COSA provides a comprehensive understanding of EMS costs, allowing for more equitable and defensible rate setting. The document emphasizes the need for accurate local cost measurement and highlights the misalignment between reimbursement policies and operational realities. It also addresses the inconsistency in how states define EMS services and the implications for funding and rate setting. Ultimately, the COSA framework aims to support sustainable EMS financing that acknowledges the essential public safety role of EMS systems.