AB 1328 creates a new framework for Medi‑Cal reimbursement of ground nonemergency ambulance services by linking fee‑for‑service rates to the federal Medicare ambulance fee schedule and establishing a parallel managed‑care directed payment program. It also expands who may certify medical necessity and modernizes mileage documentation options for medical transportation providers.
The bill matters because it materially raises the floor for payments to nonemergency ambulance providers (by tying payments to a Medicare‑based formula), shifts administrative responsibilities to the Department of Health Care Services and Medi‑Cal managed care plans, and relies on a mix of federal financial participation and state appropriations. It also changes compliance practices — for clinical certification and for mileage recordkeeping — with operational and fiscal consequences for providers, plans, and the state budget.
At a Glance
What It Does
The bill requires Medi‑Cal fee‑for‑service reimbursement for ground nonemergency ambulance transport to be calculated from the federal Medicare ambulance fee schedule (with geographic adjustments) and directs DHCS to run a managed‑care directed payment program to at least match those FFS rates. It instructs DHCS to maximize federal financial participation and allows implementation via plan letters or provider bulletins instead of formal rulemaking.
Who It Affects
Directly affected parties include licensed ground ambulance operators and nonemergency medical transportation vendors, Medi‑Cal managed care plans (and their subcontractors), and the California Department of Health Care Services. Indirectly affected are county and state budget offices that must account for appropriations and any shortfall in federal funding.
Why It Matters
The provision sets a predictable, Medicare‑anchored reimbursement path that could materially increase provider revenue and change how managed care reconciles payments. It also reduces administrative friction around mileage documentation and who may certify medical necessity — which affects provider workflows and audit practices.
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What This Bill Actually Does
AB 1328 creates three companion changes to how Medi‑Cal pays for and documents nonemergency ground ambulance transport. First, it moves fee‑for‑service reimbursement away from historically low Medi‑Cal rates toward a Medicare‑linked formula: rates will be derived from the federal Medicare ambulance fee schedule then adjusted for local geographic practice costs.
The statute instructs DHCS to run a managed‑care directed payment program so that managed care payment levels are at least equivalent to fee‑for‑service, and it ties the start of these payments to legislative appropriations and the department’s efforts to claim federal matching dollars.
Second, the bill relaxes who may certify medical necessity for nonemergency ambulance transport. Where federal rules allow nonphysician practitioners to sign certifying statements, Medi‑Cal will accept those signatures for coverage determinations.
DHCS must revise provider manuals and guidance so hospitals, clinics, and transport providers know which clinicians may complete certification under the Medi‑Cal system.Third, AB 1328 modernizes mileage documentation. Providers may continue to use odometer readings, but they may also use vehicle GPS tracking, digital mapping apps, or any other mechanism DHCS designates as reasonable.
The department is required to update corresponding regulations (including a specific Title 22 provision) and to describe acceptable documentation practices for audits and claims.Operationally, the bill ties implementation to two levers that will shape rollout: (1) the department’s ability to secure federal financial participation for both FFS increases and directed payments, and (2) an appropriation from the Legislature to fund any state share. The statute also includes an express ability for DHCS to issue plan letters or provider bulletins instead of going through formal rulemaking, speeding implementation but narrowing the usual public regulatory process.A notable textual quirk: the statute’s timing language reads “Commencing on July 1, 2026, 2027, subject to an appropriation,” which appears internally inconsistent.
That ambiguity will require administrative clarification because the effective date governs budgeting, claims processing, and managed‑care reconciliation.
The Five Things You Need to Know
The bill sets Medi‑Cal fee‑for‑service reimbursement for ground nonemergency ambulance services at a rate calculated from the federal Medicare ambulance fee schedule, adjusted by the CMS Geographic Practice Cost Index.
DHCS must establish a Medi‑Cal managed‑care directed payment program under 42 C.F.R. §438.6(c) that raises managed‑care payments to at least the fee‑for‑service amount and adjusts those directed payments annually.
The department is instructed to maximize federal financial participation (FFP) and, if FFP is unavailable, implement the new rates using state funds provided by the Legislature; the statute expresses intent that appropriations be sufficient to fund the increases.
For certification of medical necessity, the bill permits either a physician or a nonphysician authorized under 42 C.F.R. §410.40 (or its successor) to complete the required certification statement for Medi‑Cal coverage.
For mileage documentation, medical transportation providers may use odometer readings, vehicle GPS tracking, digital mapping software/applications, or other DHCS‑designated reasonable mechanisms; DHCS must update Title 22 regulations (including §51476).
Section-by-Section Breakdown
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Medicare‑linked FFS rates and managed‑care directed payments
This provision establishes the payment architecture: fee‑for‑service reimbursements for ground nonemergency ambulance transportation are to be calculated from the federal Medicare ambulance fee schedule and adjusted by the CMS Geographic Practice Cost Index. It also mandates a managed‑care directed payment program (using 42 C.F.R. §438.6(c) authority) to lift managed‑care reimbursements to at least the fee‑for‑service level, with annual geographic adjustments. Crucially, both components are subject to legislative appropriation and DHCS’s ability to claim federal matching funds; if federal funds are not available, the department is to use state funds if appropriated. The section also authorizes DHCS to implement these changes via plan letters or bulletins without formal rulemaking, which accelerates deployment but limits the administrative record.
Who may certify medical necessity
This section allows medical necessity certification for nonemergency ambulance transport to be signed by either a physician or a nonphysician practitioner authorized under 42 C.F.R. §410.40 (or any successor regulation). The department must revise provider manuals and guidance to reflect these acceptable certifiers. The provision applies across fee‑for‑service and to managed‑care plans that choose to adopt the same certification approach, so it standardizes acceptable signatories and should reduce denials tied to narrow certifier requirements.
Authorized mileage documentation methods
This section expands acceptable mileage documentation beyond physical odometer readings to include GPS tracking, digital mapping software or apps, and any other mechanisms DHCS deems reasonable as technology evolves. It directs the department to update relevant regulations (specifically referencing Section 51476 in Title 22) so audit and billing rules align with modern tracking methods. The change reduces administrative friction for providers that already use electronic route tracking, but it also shifts attention to standards for data integrity, retention, and privacy.
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Explore Healthcare in Codify Search →Who Benefits and Who Bears the Cost
Every bill creates winners and losers. Here's who stands to gain and who bears the cost.
Who Benefits
- Licensed ground ambulance operators and nonemergency medical transportation vendors — higher, Medicare‑linked reimbursement and an explicit managed‑care mechanism raise the baseline revenue available for these services and can improve financial sustainability.
- Clinicians authorized under federal rules (e.g., nonphysician practitioners) — the expanded certification authority reduces the administrative barrier for getting trips certified and may speed patient access to covered transport.
- Providers that use digital tracking tools — the statute validates GPS and mapping software for mileage documentation, reducing disputes over mileage and allowing electronic recordkeeping to support claims.
Who Bears the Cost
- California state government (General Fund) — if federal matching funds are limited or denied, the Legislature must appropriate state funds to cover the increases, creating direct budgetary pressure.
- Medi‑Cal managed care plans — they must implement directed‑payment reconciliation and administrative workflows to incorporate DHCS directed payments, which can increase operational complexity and short‑term costs.
- Smaller transportation providers and contractors — those without existing GPS/mapping systems may need to invest in hardware, software, or training to meet new documentation expectations and audit standards.
Key Issues
The Core Tension
The central tension is between stabilizing and increasing payments to sustain nonemergency ambulance capacity — which favors raising rates and easing documentation and certification requirements — and containing fiscal exposure and preserving program integrity, which favors tight federal oversight, incremental rate changes, strong audit controls, and transparent rulemaking. The bill addresses the first side clearly but shifts many judgments and financial risks to DHCS, the Legislature, and CMS approvals.
Implementation depends on two interlocking contingencies: securing federal financial participation for both the fee‑for‑service and directed‑payment components, and a legislative appropriation to cover the state share. CMS approval is commonly required for directed payment programs and for claiming FFP on payment increases that exceed historic rates; if CMS withholds approval, the statute leaves DHCS to decide whether to proceed using state funds or delay implementation.
That creates execution risk and a potential gap between statutory intent and practical payment changes at the provider level.
The bill also delegates substantial implementation discretion to DHCS by permitting plan letters and provider bulletins in lieu of formal rulemaking. That speeds rollout but reduces the opportunity for public comment and a formal administrative record, which may complicate later legal or audit challenges.
Expanding acceptable mileage documentation and authorizing nonphysician certifiers raises important operational questions: what minimum standards will DHCS set for GPS data integrity, retention, and privacy; how will mapping discrepancies be reconciled in audits; and how will managed‑care contracts be amended to flow directed payments without creating perverse incentives or payment layering?
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