California has found yet another way to pick the pockets of American taxpayers, and the getaway vehicle is literally an ambulance.
For years, Gov. Gavin Newsom’s (D-CA) California has run a shell game with Medicaid, dressing up a cash grab as if it were legitimate health policy. The scheme is simple once you strip away the bureaucratic fog: California is letting government-run ambulance services stack payment on top of payment for the same single ambulance ride, until taxpayers across the U.S. are footing a bill worth many multiples of what the ride actually costs.
Meanwhile, private ambulance companies doing the same job, driving the same patient to the same hospital, get a fraction of the payout. The only difference is who owns the ambulance. In Newsom’s California, if the government owns it, the money spigot opens wide. If a private business owns it, taxpayers get the fair price.
Take one example: a city ambulance ride that actually costs around $700. Under California’s current scheme, taxpayers pay more than $2,000 for that same ride. Now California wants federal regulators to approve a new deal that pushes the price to over $2,600, nearly four times the real cost. A private ambulance company doing the same job gets paid a few hundred dollars. This is a laundering operation, and Newsom knows it.
It gets worse. Local governments in California have openly bragged that simply taking control of an ambulance contract, not providing better care, not driving faster, not saving more lives, could hand them tens of millions of taxpayer dollars a year. Some counties are so brazen that they still hire private companies to do the actual driving while keeping the government’s name on the contract, purely to collect the federal windfall. This is all about who gets to grab the check.
The good news is that Washington is finally paying attention. The agency that oversees Medicaid, CMS, has proposed a rule to shut this scam down nationwide and make sure every ambulance ride gets paid the same fair rate, no matter who owns the vehicle. That’s common sense, and it’s overdue.
This ambulance racket doesn’t exist in a vacuum. It’s part of a much bigger reckoning underway in American healthcare financing. CMS Administrator Dr. Mehmet Oz has made rooting out Medicaid fraud, waste, and gimmickry a signature priority, putting all 50 states on notice and demanding governors revalidate high-risk providers on a strict timeline. Oz’s team has already deferred more than $1 billion in federal Medicaid funds from California and Minnesota alone over documentation gaps and suspected fraud, and HHS says its broader anti-fraud push has already stopped roughly $42 billion in improper spending, with officials estimating up to $100 billion more in waste can still be prevented.
Here’s a number that puts the ambulance scam in perspective: CMS’s own data show a 13.2% improper payment rate for ambulance services, meaning the fraud isn’t a rounding error, it’s baked into the system. Newsom’s cash-stacking scheme is exactly the kind of financial engineering Oz and CMS are trying to stamp out nationwide, and California just happens to be Exhibit A.
The federal government already asked for public input on shutting this scheme down, and that input period is now closed. Washington has heard the arguments, seen the numbers, and made its case in writing for why this scam needs to end. We at the Center for a Free Economy submitted formal comments to CMS supporting the rule and urging regulators not to let California’s pending funding requests sneak through before the new standards take effect. There is no more listening left to do. The only thing left is a decision.
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Here’s the part that should make every taxpayer furious. California has a stack of midnight-deadline requests before federal regulators, asking for permission to lock in the very scheme the new rule is designed to kill. If Washington drags its feet, Newsom will beat the clock, cash in one last, enormous payday on the backs of taxpayers in every other state, and dare regulators to claw it back later. Every other blue state will watch, take notes, and race to do the same thing before the door closes.
Taxpayers in Ohio, Texas, and Florida shouldn’t be forced to bankroll a shakedown engineered by California politicians looking for one more pot of federal money to raid. Regulators don’t need to wait for the rule to be finalized on paper before they act on what they already know. Washington has correctly diagnosed the scam. Now it needs to slam the door before Sacramento cashes the check.
Ryan Ellis is the President of the Center for a Free Economy.