NEMT Entrepreneur provides expert insights, strategies, and resources to help non-emergency medical transportation professionals grow their businesses. Get industry-leading advice to succeed in NEMT.
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Want to boost your Non-Emergency Medical Transportation (NEMT) business? Keep an eye on these 5 crucial metrics:
- Payment Wait Time: Aim for quick turnarounds on payments to maintain healthy cash flow.
- Rejected Claims Rate: Keep it under 5% to maximize revenue.
- Money Per Trip: Know your break-even point and price accordingly.
- Cost for Each Mile: Try to keep it under $1.67 to stay profitable.
- Payment Success Rate: Shoot for at least 95% collection rate.
By tracking these numbers, you'll set your NEMT business up for growth in an industry expected to hit $15.58 billion by 2028.
Quick Comparison:
| Metric | Target | Why It Matters |
|---|---|---|
| Payment Wait Time | Low as possible | Faster cash flow |
| Rejected Claims Rate | Under 5% | Maximizes revenue |
| Money Per Trip | Above break-even | Ensures profitability |
| Cost per Mile | Under $1.67 | Keeps operations lean |
| Payment Success Rate | 95%+ | Indicates billing efficiency |
Smart tracking and the right software can cut dispatching costs in half, automate claims processing, and boost billing accuracy to 95%+. Don't just count beans - use these metrics to fuel your NEMT business growth.
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Payment Wait Time
In NEMT, your cash flow can make or break your business. That's where Days in Accounts Receivable (AR) comes in. It's a fancy way of saying "how long it takes to get paid."
The math is simple: (Total Accounts Receivable / Total Revenue) x Number of Days in Period. But here's the real deal: you want this number LOW. Every day you're waiting for cash is a day your business is hurting.
Why does this matter so much? NEMT providers have to jump through hoops to get paid by Medicaid. You need to submit claims with all the details - when you drove, what kind of service you provided, who you transported. Miss one thing, and your payment gets stuck in limbo.
"Billing errors can prove to be costly for your NEMT business in the long run, which is why it's important to learn how you can avoid making them in the first place." - Keren Dinkin, Content Writer
Want to get paid faster? Here's how:
- Bill ASAP: The quicker you submit, the quicker you get paid. File everything the same day you provide the service.
- Use tech: Invest in medical billing software. It'll cut down on mistakes and speed things up.
- Check your work: Regular audits catch errors before they mess up your cash flow.
The CMS-1500 form is your golden ticket to Medicaid payments. Get it right, and you'll see your money sooner. And with the NEMT market growing 9% each year, faster payments aren't just about keeping the lights on - they're about growing your business.
Keep an eye on how long it takes to get paid. If that number starts creeping up, it's time to take a hard look at your billing process. In NEMT, cash is king, and the faster it comes in, the healthier your business will be.
2. Rejected Claims Rate
Your rejected claims rate is a key indicator of your NEMT billing health. In 2022, the healthcare industry saw an average 11% denial rate, leading to big revenue losses. For NEMT providers, you want to keep this number under 5%. Anything higher? That's a red flag.
Let's break it down:
Say you submit 1,000 claims at $500 each. With a 10% rejection rate, you're looking at $50,000 in revenue at risk. That's a lot of cash your business could miss out on.
So what's causing these rejections? Here's the breakdown:
- 61% - Incomplete information
- 24% - Patient ineligibility
- 18% - Authorization issues
But here's the kicker: about 90% of these denials? They're preventable.
"Developing a denial prevention culture throughout the revenue cycle will save your practice time and money." - PrognoCIS by Bizmatics
Want to keep your rejection rates low? Here's what top NEMT providers do:
- Check Before You Go: Always verify patient eligibility before a trip. It's the easiest way to avoid the most common rejection reason.
- Use Smart Tech: Good NEMT billing software checks your claims before you submit them. It catches errors that could lead to rejections.
- Don't Wait on Rejections: When a claim gets rejected, deal with it within 24 hours. The longer you wait, the harder it gets to get that money back.
- Know Your Patterns: Keep an eye on which insurers reject your claims most often and why. This info helps you spot and fix ongoing issues in your billing process.
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3. Money Per Trip
Your revenue per trip can make or break your NEMT business. Let's dive into the numbers you should aim for and how to crunch them correctly.
NEMT trips bring in different amounts based on the service type. For a typical five-mile trip, ambulatory services average $21.18, while wheelchair trips fetch about $28.95. But that's just the tip of the iceberg.
Here's what top NEMT providers charge:
| Service Type | Weekday Rate | Weekend/Off-Hours | Holiday Rate |
|---|---|---|---|
| Ambulatory | $25 – $30 | $30 – $40 | $35 – $45 |
| Wheelchair | $45 – $50 | $75 – $90 | $85 – $100 |
| Stretcher | $100 – $200 | $125 – $225 | $150 – $250 |
But here's the kicker: your per-trip revenue needs to cover both fixed and variable costs. Let's break it down:
"To determine revenue needed per trip, divide the total monthly costs by the number of trips to find the revenue required per trip to cover all costs." - BusinessDojo Expert
Picture this: Your monthly fixed costs are $3,000 ($1,000 for insurance, $500 for maintenance, $1,500 for admin) and each trip costs you $170 ($100 fuel, $50 driver wages, $20 tolls). If you're doing 20 trips a month, you need $320 per trip just to break even.
Don't forget these money-makers:
- Mileage fees: Tack on $3-$5 per mile on weekdays
- Wait time charges: $15-$30 per 30 minutes
- Extra attendant fees: $5-$10 when needed
Keep an eye on your per-trip revenue compared to local market rates. If you're consistently falling short, it's time to rethink your pricing. Remember, NEMT businesses typically rake in between $40,000 and $60,000 annually – your per-trip revenue plays a big role in hitting these numbers.
4. Cost for Each Mile
Let's talk about the real numbers that impact your NEMT business. Knowing your cost per mile is key to staying profitable.
Industry data shows successful NEMT businesses try to keep their cost per mile under $1.67. This number comes from looking at the main expenses that affect your per-mile costs.
Here's a breakdown of typical NEMT costs per mile:
| Expense Category | Cost Per Mile |
|---|---|
| Driver Pay | $0.44 |
| Fuel | $0.53 |
| Vehicle Insurance | $0.16 |
| Maintenance/Repairs | $0.13 |
| Dispatch/Admin | $0.19 |
| Other Expenses | $0.22 |
Your actual costs might be different. For example, city operations usually have lower per-mile costs than rural services. Why? Shorter trips and more rides in a smaller area.
"Understanding the factors that influence NEMT costs and the available funding sources is essential for individuals seeking this service." - Mike B., Transportation Consultant
Want to keep your per-mile costs down? Try these strategies:
Smart Fuel Management: Use a fleet fuel card program. You can save 3-5% on fuel costs this way.
Route Optimization: Use GPS tracking and routing software. It can cut unnecessary miles by up to 20%. Fewer empty miles means more money in your pocket.
Preventive Maintenance: Regular check-ups might seem expensive, but they're cheaper than emergency fixes. Check your vehicles every 5,000 miles to catch problems early.
5. Payment Success Rate
Your payment success rate shows how much you actually collect from your billed services. The Medical Group Management Association (MGMA) says you should aim for at least a 95% collection rate to keep your NEMT business healthy.
Let's break it down:
If you bill $10,000 in NEMT services, you should collect at least $9,500. If you're getting less, your billing system needs some work.
Here's what top NEMT providers track:
| Billing Component | Target Rate | Why It Matters |
|---|---|---|
| Initial Claims | 95%+ | Clean claims = faster payments |
| Patient Collections | 90%+ | Directly affects cash flow |
| Insurance Payments | 97%+ | Your main money source |
Want to boost your payment success? Try these:
- Check Your Data: Make sure all trip details are correct before you submit claims. Wrong pickup times or patient info can hold up your money.
- Use Smart Software: NEMT billing software can catch mistakes before you submit. It's a game-changer for your collection rate.
- Look at Your Process: Every month, take a close look at your billing. Where are claims getting rejected? Why are payments slow?
"A mismanaged billing system lands NEMT providers in the deep end without a life vest." - Tobi Cloud, Author
- Train Your Team: Keep your billing staff up-to-date on rules and what payers want. They'll spot problems before they hit your wallet.
Wrap-Up
Tracking these five key financial metrics isn't just about crunching numbers - it's about building a NEMT business that lasts. RouteGenie reports that companies using good tracking software see 25% fewer missed or unbilled claims. That's money straight to your bottom line.
Let's look at what NEMT providers are achieving when they track metrics right:
| Metric Impact | Old School | With Software |
|---|---|---|
| Dispatching Costs | Regular costs | Cut in half |
| Claims Processing | Manual work | Automatic, instant |
| Revenue Cycle | Up to 45 days | Check it daily |
| Billing Accuracy | 80-85% right | 95%+ on the money |
Emmy Kolbe from iSi Technology puts it well: "Being able to pull and examine useful data within your company is one of the best ways to improve in the future." This is spot-on, especially as NEMT is set to grow from $8.6 billion in 2021 to $15.6 billion by 2028.
Take Mitchell County Transportation's story. Lisa Bailey says: "Cut work load in half. I was constantly re-entering data before using TripMaster software." Their experience shows how good tools can turn financial tracking from a headache into a business boost.
Today's NEMT software does more than count beans. It gives you:
- Up-to-the-minute money reports
- Catches mistakes on its own
- Billing rules you can tweak
- Safe ways to process payments
The trick? Pick tools that fit your business. With solid metric tracking and the right software backing you up, you're not just gathering data - you're setting yourself up for growth in an industry that's expanding by 9% each year.
"The attention CTS staff provides users is impeccable--their team is on top of all issues 24 hours a day." - Carol Long, Onslow United Transit System
