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Whether a Medicaid managed care plan can sign you directly depends first on your state. If NEMT is carved out of managed care, the plan does not buy rides at all; if it is carved in, many plans hand the benefit to a broker, which puts you back in a broker network. The direct contracts most operators can actually win sit with hospitals, dialysis centers, skilled nursing facilities and other facilities that pay for rides from their own budgets, where no Medicaid fee schedule sets the price. Below: how to tell which door is open in your state, what buyers ask for, how PMPM pricing moves risk onto you, and the clauses to read before you sign.
Start with your state's delivery model
A state can authorize NEMT trips itself and pay enrolled providers fee-for-service, hire a broker under the brokerage option in 42 CFR 440.170, or fold NEMT into its contracts with managed care organizations. Two terms decide everything after that:
- Carved in means NEMT is one of the services the MCO is paid to cover. The plan, or whoever the plan delegates to, controls the trips.
- Carved out means the state delivers NEMT separately, through fee-for-service or a broker, even for people enrolled in a plan. The MCO has no rides to give you.
Most states mix models by population or region. In its 2021 mandated report to Congress, MACPAC counted 35 states using a broker for certain populations or areas and 26 using managed care for some, while just five states managed the benefit in-house for all beneficiaries. Managed care use was growing: in 2015, only four states used it.
| Model | How trips reach you | Who you contract with | Examples |
|---|---|---|---|
| State-administered fee-for-service | The state authorizes trips and you bill Medicaid directly | The Medicaid agency, through provider enrollment | Minnesota providers bill state-administered NEMT to Minnesota Health Care Programs. In Texas, HHSC handles NEMT for fee-for-service members and no longer uses a broker for them (effective June 1, 2021). |
| Statewide or regional broker | The broker takes reservations, assigns trips and pays you | The broker | Virginia's fee-for-service NEMT runs through one statewide broker. On Sept. 15, 2026, DMAS announced that MTM had been selected through competitive procurement to take over from ModivCare. Indiana moved its fee-for-service population to a statewide broker in 2018, per MACPAC. |
| MCO-delegated (carve-in) | Each plan covers NEMT for its members and either runs it directly or subcontracts a broker | Usually the plan's broker, sometimes the plan | Texas HB 1576 moved NEMT for managed care members to the MCOs from June 1, 2021. MACPAC notes Arizona has carved NEMT into managed care since the early 1980s. In Virginia, each Cardinal Care MCO has its own contracted broker. |
| County-administered | A county agency arranges rides or other transportation assistance | The county | Ohio's county departments of job and family services arrange non-emergency transportation, including contracted livery, and are not required to when the member's MCO must furnish it under its agreement with the state (OAC 5160-15-10). |
One state can sit in several rows at once: Texas runs NEMT itself for fee-for-service members and through MCOs for plan members. Models also change: Texas switched in 2021, and Virginia picked a new fee-for-service broker in 2026. Confirm your state's current model on the Medicaid agency's transportation page or provider manual; the state's MCO contract, where public, shows whether plans may delegate NEMT.
Why "direct with the MCO" usually means the plan's broker
In a carve-in state the plan is the payer but often not the buyer you deal with. MACPAC notes that plans "may administer the benefit directly or contract with a broker," and that different plans in one state may each subcontract with different brokers. In Virginia, the DMAS NEMT enrollment guide updated July 1, 2025 says each MCO has a contracted transportation broker and tells providers: "You must enroll with the broker(s) to transport Medicaid Members." Of the five plans listed, four used ModivCare and one used Access2Care.
So a request to a plan for a direct NEMT contract usually gets routed to its broker. That is still useful: it tells you which broker controls each plan's volume, the real map of your Medicaid market. Our broker report card covers how the large brokers compare.
Direct contracting still runs through state enrollment
A direct plan contract does not let you skip Medicaid enrollment. Federal managed care rules require the state to screen, enroll and periodically revalidate all MCO network providers. A plan may sign you while enrollment is pending for up to 120 days, then must terminate if the state cannot enroll you. Finish Medicaid provider enrollment first.
Where a direct plan contract is genuinely possible
- A plan that runs NEMT itself. Ask the plan's network management team one question: is NEMT administered in-house or delegated, and to whom? If it is in-house, the network manager is your buyer.
- Transportation outside the core benefit. MACPAC notes that plans may override state limits or provide transportation for additional services as value-added services when the trips add value. Ask whether any of that is purchased outside the broker contract, for example by a care management team or a specific program.
- A gap you can document. If you run a level of service or cover counties where the plan's members wait, bring the evidence: vehicles by level of service, counties served and hours. Even if the answer is still "go through our broker," you arrive as a named referral, not a cold application.
Expect Medicaid audit terms to flow down. A broker that runs NEMT for a plan is a subcontractor, and 42 CFR 438.230 gives the state, CMS, the HHS Inspector General and the Comptroller General the right to audit the books, records and systems of the subcontractor or of the subcontractor's contractor, through 10 years from the end of the contract or the completion of any audit, whichever is later. As the broker's contractor, your trip logs are inside that reach.
Health systems and facilities: buyers Medicaid rules do not price
When a hospital, dialysis center, skilled nursing facility or adult day program pays for a ride from its own budget, there is no Medicaid fee schedule, no broker portal and no trip authorization from the state. Rate, standards and payment terms are whatever you negotiate, which makes facility contracts the most direct route off broker-only revenue for most operators.
The common buyers and what they are buying:
- Hospital discharge. A patient who is medically ready to leave but has no ride occupies a bed. The discharge planner or case management team needs a vendor who answers the phone and shows up the same day.
- Dialysis centers. Patients on a recurring schedule make standing orders possible, which is the most predictable volume you can get. A late arrival can push back the patient's treatment slot.
- Skilled nursing and assisted living. Residents go out for specialist visits and procedures, and the facility wants one number to call.
Medicaid billing rules do not set the terms here, but federal fraud and abuse rules still shape how a provider can give rides to its patients. The anti-kickback local transportation safe harbor, 42 CFR 1001.952(bb), protects free or discounted local transportation for established patients under conditions: the program follows a uniform written policy, is not ambulance-level, is not marketed, stays within 25 miles (75 in rural areas), and the provider bears the cost without shifting it to any payer or patient. The mileage limit does not apply when an inpatient, or a patient held in observation for at least 24 hours, is discharged home. It has further conditions, including how drivers and ride arrangers are paid, which is one reason a hospital's compliance team asks detailed questions of a transport vendor. Ask what their policy requires and build your service to it.
Do not assume Medicare picks up the bill. Original Medicare's ambulance benefit is built around cases where using other transportation could endanger the patient's health, which is not what a wheelchair van does. Confirm who pays before the first trip, and put it in writing.
What a network manager or discharge planner asks for
Plans, brokers and facilities ask for largely the same core packet. Have it ready as one PDF before the first meeting.
| Item | What they are checking | Notes |
|---|---|---|
| Business licenses, permits and Medicaid enrollment | That you are legal to operate in their service area | Requirements vary by state and sometimes by city or county. Include your NPI and Medicaid ID for plan contracts. |
| Certificates of insurance | Auto liability, general liability, workers' comp and any umbrella, at the limits their contract sets | Many will ask to be named as additional insured. Send current certificates, not the policy. |
| Driver screening | Background checks, motor vehicle records, drug and alcohol testing and exclusion screening | Check staff against the OIG exclusion list; excluded people and entities cannot be paid by federal health care programs. Background check standards vary by state. |
| Training records | Passenger assistance, wheelchair securement, CPR and first aid, HIPAA | Keep a driver qualification file per driver that you can pull on request. |
| HIPAA business associate agreement | That you will protect patient information you receive | HHS publishes sample BAA provisions. Read the breach notice deadline; a contract can set a shorter one than HIPAA's outer limit. Our covered entity vs. business associate guide explains when you are one. |
| On-time and complaint metrics | Whether you run the way you claim | Show on-time performance by month, with your definition of on time, plus complaints per 1,000 trips and how you closed them. Pull it from dispatch data, not memory. |
| Capacity by level of service | Whether you can take their volume without dropping it | Vehicles by type (ambulatory, wheelchair, stretcher, bariatric), counties served and daily trip capacity. |
| After-hours and weekend coverage | Whether a 7 p.m. discharge gets a ride | State your hours, your after-hours phone process and the response time you will commit to. |
| Vehicle inspection and incident process | Safety and what happens when something goes wrong | Inspection logs, your incident report form and who gets notified, how fast. |
A plan or broker runs this through formal credentialing; a hospital may route it through purchasing and compliance. Ask who signs, who books and who pays the invoice: they are often three different people.
Per trip compared with PMPM: who carries the utilization risk
Most NEMT contracts pay per completed trip, often with a base rate plus mileage and different rates by level of service. Under per-trip pricing, the buyer carries the volume risk: if riders take more trips, the buyer pays more. You carry the cost risk: if deadhead, wages or insurance rise, your margin shrinks until you renegotiate.
A capitated or PMPM (per member per month) contract pays a fixed amount for each enrolled member each month, whether those members ride or not. That flips the risk. If members ride more often, ride farther or need more wheelchair and stretcher trips than the price assumed, your revenue stays flat while your costs climb. That is utilization risk, and under PMPM you hold it. Capitation is common higher up the chain: MACPAC found about two thirds of the 61.5 million Medicaid NEMT ride-days in FY 2018 were paid under capitated broker or plan arrangements, and recorded concerns that capitated brokers may have a financial disincentive to authorize trips. That is where the pressure goes when utilization runs over.
The math you need before you price a PMPM offer:
- Expected trips: members covered x trips per 1,000 members per month, from at least a year of the buyer's actual utilization data for that population.
- Cost of those trips: expected trips by level of service x your cost per trip at the average trip length, plus no-shows and cancellations that still cost driver time.
- Break-even PMPM: total expected monthly cost divided by members, before any margin or reserve for months that run hot.
If the buyer will not share utilization data, you are pricing blind. Ask for protections: a risk corridor or reconciliation if trips per 1,000 run past an agreed band, a clear definition of who counts as a member, and a repricing trigger if membership or the covered population changes. Build your cost per trip in our cost per trip calculator and check it against the rate logic in how much to charge for NEMT trips. There are no public PMPM benchmarks for NEMT subcontracts, so the number has to come from your data and theirs.
Contract terms to read before you sign
| Clause | What to look for | Why it matters |
|---|---|---|
| Assignment and change of ownership | Whether the contract can be assigned to a buyer of your company, and whether a stock sale counts as an assignment | A contract that ends when you sell is worth little in a sale. Buyers check this first. |
| Termination | Termination for convenience and its notice period; termination for cause and any cure period; what happens to standing orders on exit | A 30-day convenience clause makes a three-year contract a 30-day contract. Plan vehicle financing around the notice period, not the term. |
| Payment terms | Days to pay, what counts as a clean claim or valid invoice, dispute windows, offsets and recoupment rights | Federal rules require MCO contracts to meet prompt-payment standards, but a plan and its providers may agree to a different schedule in the contract. Facility contracts set their own terms. Model the cash gap at the stated days. |
| Audit and records | Who can audit, how far back, what records you must keep and for how long | Medicaid-linked contracts can carry the 10-year federal audit reach described above. Facility contracts may add their own audit rights. |
| Indemnity and insurance | Whether indemnity is mutual or one-way, any caps, and insurance limits higher than you carry today | A one-way indemnity for "any claim arising from transport" can exceed your policy limits. Have your agent read it before you sign. |
| Performance standards and penalties | On-time definitions, late-pickup penalties, complaint thresholds and how they are measured | The definition decides the number. Make sure their on-time window matches how your dispatch records times. |
| Rate adjustments | Fuel adjustment, annual increases and who can reopen rates | A flat rate for three years absorbs every fuel and wage increase into your margin. |
A step-by-step pursuit plan
- Map your state. Carved in or out, which populations use fee-for-service, a broker or plans, and whether counties play a role.
- List every plan and its NEMT administrator. In-house or delegated, and to which broker. That is your Medicaid target map.
- Close enrollment gaps. State enrollment first, then each broker network you are not yet in.
- Build the packet and your numbers. Everything in the table above, plus on-time performance, complaints, capacity and your cost per trip. Do not quote a rate until you know your break-even.
- Rank facility targets. Dialysis centers, hospitals and skilled nursing facilities within your efficient service radius. Find the person who books rides today, not just the administrator.
- Offer a defined pilot. One unit, shift or discharge window for 60 to 90 days, with metrics agreed in advance. Report monthly without being asked, then use the results to ask for more volume or a longer term.
- Read every contract with counsel, and track each relationship in your client management system so renewals and recredentialing dates do not slip.
FAQ
Can an NEMT company contract directly with a Medicaid MCO?
Only if your state carves NEMT into managed care and the plan runs the benefit itself or buys some transportation outside its broker contract. In carved-out states the plan does not cover NEMT, and in many carved-in states each plan delegates NEMT to a broker, so you join the broker's network. You still need state Medicaid enrollment either way.
What is the difference between carve-in and carve-out NEMT?
Carve-in means NEMT is part of what the managed care plan is paid to cover, so the plan or its broker controls the trips. Carve-out means the state delivers NEMT separately, through fee-for-service or a state broker, even for plan members. Many states use both for different populations or regions.
How do NEMT companies get hospital contracts?
Find the person who books rides today, usually in case management, discharge planning or the department that schedules outpatient visits. Bring a complete credentialing packet, on-time data and a clear after-hours process, and offer a defined pilot with agreed metrics. Expect purchasing and compliance to review the contract and your business associate agreement.
Is a PMPM contract better than per-trip pricing?
Neither is better in the abstract. Per trip leaves volume risk with the buyer. PMPM pays a fixed amount per member and moves utilization risk to you, so it only makes sense when you have reliable utilization data for the covered population and protections if trips run past the assumptions.
This article is general information, not legal, tax or investment advice. Medicaid delivery models, enrollment rules and contract requirements vary by state and change over time; confirm with counsel, a CPA or your state Medicaid agency before you sign or price a contract.
What to do in the next 30 days
- Confirm your state's NEMT delivery model and write down, for each population, who controls the trips.
- List every MCO in your service area and the broker or team that runs its NEMT.
- Assemble the credentialing packet as one PDF, with 90 days of on-time and complaint data, and note every expiration date.
- Run your cost per trip, set a floor rate for facility work, and pick five facility targets.
- Check your largest current contract's assignment, termination and payment clauses against the table above.
