Medicaid delivers care to 74.5 million individuals for less money than any other large-scale health financing mechanism. A 2016 Henry J. Kaiser Family Foundation study noted that “spending per enrollee is lower for Medicaid compared to private insurance after controlling for differences in sociodemographic and health characteristics between the two groups.” One reason might be that Medicaid covers certain inexpensive, non-medical services that, when delivered early in the progression of chronic diseases, can check or slow the diseases, thereby improving beneficiaries’ health and saving money. One non-medical service—transportation to medical appointments—has been part of Medicaid since its inception in 1966 and addresses one of the socioeconomic disadvantages that prevent Medicaid beneficiaries from accessing health services. It is suggested that 3.6 million Medicaid beneficiaries “miss or delay care” annually due to transportation problems. Although non-emergency medical transportation (NEMT) is a mandatory Medicaid benefit, states can limit its availability through federal waivers. As Medicaid enters a period of unprecedented experimentation and, potentially, reduced federal resources, NEMT remains a critical feature of the program.

NEMT In Context

Since its inception, Medicaid has provided beneficiaries with transportation to medically necessary health care services. NEMT is found as early as 1966 in the “Handbook of Public Assistance” (Supplement D), the program’s earliest comprehensive federal interpretive guidance. Additionally, as part of the Early and Periodic Screening, Diagnostic, and Treatment (EPSDT) benefit, states are required to offer children (from birth to age 21) and their families “necessary assistance with transportation” to and from providers. In practice, NEMT provides Medicaid beneficiaries who lack the means to travel to and from medical appointments with the most appropriate and least costly form of transportation, which may involve the use of livery vehicles, vans, or public transit.

Despite federal funding and regulations, Medicaid is best understood as a set of diverse state-directed programs. This diversity carries into NEMT, as states deploy several models to manage and finance the benefit:

  1. Dominant model: brokers and managed care organizations (MCOs). The majority of states have evolved to deliver NEMT through NEMT-focused brokers or MCOs (which typically subcontract with NEMT brokers). In most of these states, the broker or MCO receives a capitated payment to manage the NEMT benefit.
  2. Other models:
    • State entities: A few states rely on government entities such as Departments of Transportation to provide the service and directly fund those entities through an annual contract to reimburse ride providers on a per-ride (fee-for-service) basis.
    • Local service providers: Other states deliver NEMT through county or municipal ride services that may, in turn, fund independent taxi companies—and pay these transportation providers on a fee-for-service basis.

For several reasons, states have increasingly chosen NEMT brokers and MCOs over the other models. As in fee-for-service in medical care, there is worry that fee-for-service transportation incentivizes overuse, and it has been linked to program integrity problems in a few states. In contrast, most NEMT brokers receive a capped amount of money and therefore need to manage limited funds by, for example, assuring the assignment of the least expensive appropriate form of transportation necessary and monitoring trip information to identify the most efficient, highest-quality ride providers.

Due to lags and gaps in national Medicaid data, it is challenging to compile a contemporary snapshot of NEMT usage, although transportation researchers at Texas A&M estimated $2.9 billion was expended on NEMT to provide 103.6 million NEMT trips in fiscal year 2013. The Kaiser Commission on Medicaid and the Uninsured noted in 2016 that NEMT was used most frequently to access behavior health services (including mental health and substance abuse treatment), dialysis, preventive services (including doctor visits), specialist visits, physical therapy/rehabilitation, and adult day health care services.

NEMT Beyond Medicaid

Beyond Medicaid, NEMT is increasingly used in other government programs and health insurance markets. The Centers for Disease Control and Prevention includes transportation options as a social determinant of health in its Healthy People 2020 initiative, and the Association of Health Insurance Plans recently published a report on this topic. Government and private-sector payers increasingly recognize that providing transportation to routine health care improves health outcomes and limits unnecessary expenses, such as hospitalization costs. Below, we briefly survey the use of NEMT in these other programs and markets.

 Medicare

NEMT has become a popular supplemental benefit in the Medicare Advantage program. According to a 2016 Health Affairs blog, NEMT is available to roughly one-fourth of that program’s 19 million enrollees. The benefit is most commonly available in $0 premium plans that focus on lower-income beneficiaries. This occurs despite the fact that traditional Medicare provides NEMT via ambulance only and only when other means of transportation, such as a taxi or wheelchair van, would jeopardize the health of the beneficiary. Ken Thorpe, a nationally recognized proponent of value-based insurance design and Medicare Advantage, has called NEMT “cost-effective for a wide range of medical conditions.”

Department Of Veterans Affairs

The Department of Veterans Affairs (VA) offers mileage reimbursement and NEMT services for travel to health care and rehabilitation appointments for disabled veterans that meet one of eight qualifying criteria. The VA also provides transportation for family caregivers of veterans when certain criteria are met.

Employer-Sponsored Insurance

As of today, NEMT is uncommon in employer-sponsored insurance. This is likely because most people with employer-sponsored insurance are able to make it to and from their medical appointments without assistance. There is no easy way to know how many employers offer NEMT and whether the benefit is limited to specific care management contexts. But there are signs that commercial insurers are considering NEMT as they increasingly deploy customized interventions to address social determinants of health and value-based benefits. We offer two examples: A 2016 “innovation model” manual from the State of Connecticut to self-insured plan employers surveys value-based insurance benefits and notes NEMT as a supplemental benefit worthy of consideration. The Blue Cross Blue Shield Association recently announced a national partnership with Lyft “to ensure Americans are not missing vital health care appointments simply because they lack reliable transportation.”

Accountable Care Organizations (Episode Model)

A Robert Wood Foundation report by Linda Wilson about accountable care organizations (ACOs) notes that these new provider-led care systems “are developing strategies to address social needs that have an impact on health.” These strategies include providing beneficiaries with NEMT. Several Medicare ACOs recognize the need for “transportation assistance” in the description of their services. A recent study by Taressa Fraze and colleagues published in Health Affairs, concluded that several ACO leaders “view transportation as a barrier for patients to receive timely, high-quality care.” As a result, many ACOs assist patients with transportation to medical appointments by providing transportation subsidies, hiring brokers, or managing NEMT for patients.

Concerns Over NEMT

Despite the expansion of NEMT services generally, and of brokerage as the preferred model for delivering NEMT, the benefit has drawn increased scrutiny within Medicaid. The most prominent concerns are discussed below.

Fraud and Abuse

Program integrity lapses have damaged NEMT’s reputation. Like other parts of the Medicaid program, NEMT is not free from fraud and abuse. Over the past few years, investigators have uncovered bad conduct by some NEMT drivers and vendors. In Massachusetts, a ride vendor billed rides for deceased beneficiaries, and in Connecticut, an ambulance provider billed rides for dialysis transport when an ambulance was not required. Incidents of billing for false trips or up charging on vehicle type have resulted in out-of-court settlements as high as $300,000. These examples explain why states looked to the brokerage model in the first place. The brokerage model is designed to address and mitigate these problems through capitated arrangements that insulate Medicaid budgets from fraud losses and encourage brokers to root out abuses.

Administration

Recent audits by the Department of Health and Human Services (HHS) Office of Inspector General suggest that the Medicaid programs of New Jersey and North Carolina both had gaps in their oversight of the NEMT benefit. A 2016 Government Accountability Office (GAO) study noted gaps in NEMT guidance at the state and federal levels and suggested a review by regulators because “NEMT is at high risk for fraud and abuse.” A few months after the publication of the GAO report, the Centers for Medicare and Medicaid Services (CMS) issued a NEMT Toolkit designed to give states and NEMT providers a primer on providing NEMT.

Necessity

Concerns over the necessity of the NEMT benefit may be fueling a desire to re-examine its use in the Medicaid program, at least for particular populations. Currently, two states—Indiana and Iowa—have waived NEMT for their Medicaid expansion populations. In a 2016 Health Affairs blog, Seema Verma and Brian Neale, now the CMS administrator and head of Medicaid, respectively, made the case for not providing NEMT in the Indiana Medicaid expansion program, HIP 2.0 (Healthy Indiana Plan 2.0): “Consistent with commercial market benefit packages, HIP does not require health plans to cover non-emergency transportation (NEMT) services. Transportation availability has not proven to be a significant issue for HIP members during its eight-year history.”

The Continuing Case For NEMT

NEMT skepticism is not universal, even in Republican-led states. At least four states led by Republican governors—Michigan, Nevada, New Jersey, and Ohio—have shown a commitment to continue providing NEMT as they implement the Medicaid expansion.

Two other states with Republican governors—Arkansas and Massachusetts—have sought to limit NEMT, while continuing the benefit for select populations. Arkansas, which contemplated the limitation of NEMT for its expansion program, nonetheless contracted for a favorable report on the benefit in its traditional Medicaid program. A state taskforce convened in 2015 concluded that it has a “very effective brokerage model for non-emergency medical transportation (NEMT) with a capitated benefit structure that manages the program in a cost effective manner.” A recent 1115 waiver amendment request from Massachusetts proposes to waive the “assurance” of NEMT for its Medicaid expansion population but retains NEMT for opioid addiction recovery. Thus, Massachusetts acknowledges the importance of NEMT for adherence in medication-assisted treatments and recognizes that the scarcity of Medicaid enrolled practitioners that provide medication-assisted treatments often requires long-distance travel to and from services.

Several studies note that missing routine, preventive care can lead to unnecessary costs and hospitalization. Although it is difficult to isolate the impact of transportation on health outcomes, a study conducted by Florida State University concluded that if only 1 percent of the medical trips funded resulted in the avoidance of an emergency department hospital visit, the payback to the State would be 1108 percent, or about $11.08 for each dollar the State invested in its medical transportation program. According to the study, “Overall, the State of Florida invested $372,264,302 in these transportation disadvantaged programs in 2007. These funds generated benefits of $3,172,813,246.31, which is a payback of 835%, or $8.35 per each dollar invested in these programs.”

Other studies offer less dramatic, but still affirming, findings on the value of NEMT. A 2014 study by Leela V. Thomas and Kenneth R. Wedel concluded that Medicaid beneficiaries with asthma, heart disease, or hypertension who required monitoring to keep their chronic conditions stable were significantly more likely to attend medical appointments if they used NEMT (see Exhibit 1).

Exhibit 1: Non-Emergency Medical Transportation And Health Care Visits Among Chronically Ill Urban And Rural Medicaid Beneficiaries

ConditionRecommended number of annual visitsUsed NEMT
and had a recommended visit
Did not use NEMT but had a recommended visit
Asthma2--12 per year73.97%53.89%
Heart disease10 per year (2 with specialist)64.81%27.60%
Hypertension4 visits per year50.97%27.20%

Source: Thomas LV, Wedel KR. Nonemergency medical transportation and health care visits among chronically ill urban and rural Medicaid beneficiaries. Social Work in Public Health. 2014;29(6):629-39. Notes: Sample size = 10,824. NEMT population within sample = 697.

A 2013 study in the Journal of Health Economics and Outcomes Research examined the high costs of ambulance transportation for people in need of dialysis (roughly $3 billion annually) and suggested that greater use of public and NEMT transportation might save as much as one-third of these costs. A broader study of the value of transportation services in rural areas also affirmed NEMT’s return on investment. The cost to rural communities of “foregone medical trips” was estimated at between $4.16 and $6.65 for every dollar spent on transportation.

Final assessments of the waiver programs in Iowa and Indiana will help us understand the impact of not providing NEMT to Medicaid expansion beneficiaries. A state-sponsored interim assessment by the Lewin Group suggested that NEMT was not important to expansion beneficiaries. However, this interim assessment focused narrowly on missed appointments, not medical appointments never made because of lack of NEMT or the potential default to emergency care. While we await final assessments, it is worth noting that two Medicaid MCOs—United Healthcare in Iowa and Anthem in Indiana—continue to provide NEMT even without the state requirement.

Looking Ahead

NEMT is one of many parts of the Medicaid program that will likely be subject to experimentation in the coming years. A March letter from HHS secretary Tom Price and CMS administrator Seema Verma promises to “empower” states seeking flexibility in any of seven listed areas, one of which is NEMT. Beyond Indiana and Iowa, two other states—Kentucky and Massachusetts—have waiver applications that would curtail NEMT to some expansion population beneficiaries.

Meanwhile, the NEMT industry is changing rapidly: The dramatic growth of rideshare services such as Uber and Lyft may create new flexibilities for the delivery of NEMT. Policy makers are watching: A 2015 NEMT brief by the National Council of State Legislatures foreshadows greater integration of rideshare and NEMT providers (even while affirming the value of the benefit as “a vital lifeline”). A Medicaid and CHIP Payment and Access Commission presentation concurs: “Services such as Lyft and Uber could improve beneficiary experience with shorter wait times and faster service.” In addition, an article authored by Brian Powers and colleagues published in the Journal of the American Medical Association suggested that new medical transportation technology offered by Uber and Lyft could reduce wait times and produce cost savings of more than 30 percent. NEMT brokers, for their part, are not resisting the use of rideshare services. Brokers and local service providers use rideshare services—particularly Lyft—although rider limitations (physical and cognitive) and state credentialing requirements limit the number of NEMT rides that can be delivered by typical rideshare drivers.

To address program integrity concerns, Congress could require states to manage the NEMT benefit by contracting with brokers, incentivize states to choose the broker option, or require states that do not use brokers to use utilization management tools commonly used by brokers, such as prior authorization. Several years ago, the HHS Office of the Inspector General identified NEMT brokerage (the report refers to brokers as prime vendor contracts) as a “proactive safeguard.” An NEMT broker with a capitated, risk-based contract is the best way to ensure that the service is provided in a timely fashion only to eligible Medicaid beneficiaries (at the appropriate level of transportation for the beneficiary’s needs) by screened, credentialed drivers and safe vehicles.

In the coming months, states will no doubt use waiver authority to experiment with Medicaid in new ways—by implementing work requirements, increasing member cost sharing, adding healthy behavior incentives and disincentives, providing value-based benefits, and, potentially, limiting NEMT. Research shows that transportation is one of the most common barriers faced by low-income populations in accessing timely and necessary medical care, and NEMT fills this access gap by providing the appropriate and least costly method of transportation. Given the high needs of the Medicaid population and the trend across health insurance toward greater use of non-medical benefits, including NEMT, to improve the efficiency of medical care, we expect that NEMT will continue to be an important part of Medicaid.