Key Takeaways:

  • NEMT Business Overview: The Non-Emergency Medical Transportation (NEMT) industry is growing due to increased demand from elderly and disabled individuals needing transportation to medical appointments.
  • Licensing & Compliance: Obtaining proper licensing, meeting Department of Transportation (DOT) and Medicaid requirements, and complying with state regulations are essential.
  • Business Setup: Entrepreneurs must choose a business structure, secure funding, and establish relationships with hospitals, clinics, and state Medicaid programs.
  • Contracting Opportunities: Securing NEMT contracts involves government bidding, networking with healthcare providers, and registering with Medicaid brokerage services.
  • Insurance & Liability: Comprehensive insurance, including general liability, commercial auto, and workers' compensation, is critical to protect the business and its clients.
  • Technology & Operations: Investing in dispatch software and fleet management tools can improve efficiency and ensure compliance with contractual obligations.
  • Marketing & Growth: Digital marketing, networking with medical facilities, and joining industry associations can help secure contracts and expand operations.

Medical transportation contracts are a vital component when you wish to start a business in the medical assistance field. Growth within the healthcare industry gives entrepreneurs an opportunity in non-emergency medical transportation (NEMT). Non-emergency transportation providers are companies that provide travel services to Medicaid recipients.

First, you need to meet several criteria set by the Department of Transportation (DOT) to start a non-emergency transport business. The Medicaid program is funded through federal and state funds, but the program itself is managed by the states.

Ironically, it’s a service that few people consider when starting a business, yet it presents a profitable market niche. Non-emergency medical transportation primarily deals with transporting the disabled and elderly. Further, you will transport people who need some type help, and this field possesses greater demand than taxicab services. The business mainly transports the following:

  • People in wheelchairs
  • People in stretchers
  • People who are considered ambulatory

Ambulatory refers to a person who can walk but moves more slowly due to disability or age. Such a person may walk using a cane or walker. It’s worth noting that this service does not move people on life support, but mainly moving people to medical appointments or wherever the elderly, sick, or disabled need to go.

Planning Your Business

An independent operator is a start-up running its own operation, offering a variety of benefits. When running your own NEMT business, you must do the following:

  • Set up your own schedule
  • Hire your own staff
  • Obtain contracts
  • Train employees

Further, you must choose a suitable location for the business. Keep demographics in mind by locating a spot where there is a large elderly population in the vicinity. From there, create a list that includes the following:

  • Hospitals
  • Daycare centers
  • Clinics
  • Retirement homes
  • Group homes
  • Dialysis centers

You may reach out to various facilities and ask representatives what kind of transport services they could use to enhance your business.

Understanding Medicaid and State Contracting

To secure NEMT contracts, businesses must first understand how Medicaid-funded transportation services operate. Medicaid transportation is administered at the state level and is often managed through brokers like LogistiCare, MTM, and Access2Care. These brokers issue Requests for Proposals (RFPs) where providers can bid for contracts. To qualify, NEMT providers must:

  • Register with the state’s Medicaid program.
  • Obtain necessary state and federal licenses.
  • Meet vehicle and driver safety standards.
  • Maintain accurate trip logs and billing records.

Developing relationships with Medicaid brokers and understanding their reimbursement policies is key to securing long-term contracts.

Competition

Additionally, you should identify your competition and analyze their strengths and weaknesses. Contact competitors, ask them proper questions, and read any information on their websites. In addition, conduct some research on their drivers and vehicles.

How to Get NEMT Contracts: Bidding & Direct Contracts

Winning NEMT contracts requires strategic planning and proactive networking. There are two primary methods for obtaining contracts:

  1. Government & Medicaid Contracts
    • Register as a Medicaid provider in your state.
    • Apply through NEMT brokers that manage transportation contracts.
    • Monitor state procurement websites for open contract bids.
    • Submit detailed proposals that highlight reliability, safety, and efficiency.
  2. Private Facility & Healthcare Partnerships
    • Approach hospitals, nursing homes, dialysis centers, and rehabilitation facilities.
    • Offer value-added services such as same-day appointments and multi-patient transport.
    • Negotiate long-term service agreements for routine transportation needs.

Contracts are awarded based on compliance, pricing, and reliability. Competitive pricing strategies and excellent service history improve the chances of winning bids.

Getting Started

To get started, you must register in your respective state, but each state may have varying qualifications. You should call your local Department of Health and Human Services to know what qualifications you would need. Afterward, register your business name and obtain the necessary license. Once registration is complete, you will get vehicles for your start-up.

The most common types of vans used include the following:

  • Raised doorways and roofs where clients can enter from rear or side
  • Hydraulic or manual lifts and securing devices for wheelchair clientele
  • Vans should accept ambulatory and wheelchair-bound clients

Finally, purchase dispatch software to dispatch and schedule transportation times.

Essential Vehicles & Equipment for NEMT Operations

Choosing the right vehicle is crucial for success in NEMT. Depending on the type of patients being transported, vehicles should include:

  • Wheelchair-accessible vans: Equipped with ramps or hydraulic lifts.
  • Ambulatory vehicles: For clients who do not require a wheelchair.
  • Stretcher vans: For non-emergency transport of bed-bound patients.

Additional equipment requirements include:

  • GPS and dispatching software for scheduling and routing.
  • Secure seating and restraint systems for safety compliance.
  • Onboard communication devices for emergency support.

Properly equipping your fleet ensures compliance with Medicaid and state transportation regulations.

Insuring your Business

You need an auto insurance policy for all of your vans, most notably a general liability policy to make sure all of your clients are covered in case an accident occurs. Insurance also covers damage to your vehicles, including theft and traffic-related incidents. Additionally, you should get a worker compensation policy to safeguard your employees if they get injured in a work-related accident.

Compliance & Safety Standards for NEMT Providers

Safety and compliance are paramount in securing NEMT contracts. Most states require NEMT businesses to meet strict guidelines, including:

  • Vehicle Inspections: Regular safety checks and maintenance logs.
  • Driver Training: Certification in CPR, defensive driving, and disability assistance.
  • Background Checks: Mandatory screenings for drivers and staff.
  • HIPAA Compliance: Protecting patient information during transport.

Failure to comply with these regulations can lead to contract termination or legal penalties.

Payment Methods

The types of payment you accept depend on the contract and clientele. For example, a business may invoice certain facilities monthly. If you have contracts with Medicaid or state-contracted groups, such facilities may require that you send them an invoice, and you would get a check from that facility on a monthly or weekly basis. Contact your DHHS to learn more about such requirements. Fees and prices are factored into your overall costs. When determining your fee structure, keep in mind the following expenses:

  • Staff
  • Vehicle fleet maintenance
  • Fuel

Maximizing Reimbursements & Billing Efficiency

Most NEMT services are reimbursed through Medicaid, private insurance, or direct client payments. To optimize cash flow:

  • Use electronic claims processing to expedite reimbursements.
  • Track mileage and trip logs accurately to prevent claim denials.
  • Implement automated billing software to manage invoices.

Proper billing and documentation prevent revenue losses and ensure compliance with Medicaid regulations.

Business Hours

Hours of operation depends on your own preference and has its own set of benefits. Primarily, you want to operate during the busiest hours, roughly 5 days a week from 7 a.m. to 5 p.m. Saturdays are also good busy times for your business.

  • Note: Your hours of operation will change as you gain additional vehicles and employees

As an owner, you’ll want to be able to manage and market your business.

Frequently Asked Questions

  1. How do I register as an NEMT provider with Medicaid?
    To register, you must apply through your state’s Medicaid office, obtain the required licensing, and meet vehicle and safety regulations.
  2. What types of contracts are available for NEMT providers?
    Contracts are available through state Medicaid programs, private healthcare facilities, and transportation brokers that manage NEMT services.
  3. How can I increase my chances of winning NEMT contracts?
    Submit competitive bids, maintain excellent service records, invest in compliance and safety, and network with healthcare providers.
  4. What kind of insurance is required for an NEMT business?
    General liability, commercial auto, workers' compensation, and specialized NEMT insurance policies are required.
  5. What is the best way to market an NEMT business?
    Develop partnerships with hospitals and clinics, optimize online presence, and join industry associations to establish credibility.

To learn more about medical transportation contracts, submit your legal inquiry to our UpCounsel marketplace. UpCounsel’s top lawyers will help you in the start-up phase of your medical transportation business, including the necessary licenses you’ll need to operate in your state. Further, our lawyers will remain by your side as you operate and transition your start-up into a viable operation.