Cutting Medicaid Non-Emergency Medical Transportation Will Harm Community-Level Public Transportation

Cutting Medicaid Non-Emergency Medical Transportation Will Harm Community-Level Public Transportation
Posted on August 10th

As has been discussed previously on the Health Affairs Blog (here, here, and here), Medicaid’s non-emergency medical transportation (NEMT) benefit is stuck in the crosscurrents of competing trends: On the one hand, the value of the benefit is increasingly apparent due to recent research and the increasing interest in NEMT as a tool to address social determinants of health. On the other, the Trump administration is persistently taken actions (including a Request for Information scheduled for this year and a regulation projected for 2021 that will have the effect of curtailing Medicaid NEMT, even as the administration advances policies to promote NEMT in other health care markets (including as a transportation supplemental benefit in Medicare Advantage). 

The purpose of this post is not to re-hash arguments previously made on the blog but to advance a new argument for the importance of NEMT. That is: Because Medicaid NEMT and local transportation services are commonly provided by the same local transportation agencies, the two services are interdependent. Cuts to Medicaid NEMT would therefore undermine entire communities’—not just Medicaid beneficiaries’—access to transportation. This is particularly true in rural states where local transportation agencies have fewer funding streams and serve less affluent communities. While states rely on different models to deliver NEMT (including contracting with statewide NEMT brokers, embedding NEMT within managed care organization contracts, and directly reimbursing transportation providers), transportation agencies remain important providers of NEMT—particularly in rural communities. To create efficiencies, transportation agencies commingle Medicaid NEMT with other essential services, including para-transit for people with developmental and physical disabilities, senior rides for older adults, and services for other vulnerable citizens who rely on public transportation to get to work, grocery stores, vocational training, and other destinations necessary to maintaining community engagement. 

The co-dependency between Medicaid NEMT and broader community transportation services is not well understood in health policy circles. For this reason, the Medical Transportation Access Coalition (MTAC) partnered with the Community Transportation Association of America to document the interconnectedness of Medicaid NEMT and community transportation. We interviewed local transportation agency heads from four states (Iowa, Idaho, Vermont, and West Virginia) and reviewed their program statistics. Given the limited scope of our research, our findings are more suggestive than conclusive. However, given the dearth of research on this subject, we still think this blog post makes an important contribution to the policy debate about NEMT. The information presented below is further documented in a longer report posted on the MTAC website concurrent with this post. 

Synergies Between Medicaid NEMT And Community Transportation Services

Community transportation services are commonly provided via vans that operate on fixed routes. These routes are only viable when publicly subsidized riders—such as those on Medicaid—fill the vehicles. If NEMT was curtailed, Medicaid riders and funds would leave these routes. Inevitably, this would constrict funds and force a reduction in community transportation services for non-Medicaid purposes. Of the five local transportation agencies we interviewed, the percentage of their budget supplied by Medicaid NEMT ranged from 5 percent to 59 percent. Large swaths of rural America are not served by taxi or transportation network companies such as Uber or Lyft; in hundreds of rural communities, there simply is no public transportation alternative to those offered by these local transportation services. 

Medicaid NEMT And State Transportation Funds

In one of the four states we sampled, Iowa, NEMT rides figure prominently in the state’s Department of Transportation funding formula for local transportation agencies. In Iowa, transportation agencies draw state transportation funds based upon the number of rides they provide. Thirty-four percent of the rides offered by one of the interviewed transportation agencies are from Medicaid NEMT. If these rides disappeared, that agency would face a 34 percent reduction in state transportation funds. We interviewed two Iowa local transportation agency heads who speculated that if these funds were lost they would need to cut services well beyond just their Medicaid rides. One suggested he would defer purchases to update his vehicle fleet. This would compound an existing problem—60 percent of his fleet is already beyond the recommended age for public transportation vehicles. 

In West Virginia and Idaho, local transportation agencies do not have the benefit of state Department of Transportation funds; this increases their dependency on NEMT. The local transportation head we interviewed in West Virginia noted that NEMT contracts generate 24 percent of agency funding; in contrast, only 2 percent of its funding comes from local governments. 

State Medicaid NEMT Rule Changes

In two of the four states we examined (Vermont and Iowa), state Medicaid offices—as part of broader Medicaid cost-saving moves—recently revised Medicaid NEMT reimbursement to the detriment of local transportation agencies. The Department of Health Access in Vermont now reimburses local transportation providers based on a per-member-per-week capitated payment built on the number of Medicaid beneficiaries who have taken a trip within the past 13 months. This rate is not adjusted for long-distance trips or riders who require several trips per week (such as riders with substance use disorders [SUDs] who require frequent trips for treatment). Thus, local transportation agencies are disadvantaged for being responsive to their most rural residents and those with SUDs who require regular transportation for treatment.    

In December 2017, Iowa Medicaid implemented a rule change for individuals on the Medicaid Intellectually Disabled Waiver that limited NEMT funding from the Department of Transportation for this population. This rule change resulted in a loss of $120,000 in reimbursements for one of the interviewed local transportation agencies. The other interviewed agency reported a 28 percent decrease in NEMT revenue in 2018. Because Medicaid NEMT and community transportation funding and services are interwoven, these policy changes have already strained services, resulting in deferred purchases of new vehicles, laying off paid drivers in favor of volunteers, and cutting services. 

The Stakes

Transportation agency heads were asked to speculate about what they would do if Medicaid NEMT contract funds were substantially cut. According to all five interviewees, the loss of Medicaid NEMT contract revenue would result in a dramatic reduction of non-NEMT local transportation services. The Vermont agency head suggested she would need to lay off half of her drivers, with a corresponding drop of service across her routes. The Iowa agency heads, respectively, predicted: cutting in half its 72-vehicle fleet and eliminating all individual trips and no longer serving residents unable to access fixed routes. The West Virginia agency head suggests that if NEMT were eliminated, he would be forced to slash local services, including transportation to workshops for people with disabilities, transportation to shopping for people with disabilities, and transportation to medical appointments for vulnerable individuals outside of Medicaid. The Idaho agency heads offered similar predictions that included laying off drivers and providing fewer services to their communities. 


The budding interest in social determinants of health (of which transportation access is a primary concern) sharpens the focus on transportation as an asset that impacts both the health of individuals and population health. Recent studies have shown NEMT to be a net cost saver to Medicaid in treating individuals with kidney failure requiring dialysis and individuals with diabetes requiring wound care. An actuarial analysis commissioned by the Medical Transportation Access Coalition found that “NEMT more than pays for itself as part of a care management strategy for people with chronic diseases.” Entities, such as Medicare Advantage plans and accountable care organizations, which are looking holistically at the care needs of vulnerable people, are increasingly making the determination that NEMT is a good investment for Medicare and commercially insured populations.  

As discussed above, in the states we examined, NEMT is often provided to eligible Medicaid beneficiaries through modestly resourced local transportation agencies. Regardless of the NEMT delivery model, the provision of Medicaid NEMT and local public transportation is frequently interwoven. If Medicaid NEMT riders were not on community transportation routes, a significant portion of existing local community transportation services would be unsustainable. These facts illustrate another reason—and an important one at that—why curtailing Medicaid NEMT is unwise. 

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