Medicaid Non-Emergency Medical Transportation: Overview and Key Issues in Medicaid Expansion Waivers

Posted on August 10th

Medicaid’s non-emergency medical transportation (NEMT) benefit facilitates access to care for low income beneficiaries who otherwise may not have a reliable affordable means of getting to health care appointments. 

NEMT also assists people with disabilities who have frequent appointments and people who have limited public transit options and long travel times to health care providers, such as those in rural areas. NEMT expenses eligible for federal Medicaid matching funds include a broad range of services, such as taxicabs, public transit buses and subways, and van programs. Although comprehensive data about Medicaid NEMT expenditures do not exist because states are not required to separately report on this item, the Transit Cooperative Research Program, a federally funded independent research entity, estimates NEMT spending at $3 billion annually, less than one percent of total Medicaid expenditures. This issue brief describes the NEMT benefit, how states administer it, and the reasons that beneficiaries frequently use NEMT. It also explores current policy issues related to NEMT in the context of alternative Medicaid expansion waivers.

What is Medicaid’s Non-Emergency Medical Transportation Benefit?

State Medicaid programs are required to provide necessary transportation for beneficiaries to and from providers.

 NEMT services are not included in the statutory list of mandatory Medicaid benefits but are required by a long-standing federal regulation, based on the Department of Health and Human Services’ statutory authority to require state Medicaid plans to provide for methods of administration necessary for their proper and efficient operation. 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.

How is the Medicaid NEMT Benefit Administered?

State Medicaid agencies have considerable latitude in how they administer NEMT benefits. 

Federal law contains a broad guideline that state Medicaid plans must specify the methods used to provide NEMT. Most states utilize third-party brokerage firms to coordinate transportation for beneficiaries in return for a capitated payment, while some states deliver NEMT directly via fee-for-service reimbursements, and still others rely on a mix of capitated brokerage, direct delivery, and public transit voucher programs as appropriate based on geographic and beneficiary needs.

State spending for Medicaid NEMT services can be reimbursed as an administrative expense or as a medical service expense. 

Reimbursement as an administrative expense caps the Federal Medical Assistance Percentage (FMAP), or the amount of federal matching funds available, at 50% like other administrative expenses. Claiming as an administrative expense affords states greater flexibility in delivery system design and eliminates the free choice of provider requirement, allowing for contracts with a single provider and alternative payment models, like vouchers. Claiming NEMT as a medical service expense allows for reimbursement at the state’s regular FMAP, which ranges from 50 to 74.63% in FY 2017, depending on state per capita income, for most populations. Claiming as a medical service expense generally makes NEMT subject to additional guidelines, including offering beneficiaries free choice of providers and covering travel for attendant care providers. However, the Deficit Reduction Act (DRA) of 2005 added an option for states to include NEMT brokerage programs in their Medicaid state plans where cost-effective. States using the DRA option can claim NEMT as a medical expense, accessing their regular FMAP, while also limiting beneficiaries’ free choice of provider and varying NEMT programs by geographic region and in amount, duration, and scope.

Why Do Medicaid Beneficiaries Use NEMT?

NEMT can be a cost-effective means of facilitating access to care for Medicaid beneficiaries.

One study estimated that at least 3.6 million people miss or delay medical care each year because they lack available or affordable transportation. This study found that improved access to NEMT for this population is cost-effective or cost-saving for all 12 medical conditions analyzed, including preventive services such as prenatal care, and chronic conditions such as asthma, heart disease, and diabetes. Another study found that adults who lack transportation to medical care are more likely to have chronic health conditions that can escalate to a need for emergency care if not properly managed. This study also noted that adults who lack transportation to medical care are disproportionately poor, elderly, and disabled and more likely to have multiple health conditions. Most recently, a report for the Arkansas Health Reform Task Force cited national studies showing a positive return on investment for NEMT and recommended that the state retain its current Medicaid NEMT benefit structure as it has proven cost effective.

Beneficiaries frequently use NEMT to access behavioral health services, preventive health services, and care for chronic conditions.

While there are no comprehensive national data about beneficiary use of NEMT (because states are not required to separately report this data), information from one company that provides Medicaid NEMT services in 32 states indicates that the most frequently cited reasons for using NEMT are accessing behavioral 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.

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