Introduction

Non-emergency medical transportation (NEMT) is a required benefit provided to Medicaid beneficiaries to enable access to medical services and treatment that may be routine or non-emergent in nature. Although the NEMT benefit constitutes less than 1% of national annual Medicaid expenditures,¹ this service provides a vital role in bridging the transportation gap for Medicaid beneficiaries. Every year, an estimated 3.6 million Americans either miss or delay care due to a lack of access to adequate transportation.² Based on a market forecast of the NEMT market, there is expected growth from a market size of $8.66 billion in 2021 to a projected market size of $15.58 billion in 2028.³ Currently, states have substantial discretion in determining how to implement this benefit within the framework of federal guidelines. A comprehensive understanding of how this benefit is administered can provide insights for NEMT management across states by identifying usage metrics and guidance for future quality improvement strategies.

For this paper, we reviewed information related to seven of Milliman’s Medicaid state clients to develop an analysis of each state’s respective implementation of the NEMT benefit, including what model is used and the per member per month (PMPM) cost of benefit administration. Leveraging this data and additional research indicating a need for improved oversight, we developed hypotheses for how to improve NEMT benefit administration and better understand, manage, and optimize the expense of this growing benefit offering.

NEMT utilization

On average, between 2018 and 2021, the NEMT benefit was used by 3–4 million Medicaid beneficiaries annually, or 4%–5% of total beneficiaries each year⁴ across the country. This benefit was most often relied upon to access the following services: preventive healthcare, the evaluation and management of acute and chronic conditions, labs and imaging, and behavioral health. NEMT also provides Medicaid recipients with access to more acute care, such as substance use disorder treatment services.⁵

Along with providing access to routine and life-sustaining care, several factors can contribute to an increase in NEMT utilization, including the aging U.S. population and the rising prevalence of chronic disease.⁶

Reviewing NEMT models

Based on a review of seven state Medicaid programs, we conducted a macro-level analysis of NEMT delivery models (see Figure 1) to better understand two key characteristics of the programs.

1. Delivery model. Describes the common operating and administration models for NEMT programs.
2. Cost of delivery. We evaluated NEMT program costs as a component of Medicaid capitation rates and normalized our findings to a PMPM basis to compare the relative cost of each state’s NEMT benefit. The average PMPM cost for each state is displayed in Figure 1.

With these findings, we developed high-level observations in relation to the type of delivery models currently being deployed along with the relative cost of those models.

NEMT benefit landscape

State Medicaid agencies have significant flexibility in administering NEMT benefits, resulting in the deployment of various models across the nation. Excluding outlier models for regions outside the continental U.S. (OCONUS), which may include more routine air travel, we have subsequently outlined the scope of NEMT models. The following delivery models are widely cited in literature related to the NEMT benefit, including works by the Medicaid and CHIP Payment Access Commission (MACPAC)⁷ and the National Conference of State Legislatures (NCSL).⁸

1. Brokerage model (statewide or regional). Transportation brokers manage the NEMT benefit; financed by capitated funding.
2. Managed care organization (MCO) model. Contracted managed care plans administer the NEMT benefit. Actual service delivery is typically delivered by a vendor selected by the MCO.
3. Mixed model. Combination of in-house, managed care, and broker models within one state.
4. In-house model.* The Medicaid agency facilitates and funds NEMT by contracting with NEMT providers on fee-for-service basis.

Each category outlined has unique operational characteristics and expenses. To better understand these factors, we conducted an analysis of existing Medicaid state NEMT benefit data.

Delivery model cost analysis

Among the various operating models, the most utilized approach involves partnership with brokerage companies to administer the NEMT benefit to the state’s Medicaid population.⁹ The NEMT market appears to be evolving with operating models and cost structures, likely resulting in wide variance in margins for service providers and quality of experience for beneficiaries. Based on the observed sample, NEMT pricing and contracting appear inconsistent and fluctuate by geography, suggesting an immature and loosely regulated market for this service.

Potential drivers of cost variance

Within our sample, there was evenly split usage between MCO and brokerage models, with the broker model often being cited as the most popular on a national level.¹⁰ Along with information about delivery models, we gathered data about the average PMPM cost for each state. We observed that the PMPM cost of the program can vary greatly based on a number of factors, including:

• Population demographics and care needs. When reviewing the PMPM cost of delivering the NEMT benefit, it is important to consider differences in healthcare needs as Medicaid states have a variable mix of beneficiaries enrolled. Following this premise, the PMPM cost for NEMT services may be greater in populations that require a high amount of medical support, such as aged, disabled, and managed long-term services and supports (MLTSS) member populations. We observed this cost variation in a regional data analysis of calendar year (CY) 2024 projected PMPM expenses for one of Milliman’s client states. This particular data set allowed for granular insight into the utilization differences between different populations in the state.
• Regulatory and performance management requirements. We did not identify clear, specific regulatory requirements or resulting requirements for performance reporting in the states surveyed. The broad federal parameters under which the NEMT program is mandated can lead to a large variance in program scope and performance, which can influence the cost of services.
• Program oversight. Nationally, there is a noted need for program oversight of the NEMT benefit delivery, with few states identifying and dedicating resources responsible for the management of NEMT benefit outcomes. A challenge faced by many states is maintaining program integrity and overseeing vendor relationships.¹¹
• Market diversity of NEMT providers. In our sample, we observed a large variance in the number of service providers available to provide NEMT services in each state. In states with fewer options, we hypothesize that costs may be higher due to a lack of market competition.

This variance of observed costs is reflected across the states surveyed, with expenses ranging from $0.72 to $16.57 PMPM.

Oversight implementation

In exploring NEMT delivery systems across Medicaid client states and available research, there was a common thread of deficiency in adequate oversight mechanisms. This apparent lack of structured oversight not only creates opportunities for instances of fraud, waste, and abuse (FWA) on the part of both providers and beneficiaries,¹² but it also contributes to many of the reported issues consumers face when trying to utilize the service, such as late pickups, last-minute cancellations and no-shows.¹³ This lack of oversight is a challenge in the benefit delivery that may be mitigated with the implementation of monitoring and reporting mechanisms, such as the use of GPS technology and electronic scheduling software.¹⁴

Opportunities in NEMT

One of the key challenges of NEMT benefit administration is insufficient data collection and oversight.¹⁵ The lack of a standard data collection methodology presents an opportunity for the use of web-based applications for the coordination of rides and for the tracking of vendor performance. Monitoring vendor performance will not only result in improved logistical operation of the benefit, but it will also allow for more on-demand transportation access for beneficiaries who may be facing extenuating circumstances, such as an emergency doctor’s appointment. Improved access to routine care can create an opportunity for lower emergency room utilization, driving improved population health and cost savings. An additional benefit of improved oversight is the gained ability to use high-integrity data as a reference point for identifying areas of improvement and implementing benefit changes.

Conclusions

The NEMT benefit is a critical component of Medicaid coverage as it provides access to healthcare for millions of transportation-disenfranchised beneficiaries, thus improving their quality of life and healthcare experience.¹⁶ As there are no prescriptive regulations that drive delivery models of the NEMT benefit, there are diverse delivery models used throughout the country.

As the healthcare landscape evolves, there are innovations which may improve NEMT’s effectiveness in directly addressing social determinants of health. The most prevalent finding in this market analysis is substantial variability in delivery models, costs, regulations, and performance measurement. The first and most crucial step in enhancing NEMT services is to establish clear rules and performance standards, supported by reporting, and consistent use of associated technology. This approach would support a comprehensive understanding of the market and the quality of services provided. However, further data collection and performance reporting at the state and national level are essential next steps to enable more evidence-based conclusions for program improvement.

State Medicaid agencies play a crucial role in ensuring that MCOs deliver high-quality, cost-effective healthcare services to their beneficiaries. As Medicaid programs grow and federal requirements become more complex, it is critical to maintain program integrity. Effective performance management is essential to maintaining accountability, improving patient outcomes, and optimizing the use of public health funding that can be clearly demonstrated. Through strengthened performance management and enhanced analytics, state Medicaid agencies can drive improvements, swiftly respond to emerging needs, and focus on state-specific priorities while holding MCOs accountable, resulting in greater effectiveness of Medicaid programs.

* Our sample does not represent a state Medicaid program utilizing the in-house delivery model.

¹ National Academies of Sciences, Engineering, and Medicine. (2014). Research Results Digest 109: Impact of the Affordable Care Act on Non-Emergency Medical Transportation (NEMT): Assessment for Transit Agencies. The National Academies Press. Retrieved April 24, 2025, from https://nap.nationalacademies.org/read/22268/chapter/1#10.

² National Academies of Sciences, Engineering, and Medicine. (2005). Cost Benefit Analysis of Providing Non-Emergency Medical Transportation. The National Academies Press. Retrieved April 24, 2025, from https://onlinepubs.trb.org/onlinepubs/tcrp/tcrp_webdoc_29.pdf.

³ The Insight Partners. (2024). Non-Emergency Medical Transportation Market Overview, Growth, Trends, Analysis, Research Report (2021-2031). Retrieved April 24, 2025, from https://www.theinsightpartners.com/reports/non-emergency-medical-transportation-market/.

⁴ U.S. Department of Health and Human Services. (2023, June 20). Expanded Report to Congress: Non-Emergency Medical Transportation in Medicaid, 2018–2021. Retrieved April 24, 2025, from https://www.medicaid.gov/medicaid/benefits/downloads/nemt-rtc-2018-2021.pdf.

⁵ U.S. Department of Health and Human Services. (2023, June 20). Expanded Report to Congress: Non-Emergency Medical Transportation in Medicaid, 2018–2021. Op. cit.

⁶ The Insight Partners (2024). Non-Emergency Medical Transportation Market Overview, Growth, Trends, Analysis, Research Report (2021-2031). Op. cit.

⁷ Medicaid and CHIP Payment and Access Commission (MACPAC). (2019, May). Medicaid Coverage of Non-Emergency Medical Transportation. Retrieved April 24, 2025, from https://www.macpac.gov/wp-content/uploads/2019/05/Medicaid-Coverage-of-Non-Emergency-Medical-Transportation.pdf.

⁸ The National Conference of State Legislatures (NCSL). (2023, February 13). Nonemergency Medical Transportation (NEMT). Retrieved April 24, 2025, from https://www.ncsl.org/health/nonemergency-medical-transportation-nemt.

⁹ The National Conference of State Legislatures (NCSL). (2023, February 13). Nonemergency Medical Transportation (NEMT). Op. cit.

¹⁰ The National Conference of State Legislatures (NCSL). (2023, February 13). Nonemergency Medical Transportation (NEMT). Op. cit.

¹¹ U.S. Government Accountability Office (GAO). (2016, February). Nonemergency Medical Transportation: Updated Medicaid Guidance Could Help States. Retrieved April 24, 2025, from https://www.gao.gov/assets/gao-16-238.pdf.

¹² Ganuza, A. & Davis, R. (2017, February). Disruptive Innovation in Medicaid Non-Emergency Transportation. Center for Health Care Strategies. Retrieved April 24, 2025, from https://www.chcs.org/resource/disruptive-innovation-medicaid-non-emergency-transportation/.

¹³ West Georgia Non-Emergency Medical Transport. (2024, May 20). NEMT in Focus: Major Challenges and How Providers Can Address Them. Retrieved April 24, 2025, from https://www.wgnemedtransport.com/nemt-in-focus-major-challenges-and-how-providers-can-address-them.

¹⁴ Buderi, K. (2020, October 29). Mandated Report on Non-Emergency Medical Transportation Work Plan and Preliminary Findings. Medicaid and CHIP Payment and Access Commission (MACPAC). Retrieved April 24, 2025, from https://www.macpac.gov/wp-content/uploads/2020/10/Mandated-Report-on-Non-Emergency-Medical-Transportation-Work-Plan-and-Preliminary-Findings.pdf.

¹⁵ Ganuza, A. & Davis, R. (2017, February). Disruptive Innovation in Medicaid Non-Emergency Transportation. Center for Health Care Strategies. Op. cit.

¹⁶ Rochlin, D. H., Lee, C.-M., Scheuter, C., Milstein, A., & Kaplan, R. M. (2019). Economic Benefit of “Modern” Nonemergency Medical Transportation That Utilizes Digital Transportation Networks. American Journal of Public Health 109(3), 472-474. https://doi.org/10.2105/AJPH.2018.304857.