# Demand Response Transportation: What It Means and Where NEMT Fits

Canonical URL: https://nemtguide.com/glossary/demand-response/ · Updated 2026-10-02

Demand response transportation is any ride service that sends a vehicle when a rider or agency asks for one, instead of running a fixed route on a timetable. Federal ADA rules define it that way in 49 CFR 37.3, the National Transit Database counts it as its own mode, and NEMT is demand response service. Texas Medicaid calls its fee-for-service ride companies demand response providers.

- In federal rules, demand response is any service that is not a fixed route system, meaning no set route on a set schedule.
- Transit agencies reported 139.7 million demand response boardings for 2024, and contractors, taxi companies, and rideshare companies ran about 54 percent of them.
- Which ADA vehicle rules apply depends on who runs the service: a company in the business of carrying people, or a business that runs vans on the side.
- Texas pays its fee-for-service demand response companies $33.83 to $79.63 per leg for each authorized seat under T2003, plus $36.28 per paid one-way trip from October 1, 2026.

A rider calls, and you send a vehicle. That is demand response, and it is how every NEMT company already runs. The term still matters to an owner, because three rulebooks use it and each one decides something different: what a transit contract pays for, which vans you must make accessible, and, in Texas, what kind of Medicaid provider you are.

## What demand response transportation means

Federal ADA rules define it by what it is not. Under [49 CFR 37.3](https://www.ecfr.gov/current/title-49/section-37.3), a demand responsive system is any system, public or private, for carrying people that is not a fixed route system, and a fixed route system runs a vehicle along a set route on a fixed schedule. If your vans do not run a timetable, your service is demand response, whether trips are booked a week ahead, called in the same day, or [will-call](https://nemtguide.com/glossary/will-call-trip/) returns.

The same label covers services paid for in very different ways:

- **NEMT.** Medicaid rides to covered care, arranged by a state, a broker, or a health plan.
- **ADA [paratransit](https://nemtguide.com/glossary/paratransit/).** The service a transit agency must run for riders whose disability keeps them off its buses.
- **Public dial-a-ride.** Local service for riders who pay a fare. MART, one of the two brokers in Massachusetts's [human service transportation](https://nemtguide.com/glossary/human-service-transportation/) system, also runs a Dial-a-Ride for paying riders in Leominster, Fitchburg, and Gardner.

## How transit agencies count demand response

Transit agencies report their service to the Federal Transit Administration's National Transit Database (NTD), where demand response is mode DR. Contracted work is split by who runs it: PT for a general contractor, TX for a taxi company, and TN for a transportation network company. That split began with report year 2019, when demand response taxi service stopped being a separate mode.

Companies under contract ran just over half of all demand response boardings in 2024:

| Who ran the service | Type of service | Boardings in 2024 |
|---|---|---|
| The agency's own staff | DO | 63,782,956 |
| A general contractor | PT | 67,430,831 |
| A taxi company | TX | 6,621,924 |
| A transportation network company | TN | 1,910,063 |

The total was 139,745,774 boardings, so general contractors, taxi companies, and transportation network companies together ran about 54 percent. An NTD trip is an unlinked passenger trip: each boarding counts once. Revenue hours count time in service, including layover and recovery time, and revenue miles count miles in service. Both leave out [deadhead](https://nemtguide.com/glossary/deadhead-miles/), such as driving to and from the garage. If a contract pays per revenue hour, read how it defines one before you set your rate.

A private company running demand response service for a transit agency must meet the ADA rules that would apply to the agency, and buy accessible vehicles whenever the agency would have to ([49 CFR 37.23](https://www.ecfr.gov/current/title-49/section-37.23)). The [ADA paratransit contractor guide](https://nemtguide.com/guides/ada-paratransit-contractor/) covers that work, and microtransit contracts covers on-demand zones.

## The ADA vehicle rules for demand response

Part 37 has two sets of purchase rules for private demand response service. Which one applies depends on who runs it:

- **A company in the business of carrying people,** such as your NEMT company. A new van or other vehicle that is not a car must be accessible unless the service as a whole already gives wheelchair users equivalent service ([49 CFR 37.103](https://www.ecfr.gov/current/title-49/section-37.103)). Equivalent means equal response time, fares, service area, hours and days, information, reservations, capacity, and trip purposes (37.105). The [ADA requirements guide](https://nemtguide.com/guides/ada-requirements-for-nemt/) walks through the test.
- **A business whose main work is something else,** such as a hospital or senior living community that runs its own van. A vehicle with more than 16 seats, counting the driver, must be accessible unless the service is already equivalent. For 16 seats or fewer there is no specific purchase rule, but the service as a whole must still be equivalent for wheelchair users ([49 CFR 37.101](https://www.ecfr.gov/current/title-49/section-37.101) and 37.171).

The second set can reach you. Under 37.23(d), a company that runs demand response service under contract with another private company is governed, for that service, by the rules that apply to the other company. Drive residents for a senior living community under contract, and the community's rules govern those trips. See [facility contracts](https://nemtguide.com/guides/how-to-get-nemt-facility-contracts/).

## Demand response in Texas Medicaid

Texas turns the term into a provider type. Its Medical Transportation Program (MTP) arranges rides for fee-for-service Medicaid members, the Children with Special Health Care Needs Services Program, and Transportation for Indigent Cancer Patients, and prior authorizes every trip. Under 1 TAC 380.101, demand response means rides in vehicles the provider dispatches in response to client requests, including shared one-way trips. The MTP handbook (September 2026) lists taxis and wheelchair vans among them, and it does not cover health plan members, who get rides through their plan. See the [Texas guide](https://nemtguide.com/states/texas/).

Demand Response Transportation Services (DRTS) companies enroll with TMHP and sign a regional contract with HHSC through open enrollment HHS0016482, which takes applications until 5 p.m. Central on September 15, 2027. Each contract runs three years from signing, and HHSC may extend it up to two more years, one at a time. A contractor may record each leg's origin and destination by GPS instead of collecting the rider's signature.

### A billing example

Texas pays DRTS per one-way leg under [T2003](https://nemtguide.com/glossary/t2003/), at a rate set by the type of county where the leg starts, times the number of seats HHSC authorized for that leg. From September 1, 2026, the rates are $33.83 for a metro county (U1), $62.31 for a micro county (U3), and $79.63 for a rural county (U2). HHSC's Addendum 8 (September 24, 2026) adds an Economic Impact Payment of $36.28 per paid one-way trip from October 1, 2026, whatever the number of riders or the modifier.

Say HHSC authorizes two seats on each leg, for a member and an attendant, on a round trip from a rural county to a dialysis center in a metro county on October 6, 2026:

1. **Outbound leg, rural origin.** T2003 U2 at $79.63 times 2 seats: $159.26, billed to TMHP.
2. **Return leg, metro origin.** T2003 U1 at $33.83 times 2 seats: $67.66, billed to TMHP.
3. **Economic Impact Payment.** $36.28 for each of the 2 paid one-way trips: $72.56, invoiced to HHSC.

The day pays $299.48. The extra payment is not billed to TMHP. You email HHSC an invoice at HHSCProvFolio@hhs.texas.gov within 95 days of the date of service, listing the TMTS authorization number, TMHP's internal control number for the claim, the date of service, and the total, with the attestation the addendum sets out. HHSC must give 90 calendar days' notice before it changes or ends the payment.

## Frequently asked questions

### Is NEMT the same as demand response transportation?

NEMT is one kind of it. Demand response describes how the rides run: booked on request, with no fixed route or timetable. NEMT describes who pays and why: Medicaid rides to covered care. ADA paratransit and public dial-a-ride are demand response too, but a transit agency runs or buys them, not Medicaid.

### What does DRTS mean in Texas?

Demand Response Transportation Services: the companies that drive fee-for-service trips in Texas's Medical Transportation Program. Texas rule 1 TAC 380.101 defines demand response as rides in provider-dispatched vehicles sent in response to client requests, including shared one-way trips. These companies enroll with TMHP, contract with HHSC, and bill T2003 with a modifier for the type of county where each leg starts.

### Do I have to buy wheelchair vans to run demand response service?

Not every vehicle. Under 49 CFR 37.103, a company in the business of carrying people does not have to make a new car accessible. A new van or other vehicle it buys or leases for demand response service must be accessible, unless the service as a whole already gives wheelchair users equivalent service under 37.105. Under contract with a transit agency, the agency's rules apply instead (37.23), and brokers and states can require wheelchair vans on top of these rules.

### How does the National Transit Database count demand response?

As mode DR. Agencies report unlinked passenger trips, which count every boarding, and vehicle revenue hours and miles, which count time in service and leave out deadhead. Contracted service is reported by type of service: PT for a general contractor, TX for a taxi company, and TN for a transportation network company. Since report year 2019, demand response taxi service is reported as DR with type TX.

## Official resources

- [eCFR: 49 CFR part 37, Transportation services for individuals with disabilities](https://www.ecfr.gov/current/title-49/subtitle-A/part-37)
- [U.S. DOT: National Transit Database annual service data](https://data.transportation.gov/d/wwdp-t4re)
- [TMHP: Medical Transportation Program Handbook (September 2026)](https://www.tmhp.com/sites/default/files/file-library/resources/provider-manuals/tmppm/pdf-chapters/2026/2026-09-september/2_14_med_transport_program.pdf)
- [Texas HHSC: Open Enrollment HHS0016482, Demand Response Transportation Services](https://resources.hhs.texas.gov/open-enrollment/hhs0016482)