# Least Costly Appropriate Transportation: How Medicaid Picks the Mode for Each Ride

Canonical URL: https://nemtguide.com/glossary/least-costly-mode/ · Updated 2026-09-29

Least costly appropriate transportation is the Medicaid rule that each ride uses the cheapest mode that still fits the rider's physical and emotional condition, after free options such as a family member's car. CMS traces it to a 1991 letter and restated it on September 28, 2023. It is why a bus pass or sedan beats a wheelchair van whenever the rider can safely use one.

- Medicaid first looks for a free ride, then books the cheapest mode that fits the rider's physical and emotional condition.
- Appropriate comes before cheap: a rider who stays in a wheelchair must get a wheelchair accessible vehicle.
- The mode is set before a company is picked, so your fleet decides which trips you can get.
- Under Illinois rates effective January 1, 2026, a 10-mile trip in most counties pays $2.30 by private car and $38.00 by wheelchair van.
- You bill the mode the trip was authorized and given at, not the vehicle you happened to send.

Before a broker picks a company for a trip, it picks the kind of ride. That choice follows one Medicaid rule: the cheapest mode that still fits the rider. It is the reason some trips never reach a wheelchair van, and the reason others must.

## What the least costly appropriate rule says

CMS's Medicaid Transportation Coverage Guide (SMD 23-006, September 28, 2023) names two access requirements for every Medicaid ride. The ride must be the least costly and most appropriate mode suited to the rider's needs, and it must go to the nearest qualified provider unless there is a medical need to go farther.

CMS says the rule was first stated in a State Medicaid Director letter of March 7, 1991, which read the Social Security Act's proper and efficient administration clause to require two things:

1. **Free first.** The state first tries any available free option, such as a ride from family or friends.
2. **Then the cheapest mode that fits.** When several modes are available, the state uses the least costly one that is appropriate for the rider's physical and emotional condition.

CMS adds in the same guide that the least costly mode must still ensure quality of service, and that states must also pay enough to keep rides available. The rule sits on top of the [Medicaid assurance of transportation](https://nemtguide.com/glossary/assurance-of-transportation/), which makes the state ensure a ride in the first place.

Brokers are bound too. Under [42 CFR 440.170(a)(4)(ii)(D)](https://www.ecfr.gov/current/title-42/chapter-IV/subchapter-C/part-440/subpart-A/section-440.170), a broker may not withhold a needed ride, or give a rider one that is not the most appropriate and cost-effective means of transportation, for financial gain or any other purpose. A government broker that sends trips to its own vehicles or another public provider must document, for each rider, that the public provider was the most appropriate and lowest cost choice.

## The mode ladder, cheapest first

Illinois posts its non-ambulance rates by county, which makes the ladder easy to see. For a 10-mile trip in Sangamon County, using the fee schedule effective January 1, 2026, with mileage paid on loaded miles:

| Mode | What it is | Illinois code and rate | 10-mile trip |
|---|---|---|---|
| Free ride | A ride from family, friends, or another agency | Not paid | $0 |
| Private auto | A private car, paid by the loaded mile | A0090, $0.23 a mile | $2.30 |
| Taxi | A taxicab, paid the local community rate, or this state maximum where none is set | A0100, $2.66, plus $0.91 a mile | $11.76 |
| Service car | A passenger vehicle for a rider who needs neither a wheelchair van nor an ambulance | [A0120](https://nemtguide.com/glossary/a0120/), $20.00, plus $0.80 a mile | $28.00 |
| Medicar (wheelchair van) | A van with a lift or ramp and wheelchair lockdown, for a rider who stays in a wheelchair | [A0130](https://nemtguide.com/glossary/a0130/), $30.00, plus $0.80 a mile | $38.00 |

A bus or train pass sits near the bottom of the ladder, and a stretcher van or ambulance sits above the wheelchair van. Illinois's fee schedule requires prior approval for all non-emergency transportation, and its handbook (March 11, 2024) pays for a ride only if a cost-free mode is not available or not appropriate.

Passes follow the same math. CMS says a monthly transit pass is cost effective when it costs no more than the single trips the member would take to covered care that month. In its example, a $40 unlimited monthly pass is cost effective for a member with four verified appointments that month at $10 a round trip. Indiana's module (August 19, 2025) allows monthly bus passes for ongoing medical needs when the pass is cost effective and the member has agreed to use it.

The national numbers show the result. In fiscal year 2018, vans, which include wheelchair and stretcher vans, carried 46 percent of Medicaid ride-days and taxis 36.7 percent, with personal vehicles at 6.9 percent and public transit at 5 percent (MACPAC, June 2021). MACPAC notes that rideshare trips were likely billed as taxi rides.

## Who decides the mode

The broker or the state sets the mode, usually from what the rider, a caregiver, a facility, or a practitioner reports:

- **New York** (manual effective August 25, 2023) authorizes rides using the most cost effective, medically appropriate mode, and says the mode must be decided by a medical practitioner directly involved in the patient's care. Ambulette and non-emergency ambulance requests need the practitioner's Verification of Medicaid Transportation Abilities, Form 2015.
- **Illinois** requires an HFS 2270 Physician Certification Statement before each non-emergency trip from a hospital or long-term care facility. The form certifies that the right level of transportation is being requested.
- **Georgia** (manual version date July 1, 2026) has the broker choose the most appropriate mode from the member's mobility and functional independence, and encourages public transportation whenever it is cost effective.
- **Indiana** says the transportation must be the least expensive type that meets the member's medical needs, driven along the shortest, most efficient route.

The mode prints on your trip as its [level of service](https://nemtguide.com/glossary/level-of-service/). The form behind it is often called a [medical necessity form](https://nemtguide.com/glossary/medical-necessity-form/).

## Where cheap stops: appropriate comes first

The cheapest mode only counts if it fits. CMS's guide sets the limits:

- **Disability.** States must consider a rider's support needs. If a rider uses a wheelchair, the state must make sure the ride comes in a [wheelchair accessible vehicle](https://nemtguide.com/glossary/wheelchair-accessible-vehicle/).
- **Behavioral health.** States must also consider a rider's behavioral health needs, and may cover behavioral health rides given by trained, credentialed drivers.
- **Transit that does not work.** Georgia requires modes other than public transit when a rider cannot use transit because of a condition, cannot be served by paratransit, is going to a place more than half a mile from a stop, or is medically fragile and needs an escort.
- **Paratransit.** If a state uses [paratransit](https://nemtguide.com/glossary/paratransit/), CMS says the state should make sure it is reliable and timely enough for members to reach care.
- **The rider's own car.** A state may expect members to drive themselves, but not when their circumstances rule it out, and CMS lists maintenance and fuel costs among those circumstances.

## How the rule decides which trips your van gets

The mode is chosen before the company. New York's broker, for example, assigns approvable trips first by the medically appropriate mode, then by the rider's choice among its contracted companies, and only then at its own discretion. Capitation adds pressure: Pennsylvania's June 25, 2026 broker study notes that a broker paid per member has a reason to use lower-cost modes when appropriate.

That leaves a clear pattern:

1. **Riders who can use transit or a car go down the ladder.** They get passes, mileage reimbursement, taxis, or rideshare where the state allows it. See [mileage reimbursement](https://nemtguide.com/glossary/mileage-reimbursement/) and NEMT vs rideshare.
2. **Riders who need a lift, a stretcher, or hands-on help stay with NEMT companies.** No cheaper mode fits them, so the ladder stops at a van for these trips.
3. **You bill what was authorized and given.** Indiana, for example, has companies bill an ambulatory member carried in a wheelchair van at the ambulatory rate, not by vehicle type.
4. **A changed need needs a changed authorization.** If a rider now needs a wheelchair or a stretcher, ask the broker to update the mode, with the practitioner's form, before the trip.
5. **Price ambulatory work against the cheaper modes.** For walking riders, your competition is the taxi, the rideshare, and the family car, so check your [cost per trip](https://nemtguide.com/guides/nemt-cost-per-trip/) against the state's sedan and taxi rates.

For the rates behind each mode in your state, see [NEMT reimbursement rates](https://nemtguide.com/guides/nemt-reimbursement-rates/).

## Frequently asked questions

### Can Medicaid make a rider take the bus?

Yes, when the bus fits. New York's transportation manual says a member who uses public transit for daily life should in most cases be booked at a mode no higher than public transit. Georgia's manual lists when brokers must use other modes, such as when the rider cannot use transit because of a condition or the stop is more than half a mile away.

### How does a rider get a higher mode approved?

With the medical reason on the right form. New York requires its Form 2015 from the ordering practitioner for ambulette and non-emergency ambulance trips, and the practitioner must record the reason in the patient's chart. Illinois requires its HFS 2270 Physician Certification Statement before each non-emergency trip from a hospital or long-term care facility.

### Does least costly mean the broker must pick the cheapest company?

No. The rule picks the mode, not the company. New York's broker assigns trips first by the medically appropriate mode, then by the rider's choice among its contracted companies, and only then at its own discretion. Within a mode, the rider's choice and then the broker decide who gets the trip.

### Is rideshare the least costly option?

It can be, for riders who can ride in a regular car, where the state allows rideshare. CMS says states using rideshare companies must still meet the least costly and most appropriate rule, account for whether the ride is medically appropriate, and pay consistent with efficiency, economy, and quality of care. A rider who needs a lift, ramp, or stretcher needs a vehicle built for it.

### Can a broker send a cheaper mode than the rider needs?

No. Under 42 CFR 440.170(a)(4)(ii)(D), a broker may not withhold a needed ride, or provide one that is not the most appropriate and cost-effective means for that rider, for financial gain or any other purpose. CMS adds that the least costly mode must still ensure quality of service.

## Official resources

- [CMS: Medicaid Transportation Coverage Guide, SMD 23-006](https://www.medicaid.gov/federal-policy-guidance/downloads/smd23006.pdf)
- [eCFR: 42 CFR 440.170, Transportation and the NEMT brokerage program](https://www.ecfr.gov/current/title-42/chapter-IV/subchapter-C/part-440/subpart-A/section-440.170)
- [Illinois HFS: Non-Ambulance Transportation Fee Schedule (January 1, 2026)](https://hfs.illinois.gov/content/dam/soi/en/web/hfs/medicalproviders/medicaidreimbursement/transportation/nonambulancefs01012026.xlsx)
- [eMedNY: New York State Medicaid Transportation Policy Manual](https://www.emedny.org/ProviderManuals/Transportation/PDFS/Transportation_Manual_Policy_Section.pdf)