Brokers and Medicaid
What Is a NEMT Carve-Out? Carve-In vs Carve-Out and Where You Apply
A NEMT carve-out means a state keeps non-emergency rides out of its Medicaid health plans' contracts and pays for them another way, usually through a state broker or its own fee-for-service program. In a carve-in, rides are a plan benefit and each plan or its broker arranges them. The choice decides who you sign with, who books your trips, and who pays you.
- Carve-in means rides are a Medicaid health plan benefit. Carve-out means the state keeps rides out of the plans and runs them itself or through a broker.
- In a carve-in state you sign with each plan's ride vendor. In a carve-out state one state broker or the state itself usually covers every member.
- Most carve-in states still run a separate ride program for members outside the plans, so many owners hold both kinds of contract.
- A state can carve out only some rides. Illinois has plan members' ambulance trips billed to the state while plans pay for van rides.
- Health plan networks need state Medicaid enrollment under 42 CFR 438.602(b), and each rider's coverage on the ride date tells you who pays.
Medicaid health plans cover most of a member’s care, but rides do not always come with them. Whether your state puts rides inside the plans or keeps them out tells you who books each trip, who you sign with, and who pays the claim.
What a NEMT carve-out means
Carve-out and carve-in describe where a Medicaid benefit sits when a state uses managed care. In a carve-in, the service is one of the plan’s covered benefits, and its cost is built into the monthly amount the state pays the plan for each member, called capitation. In a carve-out, the service is left out of the plan’s contract and payment, and the state covers it some other way.
Federal rules allow both. CMS’s Medicaid Transportation Coverage Guide (SMD 23-006, September 28, 2023) says rides covered as a medical service can be included in managed care capitation rates, and that states may choose to carve transportation out of managed care. Either way, the state Medicaid agency stays responsible for getting members to covered care.
The contract language is plain when you know where to look:
- A carve-out in writing. New Jersey’s managed care contract (January 2026, Article 4.1.3) lists services that stay in the fee-for-service program and “shall not be included in the Contractor’s capitation.” Non-emergency transportation is on the list, including wheelchair vans (the contract calls them MAVs), stretcher ambulance, and livery rides, all provided by the state transportation broker.
- A carve-in in writing. Texas’s managed care contract (revision 2.33, June 1, 2021) moved responsibility for members’ rides from managed transportation organizations to the health plans, under House Bill 1576 of 2019.
A carved-out ride program can still be a managed program. When a state pays a broker a fixed amount per member for rides only, 42 CFR 438.9 calls that broker a NEMT prepaid ambulatory health plan, and some managed care rules apply to it. CMS counted 16 of these ride-only programs in 2024, with about 10.6 million people enrolled on July 1, 2024. See NEMT broker.
Carve-in vs carve-out: what changes for you
| Carve-in | Carve-out | |
|---|---|---|
| Who is paid for the rides | The health plan, inside its monthly payment | The state’s broker or ride program, outside the plan’s payment |
| Who books the trip | The plan or the ride vendor it hires | The state broker, or a state or county office |
| Who you sign with | Each plan’s ride vendor | The state broker, or the state Medicaid program itself |
| Who pays your claim | The plan or its vendor | The broker, or the state’s claims system |
| Who sets your rate | Each contract | The broker contract or the state fee schedule |
| Contracts to cover one county | One for each plan’s ride vendor | Usually one broker or program |
For how health plans work from the provider’s side, see Medicaid managed care organization. For members outside the plans, see fee-for-service Medicaid.
Which states carve NEMT in or out
Most states now use a mix. MACPAC, the commission that advises Congress on Medicaid, found in June 2021 that 26 states used managed care plans for NEMT for some members or areas, up from four in 2015, and 35 used a broker for some. The same report notes that Arizona has carved rides into its plans since it adopted managed care in the early 1980s. In a study dated June 25, 2026, Pennsylvania’s Department of Human Services counted 20 states and DC that carve rides into their health plans for plan members while a broker or state program serves everyone else.
These examples show the range, with the date of each state’s own document:
| State | Rides for health plan members | Rides for everyone else | Source date |
|---|---|---|---|
| New Jersey | Carved out: Modivcare, the state broker, arranges rides for NJ FamilyCare members anywhere in the state | The same broker | Managed care contract, January 2026 |
| Georgia | Carved out: the broker must serve all eligible members, and Verida has been the broker in all five regions since April 1, 2026 | The same broker | NEMT manual, July 1, 2026 |
| New York | Carved out of mainstream plans on December 1, 2015, and of long-term care plans, except PACE, on March 1, 2024 | Medical Answering Services authorizes the trip, and you bill eMedNY | Manual, August 25, 2023; Medicaid Update, January 2024 |
| Texas | Carved in since June 1, 2021: each plan approves and arranges its members’ rides | The Medical Transportation Program | Managed care contract, version 2.45; MTP handbook, September 2026 |
| Indiana | Carved in: each plan’s NEMT broker | Verida, for Traditional Medicaid | Transportation module, August 19, 2025 |
| Illinois | Carved in for wheelchair van, service car, and taxi rides. Ambulance claims go to the state | The state, after prior approval from Transdev | Handbook, March 11, 2024 |
| Nevada | Urban counties carved out: MTM serves everyone. Rural plan members call their plan and are routed to SafeRide | MTM in urban counties. Check the state page for rural members | State page, updated March 25, 2026 |
Plans and brokers change often, so confirm on the state’s own page. Our NEMT brokers by state guide links the official page for every state, and how states run NEMT sorts every state by model.
Why it decides where you apply
The model tells you which door to knock on. Work through it in this order.
1. Find your state’s model
Open the state Medicaid agency’s transportation page. A carve-out state names one broker or program for everyone. A carve-in state tells plan members to call their plan and names a separate program for the rest.
2. In a carve-out state, go to the state’s program
In New Jersey, you apply to Modivcare. In Georgia, you apply to Verida. In New York, you apply to Medical Answering Services first: eMedNY rejects new ambulette, taxi, livery, and rideshare applications filed after April 15, 2024 without a letter of support from Medical Answering Services. Then you enroll with New York Medicaid and bill eMedNY.
3. In a carve-in state, work plan by plan
List the health plans in your county, find each plan’s ride vendor, and credential with each one. Indiana’s module (August 19, 2025) shows the pattern: every company enrolls in the IHCP, then takes Traditional Medicaid trips through Verida and plan members’ trips through each plan’s NEMT broker. In Texas, plan members ride through each plan’s vendor, while demand response companies enroll directly with TMHP to take the state program’s fee-for-service trips. See contracting with Medicaid health plans.
4. Enroll with state Medicaid when the program requires it
Under 42 CFR 438.602(b), the state must screen and enroll every network provider of its health plans. A plan may sign you while enrollment is pending, but for no more than 120 days. Carve-out programs set their own rule: New York requires eMedNY enrollment, while Georgia’s manual (July 1, 2026) sends ride companies straight to the broker for a service agreement. See how to become a Medicaid transportation provider.
5. Check who covers each rider on each ride date
Say two riders live in the same building and go to the same clinic in Indiana. One is in a Hoosier Care Connect health plan and the other has Traditional Medicaid. The first trip comes from the plan’s NEMT broker and the second from Verida, under two contracts with two claim processes, even if one van carries both. New York’s manual (effective August 25, 2023) says claims sent to Medicaid for members whose plan covers transportation are denied. Check eligibility before every trip.
When a state switches between carve-in and carve-out
A switch moves trips from one company to another on a fixed date. When New York carved rides out of its long-term care plans on March 1, 2024, the plans sent their members’ trip data to Medical Answering Services, and the broker trained plan staff to enter adult day care trips as standing orders (state FAQs, revised November 2024).
A switch can also create new buyers. New York’s MLTC Policy 24.01 kept social adult day care rides as a plan benefit from January 1, 2025, and made each day program responsible for its own rides, with its own vans or by contracting directly with transportation providers. See adult day care transportation.
When your state or a plan announces a change, get credentialed with the new company before the start date, move standing orders, and bill your last trips under the old contract on time. The NEMT broker transition guide walks through it.
Frequently asked questions
Is a NEMT carve-out the same as fee-for-service?
Not always. A carve-out only means the health plans are not paid for rides. The state may then pay ride companies fee-for-service, as New York does through eMedNY, or pay a broker a monthly amount per member, as Georgia does with Verida. A broker paid that way for rides only is a NEMT prepaid ambulatory health plan under 42 CFR 438.9.
Can a health plan still offer rides where NEMT is carved out?
Yes, as an extra it pays for itself. Under 42 CFR 438.3(e)(1)(i), a plan may cover services beyond the state plan that it agrees to provide, but their cost cannot be counted when the state sets the plan's payment rates. If a plan in your area offers extra rides, ask it who books them.
Do I need Medicaid enrollment in a carve-in state?
Yes. Under 42 CFR 438.602(b), the state must screen and enroll every network provider of its Medicaid plans, even one that never serves fee-for-service members. A plan may sign you while enrollment is pending, but for no more than 120 days. In Indiana, you enroll in the IHCP first, then take Traditional Medicaid trips through Verida and plan members' trips through each plan's NEMT broker.
How do I find out whether my state carves NEMT in or out?
Start with the state Medicaid agency's transportation page, which either names the state broker or tells plan members to call their plan. Then read the list of services left out of the state's managed care contract. New Jersey's January 2026 contract lists rides among the services its state broker provides. The state plan's Attachment 3.1-D also describes the model.
Can a state carve out only some rides?
Yes. Illinois has billed plan members' emergency ambulance claims to the state since April 1, 2021, and non-emergency ambulance claims since January 1, 2022, while plans still pay for wheelchair van and service car rides. New York carved rides out of its long-term care plans on March 1, 2024, but kept adult day care rides in those plans from January 1, 2025.