# What Is a Transportation Network Company (TNC) in Medicaid NEMT?

Canonical URL: https://nemtguide.com/glossary/transportation-network-company/ · Updated 2026-09-30

A transportation network company (TNC) is a rideshare company: it uses an app to connect riders with drivers in their own cars. States license TNCs under their own laws, and CMS calls them a type of Medicaid transportation provider. Where a state allows them, they get Medicaid trips through the state, a broker, or a health plan, and some states, such as Louisiana, limit them to riders who walk.

- A TNC is defined by state law: an app that connects riders with drivers using their own cars for prearranged rides.
- CMS lets each state decide whether TNCs give Medicaid rides, but the least costly appropriate mode rule still applies.
- Every TNC and driver must meet the federal floor in section 1902(a)(87): no exclusions, a valid license, and drug law and driving history processes.
- Louisiana limits TNCs to ambulatory members and ranks them after traditional NEMT companies (effective November 20, 2025).
- Louisiana and Virginia allow TNC trips only for riders who walk, so wheelchair and stretcher trips stay with NEMT companies.

## What a transportation network company is

A transportation network company, or TNC, is the legal name for a rideshare company. It runs an app that matches a rider with a nearby driver, and the driver uses a car they own, lease, or are allowed to drive. The ride is prearranged through the app, not hailed on the street.

The definition comes from state law, so the details change at the state line. The Florida, Arizona, and Virginia laws below share three parts: an app or digital network, drivers in personal vehicles, and rides arranged in advance through the app. Florida's law also separates TNCs from taxis: a TNC or TNC driver is not a common carrier, contract carrier, or motor carrier, and does not provide taxicab service.

Medicaid uses the same term. CMS's Medicaid Transportation Coverage Guide (SMD 23-006, September 28, 2023) says TNCs, "also known as ridesharing organizations," are a type of transportation provider. The national provider taxonomy has carried a code for them, 342000000X, since January 1, 2021. It describes a ride-sharing company that gives prearranged or contracted non-emergency medical transportation through mobile or online technology. A NEMT van company uses a different code, 343900000X. See [taxonomy codes](https://nemtguide.com/glossary/taxonomy-code/) for how the code goes on a claim.

## How state laws define and license TNCs

Each state's TNC law decides who counts, who licenses them, and what insurance they carry. These four show the range.

| State | Law | What it says that matters to a NEMT owner |
|---|---|---|
| Florida | Section 627.748, Florida Statutes (2026) | A company that arranges medical transportation for Medicaid or Medicare members under a contract with the state or a managed care organization is not a TNC. A TNC may still give those rides if it meets the section. From the moment a driver accepts a ride until the last rider gets out, primary liability coverage of at least $1 million must be in place, from the driver, the TNC, or both. While the driver is logged on and waiting, the floor is $50,000 per person, $100,000 per incident, and $25,000 property damage. |
| Arizona | A.R.S. 28-9551 | A TNC is an entity with a permit under Arizona's TNC article. A TNC vehicle seats no more than eight people, including the driver, and is owned, leased, or otherwise authorized for use by the driver. |
| Virginia | Va. Code 46.2-2000 and 46.2-2099.46 | TNC drivers ("TNC partners") use personal vehicles, and the Department of Motor Vehicles has exclusive control of TNCs. The same chapter defines a separate "nonemergency medical transportation carrier," a motor carrier that only gives NEMT through the Department of Medical Assistance Services, its broker, or a Medicaid health plan. |
| Louisiana | Act 286 of 2019 | The Department of Transportation and Development regulates TNCs statewide and began with a conditional permit so they could launch at once. |

Two points follow for a NEMT company. First, a TNC law is not a NEMT license. A TNC permit lets a company match riders and drivers for any trip, while Medicaid rides need Medicaid rules on top. Second, using an app to book rides does not make your company a TNC. The laws turn on drivers in their own cars, and Florida writes Medicaid and Medicare transportation arrangers out of the definition.

## How Medicaid uses TNCs

CMS leaves it to each state whether to use TNCs and how to pay them. Two federal rules still apply to every TNC ride:

1. **The least costly appropriate mode.** SMD 23-006 says a TNC ride must be the least costly, most appropriate ride that meets the member's medical needs, with payment consistent with efficiency, economy, and quality of care. See [least costly appropriate transportation](https://nemtguide.com/glossary/least-costly-mode/).
2. **The driver floor.** Section 1902(a)(87) of the Social Security Act covers any NEMT provider "including a transportation network company" and each driver, except public transit authorities. Neither may be excluded from federal health programs, each driver needs a valid license, and the provider needs processes to address state drug law violations and to disclose each driver's driving history to Medicaid.

States then set their own terms. As of September 2026:

| Program | How a TNC gets Medicaid trips | Which riders | Other rules |
|---|---|---|---|
| Louisiana (state plan LA-25-0017, effective November 20, 2025) | Enrolls in Medicaid and contracts with a health plan or its broker, or with the Louisiana Department of Health or its broker | Ambulatory members only | Ranked fourth, after public transit, gas reimbursement drivers, and traditional NEMT companies. Members may choose their provider, as long as it is the least costly choice, but may not choose a TNC. A criminal background check comes before a driver's first Medicaid ride. Paid only for trips a contracted broker schedules. |
| Arizona (AHCCCS policy 310-BB, effective October 1, 2026) | Serves and bills only through a NEMT broker under the broker's contract with a health plan | Rides the broker assigns | May not take member calls or schedule rides itself. The app must give drivers a masked phone number, not the member's real one. Driver, vehicle, and trip records are kept for six complete calendar years. |
| Indiana (Transportation Services module, version 6.1) | Enrolls as provider specialty 267, then contracts with Verida for fee-for-service members or the health plan's broker for managed care members | Rides the broker assigns | Payment needs the broker contract as well as the enrollment. |
| Texas fee-for-service (Medical Transportation Program handbook, September 2026) | Enrolls directly with TMHP, the same way demand response companies do | Rides the program authorizes | Bills T2003 with U1, U2, or U3 for the county type, taxonomy 347C00000X, and its atypical provider ID in box 33A. |
| Virginia fee-for-service (MTM Health handbook, approved August 10, 2026) | MTM Health, the fee-for-service broker, may use approved TNCs | Members who get in and out alone and use no mobility device | Driver and vehicle must meet all Medicaid and MTM Health credentialing, screening, insurance, and training rules. |

For how the Louisiana change came about, see [Louisiana approves rideshare for Medicaid NEMT](https://nemtguide.com/news/louisiana-rideshare-nemt-approved/). For the Texas modifiers, see [U modifiers](https://nemtguide.com/glossary/u-modifiers/).

## TNC vs NEMT company: the practical differences

Louisiana is a clear example, because its state plan and Medicaid rule set requirements for both in one place.

| | TNC | Traditional NEMT company |
|---|---|---|
| Riders | Ambulatory members only | Every level of service the company is credentialed for, including ELOC, Louisiana's door-through-door level for wheelchair users who need hands-on help |
| Driver's license | A valid driver's license | A valid CDL or chauffeur license |
| Criminal history check | Run by the TNC before the first Medicaid ride | Yearly, by the Louisiana State Police, an agency it authorizes, or the FBI, with results sent straight to the health plan or broker |
| Place in line | Fourth | Third, ahead of TNCs |

The table shows where the work splits. A TNC driver usually arrives in a personal car with no ramp, lift, or securement straps. Louisiana allows TNCs for ambulatory members only, and MTM Health's Virginia handbook allows them only for members who get in and out alone, use no mobility device, and need no special help. See [ambulatory](https://nemtguide.com/glossary/ambulatory/) for how programs define that rider.

One exception to watch is in Florida's law. It lets an ADA-compliant vehicle, owned by a company that uses a digital network to book rides for people with disabilities, be used as a TNC vehicle. Check how your own state and broker treat app-booked wheelchair rides before you assume they are yours.

## What TNCs leave for NEMT providers

In the programs above, TNCs get Medicaid trips only through a broker, a health plan, or the state, and Louisiana and Virginia limit them to riders who walk. The trips they cannot take go to companies that bring trained drivers and the right vehicle.

- **Wheelchair and stretcher trips.** A rider who stays in a wheelchair needs a [wheelchair accessible vehicle](https://nemtguide.com/glossary/wheelchair-accessible-vehicle/), and a rider who must lie down needs a stretcher van.
- **Hands-on help.** Door-to-door and hand-to-hand trips need a driver who leaves the car and walks the rider in.
- **Trips where the order favors you.** In Louisiana, traditional companies come before TNCs, and members may choose their provider but not a TNC.

To protect your share, read your state's rule first. Ask each broker in writing which trips it sends to TNCs and whether short-notice trips you decline go to one. Then build capacity TNCs cannot match, such as [wheelchair service](https://nemtguide.com/guides/start-a-wheelchair-transportation-business/). For a full comparison of rates, driver rules, and competing with rideshare, see [NEMT vs rideshare](https://nemtguide.com/guides/nemt-vs-rideshare/).

## Frequently asked questions

### Is a rideshare company the same as a transportation network company?

Yes. Transportation network company is the legal term state laws use for rideshare companies, and CMS uses both names in its Medicaid Transportation Coverage Guide (SMD 23-006, September 28, 2023). A company only counts as a TNC under a state law if it meets that law's definition, which usually means an app connecting riders to drivers who use their own vehicles.

### Can a TNC take wheelchair riders on Medicaid trips?

Usually not. Louisiana's state plan, effective November 20, 2025, lets TNCs carry ambulatory members only. MTM Health's Virginia handbook, approved August 10, 2026, allows approved TNCs only for members who get in and out alone and use no mobility device. A rider who stays in a wheelchair needs a wheelchair accessible vehicle with a ramp or lift and trained securement.

### Do TNC drivers need background checks for Medicaid rides?

Federal law sets a floor of exclusion and license checks, and some states add a criminal check. Section 1902(a)(87) of the Social Security Act requires that every NEMT provider and driver, TNCs included, is not excluded from federal health programs and that each driver holds a valid license. Louisiana adds a criminal background check before a driver's first Medicaid ride. Arizona requires TNCs to keep background and exclusion check records for six complete calendar years.

### Is my NEMT company a TNC if riders book through an app?

Not by that alone. State TNC laws define a TNC by what it does: it connects riders to drivers who use their own vehicles. Florida's law says a company that arranges medical transportation for Medicaid or Medicare members under a contract with the state or a managed care organization is not a TNC. Read your own state's TNC law before you describe your company as one.

### What taxonomy code does a TNC use?

The national code for a transportation network company is 342000000X, added to the provider taxonomy on January 1, 2021 and still in version 26.1 (July 1, 2026). A NEMT van company uses 343900000X. Payers can ask for something else: Texas's Medical Transportation Program handbook (September 2026) recommends 347C00000X, the private vehicle code, on TNC claims.

## Official resources

- [CMS: Medicaid Transportation Coverage Guide (SMD 23-006)](https://www.medicaid.gov/federal-policy-guidance/downloads/smd23006.pdf)
- [AHCCCS: Medical Policy 310-BB, Transportation](https://www.azahcccs.gov/shared/Downloads/MedicalPolicyManual/300/310-BB.pdf)
- [Louisiana state plan amendment LA-25-0017](https://www.medicaid.gov/medicaid/spa/downloads/LA-25-0017.pdf)
- [NUCC: Provider taxonomy code set](https://www.nucc.org/index.php/code-sets-mainmenu-41/provider-taxonomy-mainmenu-40/csv-mainmenu-57)