How to Become a NEMT Broker in 2027: State Bids, Capitation, and the Conflict Rule

A NEMT broker usually gives no rides itself. It runs the ride benefit for a state or a health plan: it takes ride requests, approves them, hands each trip to a transportation company, pays that company, and answers to the state for every late ride and complaint. Getting there takes a won bid, strong finances, and years of track record, and it usually means giving up the rides themselves.

What a NEMT broker does and who hires one

A broker sits between a Medicaid program and the companies that drive. Georgia’s NEMT manual (July 1, 2026) shows the deal: the state pays its broker a monthly rate for each eligible member in its region. The broker must accept that rate as payment in full for its administration, the rides, its overhead, and its profit. Out of it, the broker pays its providers under their service agreements. For the day-to-day role, see what a NEMT broker is.

Three kinds of buyers hire brokers.

Who hires the broker	How the work is awarded	What to know
State Medicaid agency	A competitive bid, judged on the broker’s experience, performance, references, resources, qualifications, and costs (42 CFR 440.170)	The state follows the same procurement rules it uses for its own money (2 CFR 200.317)
Medicaid health plan	The plan picks its own transportation vendor	The plan stays responsible for its state contract and must put delegated duties in the subcontract (42 CFR 438.230). Blue Cross and Blue Shield of Texas moves its Medicaid members from Modivcare to MTM Health for rides starting October 1, 2026.
Public agency, such as a transit authority	It bids on the same terms as private companies (CMS, SMD 23-006)	It may give rides itself if it meets cost and record conditions, such as pay limited to its actual costs and proof that each ride was the most appropriate, lowest-cost option

Congress made brokers a state plan option in the Deficit Reduction Act of 2005, and CMS told states on March 31, 2006 that brokers must be chosen through competitive procurement (SMDL #06-009). A company that contracts with the state to provide only NEMT, paid by capitation, is a NEMT prepaid ambulatory health plan (PAHP) under 42 CFR 438.9. It must meet parts of the federal managed care rules, including actuarially sound rates, member information standards, and the bar on excluded individuals. The full federal rules are in federal rules for NEMT brokers, and which states use which model is in NEMT brokers by state.

The conflict rule: why a broker usually cannot give rides

For an owner who already runs vans, this rule matters most. A state broker contract must bar the broker, including its contractors, owners, investors, board, officers, and employees, from giving the rides or referring trips to a transportation company it has a financial relationship with (42 CFR 440.170(a)(4)(ii)). The same bar applies when an immediate family member has that relationship, which covers a spouse, parents, children, siblings, step and in-law relatives, grandparents, and grandchildren (42 CFR 411.351).

A financial relationship means any ownership or investment interest, including stock, LLC membership, or a secured loan, or any compensation arrangement (42 CFR 411.354). The broker is liable for the full cost of any ride it sends through a prohibited referral.

There are three exceptions for a private broker: a rural area with no other qualified provider, rides so specialized that no one else can do them, or too few other providers to meet the need. Each one needs a state plan amendment. CMS says the state must show precise, current data for each county where it wants the exception, and the state should limit the broker’s own vehicles to trips no contracted provider can take (SMD 23-006, September 28, 2023).

Two recent examples show how seriously states take it:

• South Carolina. On October 2, 2025, the state’s Chief Procurement Officer found MTM Health’s proposal, which the state had picked for award, nonresponsive because it built in VeyoRide, the driver program of MTM’s affiliate Veyo, as more than an option. The 2026 draft contract keeps the same bar.
• Colorado. HB26-1328, in effect July 1, 2026, says the state’s broker may not operate, own, or control any NEMT provider operating in Colorado.

If you own a NEMT company, becoming a broker in the same program means that company, and any company tied to you or your family by ownership or pay, cannot take the trips. Work out the structure with a health care attorney before you spend anything on a bid.

How a state picks its broker

State bids follow the same basic path. South Carolina’s current bid, Solicitation 5400029919, shows each step with real dates.

1. Watch the notices. South Carolina posts its bids, amendments, and awards at procurement.sc.gov. It posted this bid on June 26, 2026.
2. Register as a vendor. South Carolina requires vendor registration before you can submit an offer online.
3. Attend the conference and send questions. Under Amendment 1 (September 11, 2026), the pre-proposal conference is September 30, 2026, and written questions are due October 2, 2026.
4. Submit the proposal. It covers your technical approach, an experience table, financial statements, and your acceptance of the state’s rate method. Proposals are due December 3, 2026.
5. Pass scoring and a demonstration. Up to three finalists give a demonstration of up to two hours, tentatively the week of February 12, 2027.
6. Survive the award and any protest. The award is set to post March 1, 2027.
7. Pass the readiness review. South Carolina will not let the new broker serve members until it passes a readiness review with the state and its external quality review organization. Georgia’s manual has state staff test each broker’s phones, computers, and staffing about three weeks before go-live.

South Carolina scores proposals on a 1,450-point scale.

What is scored	Points
Transportation operations: network, providers, and services	500
Member and provider services, including complaints	300
Administration, management, information technology, and operations	200
Qualifications: corporate background, financial information, rates	250
Demonstration of scheduling, prior authorization, credentialing, and the mobile app	200
Rates	Pass or fail: accept the state’s capitation method and rate range, or the proposal is rejected

Other states set a lower bar to bid but still score experience. Delaware’s answers for its 2025 bid, HSS-25-051 (July 17, 2025), say there were no minimum requirements. Bidders were judged on their understanding of the project, corporate background and experience, capacity, references, work plan, and pricing.

Expect it to take a long time. South Carolina issued a broker bid in January 2025 and canceled it on May 2, 2025, when it issued a second bid that drew seven proposals. The intended award from that bid was overturned on protest. A protest also paused the third bid on July 14, 2026. The Chief Procurement Officer denied that protest on August 5, 2026, and Amendment 1 set new dates. The third bid’s contract is estimated to run March 11, 2027 through March 10, 2032. The state’s last competitively awarded contract ran from May 26, 2011 to May 25, 2016. For how to read these notices, see how state NEMT broker contracts are awarded and our report on South Carolina’s third bid.

What a state bid asks you to prove

South Carolina’s 2026 solicitation, backed by its draft contract, is one of the most detailed current examples. The contract terms are a draft and can change before the award. Georgia’s manual and Delaware’s 2025 answers fill in other states’ approaches.

Area	What the states ask for
Experience	South Carolina: five years of NEMT experience running a program of similar size and scope, and a solution already used successfully in a state. You list your three most recent comparable contracts with contacts, and every similar customer from the past three years.
Financial strength	South Carolina: your three most recent years of audited financial statements (or unaudited statements with tax returns) plus interim statements. Any subcontractor doing more than 10 percent of the work sends them too. You also disclose any damages or penalties over $100,000 on the contracts you list, from the last five years.
Provider network	Georgia: enough vehicles, drivers, and attendants under agreement that one provider’s failure does not stop service. Delaware: at least 3 ambulatory and 3 non-ambulatory providers in each county, not counting the statewide transit authority.
Office and staff	South Carolina: a physical office in the state open 8 a.m. to 6 p.m. on weekdays, with key staff such as the director of transportation and the contract manager based in the state. Georgia: a central business office in the region, with the project director on site full time through implementation and the first six months.
Call center	South Carolina: 80 percent of calls answered within 30 seconds, an average speed of answer of 3 minutes or less, an average hold of 60 seconds or less, 1 percent or fewer busy signals, 5 percent or fewer abandoned calls, and staff located in the United States. Georgia: every call answered within 10 seconds and an average hold of 60 seconds or less.
Complaints	South Carolina: acknowledge each complaint within 1 business day and close it within 5. Georgia: call the person back within 24 hours and report findings to the state within 5 business days.
Paying providers	South Carolina: at least a weekly payment cycle, with undisputed invoices paid within 30 calendar days. Georgia: within 15 business days unless the provider agreement says otherwise.
Insurance	South Carolina: $1 million commercial general liability per occurrence, $1 million auto liability, $1 million employer’s liability, and $5 million per occurrence ($10 million aggregate) for data security, privacy, and errors and omissions
Penalties	South Carolina: liquidated damages of up to $1,500 a day or $10,000 an incident for general noncompliance, and up to $20,000 a day for failing the readiness test after the scheduled start

Brokers are also graded while they run. Indiana ties part of its broker’s pay to outcomes, including no more than 1 percent of completed one-way trips with a valid member complaint (FSSA presentation, August 28, 2025). Those standards flow down to providers, as how to handle NEMT broker complaints explains.

How NEMT brokers get paid, and what the margin looks like

Many state brokers are paid by capitation: a fixed amount for every eligible member each month, whether or not that member rides. Georgia and Delaware pay this way, and South Carolina’s new contract moves its broker to it. The broker keeps the difference between that money and what it spends on rides and staff. If members ride more than expected, the broker absorbs the loss unless its contract shares the risk.

Two formulas drive the business:

Capitation revenue = member months × rate per member per month

Broker margin = capitation revenue − ride costs − administration

South Carolina posted an illustration for state fiscal year 2028 with its 2026 bid (PL 005, March 23, 2026). The state marks it as a draft for illustration only, not the final rate.

Part of the illustrated $11.00 monthly rate	Per member per month	At 12,160,000 member months a year
Rides (benefit expense)	$8.64	About $105 million
Administration	$2.15	About $26.1 million
Margin	$0.22	About $2.7 million
Total capitation	$11.00	About $133.8 million

The yearly totals are those illustrated rates multiplied by the state’s projected member months. A risk corridor then limits how much of a good or bad year the broker keeps.

Part of the gap between ride spending and the target	Who carries it
The first 2 percent above or below	The broker keeps all of the gain or loss
The part between 2 and 4 percent	The broker and the state split it 50/50
Anything beyond 4 percent	The state carries all of it

In the state’s two scenarios, ride costs of $98 million against the $105 million target leave the broker a 5.0 percent margin after the corridor. Ride costs of $110 million leave it a loss of 1.0 percent. The scale is large: South Carolina’s NEMT program gave about 3.8 million rides in state fiscal year 2025, led by adult day care and dialysis trips (PL 001).

States also cap what a broker keeps. South Carolina’s draft contract requires a medical loss ratio of at least 75 percent, the share of capitation spent on rides and related quality costs, and the broker pays money back if it falls short. Delaware capped administration, overhead, and profit at 15 percent of the payment for its 2025 bid. The federal 85 percent medical loss ratio standard for health plan rates does not apply to NEMT-only plans (42 CFR 438.4(b)(9) and 438.9).

What it takes to run a brokerage

A state broker is a call center, a claims office, and a provider network manager in one. South Carolina’s draft contract requires these staff, among others:

• A director of transportation and a contract manager, both based in the state
• A transportation provider services director and a health plan liaison, both in the state, half time each
• A driver compliance manager, a quality assurance manager, and a customer services manager
• Claims analysts, a data management analyst, and a provider relations manager for medical offices
• A member advocate to resolve member complaints

The daily work under that contract includes:

1. Taking calls within the call standards above, with a complaint line staffed from 8 a.m. to 6 p.m. on weekdays.
2. Checking eligibility and approving trips against the state’s daily eligibility file before assigning them.
3. Credentialing providers, drivers, and attendants, and repeating it on a schedule.
4. Paying providers weekly and within 30 days of an undisputed invoice.
5. Sending encounter data for every paid and denied claim to the state each Wednesday by 5 p.m.
6. Monitoring providers with on-street checks, on-time and ride-time measures, complaint analysis, and GPS records for every vehicle.
7. Keeping a website and mobile app approved by the state and live before the first day of service.

Why most NEMT operators stay providers

Brokering and driving are different businesses, and the rules push owners to pick one.

• You give up the rides. The conflict rule keeps a broker and its owners’ companies out of the trips it assigns.
• The experience bar is high. South Carolina wants five years running a program of similar size, and its program gave about 3.8 million rides in state fiscal year 2025.
• The spending comes before the revenue. Audited statements, insurance with multimillion-dollar limits, staff, and systems all come before the first capitation payment.
• The margin is thin and at risk. In South Carolina’s illustration, the planned margin is $0.22 of every $11.00, and a bad year can turn it into a loss.
• Bids take years and invite protests. South Carolina is on its third bid since January 2025.
• Contracts end. South Carolina’s runs three years plus two optional one-year renewals, after which the work can go back out to bid.

A provider, by contrast, can start with one van and grow trip by trip. See starting NEMT with one van.

Other ways to grow without becoming a broker

Most of what owners want from brokering, more trips and more control, is available on the provider side.

• Work with more than one broker and plan. Spreading trips across payers lowers your risk. See working with multiple NEMT brokers and contracting with Medicaid health plans.
• Sign facility and private pay work. Dialysis centers, hospitals, and families pay you directly. See NEMT facility contracts and private pay NEMT.
• Share overflow with other providers, within the rules. MTM Health’s standard agreement, as Pennsylvania posts it (January 1, 2023), bars subcontracting any services without MTM’s written consent. See subcontracting NEMT trips.
• Win more broker trips. Brokers reward good performance: MTM Health in Virginia offers quarterly incentive payments to providers with 95 percent on-time performance or better (handbook approved August 10, 2026). See how to get more broker trips and how to get NEMT broker contracts.

How to become a NEMT broker, step by step

If you still want to broker, work through these steps before you answer a bid.

1. Choose the market. Decide between a state program, a health plan, or public agency work, and read the current contract and manual for that program.
2. Settle the conflict question. With a health care attorney, decide what happens to any transportation company you or your family own or are paid by.
3. Build a record you can prove. Collect contracts you have run, trip volumes, on-time and complaint rates, and references that can speak to them.
4. Get audited financial statements. South Carolina wants three years. It will not count a parent or affiliated company’s finances toward yours, though it may consider a letter of credit, performance bond, or parent guaranty you offer.
5. Register and watch. Register as a vendor on each state procurement site, and attend pre-proposal conferences.
6. Line up people, place, and systems. Name your key staff, find an office where the state requires one, and prepare a system that can handle scheduling, prior authorization, credentialing, claims, and encounter data.
7. Recruit a network. Line up providers in every county the bid covers, on agreements with the terms the state requires.
8. Price the bid. Model ride costs, administration, and risk inside the state’s rate range, its medical loss ratio, and any administration cap.
9. Plan the launch. Budget for implementation before revenue starts, and for readiness testing before go-live.

Search every owner and key staff member on the HHS OIG exclusion list before you sign anything. Under 42 CFR 438.610, which 42 CFR 438.9 applies to NEMT-only plans, a plan may not have an excluded person as a director, officer, partner, owner of 5 percent or more, subcontractor, or network provider.