Is NEMT a Good Business in 2027? The Honest Pros and Cons

NEMT is a real business with real demand, and it is also a business where someone else sets your price. Whether it is a good one for you depends on your state’s rates, the payers you can win, and how tightly you run each van. Here is the case for it, the case against it, and the math that decides between them.

The short answer: when NEMT works and when it struggles

NEMT tends to work when	NEMT tends to struggle when
You have standing orders, like regular dialysis riders	Your trips are mostly one-off rides scattered across a wide area
Your trips come from two or more brokers, plans, or facilities	One broker sends nearly all your trips
Your vans run full days with short gaps between riders	Vans sit idle or drive long empty stretches
You bill daily or weekly and fix rejected claims fast	Trip logs are incomplete and claims come back
You offer wheelchair or stretcher service where few companies do	You compete for ambulatory trips against taxis and rideshare
You hold cash for several weeks of payroll, fuel, and insurance	You need this week’s rides to pay this week’s bills

If the right column describes your plan, fix that first. If you are still asking what NEMT is, start there, then come back.

Why demand for NEMT is steady

The strongest point in NEMT’s favor is the law. Federal rule 42 CFR 431.53 requires every state Medicaid plan to ensure necessary transportation to and from providers, and Congress wrote that duty into the Social Security Act in December 2020. Without a federal waiver, a state cannot simply stop offering rides to members who have no other way to care.

The ridership is large, and it repeats. CMS’s expanded 2023 report to Congress counted about 3.3 million Medicaid members who used NEMT in 2021, on 55.5 million ride days. The heaviest users ride several days a month:

Riders (2021)	Share who used NEMT	Ride days a month per rider
Members with kidney failure	47 percent	5.5
Home and community-based waiver enrollees	22 percent	2.6
Members with opioid use disorder	17 percent	2.7
Members with intellectual or developmental disabilities	14 percent	3.2
Members on both Medicare and Medicaid	14 percent	1.7

Dialysis made up 68 percent of the ride days for members with kidney failure. Those riders come back week after week, so the dialysis centers near you are a good first measure of your market. See dialysis transportation.

States also say they are short of providers. CMS’s 2023 report lists keeping an adequate network, meaning enough qualified drivers and enough vehicles equipped for high-need riders, as one of the most common problems states report. It also says NEMT is less well equipped for trips that cannot be booked ahead, such as rides home after a hospital discharge. A company with wheelchair or stretcher vans that can take short-notice trips fills a real gap.

Rural areas are part of the picture too. In 2021, about 7 percent of members in frontier and remote areas used NEMT, compared with less than 4 percent of all members. See rural NEMT for how long trips pay.

What NEMT pays: you do not set the price

In most NEMT work, the payer sets the rate. State fee-for-service programs publish a fee schedule. Brokers and health plans pay from their own rate sheets, attached to your contract. You can negotiate with some, but you cannot raise prices the way a private business can.

Here are two published fee-for-service schedules. Both pay a base rate per one-way trip, and Arizona adds a rate for every loaded mile.

Service	Arizona, urban (October 1, 2026)	Arizona, rural (October 1, 2026)	South Dakota (July 1, 2026)
Ambulatory trip, A0120	$6.64 + $1.28 a mile	$7.27 + $1.63 a mile	$5.20 in town, $7.80 outside town
Wheelchair van, A0130	$11.15 + $1.54 a mile	$12.21 + $1.66 a mile	$43.39 as a “secure van,” plus $2.61 a mile outside city limits
Stretcher van, T2005	$49.09 + $1.54 a mile	$86.70 + $1.66 a mile	$109.66, plus $2.61 a mile outside city limits
Waiting time, T2007	$4.59 per half hour	$4.59 per half hour	Not listed

South Dakota calls wheelchair and stretcher service “secure medical transportation,” and it covers only riders confined to a wheelchair or needing a stretcher. It pays community transportation mileage, $1.04 a mile, only on trips outside the city of 21 miles or more one way. In town, an ambulatory ride pays $5.20 flat. Rates like these are why the payer matters as much as the ride.

Three federal rules cut into what you can bill, all from CMS’s Medicaid Transportation Coverage Guide (SMD 23-006, September 28, 2023):

• Empty miles are generally not paid. That includes the drive back after a rider no-show. States may build those costs into their rates instead. See deadhead miles.
• The ride must be the least costly mode that fits the rider. You cannot bill a wheelchair van for a rider approved for a sedan.
• A provider no-show is not paid, because no service was given.

CMS does warn against rates that are too low. The same guide says states should make sure brokers do not pay so little that local providers refuse to take part. For a state-by-state view, see NEMT reimbursement rates.

What it costs to run a NEMT van: a worked example

Rates only mean something next to costs. Here is one example day for a wheelchair van in Phoenix at Arizona’s urban fee-for-service rates, effective October 1, 2026. The trip count, miles, and hours are example numbers. The driver wage is the May 2025 national median for shuttle drivers and chauffeurs, $17.93 an hour, from the Bureau of Labor Statistics. The running cost uses the IRS business mileage rate for the second half of 2026, 76 cents a mile, as a stand-in for fuel, repairs, insurance, and the van itself.

Example day: 10 one-way wheelchair trips, 8 loaded miles each	Amount
Base rates, 10 × $11.15	$111.50
Loaded miles, 80 × $1.54	$123.20
Total pay	$234.70
Driver, 9 hours × $17.93	$161.37
Van, 130 miles driven (80 loaded, 50 empty) × $0.76	$98.80
Total cost	$260.17
Result for the day	A loss of $25.47

At these rates and costs, each trip has to bring in about $26.02 to break even, and this 8-mile trip pays $23.47. The day does not cover payroll taxes, dispatch, billing, or your office either.

Small changes move the result a lot:

Change to the example day	New result
The owner drives, so there is no driver wage	$135.90 left for the owner’s pay and overhead
Empty miles fall from 50 to 20	A loss of $2.67
Twelve trips fit in the same 9 hours, with the same empty miles	$9.31 left
Twelve trips and 20 empty miles, still with a paid driver	$32.11 left

The lesson is not that NEMT cannot pay. It is that trips per hour, empty miles, and your rate decide everything, and a thin fee schedule leaves little room for error. Put your own numbers into the NEMT break-even calculator and read how much a NEMT business makes for the full revenue math.

Other costs to plan for before your first ride:

• Insurance. MTM Health’s standard agreement, in the January 1, 2023 version Pennsylvania posts, requires at least $500,000 in commercial auto liability, $500,000 in general liability, and workers’ compensation at your state’s statutory levels. Brokers can require more.
• Enrollment fees. CMS set the 2026 federal application fee at $750 for institutional providers enrolling or revalidating from January 1 to December 31, 2026. New York lists it in its transportation enrollment steps (May 2026), so check your state’s enrollment page.
• Driver pay beyond the median. The May 2025 BLS figures show 248,530 people working as shuttle drivers and chauffeurs nationally, with a median of $37,290 a year. Pay in your metro area may be higher or lower, and the BLS tables show it by state.

The downsides to plan for

You wait weeks for your money

MTM Health’s standard agreement pays uncontested invoices within 30 days of online submission. If you bill weekly, about five weeks can pass between the first ride and the first payment. At the example day’s $260.17 in costs, five weeks of weekday runs is about $6,500 per van that you carry before any money arrives. See NEMT cash flow.

State fee-for-service programs are not always faster. Federal rule 42 CFR 447.45 requires states to pay 90 percent of clean claims from health care practitioners within 30 days, but all other claims only have to be paid within 12 months of receipt. Health plan contracts must carry the same practitioner standard, unless the plan and its providers agree on a different schedule written into the contract (42 CFR 447.46).

Contracts can end fast, and trips are not promised

MTM Health’s standard agreement shows the terms to expect:

• It guarantees no minimum number of trips.
• Either side can end it on 30 days’ written notice.
• MTM can end it at once if its own contract with the state or plan ends.
• Claims submitted more than 90 days after the ride are not paid, unless MTM’s client sets another limit.

Payers also change brokers. Starting October 1, 2026, Blue Cross and Blue Shield of Texas Medicaid members get their rides through MTM Health instead of Modivcare, and MTM Health takes over their recurring trips and trips already booked for after that date. A company that served those members only through Modivcare would need to join MTM Health’s network to keep driving them. See working with multiple NEMT brokers and NEMT payer mix.

Doors can close to new companies

Federal rules let a state, with CMS’s agreement, stop enrolling new providers of a type at high risk of fraud, for 6 months at a time (42 CFR 455.470). Minnesota stopped enrolling new NEMT providers in the seven-county Twin Cities metro on January 27, 2026, and on July 23, 2026 extended the freeze to January 27, 2027. See the Minnesota enrollment freeze. Broker networks can also be full in your county, so ask before you buy a van. See NEMT broker network full.

NEMT draws fraud audits

CMS’s 2023 report notes that the Government Accountability Office has identified NEMT as at particularly high risk for fraud and abuse. The HHS Office of Inspector General announced a targeted review of NEMT billing on October 15, 2025, and a series of audits of state NEMT payments on May 28, 2026, expected to finish in fiscal year 2028. States can also screen transportation companies at the “high” risk level, with a criminal background check and fingerprints, including for owners of 5 percent or more (42 CFR 455.450). Honest companies still pay for this with paperwork: every trip needs a complete record that matches the claim. See NEMT fraud and NEMT trip documentation.

Medicaid enrollment is set to shrink in 2027

Federal law requires states to start a Medicaid work requirement for many expansion adults no later than January 1, 2027. A CMS rule published June 3, 2026, in effect since July 31, 2026, sets the details. CMS counted about 82.4 million people in Medicaid in fiscal year 2025, roughly 20 million of them in the expansion group. It projects the requirement will reduce enrollment by 2.3 million in fiscal year 2027 and by 3.1 to 3.3 million in later years. Fewer members means fewer possible riders. See the work requirement rule.

Some rides moved to telehealth

CMS found that from the start of the pandemic through late 2021, telehealth was used more than NEMT for preventive visits, behavioral health, and substance use treatment. Rides held up better for services that need a person in the room: dialysis, lab work and imaging, cancer treatment, physical therapy, and dental care. Build your trip base around those.

The upsides that are real

• A required benefit. States must ensure rides for members with no other way to care, so demand does not depend on riders being able to pay.
• Repeat riders. MTM Health’s Virginia handbook notes that many of its fee-for-service trips recur daily or weekly, to day programs or dialysis. The same trips every week make staffing and cash easier to plan.
• Room for more payers. Besides Medicaid, CMS’s 2023 report notes the VA provides rides to certain veterans and Medicare Advantage plans increasingly offer them. PACE programs must provide rides and may hire contractors to run them (42 CFR 460.76). Hospitals and private pay riders buy trips too. Private pay is the one place you set the price. See private pay NEMT and NEMT facility contracts.
• A modest entry cost for a regulated health business. A van designed for fewer than 16 people, including the driver, and rated under 26,001 pounds does not require a CDL under federal rules (49 CFR 383.5). Federal Medicaid law adds only a short list of driver and company checks, and your state and brokers set the rest.
• Work that matters. CMS describes dialysis as one of the vital, life-sustaining services members reach by NEMT, and for many riders your van is the only way there.

How to test NEMT in your area before you buy a van

1. Learn how your state runs NEMT. Find out if trips come from the state, a broker, health plans, or a mix, on your state guide.
2. Get the real rates. Download your state fee schedule and ask each broker’s provider relations team for its rate sheet in writing.
3. Ask if networks are open. Call each broker about your county and service level, and check for enrollment freezes.
4. Count your repeat riders. Find the dialysis centers in your service area on Medicare Care Compare, list the local day programs, and call a few of each about their transportation needs.
5. Build your cost per hour and per mile. Use real quotes for insurance, your van payment, and local driver wages.
6. Run the example day with your numbers, then try it with fewer trips and more empty miles. If the plan only works on your best day, it does not work.
7. Plan cash for at least five weeks of payroll, fuel, and insurance per van before the first payment.
8. Line up a second payer before you depend on the first one.

Avoid the common traps in NEMT startup mistakes, and when the numbers work, follow how to start a NEMT business. For where demand is heading, see NEMT industry trends.