NEMT Collections in 2027: How to Collect From Facilities and Private-Pay Riders

Most NEMT money runs on rules someone else enforces: Medicaid fee schedules, broker payment terms, claim deadlines. Two kinds of bills have no such backstop. One is the facility invoice for rides a nursing home, clinic, or hospital pays for. The other is the private-pay ride a rider or family owes. This guide is the routine for collecting both, the laws that limit how you collect, and the rides you may never send to collections. For tracking Medicaid and broker claims, see NEMT accounts receivable.

Which unpaid rides you can collect

You can collect from three kinds of payers:

• Facilities that signed an agreement to pay for their patients’ rides.
• Private-pay riders and the family members who agreed to pay.
• Medicaid members, for cost sharing only. Federal rule 42 CFR 447.15 says a member’s inability to pay does not erase the copay the state plan sets. CMS allows a copay on rides only when the state covers NEMT as a medical service, not when it pays for rides as an administrative activity (SMD 23-006).

Beyond that copay, a Medicaid member never owes you for a ride Medicaid covers, because the same rule limits Medicaid to providers who accept its payment as payment in full. CMS adds that states and providers may not charge a member for a no-show (SMD 23-006, September 28, 2023). If a member wants to pay privately for a ride, private pay NEMT covers the proof some states require first.

Waiving a copay has its own federal rule. Under the civil penalty law, a waived copay counts as something of value given to the member unless you do not advertise it, do not waive copays routinely, and either judge the member’s financial need in good faith or fail to collect after reasonable collection efforts (42 U.S.C. 1320a-7a(i)(6)(A)). Keep a note in the rider’s file each time.

When Medicaid coverage reaches back to the ride date

A private-pay rider can become a Medicaid member for the very ride they owe you for. Federal rule 42 CFR 435.915 makes Medicaid start as early as the third month before the month the person applies, if they were eligible then. For applications made on or after January 1, 2027, that window shrinks to one month for the expansion adult group and two months for everyone else (CMS bulletin, November 18, 2025). See the 2027 change.

CMS says states must pay for necessary transportation during that period, even when the ride was already paid. You may have to return what the rider or family paid first, then bill the state (SMD 23-006).

California spells out the rest. Once you have proof of Medi-Cal coverage for the ride date, you may not seek payment from the rider (Welfare and Institutions Code 14019.4):

1. Tell any collector you hired to stop collecting on the ride, and tell the rider you did.
2. Do not report the ride to a credit bureau, and correct or delete anything you reported. Reporting it, or leaving an old report uncorrected, more than 30 days after you get proof counts as a violation of California’s credit reporting law.
3. Refund the rider any payment once Medi-Cal pays you (section 14019.3).

A provider that keeps pursuing the rider can owe the state a penalty of up to three times what Medi-Cal would pay, though clerical errors and good faith mistakes are considered.

A collection routine for facility invoices

Facility bills go unpaid for ordinary reasons: a missing purchase order, an invoice sent to the wrong person, a discharge planner who booked a ride accounts payable never approved. A steady routine fixes most of them before anyone talks about lawyers.

1. Set the terms before the first ride. The facility transportation agreement template has blanks for the due date, the window to question a charge, a late payment charge, and how either side may end the agreement. Add a line that lets you pause new bookings while an invoice is past due.
2. Invoice on schedule with trip detail. One line per leg, with the rider, date, addresses, and charge, as in the NEMT invoice template.
3. On the due date, send a statement of every open invoice to the accounts payable contact named in the agreement, and confirm they have each purchase order number.
4. A week later, call. Ask which rides, if any, the facility questions, and get the rest paid now. Write down who you spoke with and what they promised.
5. Send a written past-due notice that quotes the agreement’s payment clause and lists each invoice, its date, and its amount.
6. Send the notice to cure your agreement requires, giving the days it allows to pay.
7. Pause new facility-paid bookings if the cure period ends unpaid. Finish rides already scheduled for the number of days the agreement sets, so no rider is stranded. A dialysis patient with standing rides needs a few days for the facility to arrange another provider.
8. Send a final demand with the total, copies of the invoices, a deadline, and the step you will take next.
9. File in small claims or hand the account to a lawyer if the deadline passes.

Interest and late charges

Write any interest rate or late charge into the signed agreement. If the agreement sets none, state law fills the gap:

• California. A contract made after January 1, 1986 that names no rate bears 10 percent a year after a breach (Civil Code 3289).
• Texas. With no agreed rate, you may charge 6 percent a year starting on the 30th day after the due date (Finance Code 302.002). Texas also caps contract interest at 10 percent a year unless another law allows more, and treats any charge that works as interest as an agreed rate (302.001 and 302.002). Ask a Texas lawyer before you set a flat late fee.
• Florida. With no contract rate, interest runs at the rate the state’s Chief Financial Officer sets each quarter (Florida Statutes 687.01 and 55.03).
• Ohio. A written contract’s rate applies. Without one, the rate set each year under Ohio Revised Code 5703.47 applies (section 1343.03).

When the facility is a government agency

Counties, school districts, transit agencies, and federal buyers such as VA medical centers usually pay under prompt payment laws. Those laws set how many days they have to pay a proper invoice and the interest they owe when they pay late. See local government prompt payment acts for the deadlines and rates, and how to claim the interest.

Do not let a balance ride as a favor

A nursing home that pays for some rides may also send you Medicaid or Medicare riders. HHS OIG’s guidance for nursing facilities (November 2024) warns against free or discounted services on business the facility pays for when they are linked to referrals the supplier bills to a federal program. A balance you never collect works like a free service. Collect it, or end the arrangement. Anti-kickback rules for NEMT explain the risk.

Collecting from private-pay riders and families

The cheapest collection is the one you never need. A card on file with a signed authorization, as described in NEMT credit card payments, turns most private rides into same-day payments. Have the family member who books and pays sign as the responsible party.

The federal collection law

The Fair Debt Collection Practices Act and its rule, Regulation F, cover consumer debts: money owed for personal, family, or household purposes. A facility’s bill is not one. A rider’s bill is.

The law usually does not reach you when you collect your own bills. A debt collector under 15 U.S.C. 1692a is a business whose main purpose is collecting debts, or one that regularly collects debts owed to someone else. A creditor’s own officers and employees collecting in the creditor’s name are left out. A creditor that collects under any other name suggesting a third party is collecting becomes a debt collector, so never send letters from a made-up collections department.

An agency you hire is covered. Under Regulation F, it may not contact the rider before 8 a.m. or after 9 p.m. at the rider’s location unless it knows those times suit them. It is presumed to comply when it calls about a debt no more than seven times in seven days, and not within seven days after a phone conversation about it (12 CFR 1006.6 and 1006.14).

State laws that cover you directly

Several states apply collection rules to any business collecting its own consumer bills:

• California. The Rosenthal Act covers anyone who, in the ordinary course of business, regularly collects debts on its own behalf (Civil Code 1788.2). Those collectors must follow the federal law’s rules in sections 1692b to 1692j (section 1788.17).
• Florida. Section 559.72 applies to any person collecting a consumer debt. You may not contact the rider between 9 p.m. and 8 a.m. without consent, contact their employer before a final judgment without written permission, post a list of people who owe you, or threaten to enforce a debt you know is not legitimate.
• Texas. Finance Code 392.001 defines a debt collector as any person who directly or indirectly collects consumer debts, with no exception for a business collecting its own.

When the rider dies

The Consumer Financial Protection Bureau says a person’s debts are generally paid from their estate, and survivors usually owe nothing unless they shared responsibility, for example as a co-signer (reviewed August 2, 2023). That is why the responsible party signature matters. In California, file your claim in the probate case by the later of four months after letters are first issued to the personal representative, or 60 days after notice of administration is mailed or delivered to you (Probate Code 9100).

Sharing rider details with a collection agency

Whether HIPAA applies depends on whether your company is a covered entity, which HIPAA for NEMT explains. If it is, three rules shape what you send an agency:

1. Collecting is a payment activity. HIPAA’s definition of payment includes billing, claims management, and collection activities (45 CFR 164.501), and you may use or disclose rider information for your own payment activities (164.506).
2. The agency is your business associate. A company that handles health information on your behalf for a function such as billing fits the federal definition (45 CFR 160.103), and you need a written agreement before you share anything (164.502(e)). Use the business associate agreement checklist.
3. Send the minimum necessary. The minimum necessary standard applies to payment disclosures (164.502(b)). The agency needs the payer’s name and address, the ride dates, the invoices, and the amount, not the rider’s diagnosis or the kind of clinic visited.

Credit reporting is narrower still. Under 45 CFR 164.501, what you or your agency may give a credit bureau as a payment activity is limited to name and address, date of birth, Social Security number, payment history, account number, and your company’s name and address.

Small claims limits and deadlines in four states

Small claims court lets a company sue for a smaller amount without a lawyer. The table shows four states as of October 2026: the most a company can sue for, how long you have to sue on a written contract, and the interest that applies when your contract names no rate.

State	Small claims limit for a company	Time to sue on a written contract	Interest if the contract sets none
California	$6,250 ($12,500 if you sue as a person, such as a sole proprietor)	4 years	10% a year after breach
Florida	$8,000, not counting costs, interest, and fees	5 years (4 if not written)	Rate the state sets each quarter
Ohio	$6,000, not counting interest and costs	6 years (4 if not written)	Rate the state sets each year
Texas	$20,000	4 years	6% a year from the 30th day

What each state requires when you file:

• California. The claim form asks whether you demanded payment first, so send the demand letter (Code of Civil Procedure 116.320). No one may file more than two claims over $2,500 anywhere in the state in a calendar year (116.231). A company appears through a regular employee, officer, or director who was not hired only to go to small claims court (116.540). Lawyers cannot appear with you in court, the filing fee runs $30 to $100, and if you win, collecting the judgment is your job, according to the state courts’ self-help guide.
• Florida. A business may be represented by an officer, member, managing member, or partner who can bind it, or by an employee a principal authorizes in writing. If your claim rests on a written agreement, attach a copy, or the part that matters, to the statement of claim (Small Claims Rules 7.050, July 1, 2026).
• Ohio. A corporation may file and present its claim through an officer or salaried employee, but without a lawyer it may not cross-examine or argue (Revised Code 1925.17). A claim brought by an assignee or agent, such as a collection agency, cannot be filed in small claims (1925.02).
• Texas. Small claims are heard in justice courts. A company may be represented by an employee, owner, officer, or partner who is not a lawyer, according to the Texas State Law Library’s guide (updated September 30, 2026).

Book accounts count too. In California, the four years also applies to an action on a book account or an account stated (Code of Civil Procedure 337), and in Texas to a suit on an open account (Civil Practice and Remedies Code 16.004). When a judgment is out of reach or not worth the effort, write the balance off on purpose, as the accounts receivable guide describes.