NEMT Rate Increases in 2027: How Medicaid Rates Go Up and How to Push for One

A rate usually reaches you as a line on a remittance. The decision behind it runs on a calendar, and at several points the state has to ask the public before it acts. This guide shows who sets each kind of rate, how an increase moves from a state budget to your payment, and where you can speak up.

Who sets your NEMT rate

Your rate depends on who pays the trip. The same van can carry riders under three or four different rates in one day.

Who pays the trip	Who sets your rate	What moves it	A 2026 example
State Medicaid, fee-for-service	The Medicaid agency, within the budget the legislature passes	A rate review, a budget increase, or a new law, then a state plan amendment	Texas raised its demand response rate about 4.5 percent on September 1, 2026
A health plan	Your agreement with the plan or its broker	The contract, or a state order for plans to pay a minimum fee schedule	Indiana told its plans to mirror its 2026 fee schedule by January 1, 2026
A broker	Your provider agreement	Negotiation at signing or renewal, or a state floor	Louisiana brokers must pay at least the state’s published fee-for-service rate unless you agree otherwise
A state law	The legislature	A bill plus the money to pay for it	Louisiana’s Act 969 sets a minimum of $14.50 a trip and $2.10 a mile, once it is funded

Two federal standards sit behind all of them. Medicaid payments must be sufficient to enlist enough providers so that care is available to members at least as much as to the general population (42 CFR 447.204). And CMS says states that use brokers are still responsible for access. They may direct brokers to use specific provider payment methods, and they are expected to make sure a broker does not pay so little that local providers refuse to take part (SMD 23-006, September 28, 2023).

In broker states, your rate also depends on what the state pays the broker. In Kentucky, each regional broker is paid a fixed amount per member per month. An actuary for the Medicaid agency sets it from past claims, adjusted for enrollment, trend, and reimbursement rate updates reported by the Kentucky Transportation Cabinet, which sets the rates brokers pay providers. The agency and the Cabinet walked lawmakers through that model on November 5, 2025. For current rates in 11 states, see NEMT reimbursement rates by state.

How a Medicaid rate increase happens

For fee-for-service trips, an increase usually passes through six steps. Knowing which step your state is on tells you who to talk to.

1. The money goes into the state budget

Medicaid is paid jointly. When a state covers NEMT as a medical service, the federal government pays the state’s regular matching rate and the state pays the rest. For October 1, 2026 through September 30, 2027, the federal share is 68.14 percent in Louisiana, 63.81 percent in Arizona, 58.54 percent in Texas, and 50 percent in New York. So in Louisiana, each state dollar added to NEMT rates brings in about $2.14 of federal money. When a state runs NEMT as an administrative activity instead, the federal match is 50 percent (SMD 23-006).

A rate law without money does nothing. Louisiana’s Act 969 of 2026 takes effect only when an act of the legislature with a specific appropriation for it takes effect.

2. The agency proposes new rates

Each state has its own rhythm. Texas reviews the Medicaid rates for all acute care services every two years, and the review can raise, cut, or hold each rate. For services Medicare does not price, its methods include the median or mean of Medicaid fees in 14 states: the 10 most populous and the 4 that border Texas. It can also set access-based fees to encourage provider participation. Arizona updates its fee-for-service rates each October 1 and posted its 2026 proposal on July 24. Indiana set its 2026 transportation rates from Medicare’s.

3. The state posts a public notice

Before a significant change in how it sets payment rates takes effect, the state must publish a notice (42 CFR 447.205). The notice must describe the change, estimate the change in yearly spending, explain why, give an address for written comments, and list any public hearings. It can run in a state register, a major newspaper, or a clearly titled page on the Medicaid agency’s website. No notice is needed when a change only follows Medicare’s methods or levels, or is required by a court order.

4. CMS reviews the state plan amendment

The state then files a state plan amendment. CMS has 90 days to approve it, deny it, or ask for more information. If it asks, a new 90 days starts when the state answers (42 CFR 430.16). An amendment that raises payment amounts can take effect no earlier than the first day of the quarter in which the state submits it (42 CFR 430.20). Louisiana submitted amendment 24-0017, which set up a higher level of care service for NEMT providers, on December 27, 2024. CMS approved it on March 24, 2025, effective back to October 20, 2024, a date in the quarter the state submitted it. Approved amendments are posted on Medicaid.gov.

5. The new rate is posted

By July 1, 2026, every state had to publish its fee-for-service rates on a public website linked from the Medicaid agency’s site. It must update them within one month of CMS approval or the effective date, whichever is later (42 CFR 447.203).

6. Payers apply it

Retroactive changes come back to you as adjustments. When Texas made a Medical Transportation Program rate update from its May 26, 2026 hearing effective back to January 1, 2026, its claims administrator said it would find and reprocess affected claims, and any adjustments would appear on future Remittance and Status reports. Our guide to reading a remittance advice shows where they appear.

Here is how two 2026 increases moved through those steps:

Step	Arizona, rates for October 1, 2026	Texas, demand response rates for September 1, 2026
Proposal posted	July 24, 2026, citing 42 CFR 447.205	Briefing packet for a May 26, 2026 public hearing
Comments due	5 p.m. on August 24, 2026, to FFSRates@azahcccs.gov	5 p.m. on May 26, 2026, to PFDAcuteCare@hhs.texas.gov, or testimony at the hearing
What changed	Rural mileage (S0215 with the TN modifier) rose from $1.53 to $1.63 a mile	T2003 rose about 4.5 percent in urban, suburban, and rural areas
In effect	October 1, 2026	Dates of service from September 1, 2026

Recent NEMT rate changes and what drove them

State	Change	Effective	What drove it
Texas	T2003: urban $32.38 to $33.83, suburban $59.64 to $62.31, rural $76.22 to $79.63	September 1, 2026	The biennial calendar fee review and public rate hearing
Arizona	Rural mileage (S0215 with TN) $1.53 to $1.63 a mile. The urban wheelchair van base stayed at $11.15, the rate on every schedule since at least October 1, 2020.	October 1, 2026	The yearly update. AHCCCS cited dirt roads, long distances, and a lack of providers in rural areas.
North Dakota	2.0 percent inflationary increase on fee schedule codes	July 1, 2026	A legislative mandate
Indiana	Transportation rates set to 100 percent of the January 1, 2025 Medicare rates, with health plans told to match	January 1, 2026	A fee schedule update based on Medicare’s prior-year rates
Louisiana	A minimum of $14.50 per trip and $2.10 per mile, including wheelchair trips, plus a method for shared rides	Only once funded. The health department then has 90 days to file a state plan amendment.	Act 969 (HB 1028), which became law without the governor’s signature on June 25, 2026
North Carolina	A 3 percent cut from October 1, 2025, reversed back to that date	Claims from December 17, 2025 pay the September 30, 2025 rates, and earlier trips are reprocessed	The state cited a funding shortfall, then reversed the cut after court rulings

Louisiana shows how much a minimum can matter. As of September 2026, its posted schedule, effective October 1, 2025, still pays $13.50 a trip plus $1.10 a mile for ambulatory rides, and $21.50 plus $1.30 a mile for wheelchair van rides, rates dated January 1, 2022. A 10-mile ambulatory trip pays $13.50 + (10 × $1.10) = $24.50 today. At Act 969’s minimum it would pay at least $14.50 + (10 × $2.10) = $35.50. Because Louisiana’s manual makes the fee-for-service rate the floor for broker payments unless the provider agreement says otherwise, a funded minimum would raise that floor too.

North Carolina shows the other direction. The state said the October 1, 2025 cuts were needed to keep Medicaid solvent without enough money from the General Assembly. On December 10, 2025 it said court rulings required it to restore September 30, 2025 rates. The North Carolina rate cut report has the correction steps.

Where the public comment windows are

Window	When it opens	How you take part
Rate change notice	Before any significant change in rate methods takes effect	Send written comments to the address in the notice, and attend any hearing it lists (42 CFR 447.205)
Public rate hearing	Where state law requires one. Texas holds them under Human Resources Code 32.0282.	Testify in person or online, or send written comments by the deadline
Proposed rules	When rates or methods are set by rule	Comment on the proposed rule. Act 969 directs Louisiana’s health department to adopt its minimum rates by rule.
Medicaid Advisory Committee	At least two meetings open to the public each year, with a dedicated time for public comment and 30 days’ notice (42 CFR 431.12)	Sign up for public comment and bring your numbers
Legislative budget and oversight hearings	During budget writing and interim oversight	Testify or meet members. Kentucky’s Budget Review Subcommittee on Health and Family Services heard a Medicaid NEMT presentation on November 5, 2025.
Access complaints	Any time	States must keep ongoing ways for providers to report access problems and a record of how they responded (42 CFR 447.203(c)(4))
Proposed rate cuts	Before the state files the amendment	Before filing, the state must consider input from providers on how the cut would affect access (42 CFR 447.204)

Access reports carry weight. When a state finds an access problem, it must submit a corrective action plan within 90 days, the fix should come within 12 months, and raising payment rates is one of the remedies the rule names (42 CFR 447.203).

How to make the case for a higher rate

1. Learn your state’s calendar. Find when the budget is written, when the agency reviews rates, and where it posts notices. Medicaid.gov’s state overviews link to each agency. Sign up for its provider bulletins.
2. Price your trips. Work out your cost per trip for each level of service, your loaded and empty miles, and your wait time. The cost per mile calculator and NEMT cost per trip show how.
3. Show costs rising with official numbers. The IRS business mileage rate was 67 cents in 2024 and 76 cents from July 1, 2026, a 13 percent rise, and the IRS tied the mid-2026 change to recent increases in the price of fuel. Arizona’s urban wheelchair van base rate did not move over those years. CMS says a state setting payment for unloaded miles or wait time may rely on existing rate structures such as the IRS mileage rate.
4. Document missed rides. Count trips you turned back, riders who waited, and areas with no wheelchair or stretcher provider. Report them through the state’s access channels so they land in the record the state must keep.
5. Compare nearby states. For services Medicare does not price, one of Texas’s methods looks at Medicaid fees in 14 states. Use the tables in NEMT reimbursement rates by state, each with its effective date.
6. Ask for a method, not only a number. A one-time increase fades. Indiana set its 2026 rates from Medicare’s, and North Dakota adds an inflationary increase set by the legislature. Until recently, Minnesota’s statute raised or lowered its per-mile rate 1 percent for every 10 cents that gasoline cost above $3.00 a gallon. That clause expired on July 1, 2026 for fee-for-service and expires January 1, 2027 for managed care.
7. Make the rural case where it applies. CMS strongly encourages states to recognize rural providers’ costs and says they may set higher base rates or pay supplemental payments. Our rural NEMT guide has the deadhead math.
8. Show what it costs the state. Multiply the trips affected by the increase, then take out the federal share. A small state cost is easier to fund.
9. Put it in writing and show up. File comments inside each window, testify at hearings, and meet your legislators before the budget session starts.

Working together without breaking antitrust law

Owners carry more weight as a group, through a state association or a coalition. The FTC says a trade association may represent its members before legislatures and government agencies. See NEMT associations for how provider groups organize.

There are two lines never to cross. Do not agree with competitors on the prices you will accept. And do not agree to stop taking trips until rates rise. The FTC says an agreement among competitors not to offer services at prevailing prices, as a way to force a higher price, raises antitrust concerns. The FTC successfully challenged trial lawyers who agreed to stop representing poor criminal defendants for the District of Columbia until it raised their fees, and the Supreme Court upheld that ruling in 1990. Each company may decide alone that a rate is too low.

Courts are rarely the answer. In Armstrong v. Exceptional Child Center (2015), the Supreme Court held that Medicaid providers cannot sue for an injunction to force a state to comply with the federal law that rates be sufficient to enlist enough providers. The remedy Congress provided is HHS withholding federal funds. The budget and the comment windows are where rates actually change.

When a broker or health plan sets your rate

When a health plan or broker pays the trip, your rate follows your contract. The state still has levers:

• Minimum fee schedules for plans. Federal rules let a state require its health plans to pay a minimum fee schedule based on state plan rates, or a uniform dollar or percentage increase (42 CFR 438.6(c)). Indiana’s bulletin of November 6, 2025 told its plans to mirror the 2026 fee schedule.
• Broker floors. Louisiana’s manual sets the published fee-for-service rate as the minimum a broker pays, unless the broker and provider agree otherwise in the provider agreement. Read that clause before you sign.
• State direction to brokers. CMS says states may direct brokers to use specific provider payment methods.

When your state’s rates rise, ask your broker in writing whether and when it will pass the increase through. For the rest of the conversation, see how to negotiate NEMT broker rates.

After an increase takes effect

1. Read the effective date. Note whether it applies to dates of service or to claims paid, and whether it reaches back.
2. Watch your remittances. Retroactive increases arrive as adjustments on later payments. Match each one to the trips it covers.
3. Update your rate sheet and the charge you bill, so your claims show the new amounts. The free NEMT rate sheet keeps each payer’s rate in one place.
4. Check every payer. A state increase may not reach your broker or plan rate on the same day, or at all.
5. Mark the next review. Texas reviews these rates every two years, so start collecting numbers for the next one now.