# How to Start an Ambulatory Transportation Business in 2027: Sedans, Rates, and Rules

Canonical URL: https://nemtguide.com/guides/start-an-ambulatory-transportation-business/ · Updated 2026-09-29

To start an ambulatory transportation business, form an LLC, get a free EIN and NPI, and insure a sedan or minivan registered to the company. Screen and train drivers, enroll with Medicaid, where the federal application fee is $750 in 2026, and get credentialed by each broker. Ambulatory trips need no lift but pay the least: $6.64 plus $1.28 a mile in urban Arizona from October 1, 2026.

- Ambulatory riders walk to the car and ride in a regular seat, so a sedan or minivan works and no lift, ramp, or CDL is needed.
- Ambulatory trips pay the least per ride: a 10-mile trip pays $19.44 in urban Arizona (October 1, 2026) and $12.71 in Indiana (January 1, 2026).
- Louisiana wants the car owned or leased by your company and registered in its name, and MTM Health in Virginia wants your company name on both sides.
- Rideshare, gig drivers, volunteers, and transit compete for the easiest riders. Sedan companies win the riders who need a hand, facility trips, and standing orders.
- Check for enrollment freezes first: Minnesota's Twin Cities metro is closed to new NEMT providers until January 27, 2027, and North Dakota closed statewide on June 11, 2026.

An ambulatory transportation business drives Medicaid members and other riders who can walk to medical visits in a sedan or minivan. It is the lowest-cost way into NEMT, because a sedan needs no lift or ramp. It is also the level where rates are lowest and competition is heaviest, so the plan has to fit the riders brokers still need you for.

## What an ambulatory transportation business does

An [ambulatory](https://nemtguide.com/glossary/ambulatory/) rider walks to the car, gets in, and rides in a regular seat. The driver may open doors, help the rider in and out, and fold and store a mobility device when needed. The driver never lifts the rider.

MTM Health's Virginia handbook, approved August 10, 2026, names three levels of help, and each trip's manifest says which one you owe:

| Level | What the driver does |
|---|---|
| [Curb to curb](https://nemtguide.com/glossary/curb-to-curb/) | Helps the rider in and out of the car and stays at or near it. This is the default level. |
| [Door to door](https://nemtguide.com/glossary/door-to-door/) | Walks the rider from the door of the home or clinic to the car and back, without going inside a home |
| [Hand to hand](https://nemtguide.com/glossary/hand-to-hand/) | Hands the rider to staff, family, or another responsible person at the destination, as some riders with dementia need |

States name this service in different ways, which matters when you apply:

- **Indiana** calls it commercial ambulatory service and enrolls companies as specialty 264, Common Carrier (Ambulatory).
- **Illinois** calls a passenger car trip a service car transport, for a rider who needs neither an ambulance nor a wheelchair van.
- **Minnesota** splits it into unassisted and assisted transport. By statute, unassisted riders go by taxi or public transit first, and another NEMT provider only when neither is available.

For the NPI record, the national code set (version 26.1, July 1, 2026) lists 343900000X for non-emergency medical transport vans and 344600000X for taxis. Your state's provider type decides which one fits.

## Why sedans are the cheapest way in, and the catch

A sedan company skips the most expensive parts of NEMT. There is no lift, ramp, or wheelchair securement to buy, inspect, or train on. A driver needs a commercial driver's license only for a vehicle built for 16 or more people, driver included ([49 CFR 383.5](https://www.ecfr.gov/current/title-49/section-383.5)). A car built for 8 or fewer people and rated under 10,001 pounds is not a commercial motor vehicle under federal safety rules ([49 CFR 390.5](https://www.ecfr.gov/current/title-49/section-390.5)).

The catch is that ambulatory riders have the most options. CMS requires states to use the least costly ride that suits the rider's condition (SMD 23-006, September 28, 2023). For a rider who walks, that can mean gas money for a family driver, a bus pass, a volunteer, or a rideshare car before a NEMT company. MTM Health's Virginia handbook lists every one of those options. See [least costly mode](https://nemtguide.com/glossary/least-costly-mode/) and [NEMT vs rideshare](https://nemtguide.com/guides/nemt-vs-rideshare/).

## What ambulatory trips pay

Each Medicaid program sets its own codes and rates. Most pay a base rate for each one-way trip plus a rate for each mile with the rider on board. Here is a 10-mile trip at current state rates, next to the same trip for a wheelchair rider:

| Program (effective date) | Ambulatory codes and rates | 10-mile ambulatory trip | 10-mile wheelchair trip |
|---|---|---|---|
| Arizona, Phoenix and Tucson areas (October 1, 2026) | [A0120](https://nemtguide.com/glossary/a0120/) $6.64, [S0215](https://nemtguide.com/glossary/s0215/) $1.28 a mile | $19.44 | $26.55 |
| Arizona, rest of state, with TN (October 1, 2026) | A0120 $7.27, S0215 $1.63 a mile | $23.57 | $28.81 |
| Indiana (January 1, 2026) | [T2003](https://nemtguide.com/glossary/t2003/) $12.71, A0425 U3 $1.67 a mile past the first 10 | $12.71 | $31.79 |
| Illinois, Cook, DuPage, Kane, Lake, McHenry, and Will (January 1, 2026) | A0120 $20.00, A0425 $1.03 a mile | $30.30 | $40.30 |
| Illinois, other counties except Madison and St. Clair (January 1, 2026) | A0120 $20.00, A0425 $0.80 a mile | $28.00 | $38.00 |

A few rules change the math:

- **Indiana deducts the first 10 miles** of each one-way ambulatory or wheelchair trip, but on longer trips you must still bill every mile, the first 10 included. A 20-mile trip pays $12.71 plus 10 miles at $1.67, or $29.41.
- **Illinois requires prior authorization** for the NEMT trips it pays directly, requested at least seven business days ahead. The base rate follows the county where your company is registered with the state, and Madison and St. Clair counties pay $1.61 a mile.
- **Arizona sets lower rates for rideshare.** Its schedule lists rates for transportation network companies, set only for the health plans' capped fee schedule: $4.00 for A0120 and $0.67 a mile for S0215 in the Phoenix and Tucson areas. That 10-mile trip comes to $10.70.
- **Extra riders pay less.** Indiana pays each added rider from the same county to the same area at half the base rate, $6.36 on T2004, with no mileage. South Dakota pays $2.60 for each added rider on an in-city A0120 trip (July 1, 2026).

Brokers and health plans pay by contract, not always by the state schedule, so get each rate sheet in writing. For the full code list, see [NEMT billing codes](https://nemtguide.com/guides/nemt-billing-codes/), and for the taxi code, [A0100](https://nemtguide.com/glossary/a0100/).

### What a mile costs you

The IRS sets its business mileage rate from a yearly study of the fixed and variable costs of running a car. For miles driven from July 1, 2026, it is 76 cents. It makes a rough yardstick for one car:

| Example: one 10-mile trip with 6 empty miles to the pickup | Phoenix area | Cook County |
|---|---|---|
| What the trip pays | $19.44 | $30.30 |
| 16 miles at 76 cents | $12.16 | $12.16 |
| Left for driver pay, dispatch, and profit | $7.28 | $18.14 |

Your real cost per mile will differ, so run your own numbers in the [cost per mile calculator](https://nemtguide.com/tools/nemt-cost-per-mile-calculator/) and the [trip price calculator](https://nemtguide.com/tools/nemt-trip-price-calculator/). At ambulatory rates, a few extra empty miles can take most of what a trip pays.

## Vehicle rules for sedans and minivans

CMS says federal Medicaid law sets no basic vehicle standards of its own, so the rules for a sedan come from your state and each broker. Three programs show what to expect:

| Program | What it requires of an ambulatory vehicle |
|---|---|
| MTM Health, Virginia (August 10, 2026) | Sedans, passenger vehicles, and minivans for riders who get in and out on their own and use no mobility device. Company name and phone on both sides in letters at least 3 inches high, and never the word Medicaid. A fire extinguisher, first aid kit, spill kit, seat belt cutter, and two belt extensions. Inspection before the first trip and every six months. |
| Louisiana Medicaid (July 14, 2025) | The company owns or leases each vehicle, registered in the company's name. No two-door cars, pickup trucks, or salvage titles. Working air and heat front and rear, a seat belt cutter, a fire extinguisher, and the broker's inspection decal. Vehicles cannot be shared with another NEMT provider. |
| Arizona AHCCCS (packet rev September 2026) | Registration for company vehicles, vehicle insurance, and the company logo on every vehicle, checked at the site visit |

Virginia's Medicaid agency adds that taxis and multi-passenger vans carry the greater of the insurance Virginia DMV requires or the local taxi ordinance amount (May 26, 2026). For the common checklist, see [NEMT vehicle requirements](https://nemtguide.com/guides/nemt-vehicle-requirements/) and [NEMT insurance requirements](https://nemtguide.com/guides/nemt-insurance-requirements/).

### Can you use your own car?

Check before you plan on it. Louisiana requires the company to own or lease the car and register it in the company's name. Arizona asks for company vehicle registration. A car titled to you personally may need to move into the company or onto a lease with it. Ask your state and each broker in writing.

Some brokers also run gig programs for people with their own cars. MTM Health recruits these independent driver providers through an affiliate company, and says most of those trips run between 5 a.m. and 6 p.m. That is driving for the broker, not owning a NEMT company. See can I use my personal vehicle for NEMT.

## Licenses and permits a sedan company may need

A sedan company needs the same Medicaid enrollment as any NEMT provider, plus whatever your state and city require for carrying passengers for pay. Examples, as of September 2026:

| Where | What applies to sedans |
|---|---|
| Arizona | An ADOT vehicle for hire permit is on the NEMT provider profile, which also rates NEMT as high risk, with a site visit and fingerprint-based background checks |
| Illinois | Service cars must be licensed by the Secretary of State as livery or public transportation, and drivers need state-approved safety training every three years |
| Louisiana | A certificate of public necessity and convenience for each provider, driver, and vehicle in Orleans Parish (New Orleans), and a NEMT permit for each in Jefferson Parish |
| Minnesota | Every NEMT provider, sedans included, must meet the state's special transportation service operating standards, and every driver enrolls individually |
| Virginia | Vehicles titled and licensed in Virginia with DMV operating authority or a DMV exemption. Taxi-plated vehicles follow local taxi ordinances. |

Federal rules call for no CDL or USDOT number for a sedan or minivan on in-state trips. The [NEMT license requirements guide](https://nemtguide.com/guides/nemt-license-requirements/) covers every layer, and your [state guide](https://nemtguide.com/states/) lists your state's rules.

## Drivers: who can drive and what training they need

Federal law sets a floor for every NEMT driver paid by Medicaid, including rideshare drivers. Under section 1902(a)(87) of the Social Security Act, as CMS explains in SMD 23-006, each driver must hold a valid license and not be on a federal exclusion list. Each company must have a process for drug law violations and a process to report each driver's driving history to the state.

States and brokers add more. MTM Health's Virginia handbook requires drivers who are at least 21 with two years of experience, no more than two chargeable accidents or moving violations in three years, and no license suspension for moving violations in five years. Before a first trip they need a background check and training in passenger assistance (PASS), HIPAA, and defensive driving. Arizona requires CPR, first aid, and HIPAA training for every driver, and reports of driver changes within 30 days.

Train for the help ambulatory riders need: helping a rider in and out, walking a rider to the door, and handing a rider off at a clinic. See [NEMT driver requirements](https://nemtguide.com/guides/nemt-driver-requirements/).

## Where brokers still need ambulatory capacity

Brokers fill easy ambulatory trips from many sources, and some rules keep those sources away from harder trips. That is where a sedan company fits.

- **Riders who need a hand.** Georgia's NEMT manual (July 1, 2026) lets its broker use rideshare only under listed conditions: for ambulatory members who need no physical help, as a backup when the assigned provider does not show, when no provider is available, and when the member asks and the broker approves. Riders who need physical help stay with NEMT providers.
- **Facility trips.** The same manual bars rideshare for trips to and from nursing homes and adult day health centers. See [adult day care transportation](https://nemtguide.com/guides/adult-day-care-transportation/).
- **Standing orders.** MTM Health's Virginia handbook says a large share of its trips are recurring, such as daily or weekly rides to day support or dialysis. Standing orders set up with a designated provider go to that provider automatically, and MTM asks for the same driver whenever it is feasible. See [dialysis transportation](https://nemtguide.com/guides/dialysis-transportation/) and [NEMT standing orders](https://nemtguide.com/guides/nemt-standing-orders/).
- **Credentialed capacity.** MTM Health's Virginia handbook allows rideshare and volunteer drivers for sedan riders only when they meet every Medicaid and MTM credentialing, screening, insurance, and training rule.

Ask each broker where it is short before you buy a car. Modivcare's provider page shows a map of the priority areas where it most needs providers. MTM Health says that if it has a need in your area you will hear back quickly, and if not, it keeps your application on file. Ask which counties and which service levels are short, in writing. See [what to do when a broker network is full](https://nemtguide.com/guides/broker-network-full/).

Some doors are closed for now. Minnesota is not enrolling new NEMT providers located in the seven-county Twin Cities metro until January 27, 2027, though providers based in other Minnesota counties can enroll. North Dakota stopped enrolling new NEMT agencies statewide on June 11, 2026, for six months, and may extend it. See [enrollment moratorium](https://nemtguide.com/glossary/enrollment-moratorium/).

## What it costs to start

These are the lines every ambulatory start-up pays, with the fixed amounts where one exists:

| Cost | Amount as of September 2026 | Notes |
|---|---|---|
| EIN | $0 | The IRS never charges for an EIN |
| NPI | $0 | CMS issues it free through NPPES |
| Medicaid application fee | $750 in 2026 | Charged where your state collects it. Not due if you are already enrolled in Medicare or another state's Medicaid program ([42 CFR 455.460](https://www.ecfr.gov/current/title-42/section-455.460)). |
| State or city permits | Varies | Vehicle for hire, livery, or local NEMT permits |
| Sedan or minivan | Varies | Owned or leased by the company where your program requires it |
| Commercial auto and liability insurance | Get quotes | Limits come from your state and each broker |
| Driver checks and training | Varies | Background checks, driving records, PASS, first aid, HIPAA |
| Cash reserve | Enough to cover payroll and fuel until claims pay | Brokers and Medicaid pay after the trip is billed |

For a full budget, see [how much it costs to start a NEMT business](https://nemtguide.com/guides/how-much-does-it-cost-to-start-a-nemt-business/), the [startup cost calculator](https://nemtguide.com/tools/nemt-startup-cost-calculator/), and [how to start NEMT with little money](https://nemtguide.com/guides/start-nemt-with-no-money/).

## How to start an ambulatory transportation business, step by step

1. **Find out who pays for rides in your state.** Check whether a broker, the health plans, or the state itself runs NEMT, and whether an enrollment freeze applies. Your [state guide](https://nemtguide.com/states/) shows who to call.
2. **Ask brokers where they need sedans.** Get the counties, service levels, and hours that are short.
3. **Form the company.** Register an LLC or corporation, then get a free EIN. See [LLC for NEMT](https://nemtguide.com/guides/llc-for-nemt/).
4. **Get your NPI.** Pick the taxonomy your state lists for your provider type.
5. **Get state and local permits.** Ask your city and county whether they license passenger transportation for pay.
6. **Buy or lease the car in the company's name.** Match your program's rules, such as Louisiana's bans on two-door cars and salvage titles, working air and heat, and the required equipment.
7. **Insure it.** Buy commercial auto and general liability at the limits each broker requires, and workers' compensation if your state requires it.
8. **Hire, screen, and train drivers.** Run exclusion checks, driving records, and background checks, and finish PASS, first aid, and HIPAA training.
9. **Enroll with Medicaid and each broker.** Pay the application fee where it applies, pass any site visit, and complete credentialing. See [how to become a Medicaid transportation provider](https://nemtguide.com/guides/how-to-become-a-medicaid-transportation-provider/).
10. **Run and document every trip.** Record times, miles, and signatures on each leg so every claim holds up.

The [NEMT startup checklist](https://nemtguide.com/templates/nemt-startup-checklist/) puts these steps on one page, and [how to start a NEMT business](https://nemtguide.com/guides/how-to-start-a-nemt-business/) covers each one in depth.

## When to add a wheelchair van

The rate tables show why an ambulatory company may add wheelchair service. In Indiana, the same 10-mile trip pays $12.71 for an ambulatory rider and $31.79 for a wheelchair rider. In Illinois, the wheelchair base is $30.00 against $20.00 for a service car. Georgia also limits rideshare to ambulatory riders who need no physical help, so wheelchair trips there stay with NEMT providers.

A wheelchair van brings new costs: a lift or ramp, securement equipment, driver training on both, and their upkeep. Add one when brokers are turning wheelchair trips away in your area and your sedan work covers its own costs. See [how to start a wheelchair transportation business](https://nemtguide.com/guides/start-a-wheelchair-transportation-business/).

## Frequently asked questions

### How much does it cost to start an ambulatory transportation business?

Less than any other kind of NEMT company, because a sedan or minivan needs no lift or securement. The EIN and NPI are free. The federal Medicaid application fee is $750 in 2026 where your state collects it, unless you are already enrolled in Medicare or another state's Medicaid program. The big costs are the vehicle, commercial auto insurance, driver checks and training, and cash to cover payroll until claims pay.

### Can I start an ambulatory transportation business with my own car?

Sometimes, but many programs want the car in the company's name. Louisiana's Medicaid rules (July 14, 2025) require the provider to own or lease each vehicle and register it in the company's name, and they bar two-door cars, pickup trucks, and salvage titles. Arizona asks for registration for company vehicles and your logo on every one. The Texas Department of Insurance says most personal auto policies do not cover driving for business or for a ride-hailing service, so plan on a commercial policy.

### Do I need a special license to drive ambulatory patients?

The driver needs a valid license for the car, and no CDL for a sedan or minivan. A CDL starts at vehicles built for 16 or more people, driver included. The company may need a permit. Arizona lists an ADOT vehicle for hire permit, Illinois licenses service cars as livery or public transportation, and Louisiana Medicaid requires a certificate of public necessity and convenience from the Orleans Parish taxicab bureau for each provider, driver, and vehicle working in New Orleans.

### How much does Medicaid pay for an ambulatory trip?

It depends on the state. A 10-mile trip pays $19.44 in the Phoenix and Tucson areas (A0120 plus S0215, October 1, 2026), $12.71 in Indiana (T2003, January 1, 2026, with miles paid only past the tenth), and $30.30 in Cook County, Illinois (A0120 plus A0425, January 1, 2026). Brokers and health plans pay by contract, so ask for each rate sheet before you sign.

### Can ambulatory drivers help riders into the building?

Yes, when the trip calls for it. MTM Health's Virginia handbook (approved August 10, 2026) lists three levels: curb to curb, door to door, and hand to hand, where the rider is handed to staff or family. Door-to-door help never includes lifting the rider, and drivers should not go inside a home. Give exactly the level on the manifest.

### Can I carry more than one ambulatory rider at a time?

Yes, where the broker or state allows it, but extra riders pay less. Indiana pays each added rider going from the same county to the same area at half the base rate, billed as T2004 at $6.36 with no mileage (January 1, 2026). South Dakota pays $2.60 for each added rider on an in-city A0120 trip (July 1, 2026). Ask your broker how it books and pays shared rides.

## Official resources

- [AHCCCS: Ground transportation fee schedules](https://www.azahcccs.gov/PlansProviders/RatesAndBilling/FFS/transportationground.html)
- [Indiana Health Coverage Programs: Transportation Services provider module](https://www.in.gov/medicaid/providers/files/modules/transportation-services.pdf)
- [Illinois HFS: Transportation providers](https://hfs.illinois.gov/medicalproviders/medicaidreimbursement/transportation.html)
- [MTM Health: Virginia transportation provider handbook](https://www.mtm-inc.net/wp-content/uploads/2018/12/VA-Provider-Handbook-2026.pdf)
- [IRS: Apply for an EIN online](https://www.irs.gov/businesses/small-businesses-self-employed/get-an-employer-identification-number)
- [CMS: NPPES, apply for an NPI](https://nppes.cms.hhs.gov/)
- [HHS OIG: List of Excluded Individuals and Entities](https://oig.hhs.gov/exclusions/)