# HHS Inspector General Opens a Targeted Review of Medicaid NEMT Billing and a State Audit Series

Canonical URL: https://nemtguide.com/news/oig-nemt-fraud-reviews/ · Updated 2026-09-29

The HHS Office of Inspector General (OIG) is running two new reviews of Medicaid non-emergency medical transportation (NEMT). Project OEI-02-25-00360, announced October 15, 2025, will use signs of questionable billing to pick NEMT services and check whether they met Medicaid rules. A series of state NEMT payment audits followed on May 28, 2026. As of September 2026, both are active and neither has a published report.

## What OIG announced

| Item | Targeted review | State audit series |
|---|---|---|
| OIG office | Office of Evaluation and Inspections | Office of Audit Services |
| Number | Project OEI-02-25-00360 | Series SRS-A-26-028, first audit OAS-26-02-087 |
| Announced | October 15, 2025 | May 28, 2026 |
| What it will do | Use "key indicators of concerning billing" to choose NEMT services for review, measure how many did not meet Medicaid requirements, and estimate the savings from targeting reviews this way | Determine whether the selected states complied with Medicaid payment requirements for NEMT |
| Status, September 2026 | Active | Active, one audit in progress, series expected to finish in fiscal year 2028 |
| States named | None | None. Project titles stay unpublished until each report is posted |

The audit series notice sums up the rules behind it. Prior authorization for NEMT generally has to be supported by a medical practitioner's order. NEMT providers must be lawfully authorized to provide transportation. They must also keep records that support the services they provide.

## Why OIG is looking at NEMT again

In the targeted review notice, OIG says transportation "can pose a significant risk of fraud, waste, and abuse in Medicaid." It adds that past OIG work found significant weaknesses in state and federal efforts to stop it.

The fraud units that prosecute Medicaid cases show the same pattern. In OIG's report on Medicaid Fraud Control Units for fiscal year 2025, published in March 2026, nonemergency transportation had 52 fraud convictions. That tied nurses for third in OIG's chart of the top five provider types, behind personal care attendants (326) and non-residential mental health facilities (63). Transportation also had 31 civil settlements and judgments, fifth on OIG's chart of the top five. See what a Medicaid Fraud Control Unit does.

## What earlier OIG NEMT audits found

OIG audits the state, but the evidence comes from providers. In New York, auditors read the files kept by the state's transportation manager and asked medical offices and transportation companies for their own records. Three OIG audits of state NEMT programs from 2020 to 2022 show where claims fail.

| Audit | Trips reviewed | Result | Most common problems |
|---|---|---|---|
| New York City, A-02-21-01001 (September 12, 2022) | 100 payments from 2018 and 2019 | 17 met the rules, 41 did not, and 42 could not be confirmed | No valid practitioner's order (22), trip not adequately documented (13), driver qualification records not provided (7), trip billed but not given (2), level of service not authorized (1) |
| Massachusetts, A-01-19-00004 (January 25, 2021) | 100 claim lines from 2016 and 2017 | 14 met the rules and 86 did not | Too little documentation that the ride happened (62), no covered medical service that day (48), trip billed but not given (2). Driver and vehicle records fell short on all 100 |
| Indiana, A-05-18-00043 (August 2020) | 120 claims from 2016 and 2017 | 102 met the rules and 18 did not | No documentation to support the ride (17), provider certification not signed or dated (1) |

OIG then projected the errors across each state's claims. It estimated New York improperly claimed at least $84.3 million in federal funds, plus $112 million more that may not have met the rules. For Massachusetts it estimated $14.1 million in improper claims ($7.1 million federal share), and for Indiana $3.5 million in federal share.

The trips OIG could not confirm matter too. In New York, 31 of the 42 were open because transportation companies did not produce driver and vehicle records. In 7 more, OIG could not reach the company at all.

## What the reviews mean for your company

OIG names no states or companies in either notice, so treat your own files as open to review. Your Medicaid provider agreement already covers this. Under 42 CFR 431.107, every provider agrees to keep records that show the extent of the services it gives. It also agrees to hand them over on request to the state Medicaid agency, HHS, or the state Medicaid Fraud Control Unit.

A review can also affect your cash. If the state finds a credible allegation of fraud against a provider, 42 CFR 455.23 requires it to suspend Medicaid payments while the case is investigated, unless it has good cause not to. The state can do this without warning. It must send notice within 5 days, or later if law enforcement asks, but never more than 90 days after.

Federal law also sets a floor for every driver. Section 1902(a)(87) of the Social Security Act, described in CMS guidance SMD 23-006 of September 28, 2023, requires each state to make sure no NEMT provider or driver is on OIG's exclusion list and every driver holds a valid license. Each provider also needs a process to address state drug law violations and a process to disclose each driver's driving history to the state.

## What to check in your records now

1. **Tie every trip to a covered visit.** Massachusetts and Indiana auditors checked that the rider got a Medicaid service on the date of the ride. Keep the appointment, the facility name, and the address with each trip.
2. **Complete every trip record.** New York's auditors looked for the date, the pickup and drop-off addresses, the driver, and the vehicle. Our [trip documentation guide](https://nemtguide.com/guides/nemt-trip-documentation/) lists the fields.
3. **Match the authorization to the trip.** The order or prior authorization should be dated before the ride, cover that date, and match the level of service you billed. In New York, OIG found orders dated 2 to 33 months after the ride.
4. **Keep driver files by date of service.** Save each driver's license, training, and background records, plus your screening of each driver against OIG's exclusion list, which OIG updates every month. See the [OIG exclusion list guide](https://nemtguide.com/glossary/oig-exclusion-list/).
5. **Keep vehicle files by date of service.** Save inspection certificates, registrations, and maintenance records that were current on the day of each trip.
6. **Never bill a trip the rider did not take.** In Massachusetts, one of the two billed trips that never happened had been cancelled by the rider, and in the other the dispatcher was never told the rider was not taken.
7. **Answer record requests completely and on time.** In New York, claims from companies that did not answer were left unconfirmed, and OIG told the state to review them and refund any that broke the rules.
8. **Fix what you find.** Return overpayments through your state or broker's process. For possible fraud, OIG runs a Health Care Fraud Self-Disclosure Protocol. Our [NEMT fraud guide](https://nemtguide.com/guides/nemt-fraud/) covers what to do if you find a problem.

To run a full practice audit on your own files, follow [how to prepare for a Medicaid audit](https://nemtguide.com/guides/medicaid-audit-for-nemt/). For a state that now checks NEMT claims before paying them, see [Minnesota's prepayment review](https://nemtguide.com/news/minnesota-nemt-prepayment-review/).

## Key dates

| Date | What happened |
|---|---|
| September 12, 2022 | OIG reports on New York City NEMT payments |
| October 15, 2025 | OIG announces the targeted review, OEI-02-25-00360 |
| March 2026 | OIG reports 52 NEMT fraud convictions by fraud units in fiscal year 2025 |
| May 28, 2026 | OIG announces the state NEMT audit series, SRS-A-26-028, and its first audit, OAS-26-02-087 |
| Fiscal year 2028 | OIG's estimated finish for the audit series |