Non-Emergency Medical Transportation: History, Current Trends and the Road Ahead

Assuring access to medical transportation for disadvantaged populations has been an important government responsibility almost since the establishment of Medicaid itself back in 1965, under which each state program had to include a “provision for assuring transportation of recipients to and from providers of services.”[1] While states have consistently acknowledged the value of non-emergency medical transportation (NEMT) during the past half century, the administration and financing of the benefit has changed over time. That change appears to be accelerating in the current era of seismic reform.

In the early days, states were encouraged to provide transportation for “needy” populations by the Department of Health, Education and Welfare (HEW), which is now called the Department of Health and Human Services (HHS). HEW published guidelines for transportation assistance programs during the years after 1965, and states were expected to comply. In the early 1970s, a patient suffering from cerebral palsy filed a class-action lawsuit against the state of Texas for its failure to provide adequate transportation to medical services. The decision in the case, Smith v. Vowell (1974), affirmed states’ responsibility to ensure access to transportation and reprimanded the Texas medical assistance program for its shortsighted policies.

Senior District Judge Clary: “Untreated, the minor medical problem becomes the major medical problem and, in the end, and with consummate irony, the individual who did not initially qualify for transportation becomes, owing to those very policies, sick enough to qualify as an emergency case to be transported by ambulance and to be admitted as a hospital in-patient. It is the worst kind of false economy. The deprivation of medically necessary transportation is disadvantageous even to the state for it only results in the end in higher medical costs.”[2]

In 1978, federal regulators issued further guidance on transportation requirements and declared: “…unless needy individuals can actually get to and from providers of services, the entire goal of a State Medicaid program is inhibited at the start.”[3] This statement, along with the opinion from the judge in Texas, is an early acknowledgment that NEMT saves costs and enables the effective delivery of care. Indeed Dr. Sara Rosenbaum, a professor of health policy at George Washington University and noted expert on Medicaid policy and reform, wrote in 2009: “HHS and the courts have recognized for nearly 45 years […] the fundamental importance of assistance in transportation to program quality and efficiency.”[4]

In 2005, Congress passed the Deficit Reduction Act to give states flexibility in how they design Medicaid benefits. For NEMT in particular, the law meant that states could outsource day-to-day management of transportation services to a broker that would operate under a fixed (capitated) budget instead of a fee-for-service amount. In the decade since, numerous states have opted to enter agreements with brokers, who sub-contract ride requests out to a network of transportation providers — taxis, van fleets, para-transit companies and more. Critics have pointed out that the switch to brokers has eroded patients’ choice of transportation provider and that the fixed-budget model has not been flexible enough to accommodate increased enrollment and patient need. At the same time, there is evidence that the rise of broker-managed transportation has controlled costs and improved service quality for patients who are able to obtain rides.

During the past 25 years, an even more fundamental shift has taken place in the Medicaid world with the rise of Managed Care Organizations (MCOs) which receive a capitated payment from the state to take on risk for a population of beneficiaries who would otherwise have traditional, fee-for-service Medicaid coverage. Back in 1991, MCOs covered just 10 percent of Medicaid beneficiaries and today cover about 75 percent (and over the same period, the program rolls have grown from about 27 million then to more than 70 million today.

Much of that program growth has been recent, with the expansion of Medicaid eligibility under the Affordable Care Act up to 138 percent of the federal poverty level. In states that have opted to expand Medicaid, the new members have increased demand for NEMT, leaving some brokers struggling to keep up. Two states, Iowa and Indiana, have received permission to temporarily withhold transportation benefits from the Medicaid expansion population — with the exception of “medically frail” beneficiaries who will receive NEMT services — creating a natural experiment that will enable officials to measure how a lack of transportation impacts access and costs.

The incoming presidential administration and Republican majorities in the House and Senate will likely influence the direction of NEMT — and indeed, Medicaid and other public health programs as a whole — but the precise effects are difficult to predict. There seems to be an appetite to turn Medicaid into a “block grant” program where states would have near-total flexibility in benefit design and program administration. Another possibility is the institution of per-capita spending limits. Either way, it appears that cost control will be the main priority for governors, congress and the President in the next several years.

Ride Health, as an organization leveraging private-sector resources and innovation to reinforce public health programs and goals, will work tirelessly to educate political and business leaders about the cost savings and positive health outcomes that well-coordinated NEMT provides. We want programs across all 50 states to see continued investment and improvement. The millions of people who depend on transportation assistance to reach medical care deserve no less.

[1] 34 Fed. Reg. 9787 (June 24, 1969)

[2] Smith v. Vowell, 379 F. Supp. 139 (W.D.Tex. 1974).

[3] HEW, Medical Assistance Manual, Part 6. General Program Administration §6–20–10 Legal Background and Authority; §6–20–20. Implementation of Regulation; HCFA — AT-78–51, May 30, 1978.

[4] Rosenbaum, S., Lopez, N., Morris, M. J., & Simon, M. (2009). Medicaid’s medical transportation assurance: Origins, evolution, current trends, and implications for health reform. Washington, .C.: Department of Health Policy, School of Public Health and Health Services, The George Washington University