How to Start a Non-Emergency Medical Transportation (NEMT) Business

What’s a non-emergency medical transportation business? NEMT services help people get to pre-scheduled healthcare appointments, including doctor visits, rehab, clinical testing, follow-up exams, and more.

The demand for safe and reliable public transportation for people with medical issues and disabilities, particularly in rural communities, continues to grow at remarkable rates. If you’re thinking about starting a NEMT business, read on.

The state of the NEMT industry

“Transportation issues shouldn’t prevent anyone from getting to or from a doctor’s appointment,” explains Imran Cronk, staff writer for the popular life sciences and medicine journalism website STAT.

“But they do just that for an estimated 3.6 million Americans. Some of these individuals don’t have cars or access to public transportation. Others can’t afford taxis or Ubers,” says Cronk.

There is a growing market opportunity in the NEMT services industry. The overall population of elderly and disabled patients is increasing. Plus, as a result of the Affordable Care Act, more preventative and follow-up treatments are covered by health insurance plans. In most areas, there simply aren’t many wheelchair-accessible vehicles in public transportation fleets.

Josh Komenda, CEO of VEYO, suggests that there’s a large population of those who need non-emergency medical transportation, especially for medically frail or elderly people in rural areas. Many don’t have a driver’s license or access to a vehicle. They’re geographically isolated, or they can’t access traditional public transportation for physical, mental, or developmental reasons.

A look at some telling statistics show a litany of challenges—along with business opportunities for solutions:

• 32 states reported that there more than 59,000,000 total Medicaid NEMT trips between 2015 to 2018, for issues related to behavioral health, dialysis, preventative care, and specialist care.
• Our health care system suffers an extra $150 billion in expenses primarily due to a refusal of care, delays in care, and missed appointments.
• A recent report by The Kaiser Commission on Medicaid and the Uninsured reveals that over 3.6 million patients elect to dismiss or delay necessary medical care each year because they don’t have transportation.

Medical transportation company legal structures

The legal structure of your non-emergency medical transportation business has far-reaching implications—both in respect to partnering with payment providers and resulting tax responsibilities.

NEMT businesses may be sole proprietorships, partnerships, or LLCs. If you want more help choosing a legal structure, an attorney can explain the advantages and disadvantages of each type.

While it’s possible to change your legal structure, it’s not ideal. When you’re putting together your business plan for your NEMT company, think through the possibilities around the evolution of the organization, and your expectations for growth. Your attention to detail will encourage confidence in potential investors and help to secure financing for the best start possible. Beyond legal structure considerations, use a business plan template to help you make sure that you’ve thought through every aspect of your business.  

NEMT certification, licensing, and insurance requirements

The non-emergency medical transportation industry is still in its comparative infancy as a formal niche—both in respect to technological innovation and federal regulation.

While there are no formal guidelines for the NEMT industry as a whole, each state has its own set of operational rules and regulations that all companies are required to follow.

NEMT certification elements

NEMT operators aren’t currently held to the same education and training requirements as their counterparts in ambulance transportation. You’ll still want your staff to be trained in basic medical emergency medical care—CPR, defibrillator operation, vitals assessment, and other life-saving techniques.

As the industry develops, and the need for NEMT professionals continues to grow, certification courses will almost certainly become standard.

NEMT licensing elements

Vehicle licensing is another primary element of the non-emergency medical transportation industry.

Double check your requirements with your local bureau of motor vehicles, and make sure you understand any standards set for Medicaid transportation if you offer it, like:

1. Number of penalty points on a driving record
2. A certification of the driver’s health
3. A vehicle liability insurance policy
4. A criminal background check
5. Proof of negative random drug screenings

Auto and liability insurance elements

Because driving patients has inherent risks—traffic accidents or health-related events while en route to medical facilities—adequate insurance is another critical aspect of starting a NEMT business. While there are no national guidelines for insurance policy elements and dollar amounts, you’ll want to work with your provider to make sure you’re adequately covered.

In most cases, coverage is based on a two-part formula: coverage for the individual driver, and coverage for the company in general. Make sure you understand the risks and liabilities so that being underinsured doesn’t bankrupt your company.

ADA-compliant wheelchair-accessible vans and equipment

If you’re going to start a transport business, you’re going to need the right vehicle. You’re probably looking for a minivan, full-size van, or bus that meets the requirements of the Americans with Disabilities Act (ADA) and the ADA Standards for Accessible Design.

ADA compliance elements

Your vehicles will need to be ADA compliant if your business meets any of the following:

1. Private employers with 15 or more employees;
2. businesses operating for the benefit of the public; and,
3. all state and local government agencies.

Some ADA requirements include:

• Lift door height: 56”-door opening height
• Handicap lift: 30” x 40” wide clear platform
• Wheelchair attachments: Able to withstand 2,500 of pressure per leg
• Seat belt mechanism: 4-pt. tie downs with lap and shoulder belt
• Interior lighting: one-foot candle of illumination

Be sure to think through the associated medical supplies you’ll need for your passengers—wheelchairs, gurneys, oxygen tanks, dialysis machines, for example. These extras will influence the size and floor plan of the vehicle you’ll need, and will no doubt affect your overall startup costs.

ADA-compliant vans

There are a few affordable makes and models of wheelchair accessible vans that are ADA-compliant—either right from the manufacturing line or after an accessibility conversion.

• Ford Transit Wheelchair Transport Van: This handicap wheelchair van comes ADA-compliant right out of the factory. It’s a full-size wheelchair van with plenty of headroom and multiple floor plan options.
• Toyota Sienna Wheelchair Van: This accessible vehicle is an ADA-compliant rear-entry wheelchair van that happens to be one of the more affordable mobility vehicles on the market.
• Legend Side Entry Handicap Van Conversion: Spacious side-entry accessibility using a powered ramp operated by remote control or door side control.

Service, staffing, payment, and marketing processes

On the front end, you need to be able to meet the needs of your customers—that means providing exceptional service with flexibility and consistency. That will require smart staffing decisions, and a commitment to ongoing training, especially as the industry grows.

On the back end, you’ll need to look at ways to control costs to increase your profitability.

From the start, think about:

1. The services you offer and the most efficient ways to deliver them
2. Hiring the right people to work with and for you
3. Appropriate payment options for your demographic
4. Your dynamic marketing strategy—or how you’ll find your clients

Selecting service offerings and billing

Whatever specific services you decide to offer, make sure to itemize them and communicate them clearly. You want your customers to know what they’re getting, and you want to make it as easy as possible to be transparent about billing.

Pricing your services

How you price your services will depend on a few different factors:

1. Geographic location
2. Economic conditions
3. Age and health condition of customers
4. The business’s ability to deliver services economically

Pricing techniques such as multi-service package rates, referral discount programs, and frequent customer rewards can drive additional business.

Hiring office staffing positions

Staffing an NEMT startup—outside of competent drivers—will require a mix of talented professionals with experience in customer service, accounting and finance, scheduling organization, and leadership.

As with most startups, your staff will probably need to perform multiple roles at first. You may not be able to hire your full, ideal staff right out of the gate. But even in the early days, it’s going to be important to have a solid training program for onboarding new hires.

Determining payment options

Medicaid will probably be a primary payer for services. Make sure your staff has a working knowledge of Medicaid’s detailed processes and billing guidelines. This will include ongoing training for yearly program changes.

Developing relationships with insurance providers will probably also be key. Each insurer most likely will follow their own set of operating guidelines—it’s an initial challenge that should become increasingly smoother from year to year.

Creating a marketing strategy

Once all elements of the NEMT startup are in place, it’s time to get the word out to potential customers, their family members, and their caregivers.

Money spent on a focused, multichannel marketing strategy is money well-spent. There should be a mix of traditional and digital advertising techniques within the strategic marketing plan—a method to ensure that the message reaches those online and off. Establishing a marketing ROI tracking strategy can help determine which channels deserve the larger investment of capital.

In addition to paid marketing practices, the NEMT startup can increase ROI by finding various unpaid—and sometimes earned—marketing opportunities.

These may include:

1. Partnering with non-competing businesses that serve the same customer base
2. Creating educational resources and hosting them on your website
3. Requesting write-ups in local newspapers and magazines
4. Establishing a referral program to drive word-of-mouth advertising

Start with a solid business plan. Make sure you’re properly licensed and insured, and that your vehicle is reliable and ADA compliant.

Now more than ever, it’s possible to develop a profitable NEMT business while helping individuals access the proper medical care they need to be healthy.