Unlocking the Secret to Cold Fusion in the NEMT Industry

By: Dan Reid, President/Managing Member, Grove Transit 

For you non-Val Kilmer fans or others too young to get the reference in the title, I refer you to The Saint, circa 1997.  However, in this article I plan to show you that our “cold fusion” is not a hypothetical energy source, and I will explain exactly how the seemingly impossible is, in fact, true - you can pay higher rates to high-quality NEMT providers while at the same time reducing the total cost of delivering quality NEMT services.

How, you ask, can these seemingly contradictory statements both be true?  The secret lies right there the statement itself “high quality NEMT providers” and “total cost of delivering quality NEMT services”.

First let’s look at the current environment we are operating in and set the field for everyone.   Oversight of NEMT programs has expanded significantly as regulators seek to improve program integrity while safeguarding access to care. Today, brokers and health plans are likely to face multiple audits per year, particularly when operating in multi-state or multi-region environments.  OIG audits have always been a prominent source of scrutiny, often focusing on documentation integrity, provider oversight practices, and data anomalies that may indicate fraud or abuse, however, these days investigations by State Attorneys General are more common, using audit findings and irregularities as the basis for broader investigations and indictments, as seen in states such as New York and Minnesota.

While these audits focus on entities responsible for contracting and payment, the deficiencies identified during these audits and investigations often originate at the NEMT provider level. Documentation gaps, inconsistent credentialing practices, data integrity issues, and weak internal controls can expose brokers, health plans, and agencies to significant compliance costs, corrective action plans (CAPs), and fraud, waste, and abuse (FWA) scrutiny—even when the audited entity itself has not engaged in misconduct.

By using high-quality NEMT providers, such as, for example, Non-Emergency Medical Transportation Accreditation Commission (NEMTAC) Accredited Providers and NEMT Providers who can demonstrate they meet the requirements set forth in the NEMTAC Accreditation Standard paying sources (health plans, MCOs, SNFs, brokers, etc.) can reduce audit-related cost, CAP exposure, and FWA risk, and in doing so these organizations can provide NEMT services at a lower total cost by paying higher rates to high quality NEMT providers. How, you ask?  Quite simple actually, high quality NNEMT providers will reduce downstream compliance, audit, and enforcement expenses that are rarely captured in per-trip pricing models.

Audits impose real and recurring costs. Internal compliance teams must devote extensive time to gathering provider documentation, validating credentials, reconciling records, and responding to follow-up requests. Even when documentation ultimately exists, the effort required to produce and verify it is substantial. When deficiencies are identified at the provider level, brokers, health plans, and paying sources are often required to implement corrective action plans that consume resources over extended periods.

Critically, these costs are rarely attributed to the “price” of NEMT services, even though they are a direct consequence of how those services are sourced and managed.

Some brokers and health plans rely on NEMT providers supplying attestations of compliance for credentialing drivers and vehicles instead of submitting full documentation upfront. While these models may reduce onboarding friction or appear cost-effective on a per-trip basis, they materially increase risk during audits. 

When auditors request documentation, the burden shifts to the audited entity to demonstrate that compliance existed at the relevant time. If providers cannot promptly produce complete, accurate records—or if documentation is inconsistent or missing—the result is often a finding against the broker, health plan, or agency. These findings frequently lead to CAPs, enhanced oversight, and, in some cases, escalation to OIG or Attorney General review.

Even when providers are eventually able to produce documentation, voluntary compliance models tend to generate higher administrative costs. Internal teams must spend more time tracking down records, validating their completeness, and explaining inconsistencies to auditors. These labor costs, while real, are rarely visible when evaluating provider pricing alone.  NEMTAC Accredited NEMT Providers, for example, avoid many of these costs since they have all of their credentials stored in a credentialing exchange that can be instantaneously accessed and verified by authorized parties, such as auditors and regulators.

NEMTAC accreditation offers a different approach—one that reframes how the cost of NEMT services should be evaluated. Accredited providers undergo independent, standardized validation of compliance across the domains most frequently examined during audits, including driver qualifications, vehicle safety, insurance coverage, operational policies, documentation practices, and internal controls.

Because accredited providers have established policies and procedures in place, they present a lower risk of documentation gaps, data inconsistencies, and systemic compliance failures. This reduces the likelihood that provider-level issues will translate into costly audits, CAPs, or enforcement actions for brokers, health plans, and paying sources.

Can brokers, health plans, and paying sources get the same results with quality NEMT providers that have not obtained NEMTAC Accreditation?  The answer quite simple is yes, however, these groups would need to have their own internal resources to insure that the NEMT providers in their network meet the same high standards and requirements for compliance as accredited providers.  Essentially, they would have to reinvent the wheel to get to the same level of comfort that an independent body, such as NEMTAC, provides.

Having a network consists of NEMTAC Accredited Providers and/or “accredited equivalent” NEMT providers has important implications from a total cost perspective. While these NEMT providers may command slightly higher reimbursement rates than other organizations providing NEMT services, those incremental costs will most assuredly pale when compared to the significantly higher costs associated with:

• Internal compliance labor devoted to audits and provider remediation

• Costs associated with developing, implementing, and monitoring CAPs

• Network disruption caused by provider suspensions or emergency replacements

• Exposure to FWA investigations driven by poor data quality or weak controls

  
  

When these downstream costs are considered, organizations may in fact be providing NEMT services at a lower overall cost by contracting with only high-quality compliance-tested NEMT providers, even if per-trip prices are modestly higher.

These high-quality NEMT providers also present a lower risk of committing fraud, waste, and abuse. Providers with formal policies, documented procedures, and ongoing compliance oversight are better positioned to prevent both intentional fraud and accidental non-compliance. Clear documentation standards reduce the likelihood of bad data entering claims or encounter systems, while governance and training controls support accurate and consistent reporting.

In the current enforcement environment, this distinction is critical. OIG and Attorney General reviews often begin with data anomalies or documentation gaps, even when no fraud ultimately exists. Investigating and resolving these matters can be expensive, disruptive, and reputationally damaging. By reducing the likelihood of such triggers, accredited providers help control costs that are otherwise externalized onto brokers, health plans, and paying sources.

With the current high-audit risk environment we are experiencing with Federal, state, and watchdog organizations placing an increased focus on fraud, waste, and abuse, the likelihood of a broker, health plan, MCO, or state Medicaid agency being subjected to multiple audits per year in not de minimis, and each audit will require significant internal effort. Even conservative estimates would surely indicate that reductions in compliance labor, corrective action costs, and network disruption achieved by using only NEMTAC Accredited or “accredited equivalent” providers will generate annual savings on the order of tens of thousands of dollars per network.

When viewed alongside the modest incremental cost of contracting with the higher quality and higher compliant NEMT providers, these savings suggest that total program costs will actually decline, even if nominal provider rates increase. Importantly, this analysis does not fully capture avoided enforcement risk, reduced likelihood of extended investigations, or long-term benefits associated with improved regulator confidence.  (See Figure 1 below)

Figure 1

All of this discussion has not even focused on the significant cost savings to the health care ecosystem these same providers deliver through increased reliability.  The processes these providers have in place translate into fewer missed critical medical appointments.  Studies have shown that overall health care costs escalate dramatically when individuals are taken to emergency rooms in an ambulance and from additional procedures required as a result of missed medical appointments. 

As oversight of non-emergency medical transportation continues to intensify, organizations responsible for NEMT programs must look beyond per-trip pricing and consider the full cost of service delivery. Provider-level compliance failures drive audits, corrective action plans, and fraud investigations that impose substantial and often hidden costs on brokers, health plans, and paying sources.

The use of NEMTAC-accredited providers and/or providers operating to the accreditation standards offers a practical and defensible way to reduce these costs. By lowering audit burden, limiting corrective action exposure, and mitigating fraud, waste, and abuse risk, accredited providers can enable organizations to deliver NEMT services more efficiently and at a lower total cost, even when reimbursement rates are modestly higher.

In an environment of heightened scrutiny from OIG, Attorneys General, and other regulators, incorporating independent accreditation into an NEMT network strategy represents not only a compliance improvement, but a sound economic decision.

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Dan serves as Past-President of The Transportation Alliance and sits on TTA’s Executive Committee, as well as the TTA Foundation Board of Directors.  He also serves on NEMTAC’s Board of Directors and is Co-Chair of NEMTAC’s Safety & Training Advisory Committee.  He is past Chair of NEMTAC’s Accreditation Advisory Committee, Compliance & Regulatory Advisory Committee, and the Technology Advisory Committee.  Dan is a frequent author and speaker on issues related to the passenger ground transportation industry.