Stronger NEMT Contracts: New Strategies Every Provider Should Know

Non-emergency medical Transportation (NEMT) is a lifeline for millions of Medicaid enrollees, ensuring they can access the healthcare services they need.

However, providing timely, safe, and reliable transportation requires more than just vehicles and drivers—it demands strong, thoughtfully designed contracts that set clear expectations while allowing flexibility to adapt to local challenges.

As the NEMT industry evolves, new strategies are emerging that help states, brokers, and providers improve service quality, compliance, and network adequacy.

This article draws on findings from the 2025 Health Management Associates (HMA) NEMT Contract Toolkit to explore the latest strategies for building better NEMT contracts—and how technology can help providers stay ahead.

Building Strong Foundations: Balancing Standardization and Flexibility

While each NEMT program is unique, HMA says there’s growing momentum toward standardizing contract requirements where possible.

Establishing clear baseline expectations—such as safety standards, driver training requirements, and performance metrics—helps reduce confusion and administrative burden.

However, it’s equally important to tailor NEMT contracts to local needs. States vary widely in geography, public transportation infrastructure, and available providers. Contracts must remain flexible to accommodate challenges like rural distances, unpredictable traffic, and limited provider networks.

Organizations like the Non-Emergency Medical Transportation Accreditation Commission (NEMTAC) are helping push for national standards in areas like provider accreditation and data reporting, offering valuable starting points for customization.

Setting Realistic Performance Standards

Historically, some contracts have set unattainable expectations, like 100% on-time trip completion, which can inadvertently penalize even top performers.

Today, best practices recommend setting realistic thresholds, typically between 95% and 99% for most metrics. Exceptions, such as ensuring riders are never abandoned or that driver background checks are completed, should remain at 100% compliance.

According to HMA, this approach fosters accountability without punishing providers for variables beyond their control, such as sudden traffic accidents or weather disruptions.

Enforcing Quality Through Penalties and Incentives

Contract enforcement strategies are evolving beyond traditional financial penalties.

For example, Tennessee applies penalties selectively, focusing on serious issues like missed medical appointments.

Additionally, non-financial enforcement tools—such as Corrective Action Plans (CAPs) and performance improvement plans—allow for progressive intervention without immediately resorting to sanctions.

There’s also growing interest in positive incentives. Connecticut, for instance, offers performance bonuses valued up to 5% of the contract price to brokers that exceed service thresholds. Although financial rewards are less common than penalties, they can be powerful motivators when designed thoughtfully.

Building and Maintaining Strong Transportation Networks

Maintaining network adequacy remains one of the biggest challenges in NEMT, especially in rural areas.

Rather than relying on arbitrary provider-to-member ratios, successful contracts now prioritize performance-based measures like on-time pickup and missed trip rates.

States and brokers are also getting creative:

• Offering higher reimbursement rates for long-distance or rural trips
• Encouraging mileage reimbursement programs for members or their families
• Partnering with Transportation Network Companies (TNCs) like Uber and Lyft to expand options for ambulatory riders

Importantly, TNC use must be paired with guardrails to ensure the safety of vulnerable populations and maintain service quality.

Embracing Technology to Enhance Service and Compliance

Technology is reshaping NEMT operations, and smart contracts are encouraging its adoption.

GPS tracking, real-time member apps, digital trip verification, and AI-based scheduling tools—like Tobi—are improving transparency, reducing fraud, and enhancing the rider experience.

However, successful tech deployment requires balancing innovation with accessibility. Contracts should encourage technology without imposing requirements that may unintentionally exclude smaller providers or rural communities with limited internet access.

Emerging innovations highlighted in the HMA toolkit include reloadable debit cards for driver reimbursements, vehicle cameras to enhance safety, and AI-powered route optimization.

Strengthening Program Integrity

Fighting fraud and ensuring that rides are legitimate remains a top priority for state agencies and brokers.

Modern contracts prioritize verification over excessive prior authorization, emphasizing tools like:

• GPS-based trip tracking
• Mobile apps for ride verification
• Data-driven audit strategies focused on high-risk services like standing orders for methadone clinics.

This shift strengthens program integrity and minimizes unnecessary administrative burdens that can delay access to care.

Preparing for the Future of NEMT Contracts

The future of NEMT is about more than just getting patients to the doctor’s office.

There’s growing interest in expanding transportation services to address broader health-related social needs (HRSNs), such as trips to housing services or food banks.

While promising, these expansions must be carefully managed to avoid overtaxing an already stretched NEMT network and to ensure that riders with critical medical needs remain prioritized.

Continuous stakeholder engagement—including regular input from providers, brokers, healthcare facilities, and Medicaid beneficiaries—is crucial to successfully navigating these changes.

Adaptability and Technology Matter More Than Ever

As NEMT programs grow in complexity, strong, flexible contracts—and the tools to manage them—are more critical than ever.

Providers and brokers who embrace technology, realistic performance standards, and creative network-building strategies will be best positioned to thrive in this changing landscape.

At Tobi, our NEMT software solutions are designed to help you stay compliant, optimize your operations, and deliver exceptional service to every rider. Whether you need real-time tracking, intelligent scheduling, or easier claims management, we’re here to support your success.

Ready to see how technology can transform your NEMT operations? Contact us today to schedule a personalized demo.