Transportation contracts with Area Agencies on Aging: Older Americans Act rides

How Older Americans Act money reaches a ride

The Older Americans Act funds services for people 60 and older, and transportation is one of the services it names. Title III-B, the supportive services part of the Act, covers transportation to supportive services, to nutrition programs, and to services the AAA itself offers, which the AAA arranges in cooperation with local carriers, transit agencies, and local government.

The money moves down a chain before it pays for a trip:

1. The federal Administration for Community Living awards Title III funds to each state unit on aging.
2. The state divides the money among its Area Agencies on Aging with an intrastate funding formula.
3. Each AAA writes an area plan for its planning and service area and decides which services to buy.
4. The AAA funds service providers through grants, contracts, or subcontracts.

An AAA is a public or private nonprofit agency designated by the state. It can be a county department, a city office, a regional council of governments, or a stand-alone nonprofit, and its area can be one city, one county, or several counties. Names vary. The one that covers your service area can be found through the Eldercare Locator or by calling 1-800-677-1116.

Two federal rules push AAAs toward transportation. The area plan must commit an adequate share of Title III-B money to access services, a category the law defines to include transportation, along with outreach, information and assistance, and case management. And under the federal matching rules, Title III-B pays at most 85 percent of supportive services spending, so the rest comes from state, local, or in-kind sources.

Why AAAs hire outside providers

Federal law generally bars an AAA from delivering supportive services itself. The state can approve direct service in three cases: the AAA must step in to assure an adequate supply, the service relates directly to the AAA’s administrative work, or the AAA can deliver it more cheaply at comparable quality. That approval lasts no longer than the area plan period, and before it is renewed the AAA must show what it did to find outside providers.

So AAA rides are usually run by someone else: a county transit system, a senior center, a nonprofit, or a private transportation company. The regulations define a service provider as any entity funded through a grant, subgrant, contract, or subcontract.

The state and the AAA decide whether a for-profit company can bid. The Twin Cities area agency in Minnesota takes applications from nonprofit and for-profit organizations and government units, but it has to obtain a waiver from the Minnesota Board on Aging before it funds a for-profit provider. Read the eligibility paragraph first.

AAAs sometimes buy rides with other money too. The Southern Mississippi AAA’s transportation request for the year starting October 1, 2025 was funded by the federal Social Services Block Grant, not Title III, and covered riders 60 and older in Hancock and Stone counties.

Service types and trip purposes

AAAs buy two kinds of rides, and they count them separately. California’s 2026 data dictionary for its area agencies uses these definitions:

Ohio’s rule lets the ride include help entering and leaving the vehicle, and it requires each AAA provider agreement to list the situations when drivers must give that help at the vehicle, the pickup point, and the drop-off point. Know which service a contract buys before you price it. An assisted trip takes more driver time, and the glossary pages for door-to-door and door-through-door help show how far a driver’s help extends.

Trip purposes are broader than medical visits. The Southern Mississippi request listed medical and dental treatment, social service agencies, personal care needs, hospice care, foster care and adult day care, and other needs. That is closer to non-medical transportation than to a Medicaid NEMT trip, so the booking questions and trip records differ.

Donations, cost sharing, and what riders pay

The rules on rider money are strict, and they are the part new providers most often get wrong.

Voluntary contributions

Voluntary contributions are allowed for every Older Americans Act service. The provider must:

• give every rider the chance to contribute to the cost of the ride
• tell riders clearly, in accessible formats and other languages when needed, that giving is optional
• keep each rider’s contribution, or lack of one, confidential
• ask without pressuring or intimidating anyone
• safeguard and account for all contributions
• use every dollar to expand the service it was given for

Suggested amounts are based on the actual cost of the service, and contributions are encouraged from riders whose self-declared income is at or above 185 percent of the federal poverty level. Means testing is banned, and a rider who gives nothing keeps the same service. Collected amounts count as program income under federal grant rules.

Cost sharing

A state may choose to let providers charge a cost share for transportation, since the Act’s ban on cost sharing covers other services, such as meals and case management, and leaves rides out. When a state does:

• the charge follows a statewide sliding scale based only on income and the cost of the service
• riders at or below the federal poverty line pay nothing
• assets and savings cannot be considered
• eligibility comes from a confidential self-declaration of income, with no verification
• nobody can be denied service for failing to pay

An AAA can ask the state for a waiver from cost sharing, and some contracts rule out any charge at all. The Southern Mississippi request said clients cannot be charged for services. It also required bidders to budget at least 1 percent of the total as program income from contributions, and to spend contributions before federal, state, or local funds.

One way to meet the confidentiality and no-pressure rules is to keep drivers out of it. Use a sealed envelope or a mailed statement, a written notice that giving is optional, and a contribution log kept apart from the rider’s trip record.

What an AAA contract asks of you

Requirements come from the state unit on aging and the AAA, so they vary. Ohio writes its rules into its administrative code, which makes it a clear example of a full set:

A licensed ambulette or ambulance counts as meeting the maintenance and inspection rules. Our vehicle inspection checklist covers a daily pre-trip check.

The proposal itself asks for business paperwork. The Southern Mississippi request wanted a title page with the bidder’s Unique Entity ID, an organization chart, staff qualifications, an operational plan with dates, a line-item budget with justification, the most recent audit and the auditor’s peer review, and proof of workers’ compensation, bonding, and liability insurance. It scored the statement of work five times as heavily as the introduction.

Some AAAs expect the provider to bring match money. Federal rules let the state or AAA set the match for direct service providers, and the Mississippi request asked bidders for a 25 percent non-federal match on its block grant funds, in cash or documented in-kind contributions such as donated space or volunteer time.

Records, reports, and billing

AAA rides are paid from trip records, so the records are the product. Ohio lists the data a provider must keep for every trip:

• the rider’s name
• whether it was transportation or assisted transportation
• the date
• where and when the rider was picked up
• where and when the rider was dropped off
• who drove
• a unique identifier from the rider or caregiver attesting that the ride happened

Ohio counts one one-way trip as one unit. The Mississippi AAA paid monthly at a fixed price per unit after it received the provider’s monthly report, with financial reports and client service logs due by the fifth day of the following month. The AAA rolls these counts into its own reports to the state, using unit definitions like California’s.

Funding is capped, so riders can end up on a waiting list. The Mississippi AAA required providers to keep one, with the riders in greatest need at the top, and warned that payment depended on the availability of approved funds. Expect a contract ceiling, and track your units against it every month so you do not deliver rides the budget cannot pay for.

Pricing a unit rate

Price the unit from your full cost, not from what the last provider charged. Ohio requires the unit rate to reflect the provider’s fully allocated costs, including administration and training. The Mississippi AAA asked bidders to divide the total cost of the service on their budget sheet by the projected units.

For example, a provider budgeting $120,000 a year for an AAA route, including drivers, vehicle costs, dispatch, insurance, and a share of overhead, and projecting 6,000 one-way trips, would bid $20 per trip. If assisted trips take longer, price them as a separate unit.

Then check the contract length. The Mississippi contract ran one year, the AAA planned renewals for three more years, and any requested increase was due by August 15 and was capped at the past year’s rise in consumer prices. A rate that is thin in year one can stay thin for four years.

AAA money often sits beside other public transportation funds. Section 5310 lets a grantee use certain non-DOT federal funds, aging programs among them, as its local match, so AAAs and transit grantees sometimes fund the same service together. Our guide to Section 5310 grants explains how private operators take part, and government NEMT contracts covers registration, capability statements, and bid pricing.

How to become a provider

1. Find your AAA through the Eldercare Locator and ask for its area plan and procurement calendar.
2. Get on its notice list for requests for proposals. An AAA may award a contract for one year and renew it for several more, so a request can come out only once every few years.
3. Attend the public hearings on the area plan. The Act tells AAAs to ask older adults and providers at those hearings what they think of cost sharing, and a hearing is also a public place to raise transportation gaps.
4. Watch for a notice of intent deadline. The Mississippi AAA required a written notice of intent by April 21, 2025, for proposals due May 9, and it offered private proposal training sessions to new and returning bidders.
5. Build your budget from real costs and write the operational plan around the state’s standards.
6. Line up the paperwork before the request opens: audit or financial statements, insurance certificates, bonding, driver files, and training records.

Licensing and insurance for senior rides are covered in starting a non-medical transportation business.

Where software helps

Senior center and meal site rides repeat every week, and AAAs pay from trip logs. In HealthRide, a repeating ride is scheduled once and keeps going, and each trip keeps its GPS-recorded miles, timestamps, and the rider’s signature captured on screen. Download the trip log as a CSV or PDF file when the monthly report is due. See how recurring trips work.