Can a felon own a NEMT business? Medicaid enrollment, exclusions, and the 10-year rules

A person with a felony can often own a NEMT company. No federal law bars people with felonies, as a group, from owning one. What Medicaid screens owners for is narrower: crimes involving Medicare, Medicaid, or CHIP, exclusion by HHS’s Office of Inspector General, and whatever a state adds to its own enrollment checks. If you will also drive, the rules in hiring drivers with a criminal record apply to you as a driver, separately from everything below.

The questions to answer before you spend money on vans are which records count against an owner, for how long, and what happens if someone else’s name goes on the paperwork. How the owner disclosure form itself works is covered in Medicaid ownership disclosure.

Owning is judged differently from driving

An owner is screened for program integrity, while a driver is screened for rider safety, so the two lists of disqualifying records do not match. Driver rules come mostly from brokers and state NEMT programs and turn on violence, sex offenses, and driving history. Owner rules come from Medicaid enrollment law and turn on fraud against health programs.

Florida shows the gap plainly. Its Medicaid statute puts each principal of a provider through Level 2 background screening, and principals include managing employees, billing agents, officers, and directors, plus partners and shareholders holding 5 percent or more (Fla. Stat. 409.907). NEMT drivers working for transportation companies or brokers get Level 1 screening instead. In Florida, the owner faces the stricter check.

The records that count against an owner

Four kinds of records matter for ownership, and each runs on its own clock. The table shows which rule each one triggers and how long it matters.

The first row is the rule most owners run into. Under 42 CFR 455.416, a state Medicaid agency must deny or terminate a provider’s enrollment when anyone holding 5 percent or more, directly or indirectly, was convicted of a crime tied to Medicare, Medicaid, or CHIP in the last 10 years. The only way around it is a written finding by the state that denial is not in the program’s best interest.

A separate disclosure rule reaches further back. Under 42 CFR 455.106, the company must name every owner, agent, and managing employee convicted of a Medicare, Medicaid, or Title XX crime since those programs began. The state may refuse to sign or renew the provider agreement over any such conviction, however old.

The Medicare row matters only if the company also enrolls with Medicare, for example to bill ambulance trips. The rule reaches any felony in the 10 years before enrollment that CMS finds detrimental to Medicare and its beneficiaries. Its examples are crimes against persons such as murder, rape, and assault; financial crimes such as extortion, embezzlement, income tax evasion, and insurance fraud; and any felony that would require OIG exclusion. Guilty pleas and adjudicated pretrial diversions count.

Exclusion closes every door at once

An OIG exclusion bars a person from any role in work that federal health programs pay for, including owning a company that bills them. OIG must exclude, for at least five years, anyone convicted of a crime tied to Medicare or Medicaid services, of patient abuse or neglect, or of a felony for health care fraud or a controlled substance. It may exclude, usually for three years, after a misdemeanor health care fraud conviction, a fraud conviction in any other government program, or a conviction for obstructing an investigation or audit (42 U.S.C. 1320a-7). The full list with its lengths is in the guide to hiring drivers with a criminal record, and the OIG exclusion list glossary page covers what exclusion means for a company’s staff. Three parts of the rule land harder on owners.

The drug felony counts once you own the company. That mandatory category applies to people with health care ties, and holding an ownership or control interest in an entity that furnishes items or services is one of those ties (42 CFR 1001.101(d)). A drug distribution felony from after August 21, 1996, with no health care connection at the time, can come into play once that person owns a NEMT company.

The company can be excluded along with the person. OIG may exclude an entity when someone with a 5 percent or larger stake, or an officer, director, agent, or managing employee, has been convicted of a mandatory-exclusion offense or one of the first three permissive ones, has been assessed a civil monetary penalty, or has been excluded.

Exclusion never ends by itself. The person must apply for reinstatement and receive written notice from OIG that it was granted. OIG takes applications no sooner than 90 days before the exclusion period ends, and a provider number from a state program does not count as reinstatement (OIG reinstatements).

Putting the company in someone else’s name

Moving ownership to a spouse or relative does not clear the record, and federal law anticipates the move. The entity exclusion rule also counts a former owner who handed the stake to an immediate family member or household member in anticipation of, or after, a conviction, penalty, or exclusion, while that relative keeps the interest, so the company can be excluded on that former owner’s record. The statute, repeated in OIG’s exclusions FAQ, defines immediate family as spouses, parents, children, siblings, stepfamily, in-laws, grandparents, grandchildren, and the spouses of grandparents and grandchildren.

Running the business from behind a relative’s name creates a disclosure problem too. A managing employee is anyone who exercises operational or managerial control over the business or conducts its day-to-day operation (42 CFR 455.101). The person actually running a NEMT company fits that definition and must be disclosed, convictions and all.

Concealment carries its own risk. Florida’s Medicaid agency may weigh an application that conceals the ownership or control interest of someone who may not be eligible. Federally, knowingly making a false statement or omission on an application to enroll as a provider carries a civil penalty of up to $127,973 per false statement after HHS’s January 2026 inflation adjustment (45 CFR 102.3).

Expunged, sealed, and diverted records

Clearing a record in state court does not clear it for federal exclusion. The Social Security Act counts a person as convicted when a judgment of conviction was entered even if the record was later expunged, when a court accepted a guilty or no contest plea, or when the person entered a first offender, deferred adjudication, or similar program where judgment was withheld.

State screening laws set their own terms. Florida’s Level 2 standards look past withheld adjudication: a finding of guilt, or a plea of guilty or no contest, to a listed offense counts, as does a pending arrest for one (Fla. Stat. 435.04). Florida’s health care screening law, which its Medicaid statute applies to provider screening, adds Medicaid provider fraud, Medicaid fraud, and domestic violence to that list (Fla. Stat. 408.809).

Florida also offers a way back. A person disqualified by a felony can ask for an exemption once at least 2 years have passed since completing the sentence, including supervision and any nonmonetary court conditions (Fla. Stat. 435.07). An exemption is discretionary, so the application should show what has changed since the offense.

Fingerprints, site visits, and high risk screening

States that treat NEMT as high risk fingerprint every owner of 5 percent or more. Federal rules require that check for any provider category a state rates high risk, with fingerprints due within 30 days of a request (42 CFR 455.434). A missing set can sink the application.

Colorado is one example. Its Medicaid agency rates all non-emergent medical transportation providers high risk, requires site visits for them, and fingerprints the entity and every person with a 5 percent or larger ownership or control interest. How the screening tiers work is covered in provider risk levels, and the guide for two-owner companies covers what happens when only one owner has a record.

Brokers ask too. MTM’s Pennsylvania transportation provider agreement has the company warrant that neither it nor any owner or officer has been terminated or excluded by Medicare or any state’s Medicaid program, found to have committed Medicaid or Medicare fraud, or listed as an excluded party by a federal or state agency. A company that signs it with an owner who fails that test makes a false warranty on day one.

Checking your own record before you apply

Do this before forming the company or signing a lease, because an enrollment denial costs the application fee and months of waiting.

1. Get your own criminal record from your state’s repository, and the FBI’s if you have lived in more than one state, so you see what a fingerprint check will show.
2. Search your name on the OIG exclusion list, SAM.gov, and the state exclusion lists of the states you will bill. Old names and maiden names count.
3. Date every conviction. Count 10 years from the conviction date for the Medicaid owner rule and from the application date backward for the Medicare felony rule.
4. Read your state’s enrollment rules for owner screening beyond the federal floor, such as Florida’s Level 2 standards.
5. Disclose everything the forms ask for. A conviction the state finds on its own after you left it off reads as concealment.

Take an example. An owner pleaded guilty in March 2018 to billing Medicaid for trips that never took place and was excluded by OIG for five years starting in April 2018. That owner could apply for reinstatement from January 2023 and might be reinstated that year. Even so, a state must deny a Medicaid enrollment with that person as a 5 percent owner until March 2028, unless it documents an exception.

If a record falls inside any of these windows, or the answer depends on how a court entered a plea, pay a health care attorney for an hour before filing. If the state turns the application down, the guide on enrollments that are denied or stuck covers appeals.

Keeping the company’s records current

Once the company is enrolled, the owner answers for every driver it puts on the road. HealthRide keeps licenses, training records, and any other credential with an expiration date in one fleet and credentials registry, for drivers and vehicles alike. Reminders arrive ahead of each expiration date, and a dispatcher sees a warning before assigning a trip to someone whose credential has lapsed.