Is Medicaid NEMT going away? What federal law requires and what is really changing

Medicaid transportation is not going away. Since the end of 2020 it has been written into the Social Security Act, which means no agency can drop it nationwide with a rule change, and no state can drop it on its own. The question keeps coming up because real things are changing around the benefit: who qualifies for Medicaid, how often they have to prove it, and which broker a state pays to run the rides. Those changes move trip volume up and down for providers. They do not end the program.

How NEMT got into the statute

For most of Medicaid’s history, the transportation rule lived in a regulation, not in the law itself. CMS read the Social Security Act’s general “methods of administration” clause as requiring states to arrange rides, and put that reading in 42 CFR 431.53, which makes each state plan commit the Medicaid agency to getting members to and from their providers and explain the methods.

Because the rule was regulatory, an administration could have changed it without Congress, and one proposed to. The fiscal 2020 President’s Budget said the statute “allows, but does not require” states to provide NEMT, that the benefit had been made mandatory by regulation, and that the administration would “update regulations to clarify the NEMT benefit is strictly optional.” It cited a Government Accountability Office finding that Medicaid NEMT spending reached $1.5 billion in 2013, along with cost and program integrity problems.

Congress closed that door. Section 209 of Division CC of the Consolidated Appropriations Act, 2021 (Public Law 116-260, signed December 27, 2020) wrote the requirement into section 1902(a)(4)(A) of the Act. The clause now makes every state plan name its Medicaid agency as the one that will “ensure necessary transportation” for beneficiaries going to and from providers, and lay out the methods it will use to do it. The same section did three more things:

• Expansion adults. It added section 1937(a)(1)(F), applying substantially the same transportation requirement to benchmark coverage, the Alternative Benefit Plans most states use for the adult expansion group. Before that, the rule for those plans was also only a regulation.
• Payment condition. It added section 1903(i)(9), which bars federal payment for NEMT unless the state plan has the payment methods section 1902(a)(30)(A) requires, the part of the Act on efficiency, economy, and quality of care.
• Driver and provider minimums. It added section 1902(a)(87), which makes states confirm that no NEMT company or driver they pay is on a federal exclusion list, that drivers hold valid licenses, and that each company has a process for handling violations of state drug laws and for reporting each driver’s traffic history to the state.

CMS’s 2023 coverage guide, SMD 23-006, describes the change as codifying in statute the longstanding regulatory interpretation. The assurance of transportation entry explains what the rule promises riders.

The one route around it: a waiver for a group

A state that wants to stop providing rides to some members needs federal permission, almost always through a section 1115 demonstration. Two states show where that route stands in 2026.

• Iowa. The Iowa Wellness Plan waives the transportation requirement for most adults in Iowa’s expansion group, while medically frail members and EPSDT services keep rides. In a public notice posted September 17, 2026, Iowa HHS reported that CMS will stop approving the transportation waiver as of January 1, 2027. State plan amendment IA-26-0010 puts NEMT into the expansion group’s benefit plan on that date, following the same Iowa Code coverage rules every other Medicaid member has. The notice puts the annualized state fiscal year 2027 cost at $129,367, with the state paying $15,697, and accepts comments through October 17, 2026.
• Indiana. On June 27, 2024, the U.S. District Court for the District of Columbia vacated HHS’s 2020 approval of Healthy Indiana Plan 2.0 in Rose v. Becerra. The court found HHS had not adequately considered how the program’s premiums, lack of retroactive coverage, and limits on NEMT would affect coverage. KFF’s section 1115 waiver tracker notes that Indiana’s Family and Social Services Administration appealed to the D.C. Circuit. Indiana’s own HIP provider module, published November 12, 2025, still lists nonemergency transportation only for HIP Maternity and HIP State Plan members, not HIP Basic or HIP Plus.

A provider in Iowa should expect expansion adults to become eligible riders on January 1, 2027. A provider in Indiana should confirm each HIP member’s plan before booking.

What is really changing: who stays covered

The 2025 budget reconciliation law, Public Law 119-21, left the transportation requirement untouched. Its Medicaid sections change eligibility, and eligibility is what fills or empties a schedule.

1. Immigration status limits, from October 1, 2026. Section 71109 limits federal payment for full Medicaid to U.S. citizens and nationals plus three noncitizen groups: green card holders, Cuban and Haitian entrants, and COFA residents. The existing state option for lawfully residing children and pregnant women stays. Members who move to emergency Medicaid keep coverage only for treatment of an emergency medical condition, which does not cover scheduled rides to routine care.
2. Work requirements, by January 1, 2027. Section 71119 requires expansion adults aged 19 to 64 to show qualifying work, community service, school, or income, checked when they apply and again at each renewal (states may check more often), unless they are exempt. CMS put numbers on it in a June 3, 2026 interim final rule: about 2.3 million people off the rolls in fiscal 2027, and 3.1 to 3.3 million a year after that. The work requirements guide covers exemptions and timing.
3. Six-month renewals, from January 2027. Section 71107 moves expansion adults to a renewal every six months. It applies to renewals that fall due from January 1, 2027 onward. More renewals mean more chances to drop off for paperwork.
4. Shorter retroactive coverage, for applications from January 1, 2027. Section 71112 shortens retroactive coverage, now three months back from the application month, to two months for most members and one month for the expansion group. Trips run for a rider whose coverage was still pending become harder to get paid.

None of these changes what a covered member is entitled to. Each one shrinks or churns the list of covered members, and only covered members generate payable trips.

What is really changing: who runs the rides

The other source of “NEMT is ending” talk is the broker market, where contracts change hands on a schedule.

• Virginia. Fee-for-service rides switched brokers on October 1, 2026, from Modivcare to MTM, a change the Department of Medical Assistance Services announced in a September 15, 2026 bulletin. Managed care members keep their current brokers.
• Colorado. MediDrive becomes the statewide broker on January 1, 2027, after starting in the Denver metro on July 1, 2026. From then on, providers can be paid for trips only if they are contracted with MediDrive. The state’s own page tells providers to reassure members: “Your transportation benefit is not going away. What’s changing is how your ride is scheduled.”
• Wisconsin. In May 2026 the Department of Health Services issued a notice of intent naming Verida as the next statewide NEMT vendor. Until the handover, MTM stays on as the vendor, and the state has not picked a date.
• Modivcare’s bankruptcy. Modivcare filed for Chapter 11 in August 2025 in the Southern District of Texas. Its first-day motion said it worked with about 4,100 transportation vendors at a total monthly cost of $120 million, and it asked to pay an estimated $91.6 million those vendors were owed from before the filing. The reorganization plan became effective December 29, 2025.

For a provider, these are the moments that matter: a new credentialing packet, new rates, a new portal, and sometimes a gap in trips while the switch happens. For getting through one, see the broker transition guide.

What owners should plan for

The planning problem is churn, not extinction.

• Expect more eligibility gaps from 2027. A regular rider can lose coverage at a six-month renewal and come back weeks later. Watch for trips that stop without a cancellation.
• Know where riders are being added. Iowa adds rides for its expansion group on January 1, 2027.
• Track state notices and procurements. Iowa announced its change through a public notice under 42 CFR 440.386, and broker changes start as public procurements, like Wisconsin’s RFP S-1699 DMS-25.
• Keep more than one payer. A broker change or a membership drop hits hardest when one contract is most of your revenue. To put a number on that exposure, use the payer mix guide.

Watching your payers in HealthRide

Program changes show up first in your trip counts by payer. The payer summary in HealthRide lists, for each payer and any date range, completed trips, cancellations, what you billed, and what is still outstanding, so a drop at one broker stands out the month it starts. See reports for the full set.