Outsourcing NEMT billing: what billing companies charge and when it pays off

What a billing company takes off your desk

An outside billing company takes your completed trips, bills each payer for them, and chases every claim or invoice until it is paid, denied for good, or closed. Depending on the trip, that payer could be the state Medicaid program, a health plan, a broker, or a facility. State claim systems, clearinghouses, and broker portals all work differently. The goal never changes: every completed trip paid at the right rate.

Work you can usually hand off:

• Claim entry and submission, from trip records you supply.
• Rejections and denials, including corrections and resubmissions.
• Appeals, if the contract covers them.
• Payment posting, matching each payment and takeback to the trips it covers.
• Follow-up on unpaid claims before they hit a filing deadline.
• Reports on what was billed, paid, denied, and still open.

Work that stays yours no matter who bills:

• The trip record. A billing company can only bill what your drivers and dispatchers documented: times, miles, signatures, and the level of service delivered. Missing records become denials, whoever types the claim.
• Running only trips you can bill. Booking the right rider, level of service, and authorization happens in your office before the trip.
• Responsibility for every claim. Claims go out under your provider number, and the payment is made to you.
• Returning overpayments. Federal law gives a provider 60 days after identifying an overpayment to report and return it. After that, keeping the money can create liability under the False Claims Act. The 60-day rule guide explains how the clock works.
• Decisions. What to appeal, what to write off, and when to push a payer are business calls.

OIG’s 1998 compliance guidance for billing companies suggests the contract spell out which duties the two sides share and which sit with one side alone. The two lists above make a good first draft of that section.

How billing companies price their work

Quotes almost always follow one of three pricing models. Each rewards something different, so match the model to the problem you are trying to solve.

Ask every company the same things so the quotes are comparable: what counts as one claim, whether corrected claims and appeals are included, and whether extra charges apply for setup, for months below a minimum, or for claims that are already past due.

The federal limit on percentage fees for Medicaid

Medicaid law generally lets the state pay only the provider or the member, not someone holding the provider’s claims. The rule that carries this out, 42 CFR 447.10, makes an exception for a business agent, such as a billing service or accounting firm, that sends statements and receives payments in the provider’s name. The agent’s compensation must be:

1. “Related to the cost of processing the billing”
2. “Not related on a percentage or other basis to the amount that is billed or collected”
3. “Not dependent upon the collection of the payment”

HHS OIG also has a longstanding concern that percentage billing arrangements may raise the risk of upcoding and similar abusive billing. The safest setup is simple: Medicaid pays into a bank account your company owns, and the billing company earns a per-claim or flat fee for that work. Payments from a broker or facility follow your contract with that payer, but ask your state Medicaid agency or a health care attorney before agreeing to a percentage on anything Medicaid funds.

The same rule bars paying for services to or through a factor, meaning a company that advances you money against receivables you assign to it for a fee. A billing company that also offers to buy or advance your claims is offering factoring. Read NEMT factoring before signing anything like it.

The break-even: outside billing vs an in-house biller

Outsourcing is cheapest while volume is low and payers are few. At some volume, a salaried biller costs less than the fees. You can find your crossover point with public numbers and your own collections.

Billing and posting clerks earned a national median wage of $48,500 in May 2025, according to the Bureau of Labor Statistics. Add the employer’s 7.65 percent share of Social Security and Medicare ($3,710.25) and $42 of federal unemployment tax (0.6 percent of the first $7,000, the rate once the full state credit applies), and the minimum cost is about $52,252 a year, or $4,354 a month. That is before benefits, state unemployment tax, training, software, and cover for vacations.

Here is an example. The fee rates and volumes are invented for illustration, not typical market rates.

Break-even collections = monthly in-house cost ÷ percentage fee

In this example, the 6 percent fee passes the cost of one median-paid biller at about $72,600 a month in collections ($4,354 ÷ 0.06). Below that, outsourcing costs less in cash. Above it, a biller costs less, as long as one person can handle the volume and your payers.

Cash is not the only factor. Outsourcing can earn its fee in three situations:

• A backlog. Months of unworked denials or claims close to their deadlines call for extra hands now. A cleanup project first, then a decision on ongoing billing, limits the commitment.
• Many payers. State fee-for-service, several health plans, and brokers each have their own rules and systems.
• No backup. One in-house biller who leaves or falls ill can stop your cash for weeks.

Keeping billing inside wins when trips come from one or two brokers with simple portals, when the owner or office manager already keeps up weekly, or when you want trip problems fixed the same day by the people who ran the trip. For a weekly follow-up routine that fits either setup, see the accounts receivable guide.

Checks to make before you sign

Your broker contracts

Brokers pay under their own agreements, and those agreements often limit outside help. The WellTrans Indiana provider agreement, revised October 16, 2025, bars the provider from assigning or delegating its rights and responsibilities without WellTrans’s express written consent. It also requires the provider to treat information obtained under the agreement as confidential and to sign WellTrans’s business associate agreement. Before a billing company touches any broker portal, get that broker’s approval in writing, and ask whether it issues separate user accounts for billing agents.

The business associate agreement

HIPAA defines business associates to include companies doing billing for a covered entity, and it extends the term to their subcontractors. So a billing company working for a covered entity is that entity’s business associate. If your company is itself a broker’s business associate, the billing company is your subcontractor. In both cases, the agreement has to be signed before you share any rider information. The minimum contents are set by 45 CFR 164.504(e):

The HIPAA guide covers the rest of your obligations.

Registration and location

Under the Social Security Act, anyone who submits Medicaid claims on a provider’s behalf as an agent, clearinghouse, or alternate payee has to register with both the state and HHS. Each state runs this its own way. Michigan, for example, requires billing agents to enroll in its CHAMPS system and complete business-to-business testing, and the provider must then authorize the agent to submit its claims. Michigan also prohibits using or storing its Medicaid data on systems or servers outside the United States. Separately, federal law stops states from sending Medicaid payments to banks or other entities based abroad. Ask your state Medicaid agency what a billing company must file, and make keeping that registration current the company’s job in the contract.

Exclusion screening

Under OIG’s 2013 bulletin, federal health programs will not pay for anything an excluded person furnishes. The bulletin also bars excluded individuals from doing administrative work, billing and accounting included, for providers that receive federal program money. OIG recommends screening billing and coding contractors, and it notes that the exclusion list is updated monthly. If you rely on the billing company’s own screening, keep its screening records. See the OIG exclusion list entry for how to search it.

Questions to ask, then terms to put in writing

Start with a short interview. Ask which of your payers the company bills today, including your state’s claim system and each of your brokers. Ask for references from transportation providers with a similar payer mix, and how the company will receive your trip records each week. Ask what it charges to end the relationship.

Then get these terms into the contract:

Ask for a weekly report covering unbilled completed trips, rejections, denials with reasons, payments posted against deposits, and receivables aging by payer. If a company cannot produce those, you cannot tell whether it is doing the job.

Giving any biller clean records to work from

Outside billing succeeds or fails on the trip record it starts from. For every ride, HealthRide stores GPS-recorded miles, timestamps for each pickup and drop-off, on-screen signatures, and recorded waits on no-shows, and the trip log exports to CSV or PDF for whoever does your billing. Completed trips become invoices at each payer’s rates, and every payment is tracked against its invoice in one ledger, so you can check an outside biller’s numbers against your own.