Can I start a NEMT business without Medicaid?

Yes. Medicaid enrollment is a payer relationship, not a license to operate. A private-pay company still needs whatever for-hire permit its state and city require, commercial auto insurance at or above the state floor, and an ADA-compliant service. It simply does not bill Medicaid, its managed care plans, or its brokers.

Do I need to follow HIPAA if I only take private pay?

Possibly not. A health care provider becomes a HIPAA covered entity through electronic standard transactions such as claims (45 CFR 160.103), so a company paid only by card, check, or invoice may sit outside the definition. Two catches: a facility contract can still demand HIPAA-level privacy, and your first electronic claim to a health plan brings you inside it.

Does Medicare pay for private wheelchair van rides?

No, not under Original Medicare. The Medicare claims manual is blunt about it: wheelchair vans, ambulettes, and litter vans get no coverage under either Part A or Part B, and an ambulance is covered only when the patient's condition rules out every other way to travel. Some Medicare Advantage plans include rides as a supplemental benefit, booked through the plan. KFF found 22 percent of individual-plan enrollees and 73 percent of special needs plan enrollees in plans offering transportation in 2026. Everyone else pays out of pocket.

Can a rider with Medicaid pay me privately?

A rider can choose to pay for a ride, but tell them first that their state Medicaid program, broker, or health plan arranges rides to covered appointments. If they still want your ride, give them the price in writing before the trip and make clear that you are not a Medicaid provider and cannot bill Medicaid for it.

Will skipping Medicaid limit me to small fleets?

Not by rule, but it narrows the market. The state has to screen and enroll each provider in a Medicaid managed care plan's network (42 CFR 438.602(b)), so plan and broker volume closes along with fee-for-service. Private-pay fleets grow on facility contracts, repeat family customers, PACE and VA contracts, and long-distance trips instead.

NEMT Business Without Medicaid: Rules and Payers

A NEMT company can operate for years without a Medicaid provider number. Some owners choose that on purpose: they build on families who pay directly and on facility contracts, then enroll later or never. The trade is simple. You avoid enrollment, screening, and broker credentialing, but you give up the biggest payer for these rides, and almost every other rule about carrying passengers for hire still applies to you.

What skipping Medicaid enrollment saves you

Medicaid enrollment is a screening process with fixed costs and ongoing checks. Without it, these items come off your list:

The application fee. Institutional providers pay an enrollment application fee with each new enrollment or revalidation. For calendar 2026 applications the amount is $750. The state must collect it before the provider agreement is signed, unless an exemption applies, for example when the company is already enrolled with Medicare or with Medicaid elsewhere (42 CFR 455.460).
Risk-based screening. Each state assigns NEMT providers a screening level. At moderate risk, the state visits your site both before and after it enrolls you. At high risk, it also runs criminal background checks and takes fingerprints from the company and any owner with a stake of at least 5 percent (42 CFR 455.434 and 455.450). Enrolled providers must also allow unannounced visits to any of their locations (42 CFR 455.432).
Federal driver minimums. A 2021 federal law added paragraph (87) to section 1902 of the Social Security Act. Under it, every state needs a way to confirm four things about its Medicaid NEMT companies and their drivers: no one is on a federal exclusion list, every driver is licensed, the company deals with state drug-law violations, and the company tells the state about each driver’s driving record.
Broker credentialing. Brokers stack their own list on top. For drivers, Modivcare wants a background check, a motor vehicle report, a passed drug screen, First Aid and CPR cards, a defensive driving course, and hands-on PASS wheelchair training. For the company, it lists comprehensive general liability, auto liability that meets the state minimum, workers’ compensation (most states require it as soon as you hire), and abuse and molestation coverage. MTM’s general handbook adds that a provider whose credentials lapse may get less work, or none, until the renewals are on file.

The cost of skipping is just as concrete. The state has to screen and enroll each provider in a Medicaid managed care plan’s network (42 CFR 438.602(b)), so staying out of Medicaid enrollment also keeps you out of plan and broker networks. In New Jersey, for example, every Medicaid NEMT ride, including mobility assistance vehicle service, runs through the state’s contracted broker (N.J.A.C. 10:50-1.4).

Rules that apply whoever pays for the ride

Medicaid is a payer, not your operating license. The permits, insurance floors, and civil rights rules for carrying passengers apply to a private-pay ride exactly as they apply to a broker trip. The license requirements guide covers each layer. These are the ones private-pay owners most often assume they can skip.

State permits and their insurance floors

Three states show how different the state layer can be:

Pennsylvania. The Public Utility Commission must issue a certificate before any intrastate for-hire passenger service begins. Van service falls under the paratransit class and the filing fee is $350 per class of service. For a van with 15 or fewer seats, the PUC’s rules set minimum coverage at $35,000 of bodily injury and property damage liability plus $25,000 of first-party medical and $10,000 of wage-loss benefits (52 Pa. Code 32.11).
New Jersey. Any non-volunteer mobility assistance vehicle service needs a Department of Health license under N.J.A.C. 8:40, whoever pays for the rides. A first license runs $1,500, plus $100 a vehicle, and the application includes a state criminal history request for each owner holding 5 percent or more. Every vehicle needs $500,000 or more of auto coverage per occurrence, and the company needs $300,000 of general liability on top.
Connecticut. Livery service needs a Department of Transportation permit, and the application fee is $200 (CGS 13b-103). CTDOT’s application guide schedules a formal public hearing once an application is complete, with notice to nearby livery companies and town officials (CGS 13b-103). A livery vehicle designed for up to 14 passengers needs at least $1,500,000 of liability coverage (CGS 14-29).

New Jersey’s owner background check mirrors Medicaid’s high-risk screening, so private pay does not avoid it there. City and county permits sit on top of the state layer. Your state guide lists the agencies that apply where you operate.

Rides into another state

A private-pay ride to a hospital in another state is interstate transportation. FMCSA’s guidance in Appendix A to 49 CFR Part 390 says for-hire passenger carriers in interstate commerce must register for operating authority no matter how small or light their vehicles are, unless an exemption applies. Their federal minimum for public liability is $1,500,000 on any vehicle with 15 or fewer seats counting the driver’s (49 CFR 387.33T). This is easy to miss when a family books a long-distance trip to a specialist two states away.

ADA rules for private companies

Under the ADA’s transportation rules, a company whose trade is moving passengers is a private entity primarily engaged in transporting people. That status has nothing to do with Medicaid. If that company runs booked, demand-responsive service, any new van or larger vehicle it buys or leases, including a van with fewer than eight seats, must be accessible, unless the company’s service overall already meets the equivalent-service standard for riders with disabilities (49 CFR 37.103). Sedans fall outside that purchase rule, but the general ban on disability discrimination in 49 CFR 37.5 still covers an ambulatory-only company. The ADA requirements guide explains equivalent service.

HIPAA depends on how you bill

HIPAA applies to a provider only when it uses electronic transmissions for one of HIPAA’s standard transactions, such as an electronic claim to a health plan (45 CFR 160.103). A company paid only by card, check, and invoice may fall outside that test. Two cautions apply. A facility contract can still require HIPAA-level privacy as a condition of the work, and the first electronic claim you send to a health plan changes your status. The HIPAA guide walks through the roles.

Who pays when Medicaid does not

A private-pay company lives on several payers at once, and each has its own rules:

Riders and families. You set the price and decide when to collect. Taking a card when the ride is booked removes most of the risk of chasing an unpaid bill. Original Medicare does not fill the gap: CMS’s claims manual says Medicare provides no coverage at all under Part A or Part B for non-ambulance transportation such as ambulettes, wheelchair vans, or litter vans. See private pay NEMT and finding private-pay clients.
Nursing facilities. Federal rules require skilled nursing and nursing facilities, when necessary or when the resident asks, to help arrange transportation to dental care (42 CFR 483.55). When necessary, they must also arrange transportation to vision, hearing, and foot care appointments (42 CFR 483.25). Those trips need a vehicle, and Medicare will not pay for the wheelchair van. See skilled nursing facility transportation.
PACE organizations. PACE organizations must put every outside service in a written contract that names the rate and how it is paid. The contractor takes the PACE organization’s payment as payment in full and agrees not to bill the participant, CMS, the state, or any private insurer. A PACE organization may contract only with companies that satisfy every federal and state rule that applies to them (42 CFR 460.70), so ask what it expects of transport contractors before counting on this work without a Medicaid enrollment. See PACE program transportation.
The VA. VA pays for an eligible veteran’s wheelchair van or other special-mode trip when three things are true: the veteran medically needs that mode, cannot afford it, and had the trip approved by VA beforehand or took it during a medical emergency (38 CFR 70.4). In its 2023 rate rule, VA estimated that more than 99 percent of what it pays special needs transportation vendors goes out under contracts, so the way in is a VA contract, not a claim. See rides to VA appointments.
Injury claims. Auto injury and workers’ compensation cases sometimes pay for rides to treatment, with their own paperwork. See billing auto insurance and letters of protection.

What to tell callers who have Medicaid

Under 42 CFR 431.53, the state Medicaid agency has to make sure members have the transportation they need to reach covered care. So when a caller has Medicaid, tell them first that their state program, broker, or health plan arranges rides to covered appointments, and give them the number if you know it. Then tell them what your ride costs if they still want it.

Some will choose you anyway, for a same-day ride, a trip the program does not cover, or a driver they already know. Three habits keep that clean:

Quote in writing before the ride. Put the price, the pickup time, and your cancellation terms in a text or email, and note that you are not a Medicaid provider and cannot bill Medicaid for the trip.
Never imply program coverage. Do not tell a rider the program will pay them back, and do not describe your company as a Medicaid provider in ads or on calls.
Know what changes if you enroll. Once enrolled, you take whatever Medicaid pays, plus any allowed copay, as the full amount for the ride (42 CFR 447.15). After you enroll, the rules on charging Medicaid patients apply to you.

Adding Medicaid later

If you decide to enroll later, two choices made early make the step easier:

Build driver files to the broker standard now. If every driver already holds PASS, First Aid and CPR, a background check on file, and a clean driving record, broker credentialing becomes paperwork instead of a retraining project. The broker credentialing guide has the full document list.
Keep one legal name and EIN everywhere. Medicaid enrollment, your NPI, your insurance, and your state permits should all match from day one.

Operating history also counts in places. NEMTAC accreditation, for example, requires a full year in service and an NPI, and its fee is $3,000. For the enrollment steps themselves, see becoming a Medicaid transportation provider.

Running private-pay work in HealthRide

Without a broker paying you, collecting is part of the job. In HealthRide, a rider or facility pays by card from a pay link or a saved card, and the payment runs through our secure card processor. Facilities can request rides, follow them live, and view and pay their invoices in their own portal, and the checks you record go into the same ledger. See payments and invoicing.

Running a NEMT business without Medicaid: private pay, facility work, and the rules that still apply