NEMT fraud prevention: the schemes regulators find and the controls that stop them
NEMT fraud prevention means proving every billed trip happened as billed, with an eligible driver. GAO counted 132 criminal convictions and 57 civil settlements or judgments against NEMT providers in 25 states from fiscal 2015 to 2020. Common schemes are phantom trips, inflated mileage and tolls, ineligible riders, unqualified drivers, falsified signatures, and kickbacks. Stop them with GPS and odometer records, signatures, exclusion checks, and claim audits.
On this page
How big the NEMT fraud problem is
NEMT is a small share of Medicaid fraud cases, but it draws steady attention. GAO’s 2022 review found that from fiscal years 2015 to 2020, state Medicaid Fraud Control Unit investigations of NEMT providers led to 132 criminal convictions and 57 civil settlements and judgments in 25 states. That was about 2 percent of all Medicaid provider fraud cases with those outcomes. Seventy-one percent of the NEMT cases came from five states: Indiana, Louisiana, Minnesota, New York, and Ohio.
Audits find more problems than prosecutors do. GAO reviewed seven HHS OIG audits in which 15 to 86 percent of NEMT claims, depending on the state, did not meet program requirements, for about $20 million in improperly paid federal funds. The gaps were basic: no record of the date of service or the pickup and drop-off locations, and no proof of driver licenses or vehicle inspections.
Federal auditors are still looking. In October 2025, HHS OIG announced an evaluation that will use indicators of concerning billing to target reviews of Medicaid NEMT. In May 2026 it opened an audit series on whether selected states met Medicaid payment requirements for NEMT. The announcement notes that NEMT providers must be lawfully authorized and must keep records supporting the services they bill.
The lesson for honest providers is simple. You are judged on your records. A trip you cannot document looks the same to an auditor as a trip that never happened.
The schemes investigators find
These patterns come from GAO’s review and from recent state and federal cases.
| Scheme | What it looks like |
|---|---|
| Phantom trips | Billing for rides to closed facilities, on days with no appointment, or for riders who say the ride never happened |
| Ineligible riders | Billing for people who were hospitalized or had died |
| Inflated mileage | Billed trip miles far above what the vehicle’s odometer shows |
| Padded tolls | Tolls added to trips that did not use a toll road, or charged above the real amount |
| Billing one ride as several | A single trip with several riders billed as separate individual trips |
| Unqualified drivers or vehicles | Drivers with suspended licenses, or vehicles not certified or inspected |
| Falsified records | Asking riders to sign for trips that were not provided |
| Kickbacks | Paying Medicaid recipients to request rides, sometimes recruiting people in substance use treatment |
| Personal rides | Billing Medicaid for rides for the owner and family members, most with no medical appointment, as alleged in a 2026 Colorado indictment |
Recent enforcement examples
Recent cases show how these schemes are caught.
- New York, January 2025. The Attorney General sent cease-and-desist notices to 54 transportation companies, demanded repayment from 15, and announced four settlements totaling more than $847,000. The office cited fake trips, extended mileage, invented tolls, unlicensed drivers, and kickbacks to recruit riders.
- New York, June 2025. A takedown of 25 companies produced 16 settlements worth more than $13 million, 7 lawsuits, and 3 criminal cases. One driver claimed 96 trips and 2,158 miles in a single day, and claimed mileage ran far above what vehicle odometers showed. Investigators used odometer inspections, taxi commission records, rider interviews, and license checks.
- Colorado, February 2026. Federal prosecutors charged two NEMT business owners in separate cases. One indictment alleges more than $1 million in billing over about seven months, including more than $400,000 for rides for the owner and family members and more than $450,000 for rides of 400 miles or more per patient per day. The other alleges about $3.3 million in billing, including about $165,000 for rides after a beneficiary’s death. Charges are allegations, and the defendants are presumed innocent.
- North Carolina, March 2025. After self-disclosing to HHS OIG, a medical transport company paid $119,020.71 to resolve allegations that it billed Medicare for more mileage than it provided.
The penalties
Fraud exposure comes from several laws at once.
| Law | Penalty |
|---|---|
| False Claims Act | $14,308 to $28,619 per false claim for penalties assessed after July 3, 2025, plus three times the government’s damages |
| Anti-Kickback Statute | Felony; fines up to $100,000 and up to 10 years in prison per violation |
| Exclusion | Excluded people and companies can receive no payment from federal health care programs, and anyone who employs them risks civil monetary penalties |
| State law | State charges such as grand larceny in New York, plus repayment demands and settlements |
How states and brokers detect fraud
GAO grouped state fraud controls into four areas, and all of them touch your daily work.
- Provider and vehicle screening. Enrollment checks, credential monitoring, and vehicle inspections. Four of eight states GAO studied rate NEMT providers as high risk, which means site visits and fingerprint-based background checks.
- Pre-trip approval. Eligibility checks and confirming the right mode of transport before scheduling, sometimes with the rider’s health care provider for wheelchair or long-distance trips.
- Post-trip validation. Matching trips to medical claims and reviewing trip logs. In six of the eight states, the state or its contractors compared trip logs with time-stamped GPS data.
- Contractor requirements. Oversight and reporting terms in broker and health plan contracts. Louisiana and New York mandated GPS tracking for all trips.
New York’s rule is the most concrete. Since April 3, 2023, every transportation provider must send the broker the start point, end point, and GPS breadcrumbs for each trip. Brokers screen too. MTM reports that in 2025 it flagged and investigated more than 23,000 cases of potential fraud, found 37 percent valid, and avoided more than $3 million in losses. About two-thirds of the valid cases were generated by members rather than transportation providers.
Controls every NEMT provider should run
These controls cost little and answer the questions auditors ask first.
- Record every leg. Rider, date, pickup and drop-off addresses, the times each stop happened, driver, and vehicle. Use our trip log standard.
- Keep objective mileage. GPS miles or start and end odometer readings for each trip, never estimates.
- Collect signatures where required, from the rider or facility, at the time of service.
- Document no-shows with arrival time, wait time, and attempts to reach the rider.
- Screen drivers monthly against the OIG list, SAM.gov, and your state exclusion list, and keep dated results. See NEMT driver requirements.
- Bill only what the record shows. Tolls with receipts, the service level actually provided, and shared rides billed the way the payer’s rules require.
- Audit a sample every month. Pull ten billed trips and match each claim to its trip record, GPS or odometer miles, and signature.
- Ban gifts to riders and train staff on why.
- Give staff a way to report concerns without fear of retaliation.
Our guide to passing a broker audit covers what reviewers pull, and NEMT documentation requirements covers how long to keep it.
Build a compliance program on OIG’s seven elements
HHS OIG’s General Compliance Program Guidance, published in 2023, is voluntary. It is OIG’s reference guide for health care compliance, and its seven elements give you a ready structure. A small NEMT company can meet each element with a few pages and a calendar.
| OIG element | What it looks like in a small NEMT company |
|---|---|
| 1. Written policies and procedures | A code of conduct and short policies on billing, trip records, gifts, and exclusion screening |
| 2. Compliance leadership and oversight | A named compliance officer, often the owner, who reviews results monthly |
| 3. Training and education | Fraud, waste and abuse training at hire and every year. Modivcare and MTM already include it in their required provider training |
| 4. Effective lines of communication | A hotline, email, or open-door channel for reporting concerns |
| 5. Enforcing standards | Consequences for violations, applied the same way for everyone |
| 6. Risk assessment, auditing, and monitoring | Monthly claim-to-trip audits and exclusion checks |
| 7. Responding to detected offenses | Investigate, fix the process, repay overpayments, and report when required |
If you find a problem
Move quickly and carefully.
- Stop billing the affected trips or service level until you understand the issue.
- Preserve every record: trip logs, GPS data, claims, and messages.
- Call a health care attorney before you talk to the payer.
- Quantify the overpayment and repay it through the process your attorney recommends. HHS OIG lists settlements reached after providers self-disclosed, like the North Carolina case above.
- Fix the cause, retrain staff, and document what changed.
Proving every trip with HealthRide
The HealthRide driver app keeps GPS-recorded miles, pickup and drop-off times, and on-screen signatures on every leg, and no-shows carry the recorded wait time. Credential expiry reminders go out before a license lapses, and expired credentials are flagged before a trip is assigned. Dispatch can watch every vehicle on the live map, and the trip log in reports exports the records an auditor asks for.
Frequently asked questions
- What is the most common type of NEMT fraud?
- Billing for trips that did not happen, or did not happen as billed. GAO's review found providers billing for trips to closed facilities or on days with no appointment, billing for riders who were hospitalized or deceased, overcharging tolls, billing one shared ride as several trips, using unauthorized drivers or vehicles, and asking people to sign for trips never provided.
- Is a billing mistake the same as fraud?
- No. GAO notes that non-compliance found in audits is not necessarily fraud. An honest error is still an overpayment, though. Federal law requires you to report and return a Medicaid or Medicare overpayment within 60 days after you identify it, and money kept past that deadline can be pursued under the False Claims Act. Keep trip records that match GPS or odometer data, so an honest error can be shown to be one.
- What are the penalties for NEMT fraud?
- They stack. Under the False Claims Act, civil penalties assessed after July 3, 2025 run $14,308 to $28,619 per false claim, plus three times the government's damages. Paying kickbacks is a felony under the Anti-Kickback Statute, with fines up to $100,000 and up to 10 years in prison. Providers can also be excluded from federal health programs and charged under state law.
- Can I give riders gifts or cash to choose my company?
- No. New York's Attorney General has pursued companies that paid Medicaid recipients to request their rides. The federal Anti-Kickback Statute makes it a felony to knowingly and willfully pay anyone to induce them to arrange for or purchase a service paid by a federal health care program.
- How often should I check drivers against exclusion lists?
- Monthly. HHS OIG updates its List of Excluded Individuals/Entities every month. Modivcare's credentialing reminder for out-of-network providers calls for an OIG check at hire and monthly after that, plus SAM.gov and state exclusion checks. Save a dated copy of every search.
