Must a ride company enroll in Medicaid to serve self-directed riders?

It depends on the state. Wisconsin requires every paid IRIS provider to be enrolled with Medicaid through ForwardHealth and to keep that enrollment active, and the state makes sure provider agreements are in place before claims are paid. CMS also lets a state authorize the financial management agency to sign the Medicaid provider agreement on the state's behalf, so in some programs you sign with the agency instead. Ask the program's financial management agency which applies before you drive the rider.

Can a rider pay a relative to drive instead of hiring my company?

In some programs, yes. Under CMS rules, each state decides whether relatives or legal guardians can be paid to deliver waiver services, and on what conditions, such as allowing a relative to provide transportation only when no other provider is available. Wisconsin's IRIS waiver lets guardians and people holding a health care power of attorney be paid as participant-hired workers for its transportation services, among a short list of others.

What happens to my unpaid invoices if the rider leaves self-direction?

Federal rules require states to let a participant leave self-direction and return to provider-managed services, with safeguards so services continue during the switch. Rides you gave while the plan was active were authorized under it, so send every invoice for that period to the financial management agency promptly. Rides after the change need a new authorization from whoever manages the rider's services next.

Are self-directed, participant-directed, and consumer-directed the same thing?

They describe the same idea under different names. CMS calls it participant direction in 1915(c) waivers and self-directed personal assistance services under the 1915(j) state plan option. States add their own brand names, such as IRIS in Wisconsin. In each, the rider or a representative makes decisions about services and spending that an agency would otherwise make.

Self-directed Medicaid transportation vendors

In a traditional waiver, a provider agency delivers the rides in the service plan and bills the program. Self-directed programs work differently: the rider, or a family member acting as their representative, decides who drives and for how much, and an agency pays the bill on the rider’s behalf. If you already run waiver transportation, this is the same service with a different buyer. If you are building a non-medical transportation business, self-directed riders are a market you can only reach by knowing how their money moves.

Who decides, and who pays

The rider decides and an agency pays. CMS’s review criteria say a 1915(c) waiver offers what it calls budget authority only if the participant can, at a minimum:

Determine the amount paid for each service, in line with the state’s policies.
Schedule when services are provided.
Identify service providers and refer them for enrollment.
Review and approve provider invoices.

The money itself sits with a financial management services (FMS) agency. Under the federal rules for the 1915(j) self-direction option (42 CFR 441.484), that agency keeps a separate account for each participant’s budget, tracks disbursements and balances, pays invoices for goods and services approved in the service plan, and sends the participant periodic spending reports. Wisconsin’s IRIS policy manual puts it plainly: participants do not receive the funds in their budget. Payments for authorized services go through the agency.

For a transportation company, that means two customers. The rider chooses you, sets the schedule, and signs off on each invoice. The FMS agency checks your qualifications and cuts the check.

Vendor or hired worker: two ways rides get paid

Self-directed programs pay for rides in two ways, and only one of them is open to a company.

As a vendor or agency provider. Your company is a business the rider buys from under budget authority. You invoice, the rider approves, the agency pays.
As a participant-hired worker. Under employer authority, the rider is the legal employer of individual workers, and the FMS agency runs payroll as the rider’s tax agent. The IRS process for that role is the section 3504 agent designation described in Rev. Proc. 2013-39, with special rules for agents of people who receive government-funded home care. Wisconsin’s service definitions say plainly that this employer relationship applies only to participant-hired workers and not to agency providers.

The second route matters even though you cannot use it. A rider can hire an individual driver as a participant-hired worker instead of buying from a company, and in some programs can pay a relative or guardian to drive. Your edge as a vendor is what an individual cannot offer: backup vehicles when a van is down, wheelchair lifts, trained drivers, and insurance that covers paid passengers.

How the rate gets set

The rider agrees your rate, inside limits the state sets. CMS requires each state’s budget method to rest on reliable cost data, apply the same way to every participant, and be open to the public. Under the 1915(j) option, states must also tell participants about any limits on their services (42 CFR 441.472). The budget is the hard ceiling. Wisconsin’s IRIS manual says participants are responsible for identifying willing and qualified providers and negotiating the rates, and may not exceed their individual budget estimate when they build a plan or approve claims.

Two things follow for your pricing:

Every dollar you charge comes out of the same budget that pays for the rider’s personal care, day program, and other supports. A rate that crowds those out will not survive the next plan review.
States can spread the budget over the year. The 1915(j) safeguards list allocating the budget monthly or quarterly, and having the FMS agency flag spending that runs well over or under plan (42 CFR 441.464). A busy month of rides can hit a monthly cap even when the annual budget has room.

Quote a clear rate sheet, per trip or per mile, and give the rider a monthly estimate for their regular schedule so they can fit it into the plan before the first ride.

Wisconsin IRIS, step by step

Wisconsin’s IRIS program shows how the pieces fit in one state. IRIS is a 1915(c) self-directed waiver, and DHS runs it with three statewide fiscal employer agents: GT Independence, iLIFE, and Premier Financial Management Services. The rider chooses one, and that agent verifies that providers meet the qualifications for the services they bill, makes sure Medicaid provider agreements are signed and kept, and processes and pays vendor invoices the participant has authorized.

The ride service is called Community Transportation. It pays for taking the rider to a waiver service, a workplace, or a community activity the plan lists, and back. Any provider the rider picks needs an active Medicaid enrollment through ForwardHealth before it can be paid, and its qualifications are checked before the first service and once a year after that. An organization qualifies as one of four types:

A mass transit system under Wis. Stat. 85.20(1)(e).
A taxi or common motor carrier under Wis. Stat. 194.04.
A specialized transportation provider meeting Trans 301 and defined under Wis. Stat. 85.21, 85.215, or 85.22.
A transportation network company under Wis. Stat. 440.41 and 440.415.

A participant-hired worker needs a valid Wisconsin driver’s license and auto liability insurance on a vehicle in good repair. The Wisconsin state guide covers how specialized medical vehicle providers add community transportation for IRIS to their Medicaid enrollment.

The codes IRIS uses for rides

Organizations bill Community Transportation under four codes, each with the RI modifier:

Code	What it pays for	Who bills it
T2003 RI	One trip	Organization
S0215 RI	Miles driven	Organization or participant-hired worker
T2004 RI	A transit pass	Organization
T2001 RI	A trip or pass for the rider’s attendant	Organization

The service definition ties the cost of community transportation to the federal mileage rate the IRS sets. Its business rate moved during 2026: 72.5 cents a mile until June 30, and 76 cents from July 1. Example: a rider whose plan covers 9 miles each way to a job, five days a week, uses 90 miles a week, or $68.40 at 76 cents. If you price per trip under T2003, ask the IRIS consultant how the rate will be checked against that rule before you quote.

What IRIS will not pay for

The definition also lists exclusions. If Medicare, the regular Medicaid benefit, or another responsible payer would cover the ride, the waiver will not, and it never buys a service the public gets free. Riders aged 18 to 21 get rides through the state plan. Emergency ambulance trips are excluded. If a relative, neighbor, friend, or community program will drive the rider at no charge, that comes first.

What gets checked before an invoice is paid

Each ride has to trace back to the rider’s plan. The 1915(j) rules require anything bought with a self-directed budget to be linked to an assessed need or goal in the service plan (42 CFR 441.482). In 1915(c) waivers, CMS’s core definition of non-medical transportation limits payment to rides that reach a waiver service or an activity named in that plan. Three kinds of ride fail that test:

Rides to medical care. A trip to a doctor or clinic the state plan covers is NEMT. The state pays for it as a plan service or an administrative cost, and never from the waiver budget. See how to become a Medicaid transportation provider.
Rides already in another rate. When an adult day or day habilitation provider’s rate includes transportation, the waiver must prevent double billing. The IDD transportation guide explains how those bundled rates work.
Rides outside the plan. A trip to a destination the plan does not name needs a plan change first.

Build each invoice so the rider can approve it at a glance: the rider’s name, each date, origin and destination, the code and units, your rate, and the total, matching the plan’s authorization period.

Getting known to self-directed riders

Riders choose providers with help from the program’s support staff, so that is where to introduce your company. Wisconsin’s IRIS consultant agencies, for example, help participants identify qualified providers, and the fiscal employer agents confirm qualifications once a rider picks one. Leave consultants a one-page sheet listing the area you cover, your vehicles, your rates, and your Medicaid enrollment details. The rules on what you may and may not offer people who steer riders apply here too; see case manager referrals for NEMT.

Billing the agency from HealthRide

HealthRide generates invoices for facilities and payers from completed trips, priced from your rate schedules, so the monthly bill to a financial management agency matches the rides on your board. A rider’s weekday trips to a workplace or day program can be scheduled once as recurring trips. See invoicing and recurring trips.

Self-directed Medicaid transportation: getting paid by riders who manage their own waiver budgets