Working as a subcontractor for another NEMT provider: terms, risks, and broker rules

Two things “subcontractor” means in NEMT

The word covers two different relationships, and mixing them up causes bad decisions.

The first is the broker’s network. Brokers often call the companies they contract with subcontractors. Modivcare’s 2025 compliance training says its transportation providers are considered subcontractors of Modivcare. MTM’s 2026 Virginia handbook speaks to its providers as subcontracted transportation providers. Kentucky’s Transportation Cabinet titles its enrollment page for broker network companies “Subcontract Non-Emergency Medical Transportation Provider,” and tells them the contract runs to the broker rather than the Commonwealth.

The second is a tier below that. You drive trips for another transportation company, often called the prime, which holds the contract with the broker, health plan, or facility. You never sign with the payer. The prime assigns you trips, collects from the payer, and pays you.

This guide is about the second kind. If you want the first kind, a direct contract with the broker, start with our guide to NEMT broker contracts.

Whether brokers and states allow it

For Medicaid broker work, assume the answer is no until the broker says yes in writing. The published contracts and manuals point the same way:

New York’s reasoning is worth knowing. The state says passing trips down the line can bypass safety and financial controls that the whole program depends on.

Facility and private-pay work is different. Those trips run under the contract with the facility or the rider, so the facility’s agreement with the prime decides. Ask the prime to show you the clause that permits subcontracting before you accept a single trip.

Credentialing that still applies to you

Consent from the broker does not waive its standards. Plan on meeting every one of them yourself.

• Broker approval of your drivers and vehicles. MTM’s agreement ties payment to credentialed drivers, attendants, and vehicles. WellTrans withholds payment when a driver or vehicle it never pre-approved runs the trip.
• The federal floor for every driver. CMS guidance SMD 23-006 explains that Section 1902(a)(87) of the Social Security Act sets minimums for any NEMT company or driver a state plan pays: each driver screened against federal exclusion lists, each driver licensed, a policy for handling violations of state drug laws, and a way to share each driver’s traffic history with the state.
• How often those checks run. Modivcare’s reminder for out-of-network companies spells out a schedule: exclusion screening at hire and monthly after, a license copy kept current, a driving record every year, and a drug-law check every year or as state law requires. It wants those records kept a decade and handed over within 3 business days when asked.
• State Medicaid enrollment. A company in a broker’s network for a Medicaid health plan is a network provider under 42 CFR 438.2, and states must screen and enroll every network provider (42 CFR 438.602(b)). WellTrans has its providers warrant active Indiana Medicaid enrollment. Kentucky has broker network companies apply for a Medicaid provider number for each service type they run.
• Insurance at the broker’s levels. MTM’s standard agreement sets minimums of $500,000 per occurrence for general liability and a $500,000 combined single limit for auto, plus statutory workers’ compensation, with MTM named as additional insured. Limits vary by contract: MTM’s Rhode Island network asks for at least $1,500,000 on each liability policy. The prime will want the same coverage and its own name on your certificate.

Our broker credentialing guide lists the documents most brokers want, and the driver file checklist keeps each driver’s records in one place.

What the subcontract should settle

Put everything in writing and signed before the first trip. These are the terms that decide whether the arrangement pays and who absorbs the problems.

Two broker clauses deserve a close look because they flow straight down to you. MTM can end its agreement immediately if its own contract with its client ends, and it says no provider has a claim to any specific rider or facility. If the prime loses its contract, your work disappears the same day.

The business associate agreement between providers

A subcontractor that receives rider names, addresses, appointment times, or mobility needs is handling protected health information. HIPAA reaches you through the chain of contracts.

1. The payer or state is the covered entity. Washington’s Health Care Authority, for example, names its NEMT brokers business associates in their contracts.
2. The broker treats its network as business associates. Modivcare’s training says HIPAA requires agreements between a business associate and its subcontractors. Signing MTM’s standard agreement means signing its business associate terms too, which sit in an appendix. WellTrans builds a Subcontractor Business Associate Agreement into its provider contract as an exhibit.
3. You are the next link. HIPAA treats a subcontractor handling rider information on another business associate’s behalf as a business associate in its own right (45 CFR 160.103). A business associate may share that information with its subcontractor only after getting written assurances that meet the business associate agreement rules (45 CFR 164.502(e) and 164.504(e)).

Under 45 CFR 164.504(e)(2), the agreement must at minimum commit you to:

• Use and disclose rider information only as the agreement permits or the law requires
• Protect electronic records with the safeguards in the HIPAA Security Rule
• Report any unpermitted use or disclosure, including breaches of unsecured information
• Bind your own subcontractors to the same terms
• Make your records available to HHS on request
• Return or destroy the information when the relationship ends, where feasible

Broker terms are often tighter than the federal floor. WellTrans’s subcontractor agreement requires reporting a security incident to WellTrans within one business day. Ask the prime for the broker’s agreement so you know which deadlines flow down. Our HIPAA guide for NEMT covers the security side, and texting riders under HIPAA covers what drivers can send by phone.

Risks to weigh before you say yes

Subcontracting can fill empty vans. It also puts your revenue behind someone else’s contract, cash, and compliance.

• Payment risk. You depend on the prime’s cash flow and its paperwork. Broker agreements bar providers from billing riders and route all payment through the broker, so your only claim is against the prime.
• Contract risk. If the arrangement breaks the prime’s agreement, the broker can refuse payment for the trips and terminate the prime. You lose both the work and the money owed.
• Liability risk. MTM’s agreement makes the provider’s insurance primary and non-contributory, and a prime will usually pass that down, so an accident with a rider aboard lands on your policy first. Check that your policy covers trips you run for another company. Our NEMT liability guide walks through the claims providers face.
• Growth risk. A broad non-solicitation clause can keep you from signing with the same broker or facility for years.
• Concentration risk. One prime supplying most of your trips is the same single point of failure as one broker. Measure it with the method in the payer mix guide.

When subcontracting makes sense

It works best as a bridge with an end date. Common good fits are overflow runs for a facility contract where the facility has approved subcontracting, private-pay work for a company with more demand than vans, and trips under a broker that has consented in writing and credentialed your drivers and vehicles.

Use the time to build your own record and apply directly. A broker that already knows your drivers from a consented subcontract has less reason to say no. If the network is closed to you now, our guide to getting into a full broker network covers the waitlist and the payers that recruit.

Keeping subcontract work clean in HealthRide

The prime company will ask you for proof on every trip. Every ride in HealthRide carries it: pickup and drop-off times, the rider’s signature, GPS miles, and the recorded wait on a no-show. You can export the trip log as a spreadsheet or PDF and send it with your invoice. Finished trips turn into invoices, and each payment you record shows up in one place, so the balance the prime owes is always clear. See invoicing.