NEMT carve-out: when Medicaid rides sit outside the health plans
Under a NEMT carve-out, a state leaves non-emergency medical transportation out of its Medicaid managed care contracts. Plans get no money for rides, so the state arranges them itself, usually through a statewide or regional broker or direct fee-for-service billing. In a carve-in, the plans cover rides for their own members and choose their own brokers or transportation companies.
On this page
How a carve-out works
Federal rules leave the choice to each state. CMS’s Medicaid Transportation Coverage Guide says that if transportation is covered as a medical service under the state plan, its cost can go into the monthly capitation paid to managed care organizations. A state may also leave rides out, just as it can with any other service.
When rides are carved out, the plan’s monthly payment contains no money for transportation. New York spelled this out during its 2024 change: once the benefit left, the plans’ per-member payment stopped paying for it. The state then arranges rides on its own, most often through a NEMT broker or through direct fee-for-service enrollment.
Carve-out and carve-in side by side
| Carve-out | Carve-in | |
|---|---|---|
| Who pays for the ride | The state, directly or through its broker | Each health plan, out of its capitation |
| Who the member calls | The state’s broker or ride line | Their plan, or the broker the plan hired |
| Where a provider signs up | The state broker or state Medicaid enrollment | Each plan or each plan’s broker |
| Where the rules come from | State manual and broker contract | Plan contract and plan broker manual, on top of state rules |
State examples
- New Jersey (carve-out). The HMO contract accepted in January 2026 lists non-emergency transportation, including mobile assistance vehicles, non-emergency BLS stretcher trips, and livery, among the services left in fee-for-service and outside HMO capitation. Modivcare, the state’s broker, serves NJ FamilyCare members statewide.
- New York (carve-out). Rides left managed long term care partial capitation plans and Medicaid Advantage Plus plans on March 1, 2024. The state broker, Medical Answering Services, now arranges them fee-for-service.
- Texas (carve-in). Medicaid managed care organizations approve rides for their members. HHSC’s Medical Transportation Program serves fee-for-service Medicaid clients, and its handbook says plainly that it does not apply to managed care.
- Indiana (carve-in). The managed care entities arrange rides for PathWays, Hoosier Healthwise, Hoosier Care Connect, and Healthy Indiana Plan members. Verida brokers most fee-for-service trips.
Most states run a mix
A carve-in only covers people enrolled in a plan, so carve-in states still need another system for everyone else. Pennsylvania’s Department of Human Services sorted the states in a June 2026 study. By its count, 20 states rely on brokers alone and 7 run rides entirely in-house. The other 23 states and the District of Columbia are mixed. In 20 of those states and DC, health plans cover rides for their members while a broker or the state covers everyone else. Colorado, Michigan, and Pennsylvania pair state or county management with regional brokers.
For a provider, the model decides where the contracts are. A carve-out state usually means one broker agreement or one state enrollment covers most members, and a single broker transition can reshape your year. A carve-in state can mean several plan or broker contracts at different rates, and a rider who changes plans may change who authorizes the trip. The guide to how states run NEMT walks through each model in more depth.
Keeping several payers straight
HealthRide connects with brokers such as MTM, Alivi and Sentry, and new trips from them land on your board without anyone retyping them. Plan, facility, and private-pay trips share the same dispatch board. More on broker connections.
Frequently asked questions
- Is emergency ambulance carved out too?
- Not necessarily. Emergency transport is a separate decision. In New Jersey, the HMOs cover emergency ground and air transportation, while every non-emergency ride, including stretcher trips by BLS ambulance, goes through the state's broker.
- Where can I check if my state keeps rides out of its health plans?
- Read the managed care contract first. It usually lists the services that stay in fee-for-service. The state plan also has to spell out the ride program: CMS expects Attachment 3.1-D to name the delivery model. A quick test is the booking number. If every member calls one broker whatever plan they are in, rides are carved out.
- Does a carve-out mean the broker pays me instead of the health plan?
- The health plan drops out of the payment. In a carve-out state the state pays for the ride, either through a broker it contracts with, which then pays you, or through its own claims system. New York uses the second route: its broker, MAS, authorizes each trip, and the provider bills the state's eMedNY system using the prior authorization number.
- Can a state carve NEMT out of one program and into another?
- Yes. New York pulled medical rides from its managed long term care plans in March 2024. Starting January 1, 2025, though, trips to social adult day care stayed a plan benefit, and each day care program now runs or hires its own transportation. States with several managed care programs often treat rides differently in each one.
