What is network adequacy, and why do brokers close or open networks?
Network adequacy is the requirement that a Medicaid managed care plan have enough providers, in the right places, to serve its members on time. Under 42 CFR 438, states set and enforce the standards, and even a NEMT-only broker paid by capitation must keep a network sufficient for adequate access. Once its members are covered, a broker may turn new companies away.
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What the rule requires
Network adequacy is a state’s test of whether a Medicaid managed care plan has enough providers, of the right kinds and in the right places, to serve the members it enrolls. Every state that contracts with a plan must write adequacy standards and enforce them under 42 CFR 438.68. Under 42 CFR 438.206, each plan keeps and monitors a network, backed by written agreements, that gives every member adequate access. Members with limited English or a disability count in that test.
The federal list of provider types that need a numeric standard covers primary care, OB/GYN, behavioral health, specialists, hospitals, pharmacies, pediatric dental, and long-term services and supports. Transportation companies are not on it. Rides enter from the other side: when a state writes those numeric standards, it must weigh distance, travel time, and the means of transportation members ordinarily use.
Which rules reach a ride network
How much of this applies depends on who carries the risk for rides.
| Setup | Adequacy duty | Example |
|---|---|---|
| A health plan covers NEMT and may hire a broker | The plan’s full network duties extend to rides, and a broker it hires must carry them out | North Carolina’s Medicaid plans must build ride networks that meet the state’s NEMT policy |
| The state pays a NEMT-only broker by capitation, a NEMT PAHP | Only the basic duty to keep and monitor a sufficient network, one of the items listed in 42 CFR 438.9 | Arkansas pays one capitated broker per region under a 1915(b) waiver approved through March 31, 2028 |
| A state brokerage program under 42 CFR 440.170 | The state must audit and oversee the broker for adequacy of member access | Set by each state’s contract |
How states measure a ride network
With no federal vehicle count, states describe results. North Carolina’s managed care NEMT policy says each plan’s ride network must be able to:
- Deliver members on time for appointments, no more than one hour early, and pick them up no more than one hour after treatment ends. Shared, long-distance, and coordinated trips get two hours on each side.
- Handle urgent trips, such as hospital discharges and pharmacy runs, with no advance notice.
- Carry each member in the mode that fits their needs.
The same policy bars a plan from denying a trip because it lacks resources, and a broker running the network for a plan inherits that duty. Plans and their brokers also may not put exclusivity or non-compete clauses in contracts with transportation companies.
Why networks close and open
Adequacy cuts both ways for a transportation company.
- Closing. Under 42 CFR 438.12, a plan need not contract with more providers than its members need, though it owes a rejected company a written reason. Louisiana states plainly that brokers need not accept every applicant.
- Opening. A health plan that runs short cannot simply refuse rides. It has to cover the trip out of network while the gap lasts, and North Carolina requires plans to develop an adequate network instead.
- No cap. Colorado says there is no limit on the number of qualified NEMT providers that can contract with MediDrive, which becomes its statewide broker on January 1, 2027.
So before you apply, ask a broker which counties, service levels, or hours it is short on, and lead with that capacity. The guide on a broker network that is closed covers waitlists, enrollment freezes, and other payers in the meantime.
Once you are in the network
Once a broker adds you, the work shifts to keeping up with the trips it sends. HealthRide connects with your brokers, like MTM, Alivi and Sentry. When one of them sends your company a trip, it lands on your board without anyone retyping it. See broker connections.
Frequently asked questions
- Do federal rules set a number of vans a broker needs per county?
- No. 42 CFR 438.68 lists the provider types that need a numeric standard, such as primary care, hospitals, pharmacies, and behavioral health, and transportation companies are not among them. States write ride expectations into plan contracts and policies instead. North Carolina, for example, states its ride standard as results: members arrive on time but no more than an hour early, and wait no more than an hour after treatment.
- Can a broker refuse my company because its network is full?
- Yes. Under 42 CFR 438.12, a plan may stop adding providers once it has enough for its members, and the rule reaches NEMT-only brokers the state pays by capitation. The plan must tell you in writing why it declined. Louisiana tells applicants the same thing in plain terms: brokers do not have to accept every company that applies, and the number already in the network is one factor.
- What happens when a plan's network cannot cover a trip?
- A health plan that cannot deliver a covered service through its network must cover it out of network, on time, for as long as the gap lasts (42 CFR 438.206(b)(4)). North Carolina adds ride-specific rules: plans offer each trip to network companies first, may fall back on rideshare companies, and may not deny a trip because the plan lacks resources.
- Where can I read a state's adequacy standards?
- Each state must post its network adequacy standards on its Medicaid managed care website under 42 CFR 438.68(g). Ride-specific expectations usually sit in the plan contract, the state's NEMT policy, or the broker's provider manual, so read those too.
