What must a NEMT company disclose about its owners to Medicaid?
Every transportation company enrolled in Medicaid must tell the state who owns and controls it. Under 42 CFR 455.104, that covers anyone with a 5 percent or larger stake, directly or through another company, plus corporate officers and directors, partners, and managing employees, with birth dates and Social Security numbers. It is due at application, at signing, at revalidation on request, and within 35 days of an ownership change.
On this page
Who goes on the form
Federal rules call an enrolled transportation company a “disclosing entity” and list who inside it must be named (42 CFR 455.101). The 5 percent line does most of the work, but several roles are named no matter how much they own.
| Role | When it must be disclosed |
|---|---|
| Direct owner | Holds 5 percent or more of the company |
| Indirect owner | Holds a stake in a company that owns yours, adding up to 5 percent or more once the percentages are multiplied |
| Lender or noteholder | Holds 5 percent or more of an obligation secured by the company, worth at least 5 percent of its assets |
| Officer or director | Always, if the company is organized as a corporation |
| Partner | Always, general or limited, at any percentage |
| Managing employee | Anyone running day-to-day operations, on payroll or under contract |
The indirect math catches holding companies. CMS gives this example in its enrollment compendium: a person who owns 10 percent of a corporation that owns 80 percent of the provider holds 8 percent and must be reported, while 80 percent of a corporation that owns 5 percent works out to 4 percent and does not. CMS also counts every officer and director regardless of how many there are or whether they are paid, and it allows no exception for publicly traded companies.
What each disclosure contains
Under 42 CFR 455.104(b), the state collects:
- Identity. Name and address of each owner. A corporate owner lists its primary business address, every business location, and any P.O. box.
- Tax numbers. Date of birth and Social Security number for each individual owner, and a tax ID for each corporate owner. Corporate owners of any subcontractor in which your company holds 5 percent or more also give a tax ID.
- Family ties. Whether any owner is the spouse, parent, child, or sibling of another owner.
- Other enrolled companies. Any other Medicaid disclosing entity that one of your owners also owns or controls, such as an owner who also holds a stake in a home care agency.
- Managers. Name, address, date of birth, and Social Security number of each managing employee.
The penalty for gaps is financial. The federal share is not paid to a company that fails to disclose, and 42 CFR 455.416 has states terminate an enrollment when the provider or a 5 percent owner does not submit timely, accurate information. CMS also does not let states arrange collection so that one provider has to hand the same personal data to several of the state’s contractors.
Business dealings, convictions, and affiliations
Three related rules reach past the ownership chart:
- Business transactions (42 CFR 455.105). Within 35 days of a request, you report who owns any subcontractor you did more than $25,000 in business with over the prior 12 months, plus significant transactions with wholly owned suppliers or subcontractors over the prior five years. For example, a company that sends overflow trips to another fleet, or leases vans from a firm its owner controls, would list those dealings. Federal matching funds stop for services from the day after the answer was due until the day before it arrives.
- Criminal convictions (42 CFR 455.106). Owners, agents, and managing employees convicted of a crime related to Medicare, Medicaid, or Title XX must be named before the state signs or renews the agreement. The state may refuse to sign or renew the agreement over such a conviction, and may refuse or terminate it over an incomplete disclosure. Separately, 42 CFR 455.416 has the state deny or end the enrollment when a 5 percent owner was convicted of a Medicare, Medicaid, or CHIP offense in the last 10 years, unless it documents that keeping the provider serves the program.
- Affiliations (42 CFR 455.107). A state picks one of two options: collect affiliations from every provider that is not enrolled in Medicare at enrollment and revalidation, or ask for them only when it suspects one exists. Either way, the disclosure covers current ties, and ties within the past five years, to any provider with an uncollected Medicare, Medicaid, or CHIP debt, a payment suspension, an exclusion, or a denied, revoked, or terminated enrollment.
The state also runs every owner, agent, and managing employee you disclose through the federal exclusion lists at least monthly (42 CFR 455.436), and 5 percent owners give fingerprints when the company sits at a high screening risk level.
When to update it
Federal rules set four moments: when you apply, when you sign the provider agreement, when the state asks during revalidation, and within 35 days after any change in ownership. A sale, a new partner, or a buyout of one owner by another all start that 35-day clock, and states such as Indiana treat them as a change of ownership that needs its own filing.
Broker contracts often move faster than the federal deadline. MTM’s standard agreement has the provider report changes to its owners, corporate officers, directors, or controlling interest immediately, and MTM may request a completed disclosure form. A change of ownership, federal tax ID, or legal name means signing a new agreement with MTM.
Keeping the file current
Ownership forms go to the state and your brokers. HealthRide keeps the day-to-day compliance record alongside them: driver and vehicle credentials sit in one fleet and credentials registry, with reminders before a date lapses and a flag on any trip assigned to someone whose credential has expired.
Frequently asked questions
- Does my operations manager have to be listed if they own nothing?
- Often, yes. A managing employee is anyone who exercises operational or managerial control over the day-to-day running of the company, or who directly or indirectly conducts it, whether or not they are on the payroll as a W-2 employee. CMS says there are no exceptions to this disclosure. A manager who runs dispatch and the office every day would usually fit that description.
- Our bank holds a loan secured by the vans. Is the bank an owner?
- It can be, for disclosure purposes. A lender counts when it holds 5 percent or more of a note, mortgage, or other obligation secured by the company, and that interest equals at least 5 percent of the value of the company's assets. CMS works the math by multiplying the share of the note by the share of the assets securing it, and notes that banks often end up on the form.
- What happens if an ownership change is not reported?
- The federal share of Medicaid payments is not available to a provider that fails to make the required ownership disclosures, and states must terminate an enrollment when the provider or a 5 percent owner does not submit timely and accurate information. Brokers add their own terms: MTM's standard provider agreement requires immediate notice of changes in ownership, officers, directors, or controlling interest.
- Do I report convictions from before I owned the company?
- The rule looks at the person, not the date. Before the state signs or renews your provider agreement, or whenever it asks in writing, you must name any owner, agent, or managing employee convicted of a crime tied to Medicare, Medicaid, or the Title XX social services program at any time since those programs began. The state reports those names to the HHS Inspector General within 20 working days.
