The Complete Guide to Starting an NEMT Business
Build a non-emergency medical transportation startup or small business and understand NEMT transportation services with this guide.
Quickly and easily manage your NEMT drivers with Circuit for Teams.
The non-emergency medical transportation (NEMT) market is a rapidly growing industry that offers a great opportunity for entrepreneurs.
With an aging population and advances in medical care, there’s an increasing demand for non-emergency medical transportation services.
The NEMT market is projected to reach over $15 billion by 2028, from over $8 billion in 2021.
Every year, 3.6 million Americans miss or delay medical appointments because they don’t have transportation.
NEMT is an essential service to those who need it — helping them get to and from medical appointments, therapy sessions, lab tests, and more.
Medicaid beneficiaries make up the majority of the NEMT market, as many are eligible for rides to and from Medicaid-funded appointments.
NEMT businesses receive reimbursement from Medicaid for transporting patients to and from these appointments.
Starting your own non-emergency medical transportation company not only fulfills an important need but can also be a lucrative opportunity for a hardworking entrepreneur.
One vehicle can have gross revenue of around $50,000 to $60,000 per year.
But there are a lot of moving parts when starting an NEMT business — from getting the right insurance and licenses to setting up a billing system and marketing your services.
I’ll walk you through everything you need to know about starting your own non-emergency medical transportation business.
(While you’re at it, check out how to start a profitable medical delivery service.)
How much does it cost to start an NEMT business?
Startup costs can vary depending on a number of factors, such as the size and scope of your business.
It can cost an average of $350,000 to start your own NEMT company.
But other sites suggest startup costs are more like $12,000 to $25,000.
However, some general costs common to NEMT businesses include:
- Vehicles: This is one of the biggest expenses. You’ll need to purchase or lease vehicles to offer transportation services. The cost of vehicles will vary depending on the vehicles you choose.
- Insurance: You’ll need to purchase commercial insurance to protect your business in case of an accident. Insurance costs will vary depending on the type of coverage you choose.
- Driver training: You’ll need to train your drivers to make sure they’re knowledgeable about the NEMT industry and capable of offering quality service.
- Marketing: You’ll need to market your business to attract passengers and get new business. This includes things like business cards and website setup.
- Establishing your business: Setting up your business and getting permits and licenses can also be costly.
- First-aid gear and equipping your vehicles: You’ll need to purchase first-aid gear and equip your vehicles with the necessary safety equipment.
As you can see, there are a number of costs associated with starting an NEMT business.
But if you’re organized and have a solid business plan, you can be successful in this industry.
How to start an NEMT business
From registering your business name to getting your employer identification number (EIN) from the IRS, here are the steps to set up your new business in non-emergency medical transportation.
Step 1: Legally form your NEMT business
The first step to starting your NEMT business is creating a solid business plan.
A business plan is essential to the success of any business, but especially a new business.
It can help you map out your business, set goals, and track your progress.
Next, you must legally form your business entity.
This will protect you from liability and help you get the licenses and insurance you need.
There are several business structures to choose from as a medical transportation provider.
Each legal structure will affect liability protection needs, taxes, and registration.
- Sole proprietorship: This is the simplest business structure. You are the sole owner of the business and are personally liable for all debts and obligations. To form a sole proprietorship, you simply need to file a “doing business as” (DBA) with your state. You pay taxes on business income on your personal tax return.
- Partnership: A partnership is similar to a sole proprietorship, but there are two or more owners. Partners share equally in profits and losses and have joint liability for business debts. Each partner reports business profits and losses on their personal tax return.
- Limited liability company (LLC): An LLC offers limited liability protection. This means you aren’t personally liable for business debts and obligations. To form an LLC, you file Articles of Organization with your state and pay a filing fee. You will also need to prepare an Operating Agreement outlining how you’ll run the business.
- Corporation: A C corporation is a legal entity separate from its owners. The owners of a C-corp are called shareholders and have limited liability protection. Unlike a C-corp, an S-corp isn’t a separate legal entity from its owners, and taxes are paid through personal tax returns.
An LLC is often the best choice for new business owners because it offers limited liability protection and is relatively easy to set up.
You’ll also need an Employer Identification Number (EIN) from the IRS to hire employees, pay federal taxes, open a bank account, and even apply for business licenses and permits.
If you’ve chosen to be a sole proprietor, you can use your Social Security number (SSN) as your EIN.
Most states also need you to register for a unique state tax ID number.
You’ll need a state tax ID for each state where you plan to hire employees or file taxes.
Step 2: Gather licensing and insurance
Once you’ve chosen your business structure, you’ll need to register your business with your state and obtain a business license.
You can learn more about licensing on the Small Business Administration (SBA) website.
Many small business owners overlook the importance of licensing and insurance, but these are two essential things you need before starting your NEMT business.
Business insurance is vital for NEMT providers.
For example, it can protect you from liability if one of your vehicles is involved in an accident or if one of your passengers is injured while in your care.
Here are some insurance types to consider:
- General liability insurance: This policy will protect you from third-party claims of bodily injury or property damage.
- Commercial auto insurance: You’ll need a commercial auto insurance policy for your NEMT vehicles. This type of insurance covers damages caused by your vehicles in the event of an accident.
- Workers’ compensation: If you have employees, you’ll need workers’ compensation. This type of insurance benefits employees who are injured or become ill as a result of their job.
- Professional liability insurance: This type of policy can protect you from liability if you’re sued for professional negligence.
Talk with a licensed, reputable insurance company about your insurance options and best practices.
As far as licensing for your NEMT small business, there’s no straightforward answer.
Each state and even local municipalities have their own rules.
The best way to determine what you need is to contact your local Department of Transportation (DOT), Department of Motor Vehicles (DMV), or Department of Driver Services (DDS).
Generally, some documents you may need include:
- Proof of transport liability insurance
- Driver’s health certification
- Negative drug check verification
- Criminal history check
- Penalty points on the driving registration
Remember to check with your local authorities to find out what’s needed for NEMT services in your area.
Step 3: Get the necessary transport equipment
To offer NEMT services, you’ll need the proper transport equipment.
If you offer basic transportation services, you may only need a passenger car.
For NEMT services, you’ll need a wheelchair-accessible vehicle.
The most common type of NEMT vehicle is a minivan or van outfitted with a wheelchair lift or ramps.
Some NEMT providers also use buses or vans specially designed for transporting large groups.
In some cases, you might be able to lease or rent NEMT vehicles.
However, if you plan to offer a more specialized service, such as transporting wheelchair-bound passengers, you’ll need to purchase a vehicle equipped with the proper accessibility features.
Starting your own business can be expensive, so you may want to think about renting a vehicle in the beginning.
Even if you can only afford to start with one, your vehicle needs to be safe, reliable, and ADA-compliant.
All NEMT vehicles should be equipped with the following safety features:
- First-aid kit
- Fire extinguisher
- GPS tracking device
- Safety signage
- Emergency light or beacon
- ADA-compliant features, such as a wheelchair ramp or lift
- Wheelchairs, stretchers, oxygen tanks, walkers, or any other special equipment your clients may need
You’ll also need the proper licenses and permits for your vehicles.
Be sure to check state-specific vehicle guidelines.
Step 4: Hire NEMT employees
While the NEMT field is a health care-adjacent industry, it’s important to remember that NEMT providers aren’t medical professionals.
Your drivers don’t need the same certifications as ambulance drivers or EMTs.
But certification training and courses are now becoming standard in the NEMT industry.
Professional courses can help your team prepare for intensive emergency situations, know how to handle difficult passengers, and understand how to help passengers with disabilities.
Your employees also need a valid driver’s license and a clean driving record and background check.
Some NEMT providers choose to hire people who already have experience working in the medical field, such as certified nurse assistants (CNAs) or home health aides (HHAs).
Your employees will need to be trained in customer service and know how to operate vehicle equipment.
If you plan to offer transportation for wheelchair-bound passengers, your employees will need to know how to use the wheelchair lift or ramp safely.
They should also know how to properly secure the wheelchair in the vehicle.
If you offer NEMT services to Medicaid or Medicare patients, your employees will need to know how to use the electronic documentation system.
The system is used to track patient information and make sure that proper documentation is filed for reimbursement purposes.
As your business grows, you may wish to hire employees to fill various positions, including:
- Dispatcher: The dispatcher is responsible for coordinating NEMT vehicles and scheduling drivers. They also act as a customer service representative, fielding passenger questions and concerns.
- Drivers: Drivers are responsible for picking up and dropping off passengers and offering assistance while in the vehicle. In some cases, drivers might be responsible for performing light vehicle maintenance.
- General manager: The general manager is responsible for day-to-day business operations. This includes scheduling, employee management, vehicle maintenance, and making sure NEMT services are safe and efficient.
- Marketing manager: The marketing manager is responsible for creating marketing campaigns to promote your NEMT business. They’ll also work on building relationships with referral sources, such as hospitals, doctor’s offices, and social service agencies.
- Accountant: The accountant is responsible for managing business finances. This includes billing, invoicing, payroll, and tax preparation.
Step 5: Market your NEMT business
Now that your NEMT business is up and running, it’s time to start marketing your services to potential passengers.
After all, how can someone book a ride if they don’t know you exist?
There are a number of ways to market your business, such as:
- Creating a website: A website is a great way to promote your NEMT business and reach a wider audience. Be sure to include information about your services, rates, and contact information. You can also use your website to post news and updates about your business.
- Working with referral sources: Referral sources, such as hospitals and social service agencies, can be a great way to get new business. Develop relationships with these organizations and let them know about your NEMT services.
- Using social media: Social media is a great way to connect with potential passengers and promote your NEMT business. Create social media accounts on platforms like Facebook, Twitter, and Instagram. Then, start posting content that will interest your target audience.
When working on your website and online presence, remember that the majority of your potential customers might be disabled or elderly — so be sure your site is accessible and easy to use.
You can hang up flyers in local businesses, post on community bulletin boards, and sponsor local events.
Be sure to use your vehicles as mobile billboards by wrapping them in your company’s colors and logo.
Make sure the phone number is big and easy to read.
Step 6: Optimize driver schedules and routes
Fuel and transportation costs are some of the biggest expenses for NEMT businesses.
It’s important to optimize driver schedules and routes to keep costs down.
Consider using routing software to help you plan the most efficient routes for your drivers.
This will save you time and money by making sure your drivers aren’t wasting time (and gas) driving around aimlessly.
It’s also important to optimize driver schedules so you aren’t over or understaffed.
This can be a delicate balance, but it’s important to get it right.
If you have too many drivers on the road, you’ll end up spending more money than you need on labor costs.
On the other hand, if you don’t have enough drivers, your passengers will end up waiting longer for their rides.
To find the right balance, use Circuit for Teams to help plan and optimize driver schedules.
Quickly and easily organize drivers and routes with Circuit for Teams
Managing the logistics of where your drivers need to be and when can be a major time suck.
Save hours on route planning with Circuit for Teams.
Take control of your NEMT driver routes and manage multiple routes with ease and confidence.
Add a list of drivers and stops quickly, and let Circuit for Teams do the route optimization magic to get them where they need to go faster than ever.
Assign each route to a driver with a click, then get turn-by-turn navigation from their favorite GPS app right on their phone.
Finally, relax knowing that you can track your drivers’ locations in real time, so you always know where they are and when they’ll arrive.
Save your drivers time on the road, and save your time on payroll.
See how Burd Learn uses Circuit for Teams to save 30+ hours a week on payroll.
Take the stress out of managing NEMT logistics with Circuit for Teams.
Chances are you'll love our other stuff too. Get our newsletter for the latest on all things delivery.