How to Start a Medical Transport Business
As the population continues to age, the demand for specialized services like nonemergency medical transportation is continuing to grow. These businesses typically transport elderly and disabled patients from their homes to nonemergency medical appointments. Some are in wheelchairs and some are on stretchers, and others may just need assistance climbing stairs.
There may also be a demand for emergency medical transportation in your area, but this is an entirely different business because your company and your employees would need to provide emergency medical care in transit.
Different patients may require any of a range of different transportation services. In most cases, they can be categorized as emergency and nonemergency transportation. Some of these include:
- Ambulance transportation: This is usually for emergencies that may require medical intervention or treatment in transit, such as cardiac arrest, accident victims, etc.
- Nonemergency medical transportation: Also known as NEMT, this is a broad category of any service that doesn't require emergency care but can require ensuring that patients are comfortable, including assistance with personal hygiene.
- Patient transport ambulance: Medical care is provided as needed in transit, such as moving a patient from one hospital to another.
- Long-distance ambulance: Medical care is offered as needed in transit, such as moving a patient from one state to another.
- Stretcher transportation: This is an NEMT service that requires door-to-door transportation, such as from a bed at home to an appointment.
- Wheelchair transportation: This NEMT service either accommodates wheelchairs in the vehicle or has someone assist a patient getting into a vehicle seat from a wheelchair.
- Door-to-door transportation: This NEMT service assists people getting from their home to an appointment, either with a wheelchair or a stretcher or simply walking with the person.
- Curb-to-curb transportation: This NEMT service is for people who do not need special assistance getting inside or outside.
- Long-distance NEMT: This service takes people from one city or state to another without medical care needed during the trip.
- Air medical transport service: This involves transportation with an airplane or helicopter for either emergency or nonemergency patients.
Different transportation services may need additional staff besides a driver, such as a nurse. Long-distance NEMT transportation services often have additional seats or stretchers for family members who are going along for the ride as well as an entertainment system.
Most new businesses getting into medical transportation focus on nonemergency services. If your goal is to start an emergency medical transportation service, you will need to research state and local requirements very carefully.
In Georgia, for example, ambulance, air ambulance, neonatal transport and medical first-responder services are all licensed by the Georgia Department of Health. The requirements are lengthy, including such things as having:
- An appointed service director
- An appointed training officer
- An appointed infection control officer
- An appointed pediatric emergency-care coordinator
- An appointed communications officer
You will also need plans and protocols for a variety of medical emergencies ranging from cardiac arrest and trauma to control plans for infectious disease exposure. Having personnel trained in administering medical care and medications en route to the hospital as well as pharmacy policies and procedures is also required.
The first step in planning your NEMT business should be to develop a thorough understanding of your local market. Questions to ask include:
- Is there a need for medical transportation services in your area?
- Is there a need for medicaid transportation service providers?
- How many providers are already in business in your area?
- Is there a service that is currently in need that isn't being addressed?
- How can you distinguish yourself from your competition?
- Is there funding available from the local government or community groups for a new provider?
Make a list of potential clients and contact them to determine the answers to these questions, including:
- Nursing homes
- Retirement homes
- Assisted-living facilities
- Community groups that cater to the elderly or disabled
Talk to people who may be potential clients or users of your services. Ask them how they arrange for transportation, what it may cost them out of pocket and their level of satisfaction with their current transportation providers. Such people can typically be found in waiting rooms at medical facilities and are often happy to have someone to talk to for a few minutes.
Consider getting an industry report on the medical transportation business sector. The prices of these reports vary but can save you the time and expense of researching the market yourself. These reports will typically give you corporate profiles of companies already in the business, market shares of hospitals compared to other customers and estimates of revenue.
Some may also give you information directly related to starting a company, including costs and success rates of new service providers. They may also give you insights on the impact of new technology on the market. For example, if you're in an urban market, you should know how ride-sharing apps may affect your business. If you're planning to deliver medical supplies as a medical courier, you should understand the role that drones may play in the near future.
According to a 2015 survey, there are over 59 million trips annually for Medicaid nonemergency medical transportation each year. The percentage breakdown is:
- 38% for behavioral-health appointments
- 17% for dialysis appointments
- 15% for preventative services
- 7% for specialist appointments
- 6% for physical therapy or rehabilitation services
- 5% for adult day health care
- 12% for other care
Before you can operate an NEMT company, you will need to be licensed by the state where you plan to operate. Because you're going to be transporting people who are vulnerable, it shouldn't be surprising that the licensing requirements are comprehensive. In California, for example, some of the things you will need include:
- Federal employer identification number or individual taxpayer identification number verification
- Local business license, tax certificate and permit as required by your city or county government
- Recorded/stamped fictitious business name statement if your business is using a fictitious name
- Articles of incorporation filed with the secretary of state or fully executed partnership agreement if you have a business partnership
- Certificate of commercial liability insurance for at least $100,000 per claim and a minimum annual aggregate of at least $300,000
- Certificate of workers’ compensation insurance if you have at least one employee
- Signed lease agreement if you don't own your business premises
- Copy of drivers' license(s) and driving records
- Copy of DMV commercial vehicle registration
- Copy of proof of commercial vehicle insurance
- Copy of brake and lamp certificates
- Wheelchair and/or litter van information
- Special vehicle permits and drivers' permits if applicable
- First aid and CPR certificates
- Copy of pre-employment drug and alcohol tests
The federal Medicaid program has specific requirements for anyone who wants to become a service provider, and these are passed down to each state. Each state in turn may have its own requirements in addition to those mandated by federal regulations. To apply, you will need to contact the department in your state that is responsible for these services, like the Department of Health Care Services if you're in California.
As another example, in Florida, MNET providers are under the jurisdiction of the Florida Agency for Health Care Administration. However, the state uses three transportation brokers: Access2Care, LogistiCare and MTM. To make your services available to Medicaid patients, you will need to apply to one of those brokers to be put on their list of approved transportation providers and to receive dispatches.
Not surprisingly, the requirements for becoming a Medicaid nonemergency transportation provider are numerous and will often exceed state requirements for companies that don't bill through Medicaid, including:
- Obtain a business license
- Register in the city or county in which you'll be working
- Have proof of insurance for your vehicle(s)
- Have photos of your vehicle(s)
- Get an inspection of your vehicle(s) and maintenance records
- Get a background check on your drivers
- Provide proof of training for your drivers
- Have your driver files inspected
- Get drug and alcohol tests for your drivers
- Know which services require more than one employee
- Provide a roster of your personnel
- Have your policies and procedures documented
- Understand local regulations and be able to comply with them
- Charge a standardized rate for your services
- Obtain a coordination contract with the state or local community transportation coordinator
- Be prepared to report annual operating revenues, expenses and operational statistics
The type of vehicle or vehicles you choose will depend on the types of services you want to provide. Vans and small buses equipped with a wheelchair lift can often be bought used for $20,000 or less. However, you will need to take into account the cost of repairs and the reliability of your vehicle if you buy it used, as it will be difficult to service your patients if your van is in the shop for a day or two.
Another option is to purchase a van or small bus and have it rigged yourself. For a wheelchair-accessible vehicle, you will need a lift and/or a ramp. You will also need wheelchair securements and walker holders to ensure that your patients' equipment is properly secured.
It's a good idea to talk to a lawyer and an accountant with experience in medical transportation before selecting your business structure. A limited liability company may be an option; however, you will need to compare this to a corporation or partnership. An LLC does not typically give the owners the same degree of protection against creditors and lawsuits as a corporation does.
Because your drivers and your staff will be working with vulnerable people who are usually in poor health, even the slightest mistake or error in judgement could result in someone's injury or death. For this reason, you will need to ensure that you have adequate protection, including liability insurance.
It's going to take some time between the first day you start picking up patients to the first day you start getting paid. In the meantime, you will have vehicle payments to make and fuel for which to pay, and if you hire staff, you'll have paychecks to sign. Consequently, it's vital that your company is well funded.
If you're unable to finance your company yourself, consider bank loans or finding a business partner who is willing to invest in your company. Another option is to talk to your local government officials and community organizations to see if there are grants or small business loans available for your services. Generally, communities don't offer grants to startup businesses except in the case where they are providing a service the community lacks, like medical transportation services.
As with most businesses, marketing is key to getting your first customers. Make sure that local hospitals, nursing homes and other centers know that you are available. Ideally, there should be contacts you made at these organizations while researching your business model.
Having a website and then adding your business to local directories and Google maps will also be important. Make sure that people know your rates, and for those who are paying you directly, having a way to accept credit card payments from your vehicle may be a good idea. Of course, if you plan to cater to customers with private insurance or Medicaid, this may not be necessary.