By: Dan Reid, President/Managing Member, Grove Transit
Imagine if the Chiefs were to tell Patrick Mahomes and Travis Kelce the following, “We expect you to perform at the same high level you have always done, and in fact we will assess penalties against you if you fail to meet those standards, however, we are going to pay you on the number of plays you play (not how well you play), and if you charge us more per play than the least expensive quarterback and receiver in the league, we can’t assure you that you will get in for any plays during the game! (In other words, it won’t matter that you can do it better than anyone else, you won’t get plays and thus you won’t make money.)” Do you think the Chiefs would, as much as I hate to say it, be the most proficient, highest-performing team in the NFL? Highly unlikely I would think, yet for some reason so many paying sources seem to believe they can demand the highest standards of performance from NEMT providers while expecting those same NEMT providers to do so at the lowest pay rates possible. You don’t have to have a Harvard MBA to see the flaws in that business model.
Value-based payment is a growing trend in healthcare. It emphasizes paying providers based on patient health outcomes rather than simply paying based on the volume of services provided. NEMT providers have historically been compensated based on volume using a “fee-for-service” model, essentially based on the number of trips completed and some payments based on miles traveled. A value-based payment model has three essential elements:
Improve quality of care,
Reduce costs, and
Enhance patient outcomes
Improve Quality of Care
Value-based pay should incentivize NEMT providers to adopt best practices in their operations. An early adopter of this concept is UCare, a nonprofit health plan in Minnesota, that rewards NEMT providers for achieving NEMTAC Accreditation. Other examples would be higher pay to companies that are fully digitized with real-time information and data transfer between paying sources or passengers and NEMT providers, offering incentive pay to providers with strong safety records, best-in-class training programs, and/or use of AI telematics for driver behavior tracking and monitoring.
Reduce Costs
It may seem a bit contradictory to discuss paying an NEMT provider more and reducing costs in the same sentence, however, that only is true if you limit the discussion to the cost of transportation. By focusing on quality and efficiency, NEMT providers can achieve long-term savings for healthcare systems. This model encourages providers to optimize their resources and reduce unnecessary expenses by minimizing missed appointments and ensuring that patients receive the care they need. Over time, healthier patients will lead to lower overall healthcare costs, benefiting everyone involved. Studies show that individuals with reliable NEMT access have better outcomes and experience fewer hospitalizations and readmissions, which leads to substantial cost savings for the healthcare system as a whole. In the past, I’ve cited the 2008 Florida State University that indicated the payback to State [Florida] on NEMT could achieve over 1,000 percent! Similarly, an actuarial analysis modeled Medicaid program savings of $40 million dollars a month ($480 million per year) for every 30,000 beneficiaries who use NEMT to get to all their dialysis, diabetic wound care, and substance abuse treatment appointments. Again, the idea that paying more for qualified performance cannot result in reduced costs is a misnomer. A payment system with upside and downside exposure to NEMT providers, such as enhanced payments for achieving on-time performance and avoiding missed trips, and penalties for failure to hit certain targets and for provider no-shows would serve to achieve the goals of quality and efficiency.
Enhance Patient Satisfaction
One of the primary advantages of value-based pay in NEMT is the potential for improved patient outcomes. With a focus on quality, NEMT providers are incentivized to enhance the patient experience, resulting in higher satisfaction rates. Individuals who are ensured they will receive timely and safe transportation are more likely to attend their medical appointments, which not only benefits patients’ health but also the healthcare system by avoiding additional costs related to rescheduled or missed healthcare services.
Implementing Value-based Pay
Some portions of the value-based pay model for NEMT will be easier to adopt than others. Take for example the aforementioned program implemented by UCare in Minnesota, providers can earn up an incentive pay based on a percentage of revenues for achieving goals in three different categories:
< 1 average violation as listed on the most current MnDOT Safety Net Inspection Report
0 out-of-service vehicle violations as listed on the most current MnDOT Safety Net Inspection Report
Current Non-Emergency Medical Transportation Accreditation Commission (NEMTAC) accreditation.
UCare recognizes that NEMT providers achieving NEMTAC accreditation are employing industry best practices and is willing to reward those who do so. The other metrics appear to focus on safety (low violations) and reliability (low out-of-service vehicle issues) as metrics that can achieve the goals of improved quality of care, lowering costs, and improving patient satisfaction.
I can think of numerous other “easy to implement” value-based pay incentives programs that could be employed:
Giving NEMT providers a chance to share in the upside through incentive pay for achieving certain on-time performance metrics, as well as sharing in risk via the already often employed liquidated damages model.
Paying on different scales for trips that require high “hands-on” service levels from NEMT providers, such as assistance from door to door, assisting individuals with mobility devices, or individuals requiring other types of assistance. This would discourage providers from focusing on performing the easy and more cost-efficient trips while foregoing taking the higher time commitment and more expensive to perform trips – some of which are often the individuals with the highest need to get to appointments.
Incentivizing NEMT providers to take the “harder to fill” trips such as long deadhead trips, remote rural trips, and early or late appointments.
Rewarding companies that can timely and accurately report trip information via digital interfaces.
Real success in this area will come when paying sources allow NEMT providers to make the best decision on behalf of members, so long as these decisions stay with program requirements and can be justified. Right now NEMT providers are often faced with a dilemma when a passenger is not ready to go home at the scheduled time from an appointment. The decision can come down to accommodating the member by waiting until they are ready and/or coming back, but this can result in a negative impact on your on-time performance because the pickup time was technically outside the scheduled window. On the other hand, the NEMT provider can report the trip as a no-show, thus canceling it, and protect their on-time metric, but this comes at the cost of the member possibly not having an available ride home. Another example is allowing NEMT providers to change the level of need or mode of transportation “in the field” if it is necessary to get a member to their appointment (e.g., a passenger scheduled as ambulatory but requires a wheelchair). Many brokers have said they can’t give NEMT providers the ability to make these decisions because this opens the system up to fraud and abuse (i.e., a provider running late to a pick-up could change the trip pick-up time to stay “on-time”), however, with full GPS tracking, digitized integrated data flow, and just a few control standards, fraud can easily be avoided. A value-based pay model might permit to making of these “on the spot, in the field” decisions to those providers who have demonstrated best practices and have the infrastructure to support their actions. Again, this will encourage the adoption of industry best practices, will ultimately result in reduced costs from missed appointments, and will increase overall satisfaction.
CMS states right on its website, “Our value-based programs are important because they’re helping us move toward paying providers based on the quality, rather than the quantity of care they give patients.3” It would certainly be nice if this were extended to the NEMT industry now that we have the standards and technology to implement and track the methods for doing so.
Dan Reid operates NEMT Provider companies in Mississippi and Louisiana. He currently serves as President of The Transportation Alliance and on NEMTAC’s Board of Directors. Dan is Co-Chair of NEMTAC’s Certification and Standards Advisory Committee and serves on the NEMTAC’s Accreditation Advisory Committee, Compliance & Regulatory Advisory Committee, and Technology Advisory Committee. Dan is a frequent author and speaker on issues related to the passenger ground transportation industry.