From Fragmented Oversight to Verifiable Spend: Modernizing NEMT Payment Integrity

Reducing Fraud, Waste and Abuse Through Real-Time Verification and End-to-End Data Continuity

Payment integrity is entering a more demanding phase across healthcare, especially in public programs. Rising utilization, heightened regulatory scrutiny and increasing expectations for transparency are forcing payers to move beyond retrospective controls toward models that achieve greater accuracy earlier in the lifecycle. The prevailing direction in payment integrity is clear: shift intervention upstream, reduce downstream denials and rework, and use modern technology, including real-time integrations and advanced analytics, to make oversight more targeted. 

For example, non-emergency medical transportation (NEMT) is increasingly central to this evolution— not because it is new, but because its operating model has remained structurally misaligned with the accountability standards now expected of Medicaid and managed care programs.

NEMT is a foundational access benefit for members managing chronic and high-acuity conditions. It is also one of the most operationally complex benefits in Medicaid: high transaction volume, relatively low average claim value and multi-stakeholder execution across plans, brokers, intermediaries and transportation providers. These characteristics make it difficult to manage with traditional payment integrity approaches. In practice, many NEMT programs still operate under a “pay-now-and-validate-later” paradigm because the ecosystem cannot reliably prove what occurred at the point of service.

That gap is no longer sustainable.

Why Immediate Modernization Is Required

Recent oversight and enforcement activity underscores how transportation remains vulnerable when verification is delayed or incomplete. The Government Accountability Office (GAO) reported that Medicaid Fraud Control Unit investigations resulted in nearly 200 criminal convictions, civil settlements and judgments involving NEMT providers across 25 states from fiscal years 2015 to 2020, including instances of billing for trips that did not occur and the use of unauthorized drivers or vehicles.

Audits reflect similar themes: insufficient documentation, fragmented oversight and weak linkage between what was authorized and what was paid. An HHS Office of Inspector General (OIG) audit of New York City transportation providers estimated the state improperly claimed at least $84.3 million in federal Medicaid reimbursement for noncompliant NEMT payments, with an additional $112.0 million for payments that may not have complied. In Massachusetts, the OIG found at least $14 million in improper NEMT payments and attributed the issue to oversight that failed to ensure services were for qualifying medical needs and were adequately documented. 

These signals should not be interpreted as a blanket indictment of the NEMT ecosystem. They should be interpreted as evidence that NEMT, as currently administered in many settings, lacks the infrastructure needed to meet modern program integrity expectations.

The structural problem: open-loop operating models

NEMT program risk is frequently less about intent and more about architecture. In many programs, key lifecycle stages—authorization, scheduling, dispatch, trip execution and billing—are distributed across disconnected systems. Individual parties capture data, but it is not synchronized across the benefit lifecycle. The result is an open-loop model where the trip cannot be continuously verified, and the claim becomes the first consolidated artifact.

In an open-loop environment, fraud, waste and abuse predictably surface:

• Fraud becomes feasible when payment can be triggered without a verifiable service event, including billing for trips that did not occur (“ghost rides”), duplicate submissions or misrepresentation of mileage or service level. 
• Waste accumulates when manual reconciliation is the primary mechanism for aligning authorization, fulfillment and billing—driving call-center overhead, rework and inefficient routing. 
• Abuse becomes harder to manage when eligibility and utilization guardrails are enforced after the fact rather than embedded upstream, leading to overlapping requests, mismatched destinations or inappropriate use cases that remain invisible until paid.

Fragmentation creates ambiguity even when stakeholders act in good faith. However, ambiguity is incompatible with payment integrity at scale.

Closed-loop infrastructure: aligning payment to verified reality

The appropriate response is not simply to “digitize” more steps. It is to establish a closed-loop, interoperable infrastructure that maintains end-to-end data continuity from authorization through fulfillment to payment and audit. Closed-loop infrastructure fundamentally changes payment integrity: the verified trip event becomes the source of truth and the claim becomes a derivative output of validated activity rather than an independent assertion.

With end-to-end data continuity, programs gain the ability to confirm in real time:

• Whether a trip was authorized, completed and eligible
• Whether the driver and vehicle were credentialed
• Whether the mileage and level of service align with the verified trip record. 

This is the practical embodiment of “payment accuracy at submission” applied to NEMT, a benefit that has historically depended on retrospective reconciliation.

It also reduces the need for broad, downstream enforcement. When systems can validate completion and compliance upstream, most transactions can flow through automatically and only true exceptions require human review. This enables tighter integrity with less administrative burden and reduced abrasion.

Applying closed-loop infrastructure and technology for payment integrity

Payment integrity is evolving as the landscape shifts. Reducing fraud, waste and abuse ultimately comes down to ensuring that dollars are spent appropriately and defensibly. Building a closed-loop infrastructure of authorize, verify, adjudicate and learn builds an operating system that includes payment integrity, which leads to stronger governance, better forecasting and clearer accountability. This approach can bend the cost trend without restricting legitimate access, and organizations can respond to regulatory scrutiny with verifiable data rather than reconstructed narratives. Payers nationwide need to ensure every dollar paid corresponds to a verified, authorized and compliant service delivered to an eligible member. Leveraging a closed-loop infrastructure and technology can make it happen.