Medicaid savings through rideshare innovation

By Matthew Nicaud
August 11, 2020

As the recent coronavirus pandemic has demonstrated, the healthcare system needs some rethinking and retooling. We are in great need of solutions that increase efficiency and quality while also lowering costs for providers and patients. 

One such example is the problem of non-emergency medical transportation for Medicaid recipients. Millions of Americans miss their medical appointments each year. These no-shows reduce access for other patients. They also cost an estimated $150 billion a year by increasing administrative costs related to scheduling and rescheduling. In the context of Medicaid, these costs increase the price tag of Medicaid, which is a form of subsidized health insurance paid for by state and federal taxpayers.

Mississippi already offers generous transportation services for Medicaid beneficiaries, with no copay required. The amount allocated for the current Mississippi Medicaid non-emergency transport contract is $96.8 million for the period from October 2018 to September 2021. Total federal spending on non-emergency Medicaid transportation averages $3 billion a year. Could there be a way to reduce federal and state spending on non-emergency transport while also reducing the number of missed appointments?

Mississippi has used the same broker for years to facilitate Medicaid transportation, but the vast majority of Medicaid recipients are not using the service. The current arrangement may be saving some money over more traditional options, but the real question is whether mobile app technology now affords a much better and cheaper way to provide transport. 

Thanks to a 2017 rule change by the Trump administration, healthcare providers are allowed to provide free or low-cost transportation services to patients. The administration is also looking at an additional rule change that would provide more flexibility in this area. An obvious solution is to use ridesharing services, like Veyo, Uber Health and Lyft, to lower costs. 

Ridesharing is commonplace all across America. It works by allowing qualified drivers to use their own vehicle to transport other people. As in many other areas, the public health insurance system – Medicaid and Medicare – has yet to really catch on. But ridesharing is an innovative way of harnessing technology.

A recent study in the American Journal of Public Health estimates that adopting a ridesharing model would generate $537 million in total Medicaid savings, with an average annual savings of $268 per user. The authors also conclude that ridesharing could improve the patient experience by allowing for “on-demand scheduling, electronic records for monitoring, more-direct routes, greater reliability, and operational simplicity.”

Last year, Arizona became the first state to use ridesharing for non-emergency Medicaid transport. Multiple states have followed suit, including Florida, Georgia, Missouri, Tennessee, and Texas. A 2018 PEER report likewise recommends that the Mississippi Division of Medicaid explore ridesharing options. A conservative estimate is that Mississippi Medicaid could save millions annually from ridesharing.

At a minimum, early evidence suggests that ridesharing results in fewer missed appointments and reduced waiting times, saving money for hospitals and other providers and increasing patient satisfaction. In addition, it is less expensive than traditional transportation models and costs less per trip on average. 

Another opportunity that has arisen since the 2017 Trump rule change is that nonprofit hospitals are offering no-cost transportation using ridesharing services. This service is being provided as part of each hospital’s mandated “community-benefit” requirement. Under federal and state laws, nonprofit hospitals receive billions of dollars in tax breaks in exchange for providing some kind of “community benefit,” a loophole that seems to be more of an accounting gimmick than a concrete form of help to those who most need it. Allowing ridesharing to count toward a hospital’s community-benefit activities at least provides some savings to taxpayers while affording more reliable transportation for Medicaid recipients.  

Josh Komenda, the president of Veyo, observed that “there's been a huge opportunity to further develop much more modern technologies, automation, and tracking…Think about all the technologies that have been invented: cloud-based technology, mobile technology, GPS tracking, web portals, and mobile apps. These are ways that we have basically built a new management system.”  

These technological innovations are revolutionizing the non-emergency medical transportation industry. For instance, legacy medical transport vendors have higher costs and less flexibility because they must maintain and house a fleet of vehicles. Ridesharing avoids this expense and can adapt more easily to spikes in unexpected demand. Ridesharing also employs the latest tracking and monitoring software in order to keep patients safe and reduce waste, fraud and abuse.

In an era of budget cuts where lawmakers are forced to prioritize services and look for more efficient ways of doing things, they should consider that other states are saving money and boosting patient satisfaction by adopting a ridesharing model for Medicaid transport. Consumer-driven and consumer-friendly technological innovations are saving taxpayers millions of dollars every year.

Why should Medicaid patients – and Mississippi taxpayers – miss out?

This column appeared in the Northside Sun.


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