Tri Valley Transit warns funding pressures could strain Medicaid nonemergency transport

Jim Moulton, executive director of Tri Valley Transit and chair of the Vermont Public Transportation Association, told meeting attendees that the state’s Medicaid nonemergency medical transportation program is facing funding pressure and operational strain even as providers work to keep rides available.

Moulton said Medicaid NEMT is an entitlement program, paid on a fixed per‑member basis, and that recent trends — fewer enrolled members but higher ride utilization per member — have raised costs for transit providers while revenue has not increased in step.

That matters because Medicaid beneficiaries rely on NEMT for dialysis, cancer treatment, pharmacy trips and other care; if providers cannot cover costs, service stability could be affected.

Moulton said Tri Valley Transit and other regional providers receive a per‑member payment (operationally discussed as a per‑member‑per‑week/per‑month rate) and that membership counts include people who have taken at least one Medicaid‑eligible ride in the prior 12 months. “Medicaid is an entitlement program, which makes, that's 1 unique element to that. When people need their, medical transportation rides, our purview is to provide the ride, regardless,” Moulton said.

He told the group that the program’s revenue math is the product of the number of members times the rate, and that rising utilization by high‑use riders has been a primary driver of recent deficits. “Even though the number of members was going down, the utilization of individual members was going up,” he said, describing the 2023–2024 experience. Tri Valley is still analyzing data for the current fiscal year; Moulton said the provider is “experiencing some losses through the end of Q2” but had not completed its annual projection and may return to the committee with further analysis or a budget request.

Operational steps and cost‑sharing

Moulton described several cost‑control strategies. Providers prioritize the least‑cost mode appropriate to a rider — for example, volunteer drivers or shared rides for ambulatory riders and lift‑equipped vans for riders with mobility needs — and seek to bundle trips across programs when practical. He said the Agency of Transportation funds capital equipment (noting 90% of lift‑equipped vehicle capital costs are funded by the agency, with providers typically raising a 10% local match) and is funding a statewide scheduling and dispatching software system for providers; Tri Valley Transit is the lead agency on that software project.

Fare policies and volunteers

Moulton explained that many rural providers kept fixed‑route fares suspended after COVID after a consultant study found collection costs often exceeded fares in rural areas. “The study did reveal that, at least for Vermont because it was a Vermont limited study, the cost of fares was greater than the money actually collected. So it actually became a financially prudent decision to remain fare free,” he said.

Volunteer drivers remain an important part of the NEMT network, but Moulton said volunteer numbers are still well below pre‑COVID levels. Volunteers use their own vehicles and are reimbursed at a mileage rate tied to federal guidance; Moulton cited the federally published mileage rate, which increased to $0.70 per mile on Jan. 1. He said providers maintain layered insurance protections: volunteers’ personal policies respond first and provider insurance sits on top, with the providers’ commercial coverage running into the millions.

Coordination with schools and eligibility

Moulton clarified how school‑age trips are handled: Medicaid will pay for trips that have a medically approved purpose; routine trips to school without a medical purpose are treated as general public transit and are not billed to Medicaid. When a school‑age Medicaid trip can be handled on a public route, providers favor that least‑cost option so Medicaid incurs no direct cost. Moulton said staff, family members or case managers typically arrange Medicaid trips originating from schools.

Policy and administrative burden

Moulton said administrative requirements and federal audit expectations are a continuing workload driver, and that cost allocation rules required by federal DOT impede cross‑subsidizing programs to cover Medicaid shortfalls. He said providers cannot redirect gains from other grant programs to subsidize Medicaid beyond the permitted allocations.

Federal funding risk and reserves

Asked about contingency planning should federal funding be disrupted, Moulton said Tri Valley Transit has long‑term strategies to build reserves and maintain services for a limited window of months, and that the provider is in contact with the federal delegation and national trade groups to monitor risks. “We have worked Tri Valley Transit. Our board and staff, have had a long term strategy of building reserves in place just as good financial management practices,” Moulton said.

Where things stand and next steps

Moulton recommended the committee await the provider’s full annual analysis before judging whether additional state funds will be needed; he said Tri Valley is conducting an annual review and intends to share trend data once complete. “If we need to come back to the committee and share what that looks like,” he said, staff will present analysis and potential requests.