NEMT Brokers – Motivecare and MTM: Stealing Hundred of Billions from our Healthcare System

Two defendants are constantly sued, mostly for wheelchair tipovers. But most plaintiffs’ attorneys leave vast sums of money on the table: Motivcare (formerly LogistiCare) and MTM – two non-emergency medical brokers operate in all or part of 45 states and the District of Columbia. These companies make most of their money simply by stealing what they don’t waste (through incompetence and reckless disregard). I estimate that these two defendants, together, are stealing between $300B and half a trilliion dollars a year from our healthcare system.

Before regulations (more than 20 years ago) legitimized the hiring of brokers, most transportation companies providing NEMT service made money mostly by (a) submitting phonu invoices for trips never provided and/or (b) driving passengers around in circles (to drive up trip costs, given the industry’s senseless rate structure: $X/trip plus $Y/mile. (Since the vehicle is not moving when a wheelchair is secured, this formula explains why they rarely are – and why nearly a fourth of all my roughly 700 lawsuits involved wheelchair tipovers.) For decades, state, county and local healthcare agencies receiving MediCare, Medicaid, VA and similar funds from HHS (a similarly-clueless Federal healthcare Department) could not control this fraud and waste. So when brokers were suddenly available, these agencies increasingly engaged brokers to “wipe their hands of the responsibilities” they could not manage.

The problem is, the brokers are much worse. While they stopped some of the fraud, they committed far more, and drove up costs signicantly, effectively stealing most of it – even while they obtained these contracts by winning bids. Motivcare and MTM dominated the landscape because of the reimbursement rate, a “per capita” basis: They must bid on a cost per eligible recipient per month — rather than a cost per trip, per mile or per anything reasonable or predictable. Almost no company can bid without without enormous risk because (a) they do not know how often patients with various disabilities travel, and (b) how far each of them will travel – which varies in each service area. Motivcare is an exception: It began, as LogistiCare (until very recently) in the late 1990s, as a software developer – designing, routes and/or schedules for trips requested. So it had a database that provided it with this information. MTM (smaller, but still the broker in several entire states and parts of many others) emerged with a similar knowledge.

In one case I did against one of these brokers, they were creaming off 93 percent of that large city’s Medicaid funds (nearly $250M) just for processing paperwork – most of which they never submitted. They then bilked their service providers of much of their seven percent. And they had three other similarly-sized or larger contracts (for MediCare and two other programs) – essentially stealing $1B dollars a year from that City. Their fellow broker “managed” that city’s paratransit service.

I became involved in the case (a wheelchair tipover) because the plaintiff’s counsel did not even sue the broker (too much trouble): Instead, he sued a nursing home, which, on the hook for $10M to $20M in damages, engaged me. My counsel “brought in” the broker. Yet the plaintiff’s counsel still settled for peanuts…against a codefendant that could not afford to go to trial. If it did, with the evidence this codefendant’s counsel collected, I –who “wrote the book” on this form of transportation for USDOT in 1981, and who provided it for a decade — would have explained what was going on – and my testimony in open court would likely have eliminated this broker’s presence in this venue, and likely dented its extraordinary empire much more deeply.

In a lawsuit of any kind against Motivcare or MTM, an attorney MUST understand what these codefendants they have at stake. They cannot afford to go to trial. So plaintiff’s counsel cannot afford to leave money on the table.