For decades before NEMT brokers entered the non-emergency medical transportation (or NEMT) service scene, most companies that actually provided the service earned most of their money in two ways:
- Turning in phantom invoices (called “Transportation Authorization Requests,” or “TARs” in those days) for trips never provided. The healthcare agencies that engaged these providers could never tell since they knew nothing about this form of transportation, whatsoever (remember: They were HEALTHCARE bureaucracies not transportation bureaucracies), and therefore knew nothing about monitoring it. Further, as long as they used up the Federal transportation funds (provided by the Department of Health and Human Services – not the U.S. Department of Transportation), they did not care what happened to it…so long as they could avoid any responsibility for managing these services.
- Driving Clients around in circles. Since these providers were paid a combination rate of $X/trip and $Y/mile, instead of picking up the clients in some order which both (a) used the funds for shared rides, but (b) got the clients to their destinations in a reasonable amount of time, they picked up as many clients as they could – effectively “starting the meter” for each client and then driving them around in circles for hours at a time. Because the brokers also knew nothing about this form of transportation, they could not monitor the service their contractors provided – and thus, both the service providers and the brokers racketeered their healthcare provider.
It is noteworthy that the “official” reasons brokers were engaged was that they claimed to be able to prevent the “phantom trips.” They did this better than did the healthcare agencies – but not much better, since broker also understood nothing about this form of transportation. However, in the late 1990s, GPS equipment emerged and was used to verify where vehicles went. Few if any brokers monitored these trips in “real time” (i.e., following a bunch of red dots move around on a screen, and stop at the designated pickups and destinations identified on the maps on the screens.). Otherwise, these brokers had to check he trips after the fact – and missed a lot of phony ones never provided
As far as “spaghetti routing,” this only worked when the provider had enough density of users to pick more than one up at a time. In many lawsuits I did involving NEMT service, some drivers testified that they never provided more than one wheelchair user at a time in their vehicles – while the rates were designed to make the providers profitable by providing overlapping “shared rides.” In other words, they were providing limousine service for wheelchair users, since unlike complementary paratransit service, they did not control costs by denying same-day service – and thus, could squeeze groups of riders onto their vehicles in short spans of time. And working for an agency that had no ability to understanding the form of service they hired their brokers to provide, the broker never monitored the nature of service – paying hundreds of dollars to the providers while they drove small groups of passengers around in circles.
Since both the healthcare agencies and their brokers racketeered their healthcare agencies one way or another, neither cared, both the broker and their service providers effectively racketeered the healthcare agencies for which they worked. However, the brokers made tremendous amounts of profit because the healthcare agencies had no knowledge of how this form of service worked, and did not know or care that the brokers retained most of the funds allocated for transportation – rather than it being spent on those companies that actually provided the trips
Because neither healthcare agencies nor the brokers they hired to engage and “direct” the service knew what they were doing, neither cared how much money was wasted by letting the providers do what they wanted.
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