How to Buy an NEMT Business: Crucial Factors to Consider

An estimated four million Americans rely on non-emergency medical transportation (NEMT) at any given time, and the numbers are only rising. Given that the U.S. is facing a rapidly-aging population and a sharp rise in chronic illnesses, demand for these services is set to skyrocket, making it an attractive time to enter the industry.

With that said, managing a business is always a challenge — especially one that provides NEMT services. The industry is currently facing a massive technological shift, along with complex regulatory frameworks, and ever-evolving customer preferences.

So, even if you decide against working from the ground up and acquire a non-emergency medical transportation business for sale, there are some crucial factors you need to take into account. Wondering where to start? Here is our guide on how to buy an NEMT business.

Contents:

• Understanding the Industry
• NEMT Provider vs Broker: Which is Right For You?
• What to Consider When Buying an NEMT Business
• How to Find An NEMT Business for Sale
• How to Secure Financing for an NEMT Business
• Before Buying: Due Diligence Checklist

Understanding the Industry

As we alluded to, NEMT services are going through a golden period of demand. This is driven by factors like the rising geriatric population and chronic illnesses, as well as the expansion of Medicaid under the Affordable Care Act. By 2028, the industry is projected to be worth $15.58 billion — representing a 9% growth rate from 2022.

However, while global trends indicate a promising outlook, success in this industry is more tied to local considerations. No two markets are identical, and regional factors could have a massive influence on which NEMT for sale you consider.

At this stage, we would recommend asking questions like: What is the demographic breakup of the business’s existing clients? Who is your competition? And, crucially, what is the organization’s reputation within the community?

NEMT Provider vs Broker: Which is Right For You?

Another major consideration is scope. There are two major roles your business can fill — a provider or a broker. Let’s break down the two distinct types in more detail.

NEMT Provider

As an NEMT provider, you will be responsible for ensuring the safe transport of passengers to and from medical appointments. For this, you’ll need access to a fleet of vehicles compliant with the Americans with Disabilities Act. This means they must accommodate wheelchairs and stretchers and meet a host of additional specifications.

When you buy a non-emergency medical transportation company, don’t just think about the size of the fleet, but the condition of the vehicles (we have a guide how to buy NEMT vehicles in case you need to buy more vans) and how well equipped they are. If you miss this crucial aspect, this coil significantly affect future maintenance costs.

Providers are also responsible for training, managing, and recruiting drivers. When acquiring a running business, you may already gain access to a pre-existing network, but the management of these drivers falls squarely on your shoulders. This includes making sure staff are insured, trained, and work efficiently.

All this may seem like a lot more work than you’d initially envisioned. But when you work with modern NEMT software like RouteGenie, several tasks can be automated, streamlining your workflow significantly.

NEMT Broker

A broker, by contrast, doesn’t actively provide the actual transportation, but takes a middle-man approach to providing non-emergency medical services.

The broker first receives a request from a Medicaid beneficiary who needs to schedule a trip. They must then collect all details about the appointment, including where the passenger must be picked up, what time, and what accessibility requirements for a vehicle they have. This information is relayed to a provider that meets the criteria.

As you’d imagine, a brokerage must have contracts with insurance and Medicaid providers, as well as a network of reliable transportation providers. When all these bases are covered, becoming a broker can be an extremely lucrative proposition.

What to Consider When Buying an NEMT Business

One of the biggest drawbacks of purchasing an existing business is that you don’t get to build your own brand from the ground up. Still, all entrepreneurs come with their own ideas of how they’d like to run a business — and asking certain questions will help you determine whether an option is right for you. The list could include:

What is the Current State of the Business?

Look closely at the current state of operations. Many long-running NEMT businesses, for example, rely on outdated technology — manual scheduling, ageing vehicles, or inefficient dispatch systems. This can all be problematic, as it will require you to invest heavily in making upgrades and streamlining processes.

One of the best ways to modernize an outdated NEMT business is to implement a management software like RouteGenie. This solution allows you to automate several processes, while taking the guesswork out of routing, billing, and dispatching.

Is There Scope for Growth?

Even a business with just two vehicles may have potential if there is potential for growth. To assess this, look at the existing client base, trip volume, and pre-existing contracts — and identify why the business has hit a wall. Is it because of a lack of demand? Or simply lack of technology, or ambition?

Where Do You Want to Operate?

As you’d imagine, the location of a business will play a huge role in determining the scope for the future. A densely populated region may seem like a more promising place to build up clientele, but you will also have to face stiff competition, deal with traffic, and meet strict regulations.

Similarly, analyzing the demographic breakdown before you make a decision can give you a huge advantage. Areas with a high senior population will naturally indicate higher demand, but other factors like average income level or access to public transportation can also be significant. This breakdown will not only help you determine demand, but also the kinds of vehicles and services you’ll offer.

What Are Your Long-Term Goals?

Define what kind of business you’re trying to build. Do you want to operate a lean, efficient local fleet, or scale operations by considering various options of medical transportation for sale? The business you buy must align with the size and structure you have in mind. Consider how much you’re willing to invest in technology, staffing, and compliance — and whether the business you’re looking at can meet these goals.

How to Find An NEMT Business for Sale

Most entrepreneurs have a clear idea of the business they’d like to run, but struggle to find appropriate sellers. In this case, there are three general approaches we’d recommend for buying a non-emergency medical transportation business.

• Go Online: An online aggregator will list several local businesses on sale, allowing you to filter by type, location, price range, among other criteria.
• Consult with a business broker: A broker can help you find a business that meets exactly your requirements, easing the process significantly.
• Outreach: If you’ve already identified the business you’d like to own, there is no harm in reaching out to the owners to see if they’re willing to sell.

How to Secure Financing for an NEMT Business

There are a few ways you could finance an NEMT business buyout — each with its own distinct pros and cons. Here are some of the most prominent options.

Cash Payment

Many sellers prefer all-cash deals because they close faster. For you, it also means no debt or interest payments. However, choosing to pay in cash largely depends on whether you have the means, while still saving a cushion for operating costs.

SBA and Bank Loans

Small business administration loans are a promising option for young entrepreneurs, as they usually come with favorable terms, and are quickly approved, provided you meet eligibility criteria. However, they require a strong credit score. Traditional banks, similarly, are more secure, but may require collateral or strong financials to qualify.

Alternative Financing Options

For entrepreneurs with low or no credit scores, or upfront cash to offer can instead opt for an alternative financing option. These loans have fewer restrictions on how the money can be used and offer flexible repayment options. However, in the long term, these loans could come at a higher cost.

Before Buying: Due Diligence Checklist

Once all these factors are accounted for, proceed to reaching out to the seller that meets your criteria. Before closing the sale. Make sure to conduct your due diligence by thoroughly researching the business. Do not hesitate to seek legal advice. Your inquiry should be focused on the following points, check out our Checklist:

• Legal & Regulatory Compliance
  • Confirm the business is in good standing with local/state/federal authorities
  • Check for past or pending tax issues (federal, state, or payroll taxes)
  • Check for pending lawsuits, legal claims, compliance violations, liens or judgments filed against the business
  • Verify all required licenses (NEMT license, DOT/DMV, ADA compliance, various permits) are current
  • Confirm active insurance policies:
    • Vehicle liability
    • General liability
    • Workers' compensation
• Intellectual Property & Branding
  • Verify ownership of:
    • Business name
    • Logo
    • Website domain
    • Login credentials access to systems (email, software, hosting, etc.)
    • Social media accounts
  • Confirm trademark or copyright protections
  • Ensure intellectual property rights are included in the sale
• Contracts & Partnerships. Client Base & Reputation
  • Review all existing business contracts (with brokers, facilities, vendors)
  • Contact key partners to confirm ongoing cooperation post-ownership change
  • Reach out to existing clients for references
  • Research online reviews, ratings, and public feedback
• Employees & Staffing
  • Review employee and contractor agreements
  • Confirm completion of background checks, certifications, and drug testing
  • Assess team structure, morale, and turnover rates
• Financial Health. Equipment & Assets
  • Analyze recent:
    • Profit & Loss statements
    • Balance sheets
    • Cash flow reports
  • Identify existing debts or obligations
  • Calculate expected ROI (Return on Investment)
  • Inspect the condition of:
    • Vehicles
    • Office equipment
• Obtain a professional evaluation if needed
• Other Due Diligence
  • Identify potential operational or financial pain points
  • Confirm all factors align with your business goals
• After the Sale
  • Choose a reliable NEMT software provider like RouteGenie to manage:
    • Scheduling & dispatch
    • Billing & claims
    • Compliance & reporting
    • Client communications

Only make the deal once you’re certain all of the above meet your expectations and align with your goals.

Meanwhile, once the deal is done, the best course of action is to choose an NEMT software provider to help you manage the paperwork you’ve just inherited.

With a software RouteGenie, for instance, you can tackle challenges related to:

• Complicated trip scheduling and dispatching
• No-shows and vehicle breakdowns
• Passenger cancellations
• Medicaid and other payer regulations

And so much more! Get in touch with our team when you’re ready to take the plunge.