The proverbial shock that COVID-19 has had on the healthcare industry, and society as a whole, has rendered inertia and historical experience to be a less reliable indicator for projecting future healthcare costs.

This is especially true for Non-Emergency Medical Transportation (NEMT).

The pandemic disrupted NEMT consumers’ ability and desire to schedule trips to hospitals, as shelter-in-place orders and fear of further spreading COVID-19 have kept most NEMT consumers at home. As actuaries project costs for this industry, a major question to consider is whether or how much the “new norm” will reflect the pre-2020 experience.

• COVID-19 has complicated how brokers and NEMT providers will be reimbursed via the rate development process.
• 1135 waivers and other emergency legislation could potentially serve as the momentum for change to NEMT market competition, as well as open the door for state governments to consider long-term programmatic changes.
• The increasing use of telehealth will likely continue to disrupt NEMT utilization.

The industry is quickly adapting as a matter of necessity.

In order for NEMT brokers to continue to be competitive and profitable, there will need to be a fundamental shift in industry practices going forward. Proper planning and strategizing with actuaries to implement appropriate risk mitigation strategies, will help NEMT programs avoid financial risk and position themselves for success in the future of NEMT care. This includes:

1. Having a risk mitigation strategy.
2. Tailoring risk corridors to specific features of your NEMT program.
3. Reviewing alternative program structures and payment mechanisms that account for material changes in demand for services.

The actuarial perspective is an important asset to leverage when facing uncertain financial outcomes, as these insights can help to structure and optimize risk mitigation strategies for programs facing capitation arrangement-related risks.

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