How to Start a NEMT Business in Iowa

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Hey y'all! Welcome to the picturesque corn fields and lush landscapes of Iowa. Known as the Heartland State, Iowa boasts stunning natural beauty and a deep-rooted agricultural tradition. Iowans are known for their friendliness, strong work ethic, agricultural expertise, community spirit and political influence, all of which contribute to the state's unique identity and character and make an ideal environment for your new entrepreneurial journey.

Iowa isn't just about its cash crops of corn and soybeans; it’s about the hearty farmers of the heartland who care for them, too. And many farmers in the fields today aren’t getting any younger (for instance, the average farmer’s age is 57 years old!) and retiring. This is all to show that there is an increasing need for healthcare and transportation to and from medical appointments.

Iowa presents a prime opportunity in the Northern Midwest to launch your non-emergency medical transportation (NEMT) business for several reasons beyond the aging farmer population. From the vibrant urban centers of Des Moines, Cedar Rapids and Davenport to the expansive rural areas across the state, there are abundant opportunities to establish your NEMT business.

In this Bambi Knows Best series, we’ll guide you through each step of starting your own certified NEMT business in Iowa. From researching the local market and crafting a business plan to navigating regulations, securing funding, building your fleet, hiring and training your team and managing essential technology (or maybe you’re already softies using of our software!).

As you begin your research, we recommend hiring local consultants and connecting with other NEMT business owners in your area for valuable insights. Because at Bambi, we believe in cultivating a forest of friends over frenemies!

Here's a hoof-full table of contents to guide you through the articles that cater to your specific needs:

Part 1: Research the Iowa NEMT market

Part 2: Develop a business plan and get registered in Iowa

Part 3: Study Iowa’ regulations and get insured

Part 4: Secure funding in Iowa

Part 5: Flesh Out Your NEMT Fleet in Iowa

Part 6: Hire and Train Up Your NEMT Dream Team

Part 7: Take Care of That Tech

As you’ll see, starting an NEMT business in Iowa demands dedication, meticulous planning and an unwavering commitment to delivering exceptional patient care. Through comprehensive research of the Iowa market, adherence to local rules and regulations, securing funding and vehicles, assembling a skilled team and leveraging technology, you can be sure you’ll be tackling challenges with the agility of Bambi and establish a thriving NEMT business that makes a positive impact on your local Iowa community. You can do this!

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In This Guide

• Part 1: Market
• Part 2: Business Plan
• Part 3: Regulations
• Part 4: Funding
• Part 5: Fleet
• Part 6: People
• Part 7: Technology

Part 1: Market

Before launching a new NEMT business in Iowa, thorough market research is essential. This step ensures you avoid an oversaturated market and identifies gaps in existing NEMT services. For example, you might find that while there are NEMT providers, they only serve adult day care centers, leaving an opportunity to expand services to rehabilitation centers, hospitals and other healthcare facilities.

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1 | Identify existing NEMT providers in your area

In Iowa, the Non-Emergency Medical Transportation (NEMT) system is managed through a network of managed care organizations (MCOs) that coordinate services for Medicaid beneficiaries. These MCOs contract with multiple transportation providers to ensure access to medical appointments.

Each MCO has its own network of providers, tailored to the regions they serve and the needs of their members. Providers must meet specific requirements and standards set by the MCOs.

This managed care model provides flexibility and choice for Medicaid beneficiaries, ensuring reliable transportation that meets healthcare needs across the state. Some of the most notable NEMT providers that work with these MCOs are as follows:

• MTM, Inc.: MTM is a national NEMT broker that operates in Iowa and partners with managed care organizations (MCOs) to provide transportation services for Medicaid beneficiaries.
• Hawkeye Area Community Action Program (HACAP): HACAP offers transportation services, including NEMT, to residents in several counties in Iowa, focusing on meeting the needs of low-income individuals and families.
• AmeriHealth Caritas Iowa: As an MCO, AmeriHealth Caritas Iowa contracts with various transportation providers to offer NEMT services to its Medicaid members across the state.
• UnitedHealthcare Community Plan of Iowa: UnitedHealthcare Community Plan is another MCO that manages NEMT services for its Medicaid members in Iowa, partnering with transportation providers to ensure access to medical appointments.
• Modivcare: They are a well-known NEMT broker that operates in multiple states, including Iowa, coordinating transportation services for Medicaid beneficiaries through partnerships with MCOs.
• Compassionate Care Transportation: They offer NEMT car services for doctor’s appointments throughout the Des Moines metro area.
• Uber Health: Offers HIPAA-enabled NEMT services. Healthcare providers can request and monitor patient rides through their platform.
• Your favorite search engine. Of course, one can always perform their own search with the keywords, “NEMT providers in Iowa” or get more granular with your search by putting in specific municipalities (i.e. “NEMT companies in Des Moines”).

These providers and brokers collaborate with Iowa's managed care organizations to deliver NEMT services to Medicaid beneficiaries, ensuring access to essential healthcare appointments across the state.

2 | Assess the demand for NEMT services

Assess the demand for your NEMT business in your local Iowa area. Determine if you'll cross multiple jurisdictions or operate within a limited radius. Research local hospitals, health and wellness facilities and other relevant establishments such as:

• Adult Day Care (ADC) Centers. There are many licensed adult day care centers in Iowa. These centers provide support services for the elderly and individuals with disabilities, offering safe and engaging places during the day while giving caregivers a much-needed respite​. To get exact numbers it’s also advisable to reach out to the Iowa Department of Human Services and Iowa Department of Public Health.
• Dialysis Clinics. As of recently there are 43 dialysis facilities in Iowa. These facilities are spread across various cities and provide essential services to patients requiring regular dialysis treatments​.
• Physical Therapy Centers. There are numerous physical therapy centers across Iowa, providing a range of rehabilitation services to patients. It’s tricky to find an exact number. One way to find this out would be by reaching out to the Iowa Department of Human Services
• Hospitals: Iowa has at least a total of 118 hospitals. These hospitals include various types such as general acute care hospitals, critical access hospitals, specialty hospitals and psychiatric hospitals. For the most accurate and current count, you may want to verify with the DHS or other authoritative sources. Some of the major hospital systems are UnityPoint Health, MercyOne and University of Iowa Health Care.
• Rehabilitation centers. We don’t have an up-to-date number here either, but many hospitals have partnering rehab centers so it’s always best to reach out to them.
• Nursing homes and assisted living facilities. There are approximately 440 nursing homes in Iowa.
• Outpatient care centers. Just like rehab facilities, there is a large amount of outpatient care centers throughout the state — talk to your local hospitals for more information on these estimates.

3 | Decide on a target market

After researching NEMT market opportunities and assessing demand, pinpoint the demographic that is most viable to target, such as seniors, individuals with disabilities, or a broader patient population. Focusing on a specific group will enable you to tailor your services and marketing strategies more effectively.

The population of Iowa is estimated to be around 3.2 million (Source: Iowa State Data Center).

4 | Choose a specific NEMT service (or offer them all!)

NEMT providers offer ambulatory, stretcher, and wheelchair services. Starting with one service based on market needs and gaps is advisable, then expanding gradually. This approach ensures sustainability. Monitor competitors and either differentiate your services or find a niche that needs support. Begin with a well-equipped fleet tailored to your chosen service, whether for adult day cares or physical therapy centers.

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5 | Understand the different Medicaid delivery models

The Iowa Medicaid Enterprise (IME), a division of the Iowa Department of Human Services (DHS), administers the Iowa Medicaid program. Effective April 1, 2016, most Iowa Medicaid members transitioned to the IA Health Link managed care program. Some members continue to receive services through Iowa Medicaid Fee-for-Service. IA Health Link is managed by three contracted MCOs, providing comprehensive health care services, including NEMT, to members.

NEMT services are available to members with full Medicaid benefits who require travel reimbursement or transportation to medical appointments. Eligible members receive NEMT services through different brokers, depending on their eligibility status and coverage provider (either Iowa Medicaid Fee-for-Service or an IA Health Link MCO). The appropriate broker verifies member and trip eligibility, and handles trip scheduling and claims.

The Iowa Health and Wellness Plan (IHAWP) is a Medicaid program developed in response to the Affordable Care Act. IHAWP benefits align with the state employees' commercial health insurance plan and do not include traditional Medicaid benefits. Notably, NEMT services are not covered for IHAWP members.

For further details on the Iowa Medicaid program and its NEMT services, please consult the Iowa Medicaid program or the relevant managed care organization.

Here are some fast AR facts according to report State-by-State Profiles for Examining the Effects of Non-Emergency MEdical Transportation Brokerages on Transportation Coordination:

• NEMT Model is a Managed Care Organization
• The Operating Authority is Federal Section 1915 (b) Demonstration Waiver
• NEMT expense is classified as a “Medical Expense” (Source: Kaiser Family Foundation)
• 12% live below poverty (US Census 2015 5-Year Estimates)
• 42% live in Urbanized Areas (US Census 2010)
• $10.8 Million is the estimated annual NEMT 2013 expense (Source 2014 National NEMT Survey)
• 100,434 is the 2013 estimated number of annual NEMT trips

6 | Getting Paid

In Iowa, NEMT providers typically get paid through the following methods under the Medicaid program:

1. Fee-for-Service (FFS): Providers submit claims directly to Medicaid for each service provided. Reimbursement rates are typically set by Medicaid and may vary based on the type of service and other factors.
2. Managed Care Organizations (MCOs): Iowa's Medicaid program is managed by MCOs, which may manage transportation services directly or subcontract them to specialized transportation providers. Providers contract with these MCOs and are reimbursed according to the terms of the contract.
3. Brokers: In the brokerage model, a third-party broker or managed care organization coordinates transportation services for Medicaid beneficiaries. Providers contract with these brokers and are reimbursed according to the negotiated terms.

Providers are typically paid based on the submission of claims for services rendered, and they must follow Medicaid billing guidelines and procedures. For specific details and requirements, providers should consult with the Iowa Medicaid program or the managed care organization they are contracted with.

Well done on navigating through this information-packed first part! Now, let's proceed to Part 2, where our focus will be on developing a business plan. Click here to continue, or you can skip ahead to other sections in the series by visiting the table of contents.

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Part 2: Business Plan

We recommend starting your research through the Iowa Department of Economic Development and The Iowa Secretary of State. Starting a new business and writing up a plan in Iowa involves several important steps such as: selecting a business structure, registering the business, obtaining the necessary licenses and permits and understanding tax rules.

Here is a quick guide to help you through this part of the process:

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1 | Choose a Business Entity

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Decide on the legal structure of your business. Common options include Sole Proprietorship, Partnership, Limited Liability Company (LLC), and Corporation (C-Corp or S-Corp). Each structure has different legal and tax implications so be sure to understand the differences.

2 | Register Your Business Name and Entity

Upon choosing the entity that best suits your needs, you'll want to come up with a name for it. Have fun with it, we did when we came up with our name, Bambi, for instance!

Anyway, both the entity and the name must then be registered with the Iowa Economic Development Authority (IEDA) if you are going to do business in Iowa or with Iowans.

3 | Obtain an Employer Identification Number (EIN)

Apply for an EIN from the IRS if you will have employees or operate as a corporation or partnership.

4 | Register for State Taxes

You’ll need to register with the Iowa Department of Revenue for state taxes such as sales tax and employer withholding tax.

Great! To proceed to Part 3, where we'll cover Iowa's regulations and how to obtain insurance, click here. Alternatively, you can navigate to different sections in the series by visiting the table of contents here.

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Part 3: Regulations

To ensure a successful launch of your NEMT business in Iowa, it's essential to navigate through both state and federal regulations. This includes mastering Iowa's unique registration and compliance requirements, along with adhering strictly to federal guidelines.

1 | Find out Iowa's NEMT Requirements

To find out Iowa's NEMT requirements, you would generally need to meet certain criteria such as clearing background checks, meeting driver and vehicle requirements, and complying with other regulations outlined by The Iowa Department of Health & Human Services. Obtaining an NEMT license from them is necessary to operate legally and provide transportation services to Medicaid recipients in the state.

2 | Stay on top of federal NEMT regulations

NEMT services are also subject to federal regulations established by the Centers for Medicare & Medicaid Services (CMS). Make sure you are familiar with these federal requirements before commencing your business operations.

3 | Get insured

To get insured for your NEMT business in Iowa, you should contact insurance providers that specialize in NEMT coverage. Obtaining the right insurance coverage is essential for setting up a dependable and legally compliant NEMT business. This insurance shields your company, employees, and patients from accidents, injuries and other unexpected incidents. While ITR offers coverage for certain aspects, you'll need multiple types of insurance to ensure comprehensive protection for your business.

4 | Obtain necessary licenses and permits

Check with local city and county offices, as well as the Iowa Insurance Division for specifics around NEMT businesses.

5 | Know your employer responsibilities

If you hire employees, you’ll need to comply with employment laws, which include obtaining workers' compensation insurance, unemployment insurance and reporting new hires. It’s the law! The Iowa Department of Labor is a great source of information on this complicated topic! By following these steps and utilizing available resources, you can ensure that your new business in Iowa is established correctly and complies with state regulations.

You're making great progress in learning about the NEMT business in Iowa — keep it up! To proceed to Part 4 and learn about securing funding in Iowa, click here. Alternatively, you can explore other sections in the series by visiting the table of contents here.

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Part 4: Funding

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Part 4: Secure Funding in Iowa
Starting a startup involves initial and sustaining costs. It's crucial to be transparent with oneself and business partners about the necessary initial investment. This includes expenses such as vehicle purchases, licensing fees, insurance costs, marketing expenses, and operational overhead, among others. Once you've calculated these costs, it's important to seek sufficient funding to successfully launch and sustain your NEMT business during its initial stages.

Here are some links and steps to begin your search for financial support. Explore funding options such as small business loans, seeking angel investors or using crowdfunding platforms.

Iowa Business Growth is dedicated to helping community businesses and lenders throughout Iowa find the financing they need to enhance the business community. In 2021, they were recognized as the top SBA lender in Iowa by the Small Business Administration District of Iowa. They take great pride in being an Iowa-based lender dedicated to improving community businesses throughout the state.

Here’s an initial list of some of your options in Iowa:

1 | Small Business Loans

The SBA offers various loan programs for small businesses, including the 7(a) loan program, which provides financial assistance for businesses with special requirements. Iowa Business Growth is a great source to look for small business loans, too.

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2 | Financial incentives

The City of West Des Moines offers several programs and resources for new businesses, including financial assistance and incentives. There are likely more resources like this one in Iowa's smaller cities. Just be bold like Bambi and get to that searching!

3 | Grants

Direct grants for starting a business are rare, but there are grants available for specific purposes such as technological innovation and rural development. If you provide NEMT services to rural Iowa residents, you may be eligible to apply for a grant through Grants.gov, a comprehensive resource for federal grants.You can also look specifically at Iowa small business grants through the US Grants organization website here.

You’re over halfway through this series! To continue to Part 5 on expanding your NEMT fleet, click here. Alternatively, you can explore other sections in the series by visiting the table of contents here.

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Part 5: Fleet

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Part 5: Flesh Out Your NEMT Fleet in Iowa

Constructing a reliable and accessible fleet is crucial for the success of your NEMT business. This section of the series emphasizes key considerations when selecting and maintaining vehicles and equipment to guarantee safe and comfortable transportation for your patients.

Select your vehicles: Investing in accessible vehicles that meet the needs of your patient population is essential. Features such as wheelchair ramps or lifts should be considered to comply with Americans with Disabilities Act (ADA) regulations.

Choose your supporting equipment: There are several equipment options available to enhance your fleet, including ramps, lifts, first-aid kits, coolers and snack bags. Conduct local research to identify reputable brands that align with your sustainability goals. Supporting Iowa businesses can also improve efficiency and environmental friendliness.

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Maintain regular vehicle checks: Establish a thorough maintenance plan to ensure your fleet remains safe for everyone, including the environment.

You're almost there! To proceed to Part 6 and learn about hiring and training your dream team, click here. Alternatively, you can explore other sections in the series by visiting the table of contents here.

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Part 6: People

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Part 6: Hire and Train Up Your NEMT AR Dream Team

Building a capable, compassionate, and caring team, from safe drivers to skilled dispatchers, is crucial for delivering high-quality NEMT services and ensuring a positive experience for your riders. Hiring NEMT professionals can be achieved through various platforms and strategies, such as posting job openings on employment sites like Indeed and LinkedIn, and participating as a vendor in local Iowa job fairs. There are numerous places to find compassionate talent these days — you just need to keep your Bambi eyes and ears open!

We're nearing the end of the series! Proceed to the final part, Part 7, where we'll delve into managing your technology. Click here to continue, or feel free to jump to other sections in the series by visiting the table of contents here.

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Part 7: Technology

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Part 7: Take Care of That Tech

Finally, it’s time to find and use that care-tech to make your lives stress-free and easier — for optimizing operations and improving patient care in your Iowa NEMT business.Settle up on that NEMT Software: Technology is here to support you, so embrace it! From streamlining your operations to enhancing patient care, explore NEMT software solutions (like ours) that automate the hard and monotonous work of scheduling, dispatching and route optimization. Utilize GPS tracking for real-time vehicle location and efficient communication with patients. Whether you're a seasoned pro or a new NEMT entrepreneur, Bambi supports your business sustainability with our user-friendly software. We’re here to help!Congratulations on completing the comprehensive Iowa series, meticulously researched and written by our dedicated editorial team at Bambi. As you enter the Iowa NEMT market, do so with agility and grace — that’s the graceful Bambi style, after all.And never forget, Bambi knows best! Our team and technology are here to support you. Contact us today for any questions about getting started or to schedule a demo of our all-in-one aiNEMT software designed for entrepreneurs like you, just like Bambi!

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