Medicaid transportation fraud

What it is

Medicaid covers non-emergency medical transportation (NEMT) so that enrolled people can get to doctors’ offices, hospitals and other approved care. Transport companies are paid for the trips they provide. Medicaid transportation fraud is billing for trips that were not provided, or that were not the kind of trip Medicaid pays for. The cases here describe claims for riders who had died, riders in hospital, vans meant for wheelchair users, and trips that existed only on paper.

How it actually works

1. The provider

   A company is paid by a state Medicaid program for transporting members. In Massachusetts the company, Rite Way, provided transportation services throughout the state that were covered by MassHealth. In New York, KJ Transportation C Services Inc. was ultimately paid $20 million.

2. The riders

   Claims need riders. The cases describe two sources: members recruited with cash kickbacks, as in the Rite Way case, and members who received kickbacks in exchange for their Medicaid information, as in the KJ case. In the New Mexico case the people listed as riders were a driver and her children.

3. The trip records

   Each trip needs a record. In New Mexico, drivers signed trip forms falsely saying they had driven each other to appointments, to disguise that they were driving themselves, and the company claimed that each passenger in a vehicle had taken a separate trip. The New Mexico release also says many of the trips involved travelling to Alcoholics Anonymous meetings across the state at great distances.

4. The claim

   The company submits claims to the state, which pays them. Prosecutors described claims for members who were hospitalized, deceased or out of the country on the date claimed, or who had never heard of the company, and for wheelchair vans used by riders who did not qualify.

   Where it could have stopped

   In its 2021 audit of Massachusetts, the HHS Office of Inspector General recommended matching every claim billed on the day of an NEMT service against a corresponding qualifying medical service, and found that the state’s monitoring and oversight did not ensure that services were for qualifying medical services or adequately documented.

5. The payment

   The money reaches the company and the people around it. In New Mexico the release says the company received about $4,142,942 from Medicaid for the trips by the driver and her children, and that the driver received about $980,901 from the company over four years.

6. The prosecution

   The Massachusetts case began with a referral from MassHealth. Sentences documented here run from one year in a house of correction to 95 months in federal prison, and a New Mexico driver has pleaded guilty and awaits sentencing. In June 2025 New York’s Attorney General announced a takedown of 25 transportation companies.

Why it works

The program pays per trip. The claim is the product: a trip is billed, and the state pays on the claim. In its 2021 Massachusetts audit, the HHS Office of Inspector General found that of 100 sampled claim lines, 86 did not comply with certain federal and state requirements, and estimated at least 758,847 claims totalling $14,142,730 across the state in 2016 and 2017. The audit counts improper payments, which are not all fraud.

Documentation was thin. For all 100 sampled lines, the audit found driver qualifications and vehicle inspection, registration and maintenance policies or schedules were not adequately documented.

Real members, real identities. The cases describe claims in the names of members who were dead, abroad or unaware of the company. The KJ summary says some members were paid kickbacks for their Medicaid information.

It is a known weak point. The HHS Office of Inspector General says prior audits have consistently identified NEMT services as vulnerable to fraud, waste and abuse, and opened a new targeted review in October 2025.

Where it comes from

Entirely domestic: Medicaid is a joint federal and state program, and each state runs its own transportation benefit. The documented cases are from Massachusetts, Illinois, New York and New Mexico.

The earliest conduct here. The Massachusetts Attorney General’s release dates the billing in that case from April 2011 to September 2015. The New Mexico conduct ran from 2020 to 2026.

State enforcement is active. New York’s June 2025 announcement covered 25 companies in New York City, the Capital Region, Western New York, Westchester County, Central New York and Long Island, with 16 companies repaying more than $13 million.

Real cases

Red flags

• A claim for a ride on a date the member was an inpatient in a hospital, or after they had died.
• A claim for a member who says they never used the company.
• Wheelchair van trips billed for riders who walk.
• Cash or gifts offered to members to take rides or hand over a Medicaid number.
• Trip forms signed by drivers for each other, or each passenger in one vehicle billed as a separate trip.
• Trips to destinations at great distances that do not match any treatment, as in the New Mexico case.

If it’s happening to you

If you are a Medicaid member and someone offers cash for your Medicaid number or a ride you do not need, or you see a ride on a statement that you did not take:

1. Do not accept money or gifts for your member number or for taking rides. The cases here treat kickbacks to members as part of the scheme.
2. Check your explanation of benefits or statements if your state sends them, and look for rides you did not take.
3. Report it. See where to report; your state Medicaid agency and its Medicaid Fraud Control Unit take reports.
4. If you are a driver or employee, be aware that in the New Mexico case a driver pleaded guilty to conspiracy.
5. Keep records of trips you did take, in case a claim is questioned.

Where the money goes

Entirely domestic in the cases here.

The state Medicaid program pays the transport company on its claims, which are partly federally funded; the 2021 Massachusetts audit put the federal share of its estimated improper claims at $7,071,365 of $14,142,730. From the company, the sources describe cash kickbacks to members, payments to a driver of about $980,901 over four years in New Mexico, and in Illinois, restitution of $4.7 million and $4 million ordered against the two co-owners. The sources do not describe how the rest was spent.

By the numbers

No published dataset breaks this scheme out as its own category yet, so there is no chart to show. The data page explains which agency categories exist and why some schemes are invisible in official statistics.