Medicare and Medicaid are the federal government’s two largest healthcare programs as measured by expenditures. Medicare is a healthcare insurance program for seniors, certain individuals with disabilities, and those with end-stage renal disease (ESRD), with Medicare expenditures totaling $613.3 billion for 53.8 million beneficiaries in 2014. Under federal law, Medicare insurance includes hospital, medical, and prescription drug coverage. CMS administers the program, including safeguarding the program from loss due to fraud, waste, and abuse. Medicare is paid for through two trust funds held by the U.S. Treasury. Medicaid is a joint federal-state health-financing program for low- income and medically needy individuals. For 2014, estimated Medicaid spending totaled $499 billion for more than 65 million beneficiaries. Medicaid operates within broad federal parameters, with states having flexibility in how they operate their programs and with CMS overseeing the design and operation of states’ Medicaid programs. Medicaid is jointly financed by the federal government and the states, with the federal government matching most state Medicaid expenditures using a statutory formula—the Federal Medical Assistance Percentage rate—generally based on each state’s per capita income relative to the national average. Medicare and Medicaid, and their NEMT programs, are provided under both fee-for-service and managed care payment systems: Under fee-for-service, either CMS (for Medicare) or the state Medicaid agency enrolls NEMT providers. Providers are paid on a per-service basis. Under managed care, either CMS (for Medicare) or the state Medicaid agency contracts with health plans to provide covered health care services—which can include NEMT—in return for a fixed monthly payment per enrollee. Under Medicare managed care, private organizations offer health plans through the Medicare Advantage program. GAO has designated both the Medicare and Medicaid programs as high risk because of concerns about the Medicare program’s size, complexity, and susceptibility to mismanagement and improper payments, and because of our concerns about inadequate federal oversight over state Medicaid programs. We have also reported concerns about program integrity in Medicaid managed care, specifically with regard to vulnerabilities in protecting against improper payments. Although Medicare and Medicaid both offer NEMT services to their beneficiaries, based on the individual program requirements, certain key features of NEMT operate differently under the two programs, as described below (see table 1). These differences reflect fundamental differences between the two programs, Medicare being a healthcare insurance program administered at the federal level and Medicaid being a joint federal-state health financing program. Under Medicare, NEMT services are allowed to be delivered via ambulance transport to scheduled nonemergency medical services for some beneficiaries. For example, Medicare NEMT may cover ambulance transportation for a beneficiary with ESRD for scheduled, repeated, and nonemergency transports to and from dialysis treatments, if transportation by ambulance is medically necessary. Similarly, Medicare may cover ambulance transportation upon discharge from an inpatient hospital for transport to a skilled nursing facility or to a beneficiary’s home, when medically necessary. The beneficiary must have a written order from a doctor stating that ambulance transportation is necessary due to the beneficiary’s medical condition, and the trip must be to or from the nearest medical facility. Ambulance providers may be compensated on a fee-for-service basis or under a managed care arrangement. Under Medicaid, states must ensure NEMT for beneficiaries who have no other means of transportation to needed medical services—such as doctors’ appointments and various types of therapies—and can provide NEMT in a variety of ways. States have discretion, consistent with federal requirements, in how they deliver NEMT, including the mode of transportation used and the model used to provide NEMT. For instance, state Medicaid officials we interviewed reported covering a variety of modes of transportation for NEMT trips, including buses, taxi cabs, and vans. States also reported paying beneficiaries and their family members or friends’ mileage for using their personal vehicles to provide transportation to needed medical care. While the modes of transportation used for NEMT across states were similar, state officials reported using a variety of models to administer NEMT, including paying for NEMT on a fee-for-service basis; contracting with managed care health plans to provide health care services, including NEMT, for a per- member, per-month fee; and contracting with transportation brokers to manage all or some aspects of NEMT on states’ behalf. Further, some of our 15 selected states use a mix of models for administering NEMT. See table 2 for examples of states’ models for administering NEMT. CMS oversight of NEMT under Medicare and Medicaid varies. CMS oversees Medicare NEMT using its regular oversights activities—such as claim reviews. Under Medicaid, CMS uses a range of regular oversight activities to oversee states’ operations of their NEMT programs, including reviewing and approving state Medicaid plans and amendments; issuing guidance; conducting a range of program integrity activities, such as claims and state program integrity reviews; and offering technical assistance upon request. While CMS periodically issues NEMT guidance, some of this guidance is outdated or may be otherwise limited. CMS oversees Medicare NEMT through CMS’s regular program integrity activities. These include conducting pre- and post-payment claim reviews by Medicare Administrative Contractors and calculating the Medicare improper payment rate through the Comprehensive Error Rate Testing program. CMS initiated a 3-year Medicare prior authorization demonstration program in December 2014. This program is intended to help reduce improper payments for NEMT services. The program requires prior authorization of scheduled, repetitive nonemergency ambulance transports to test whether prior authorization helps reduce expenditures while maintaining or improving quality of care. New Jersey, Pennsylvania, and South Carolina were selected to initially implement this program because of their high utilization of nonemergency ambulance transports under Medicare and improper payment rates. Subsequently, CMS plans to expand the demonstration program to include Delaware, the District of Columbia, Maryland, North Carolina, West Virginia, and Virginia on January 1, 2016, as required by the Medicare Access and CHIP Reauthorization Act of 2015 and plans to expand the program to all states beginning January 1, 2017, if the Secretary of HHS and Chief Actuary determine certain conditions will occur under the expansion. Under Medicaid, states are responsible for the daily oversight of their NEMT programs and CMS oversees states’ operations using a range of regular oversight activities. Within broad federal parameters, states determine their own processes for overseeing their Medicaid NEMT programs, including verifying beneficiary eligibility, establishing provider requirements, and preventing improper payments. To oversee states’ operations of their NEMT programs, CMS conducts a range of oversight activities, including: CMS reviews and approves Medicaid plans and state plan amendments, which outline how states administer their Medicaid programs, including their NEMT programs. CMS periodically issues guidance on NEMT requirements. CMS has issued several pieces of guidance, including a guidebook, letters to state Medicaid Directors, and a toolkit, on different aspects of NEMT. CMS conducts a range of program integrity activities. First, CMS calculates a national-level improper payment error rate through the Payment Error Rate Measurement program. Second, CMS also contracts with entities to, among other things, audit claims, identify overpayments, and educate providers and others on Medicaid program integrity issues. Third, CMS conducts state program integrity reviews. For example, CMS conducts program integrity reviews of state Medicaid agencies—which are done to identify vulnerabilities in state operations that warrant improvements or corrections—and has provided assistance to states to address those vulnerabilities. Agency officials reported that these reviews have included an assessment of states’ oversight of NEMT providers since fiscal year 2011. Further, CMS’s ongoing program integrity reviews in three states include an assessment of risks and vulnerabilities in NEMT services. CMS also conducts special audits and investigations of traditionally high-risk areas, including NEMT. For example, CMS reported collaborating with one state, New York, to conduct a special investigation of the state’s NEMT program. CMS provides technical assistance and clarifying guidance upon request. For example, officials from one selected state reported working with CMS to identify options for redesigning their NEMT program that would be consistent with regulations. Although CMS periodically issues NEMT guidance, some guidance is outdated or may be otherwise limited because legislative and other changes have affected Medicaid and states’ NEMT programs. For example: CMS issued a guidebook in 1998 on designing and operating a cost- effective Medicaid NEMT program. This guidebook included information on factors and challenges that could be considered when designing and operating an NEMT program—describing the advantages and disadvantages of providing NEMT under a brokerage system, operating NEMT in a managed care environment, and strategies to identify and prevent NEMT fraud and abuse—and suggestions to address these concerns. However, this guidebook contains outdated information. For example, the guidebook describes limited cases when state Medicaid programs can use brokerages. However, the Deficit Reduction Act of 2005 changed the conditions under which states could use NEMT brokerages, which expanded the number of states that utilize NEMT brokers. The guidebook does not address these conditions as discussed further below. After the Deficit Reduction Act of 2005 was passed, CMS issued a letter to State Medicaid Directors in 2006 describing changes in the law, and final rules in 2009 for establishing NEMT brokerage programs under states Medicaid plans. However, CMS has not assessed NEMT guidance to determine if updates are needed in light of recent changes. For example, since 2009, there have been changes to the Medicaid program such as expanding Medicaid as allowed under the Patient Protection and Affordable Care Act (PPACA), and states have made changes to their Medicaid programs. These changes have increased Medicaid enrollment in some states resulting in more NEMT trips.