Starting a non-emergency medical transportation business can be relatively easy, albeit it can (and often is) much more difficult than many realize when they set out to get the “wheels turning.”
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The time appears ripe to start your NEMT business and if you’re now thinking of starting, I can’t imagine a better time than now. Currently, the Transit Cooperative Research program, a federally funding independent research entity, estimates NEMT revenue is near $3 billion a year. As a multi-billion dollar industry, it’s already one with lots of prospects and potential, albeit the numbers actually get much better. The best numbers I’ve read suggest over 10,000 people are retiring every single day, creating a seemingly endless stream of potential new clients to more than account for those that will no longer require your careful assistance. This is also a recession-proof industry because state Medicare programs are REQUIRED to provide necessary transportation for beneficiaries to and from their health care providers and their homes.
You’re (not) a taxi service…(except when you are)
I field several calls a week from people who are ready to go, including many with contract in hand that fall in one of two categories. The first group is the one you don’t want to find yourself in. This group is comprised of new business people thinking they bought non-emergency medical transportation insurance, including telling their insurance agent exactly what they want to do and all the details asked for, only to find out their agent either didn’t know what they’re doing, or purposefully decided to classify the operation as livery or taxi to either gain acceptance by the carrier. The net result is the business doesn’t have the proper insurance and is at risk for a claim that could be denied. Worse still, a relatively simple accident could cause the entire business to fail as a fall-out resulting from reputation damage.
Speaking of taxi service and what can cause confusion is the fact that in some states, some carriers will actually rate NEMT as a taxi service. What’s important to note is when non-emergency medical transportation is rated as a taxi / livery service, it’s done with the carrier’s direction and desire. If the carrier believes you’re a taxi service, albeit in actuality, you’re a NEMT, that’s a big problem (and can cause a cancellation notice to arrive in the mail at any time).
This brings us to issue number one, not using an agent that not only focuses on commercial insurance, albeit also understands non-emergency medical transportation. I receive several calls a week from people who are struggling to keep the lights on because their previous agent wrote the policy wrong and as a result, they have received a cancellation notice or non-renewal notice. As you can imagine, because insurance is legally and almost always contractually required, losing the auto insurance means losing their business. The business owner is then forced to drop everything, and I mean everything in their personal life, as well as anything related to growing the transportation business and exclusively spend their time, energy, and emotions reaching out seeking an insurance agent that can save them from failure.
In a nutshell, when it comes to finding the correct agent for your business insurance needs, the first and maybe the most important step is making sure the agent knows what they’re doing. If the agent is primarily a home and auto insurance agent, your chances go down precipitously. Many home and auto agents are highly motivated to put together a Non-emergency medical transportation insurance policy because of the premium involved. For most home and auto insurance agents who are used to quoting and selling $1500 policies, the thought of writing a $15,000 policy is quite appealing. All it takes is an agent who doesn’t care how much value they add, and only cares about the commission they can receive, and you have a recipe and formula for heartache. Not for the insurance agent, but rather for the person who placed their trust into an agent that was over their head. It’s the same reason why many of the larger captive agencies do not allow their agents to write this class of business. If you call up the top three or four insurance companies advertising on TV and ask to receive a quote for non-emergency medical transportation you will find out rather quickly that most or all of them won’t write it. They know how specialized one must be, and if one is already an expert on home & auto coverage, it’s not likely they’re spending much time writing specialized commercial coverage. Therein lies the problem, it’s very hard for anyone to get really good at something if they’re not actually doing it on a regular basis.
Intuitively, this should all make perfect sense. You don’t go to a foot doctor if you have a problem with your eye. Why in the world would you trust your business insurance to someone who doesn’t work in your industry and understand it better than you? You wouldn’t, albeit many do because they don’t know the value the right agent brings to the table.
How can you tell if an agent knows about the type of insurance coverage and as importantly, your business?
You should be asking for the names of other NEMT companies they have written the same type of coverage for. Often, the website is a dead giveaway. Take this site for example, there’s articles written (all either directly written by me, and/or edited by me personally) on this site for the type of insurance I write. You won’t find much in terms of major medical coverage written by me because I don’t focus on that area. There are other agents that can provide more guidance and product availability to make sure you’re properly covered. In the world of business insurance, the same is true. In many aspects, having the right agent is even more important because if you’re legally required to have certain coverage and you can’t get it, it doesn’t matter who’s at fault, you’re still out of the game.
Is the agent advising you on NEMT, providing insight and knowledge to help you grow your business?
Your insurance agent should be more than just selling you a policy and moving on to the next person. In order to really get to know your business and help you grow, the agent should be able to provide guidance on what things should or should not be on your website. Most agents don’t even have their own websites performing at a high level, so you can’t expect them to help you get yours performing at the levels required to make your phone ring. The fact you’re reading this now demonstrates my ability to write content that not only gets read, albeit also gets ranked by Google and other key search engines. When you searched for a non-emergency medical insurance quote online, there’s a reason why my site ranked as high as it does. If you want to know more, get more, receive more, than it’s probably very appropriate for you to give me a call and we can talk about your business and where you want to be.
Is the agent explaining what type of coverage you should consider and WHY you’re considering it?
If you have to explain to the agent what coverage you’re required to get, how in the world is the agent going to provide the advise and information YOU WANT, correction, YOU NEED in order to protect and grow your business. As I mentioned earlier, this is a growing industry and there’s plenty of business to go around, however, if you’re not surrounding yourself with people who know MORE than you do, you’re placing yourself at a great disadvantage over your competition who are.
If you’re planning on growing, does the agent know who quickly is appropriate and reasons not to grow.
Did you know that there’s a good and bad growth trajectory? If you grow too quickly, you greatly increase the odds of cancellation or non-renewal unless you have an agent working with you and planning your growth. Also, creating the necessary narrative to explain what the plan is, and why it’s valid.
Does the agent know what you can expect after you grow and why it matters?
Planning on expanding to another state or states? Planning on increasing your headcount and drivers? Why does having over 10 units matter? These are some of the key questions anyone you’re talking to better not only know, but how to create a reasonable strategy with you to reach economies of scale.
Does the agent know what is the number one reason why current NEMT business owners (who had/have an agent already) call me?
Ok, to be fair, that’s a tough one for sure. Not exactly a trick question though. The number one reason is because their policy was canceled. It’s almost always the fault of the agent who didn’t write it correctly. It’s highly stressful for the people who call, and it’s a place you don’t want to be in. For those that think they’re saving money by cutting corners, it often doesn’t end well. I’ve seen people go with other agents over a relatively small amount of premium difference. Furthermore, often, the other proposal was written by the SAME insurance carrier, albeit written incorrectly (see taxi vs NEMT above).
If the thought is that you can save money “until they figure it out,” I can understand your line of thinking, albeit the carrier doesn’t know if the error is on the part of the agent (they assume not), or the error is on the business owner. Often, the carrier leans on the side of caution, (which I have a baseless guess that the agent has a self-fitting story to protect themselves) and chooses to cancel or non-renew. Because there are so few carriers writing this business, it often means the business must shut their doors and turn off the lights because no other insurance can be had (even the availability of an assigned risk plan is very hard to actually get, even though it shouldn’t be).