What the Collapse of a National Broker Means for the Future of NEMT
By Joel Davis
Houston, TX – Modivcare, the nation's largest Medicaid broker in the non-emergency medical transportation (NEMT) industry, has filed for bankruptcy, listing more than $1.4 billion in debt. The Chapter 11 filing, made in the Southern District of Texas, comes after months of financial strain and failed attempts to stabilize operations.
As part of the restructuring, the company announced it had secured $100 million in debtor-in-possession financing and planned to reduce its debt load by approximately 80%, or $1.1 billion. Control of Modivcare will shift to a consortium of investors, while its stock faces delisting from the Nasdaq following a 70% drop in share value over the past year.
What Modivcare Does
Headquartered in Denver, Modivcare oversees a wide portfolio of healthcare services, including in-home care, remote patient monitoring, and—most critically—NEMT coordination. Each year, the company arranges millions of rides for Medicaid recipients, seniors, and individuals with mobility challenges across 48 states and Washington, D.C.
With a workforce exceeding 23,000 employees, Modivcare has dominated the NEMT brokerage landscape for years, relying heavily on subcontracted transportation providers. Yet, critics have long accused the company of driving down reimbursement rates, imposing burdensome requirements, and leaving smaller providers struggling on razor-thin margins.
Industry Headwinds
The bankruptcy comes at a time of mounting financial stress across the healthcare and transportation sectors. Rising labor costs, fuel price volatility, and shortages of qualified drivers have compounded challenges for NEMT operators. At the same time, Medicaid and Medicare reimbursement rates have failed to keep pace with inflation, creating a financial squeeze for companies that depend heavily on government funding streams.
In 2024, Modivcare generated $2.8 billion in revenue but still posted a net loss of $201.3 million. The weight of $1.4 billion in funded debt, combined with operational expenses and declining reimbursement rates, created what company attorneys described as an “unsustainable” leverage ratio.
Impact on Subcontractors
The bankruptcy filing has sent shockwaves through Modivcare's vast network of subcontracted transportation providers. Many operators say they were blindsided, with little to no warning that the nation's largest broker was on the brink of collapse.
For small to mid-sized providers already operating on tight margins, the risks are significant: delayed payments, renegotiated contracts, or even outright revenue losses. In bankruptcy proceedings, subcontractors with unpaid invoices may become unsecured creditors, leaving them with little chance of recovering money owed.
Industry analysts warn that the ripple effects could undermine patient access to care, as some providers may be forced to shut down operations if Modivcare reduces trip volume or reimbursement rates.
Continuity of Service - And Lingering Doubts
Modivcare has publicly pledged that services will continue uninterrupted during restructuring. However, behind the scenes, many providers report sudden drops in trip volume, inconsistent reimbursements, and interruptions in trip assignments.
At the same time, the company has signaled plans to prioritize technology adoption and streamline its portfolio—moves that may further sideline smaller providers dependent on steady broker-driven work.
Lessons for NEMT Providers
The collapse of Modivcare underscores a critical reality for the NEMT sector: overreliance on Medicaid brokers is a dangerous business model. While brokers have historically offered a steady pipeline of trips, their control over pricing, assignments, and payments leaves local operators vulnerable to corporate mismanagement, policy changes, or funding cuts.
Providers who want long-term stability must diversify. Direct contracts with hospitals, nursing homes, dialysis centers, and private insurers are no longer optional-they're essential. Operators who embrace independence, control their technology, and strengthen direct relationships with facilities will be the ones who emerge stronger from Modivcare's collapse.
The Road Ahead
Modivcare's bankruptcy is the latest-and most dramatic-sign of turbulence in the NEMT sector. But for independent providers, the crisis also offers opportunity. By leveraging this moment to build direct contracts, invest in closed-network technology, and present themselves as a reliable alternative, providers can win new partnerships and strengthen their position in the marketplace.
The future of NEMT will not be defined by Wall Street-backed brokers. It will be shaped by independent operators who protect their margins, prioritize their patients, and build businesses on a foundation of resilience and trust.
About the Author
Joel Davis is widely recognized as the leading authority in the non-emergency medical transportation (NEMT) industry. He is the founder of the United Medical Transportation Providers Group (UMTPG), a best-selling author, and a mentor to thousands of entrepreneurs nationwide.
Over the past two decades, Joel has:
- Helped more providers start and scale NEMT businesses than anyone else in the industry.
- Conducted more evaluations and audits of struggling providers, redirecting operations to profitability.
- Guided more owners through the buying and selling of NEMT businesses than any other advisor.
A graduate of the United States Military Academy at West Point, Joel was a team captain for the Army Football Team, and a pre-law and systems engineer major. Joel is also a software developer and the creator of multiple multimillion-dollar companies. He is frequently retained as an expert witness in legal disputes involving medical transportation, and he continues to shape the future of the industry through his teaching, consulting, and advocacy for provider independence.