Department of Social Services

Medicaid Rates for Transporting Developmentally Disabled Persons to Day Treatment Programs

We estimated that New York's Medicaid program pays service providers between $60 and $80 million a year to transport developmentally disabled people between their residences and the locations of their day treatment programs. We examined the efficiency of these transportation services as well as the reasonableness of the rates charged by the transportation providers. We found that the efficiency was affected by the number of transportation vendors in each local social services district as well as the extent of cooperation between the vendors and the providers of the day treatment programs. For example, in districts with more vendors, each vendor had fewer passengers and therefore used smaller vehicles that were less cost-efficient. Moreover, program providers were often unwilling to modify their programs to make transportation more efficient, in part because they did not share in any cost savings.

We also found that there were no procedures in place to ensure that the rates charged by the transportation vendors did not significantly exceed the costs incurred in providing the transportation. We identified vendors with significant profits from their operations. We noted that local social services districts had little incentive to control the rates, since they paid a relatively small portion of the costs. We recommended that the Department take action to address the lack of fiscal control over these transportation services. 94-S-39