8 Warning Signs Your Nemt Business Is Failing
No business owner wants to fail, but the reality is that 1 in 5 small businesses will fail within their first year. If you don’t want to become part of this statistic, you need to learn to recognize the signs that your business may be failing. The NEMT industry is a growing one, and there’s a lot of potential to run a successful gig for years to come. But, if you don’t catch red flags and figure out how to fix these problems, you’re going to struggle. Watch out for these signs that your business may be in trouble, and learn how to prevent them from happening in the first place.
1. Declining Customer Base
Just like in every other industry, keeping a non-emergency medical transportation business profitable relies on building a base of loyal and regular customers. Without new passengers booking trips and returning customers continuously using your NEMT services, you won’t be able to sustain and grow your business.
There are several reasons why customers could be put off from using your service:
- Inadequately equipped NEMT vehicles
- Inefficient routing and dispatch lead to delayed trips
- Over-complicated billing procedures
A clear indicator of a declining customer base is a drop-off in the number of repeated trips booked by your passengers. This shows they were unhappy with their experience and likely opted for other transportation options.
2. Poor Employee Retention
If your drivers, dispatchers, and other members of your team aren’t sticking around for long, this could be a sign that your business is entering dangerous territory. It’s natural to have employee turnover, but if you’re noticing unusually high turnover rates, it’s time to figure out why that’s happening.
As a new business, your goal is growth. It’s important to remember that NEMT is a customer-oriented business that would greatly benefit from long-lasting relationships between your employees and clients. Yes, your employees can and will leave the job if it’s not fulfilling, or if they find something better. That being said, focusing on employee satisfaction is an important task, especially as you build your business. A few big things you can do is offer competitive pay and flexible hours, create a comfortable work environment, and prioritize regular team building activities.
3. Your Cash Flow Is Plummeting
It can take a year or even longer for a new business to become profitable, but that doesn’t mean your cash flow should be suspiciously low. If you find this to be the case, you need to look into the problem and figure out where it’s stemming from.
Do you have more drivers than necessary clocked in each day? Are you operating a fleet of vehicles that spend more time in the shop than on the road? Are you spending too much time and fuel by taking inefficient routes? Are you missing out on trip opportunities?
If you’re experiencing any of these things at your business, there’s a chance you’re losing precious cash. The good news is, that if you can identify where you’re struggling the most, you can adjust your tactics to improve your financial situation.
4. There’s a New Problem Every Day
Running a successful business means you need sharp problem-solving skills. But even the best problem-solvers can be overwhelmed by inefficient processes.
NEMT businesses rely on smooth processes to keep passengers, trip brokers, and medical payers happy, so you must align processes in every department. Failure to do so will result in new problems cropping up regularly.
For example, a poorly run NEMT business will frequently encounter these challenges:
- Rejected insurance claims
- Missed opportunities for multiple pick-ups
- Rising labor costs due to driver roster mismanagement
- Passengers switching to competitors due to negative experiences
- ADA lawsuits from passengers adversely affected by your services
As the owner of an NEMT business, it’s your responsibility to identify signs your business is failing and then ensure that the framework for efficiency is in place. While facing challenges in the early days is normal, this should decline as your company matures.
5. You Aren’t Securing Regular Trips
If you aren’t finding frequent trip opportunities, your business could be in trouble. As a new NEMT provider, it’s common to start out slow as you search for broker partnerships and private pay opportunities. However, as you begin to establish your business, you shouldn’t have a problem completing a handful of trips every day.
If you find that your numbers are slipping, there may be a few reasons for this. Get in touch with the brokers you work with, and see if you are in good standing. If no issues are reported, inquire whether the broker is experiencing a decline in trip requests. If they are, this could be due to the time of year, weather patterns, or something unrelated. It’s important to note that trip requests ebb and flow, so if there’s a small decline for a week on both the broker side and your end, it’s probably not cause for serious concern.
If you’ve dealt with some recurring private pay passengers who haven’t booked a new trip in a while, follow up with them and ask if they’d like to book a ride for a scheduled appointment. Ask if there’s anything you can do to improve their trip experience or if there’s anything preventing them from rebooking with your company. It’s important to make sure you don’t burn any bridges with your customers, and if there is a problem, you should try your best to rectify it.
6. You Haven’t Had Success With Private Pay Passengers
Every NEMT provider runs their business differently. Some choose to work exclusively with private pay clients, while others commit to finding trips through broker partnerships. If you’re a company that falls in the middle of these two scenarios and you haven’t had much luck with private pay clients yet, this isn’t a huge cause for concern, but it’s definitely something to monitor.
This is because when you receive trips through brokers, the majority of your reimbursements are limited to the amount your state Medicaid agency pays. If your business is in a state with insufficient reimbursement rates that limit quick growth and profits, private pay clients are crucial to your success.
With private pay clients, you set your own rates, and you receive the full amount paid. Private pay passengers can be difficult to find, but once you have a loyal group of customers, you’ll be well on your way to reaching the profits you want.
7. Loss of Passion for the NEMT Business
If you can’t remember what inspired you to start your business in the first place, this might mean that it’s not worth pursuing the vision any further. People start their own businesses because they’re passionate about solving a problem and putting their own unique spin on the solution. If you wake up every day dreading the workday and don’t care about the future of your business anymore, it’s probably time to cut your losses.
It can be tough to walk away from something you built from scratch, but it’s not worth putting your valuable time and money into something you aren’t passionate about. If this sounds like your situation, think about what’s best for your business moving forward, and make that decision.
8. Ineffective NEMT Solutions
If you have followed all of the aforementioned tips and straightened up your ship, it is not a good time to relax. Competition within NEMT is fierce, so in order to succeed, the best players must leverage advanced software to streamline their operations. By relying on manual methods of dispatching, billing, and record-keeping, you leave your business vulnerable to human errors. This can have long-term consequences on your success. Luckily, such inefficiencies can be avoided if you find the right NEMT software solution.
Today, the global NEMT market is worth $11 billion, according to a report by Fairfield Market Research. NEMT software providers are the major contributors to the constant growth of this sector of the economy and through the years they have elevated countless NEMT enterprises by offering reliable and efficient solutions for trip scheduling, dispatch management, and booking. Choosing software like RouteGenie equips your company to face the modern challenges in the NEMT industry.
RouteGenie is a comprehensive NEMT software that helps you achieve better results in all key areas.
Other software that serves similar functions includes:
- TripSpark
- MediRoutes
- Medicare
- WellRyde
You should study their features and capabilities to find the one that will add the most value to your NEMT services.
Takeaways
NEMT services are essential for millions of patients in the US, as they provide needed transportation options for all sectors of the population. To succeed in the industry and help patients in need, you must look out for signs that your business is failing and take the appropriate steps to correct the course.
It’s time for your NEMT business to prepare for the future by adopting modern software solutions. RouteGenie is the ideal software for NEMT companies that wish to achieve growth while delivering top-quality rides and service to their passengers.
Sources
- LendingTree. Percentage of Businesses That Fail — and How to Boost Chances of Success. Accessed May 23, 2024.
- Health Management Associates. Report on Non-Emergency Medical Transportation in Medicaid. Accessed May 23, 2024.
- ADA.gov. Americans with Disabilities Act of 1990. Accessed May 23, 2024.
- GII Research. Non-Emergency Medical Transportation Market – Global Industry Analysis, Size, Share, Growth, Trends, and Forecast 2031. Accessed May 23, 2024.