Medicaid Brokers in the medical transportation industry

As an insurance agent, I find the numerous requirements Modivcare imposes on NEMT operators very frustrating. In order to be "awarded" their contract, they have insurance requirements for the Auto and General Liability policies. These are just a few examples.

The first item they impose is that auto liability coverage must have concrete auto symbol ratings.  These physical damage rating symbols are codes that indicate the relative risk of loss for each vehicle for a given model year. Each symbol has a corresponding symbol relativity, or factor, that insurers can use to develop premiums for comprehensive and collision coverage.

They require all policies to be Symbol 1 (any auto) or Symbols 2,8,9 (Owned, Hired, and Non-Owned Autos). This results in increased premiums, on the most expensive part of the policy, and a complete lack of flexibility concerning vehicle changes. Due to this broad coverage, most insurance carriers are very hesitant to remove vehicles from the policy because they could still have exposure should those vehicles be used.  This means ModivCare is dictating our client's fleet, and when a vehicle is going to be out of service for a couple of months, the transportation provider is still required to pay premiums on that unit despite being out of service.

A Wavier of Subrogation is a contractual provision whereby an insured transportation provider waives the right of their insurance carrier to seek redress or seek compensation for losses from a negligent third party (Modivcare). Typically, insurers charge an additional fee for a waiver of subrogation endorsement.

“Primary” designates that the transportation provider’s liability policy is responsible for responding to a claim first before another entity's (Modivcare) policy applies. “Noncontributory” stops the transportation provider from seeking contribution from Modivcare’s insurance policy for paying a claim.

These items allow Modivcare access to coverage under the transportation provider’s policy and even allows Modivcare to file a claim using the transportation provider’s policy.    

Obviously, these mandated stipulation drive up my costs for transportation provider who, in most instance, are completely unaware of what Modivcare is mandating and the rights they are surrendering in exchange for increased exposure to liability and cost. 

Sadly, in most instances when we try to educate transportation providers on these disproportionate and costly liabilities, if they are eager to sign up with Modivcare thinking it is a money-maker, they will typically just say something like “Do whatever Modivcare wants so we can get the contract.”