Medical Transportation Program Impact on Rural Transit in Texas Resource-Based Cost Allocation Methodology

Coordination of health and human service transportation programs in rural communities provides a source of sustainable funding for public transit. Significant funding is available for non-emergency medical transportation (NEMT) for Medicaid-eligible clients. In 2009, 21 of the 39 rural transit districts in Texas received NEMT funds under the Texas Medical Transportation Program (MTP). The benefits of MTP funds to rural transit districts are an additional funding source, a consistent cash flow through regular reimbursement for MTP services, and the opportunity to maximize resources (vehicles, miles, hours) by combining MTP passenger trips with general public transit. However, MTP may also increase resources required (miles, hours) to deliver transportation due to program service requirements, resulting in a higher cost per passenger trip and reduced productivity due to longer trip lengths and time. The purpose of this research is to develop a resource-based cost allocation methodology to accurately reflect cost and resources by MTP and general public passenger trip and apply the methodology to five case studies to analyze the impact of MTP trips on general public transit service. Results of the case study analysis reveal that in four of the five case studies, MTP is more resource intensive than general public transportation. MTP passenger trips have longer trip lengths than general public trips ranging from additional mileage per passenger trip of 13 to 40 miles. Using a resource-based cost allocation methodology, in four of the five case studies, MTP trips have higher operating cost per boarding as compared to general public service ranging from a difference of $12 to as much as a $32 per passenger trip. Four of the five case study rural transit districts do not cover the full cost of providing MTP service with MTP revenues with a shortfall ranging from approximately $6.00 per passenger trip to $19.00 per passenger trip. The cumulative impact of MTP on the Texas Performance Funding Formula was found to be positive resulting from the significant positive impact on the local investment indicator. However, the additional funding generated by MTP in the funding formula is still not sufficient to compensate fully for the deficits found.