The Indiana Department of Transportation (INDOT) has had a long-standing policy that encourages its Section 5311 subrecipients to negotiate contract rates that recover the fully allocated cost of providing the service. Subrecipients often provide services under contract to Non-emergency Medical Transportation (NEMT) brokers, social service agencies, hospitals, nursing homes, and private-pay clients. Historically, rates charged have been more of a function of what the purchaser of service was willing/able to pay rather than what it cost to provide the service. As a result, rates charged were inconsistent, complex, and resulted in inequity and cross-subsidization among the contract services. INDOT’s greatest concern is the fact that limited public transit resources were being used to subsidize the purchasers of service. Additionally, subrecipients were not maximizing the local match that could be generated from these contracts. This concern has intensified as costs are rising and many subrecipients are struggling with limited or reduced local match from their local communities.
Transit systems struggled with implementing INDOT’s policy because they did not have the knowledge, credibility or tools necessary to negotiate rates with brokers and agencies that did not understand the limits of rural public transit services or the intricacies of fund-braiding. Brokers and agencies sought to stretch their transportation budgets by negotiating rates that were less than what it cost the transit agencies to provide their trips.
INDOT has refocused its attention on assisting its subrecipients to make sure they are being paid a fair and reasonable cost for the services they provide and to make sure that each purchaser of service pays for anaccurate share of the cost for the services it obtains. As such, INDOT has decided to encourage state-wide use of the CCAM-TAC Trip Cost Allocation Tool by providing the necessary training and technical assistance necessary for successful deployment at each of their subrecipient sites.
“If we can generate more revenue from our contracts, maybe we can stretch our limited resources a little farther.” - Indiana 5311 provider
INDOT hosted RLS & Associates to provide two training sessions for all Section 5311 subrecipients on the NEMT cost calculator on February 17 and 18, 2026, with over 50 participants. INDOT intends to have all Section 5311 subrecipients use the Trip Cost Allocation Tool and will use information from utilization reports to educate and inform INDOT and their subrecipients of the true cost of rural transportation and contract transportation in Indiana. The goal is to increase contract revenue to levels consistent with the fully-allocated cost to provide those services and to utilize those revenues as additional local match or to replace local match sources.
While INDOT intends to use data captured by subrecipients to evaluate contract trip subsidization using FTA funds, INDOT also views the tool as an excellent contract negotiation and service planning tool. The service planning option of the Trip Cost Allocation Tool will allow subrecipients a simple and effective method to cost a service and use the information to evaluate the budget and operational impact of the service.
“We just negotiated new contract trip rates. I wish I knew then, what I know now—we were way off.”- Indiana 5311 provider
The workshops were a huge success. Attendees came prepared and were eager to learn about the ways the tool could be used to inform their internal decision-making, negotiate contract rates with credibility, and possibly increase revenues. Many attendees had a sense of urgency as they had exhausted all of their local revenue sources and were anxious to learn of a new tool that had the potential to help their financial situations.
In preparation for this workshop, attendees were asked to complete the registration process and submit their agency profile prior to the start of the workshop. Each agency brought their year end financial and service data. As the tool was demonstrated, time was provided for each attendee to input their information and cost trips in real time using their own data. Since all systems within the state use INDOT’s grants management software, a simple crosswalk was provided between their 4th quarter INDOT reports to the tool’s financial and service data fields. As such, attendees were able to successfully enter all necessary data into the tool very quickly. Once the data was in and the service planning and trip costing function of the tool was demonstrated, attendees started to enter sample trips. Gasps were heard around the room as attendees compared the cost of the trip generated from the tool with the contract rates they charge for those same trips.
“The tool was very intuitive . . . it was so easy, I didn’t wait for the training, I went ahead and put all my data in and started costing trips.” - Indiana 5311 provider
Attendees were eager to discuss ways in which this new information could be used, how contract rate increases could be phased in, and how they could use this information to inform and educate purchasers of service as well as their own policy makers and funders. Requests were made for additional follow-on training once more of their trip data could be entered and they could do additional comparative analysis. The workshops concluded with positive energy and focus on next steps as attendees brainstormed on how this information could be used within their own unique communities. INDOT was very encouraged by the level of interest and is committed to providing additional training, technical assistance, and guidance as needed to ensure support their subrecipients.
Have more mobility news that we should be reading and sharing? Let us know! Reach out to us (info@ccam-tac.org).
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