The Incentive Effects of Organizational Forms: Evidence from Florida’s Non-Emergency Medicaid Transportation Programs
We analyze the incentive effects of organizational forms using data from Florida’s Non-Emergency Medicaid Transportation (NEMT) programs. These programs differ in the extent to which their brokers are directly involved in providing transit services. Based on a simple model of moral hazard, we predict that the number of users and the number of claims per user of the program increase, but cost per claim of the program decreases, as its broker’s share of transit services increases. The empirical evidence supports our theoretical predictions on the incentive effects of different organizational forms.