NC: Medicaid paid $657M for ABA, one provider serves 9,000 kids; "demand soars"
- The end of childhood
- Dec 3, 2025
- 4 min read
Dec 1, 2025, The Assembly NC: More Diagnoses, More Demand
As demand for autism services soars, state health officials are trying to contain Medicaid costs. The tussle underscores the evolving understanding of the disorder. . . .
The General Assembly was supposed to pass its biennial budget by July 1, but because lawmakers can’t agree on various projects unrelated to Medicaid, the program is facing a $319 million shortfall. To avoid insolvency, on October 1 the state health department imposed reductions in fees paid to providers of various Medicaid services, including a 10% reduction in payments for the type of therapy Journi receives.
State health officials targeted Applied Behavior Analysis, often called ABA, in part because of ballooning costs as more children access the therapy and receive additional hours of care.
To reckon with the cuts, CompleatKidz has been forced to consider eliminating 100 staff positions across its 24 facilities, reducing average weekly therapy hours for each child, scrapping plans to open new clinics, and extending timelines for the more than 1,000 children across the state currently on its waitlist.
A recent court ruling means these clinics can put their contingency plans on hold. Families of 22 children with autism sued the N.C. Department of Health and Human Services, which oversees Medicaid, over the rate cuts, alleging discrimination on the basis of disability. (DeRose was not a party to the suit, but CompleatKidz participated in filings to support the families’ case.)
Last month, a court order reversed the cuts for ABA therapy; reductions of 3 to 10% remain in effect for dozens of other Medicaid services.
While autism advocates are grateful for the legal victory, the tussle highlights fiscal and philosophical questions at the heart of the evolving understanding of the diagnosis. As demand for autism services has grown, costs to the state have exploded, putting pressure on policymakers to rein in spending.
Medicaid is the state’s second-highest expense, behind education. Last fiscal year, the program spent $35.8 billion providing care to 3.1 million low-income people, with federal funds covering about 70% percent of the cost. This fiscal year, ABA providers are projected to receive $657 million from the program—more than five times as much as 2022—making up 3.4% percent of the money Medicaid spends on providers.
ABA therapy payments through Medicaid will remain frozen at their previous rates until a trial, which hasn’t been scheduled. The state says Medicaid will run out of money in April.
CompleatKidz CEO Adi Khindaria told The Assembly the court order has allowed its clinics, which serve 9,000 children in North Carolina, to maintain current service levels. Still, he said “we’ll need clarity on the final outcome before making major operational commitments.”
An Evolving Understanding
The public and academic understanding of autism has evolved since the condition was first classified in the early 20th century to describe a group of developmental, behavioral, and social difficulties. Autism diagnoses have soared since then, and include a widened spectrum, from largely nonverbal people like Journi was before receiving ABA therapy, to those with minimal support needs, like Elon Musk, the richest man in the world.
“What autism was considered to be in the 1990s and what autism is considered to be now are very different,” said David Laxton, spokesman for the Autism Society of North Carolina.
In recent months, the diagnosis has been the subject of fraught medical and political debates. In September, President Donald Trump and Health and Human Services Secretary Robert F. Kennedy Jr. pledged $50 million to study its causes; they have claimed the disorder is linked to vaccines and, most recently, prenatal consumption of Tylenol.
“What autism was considered to be in the 1990s and what autism is considered to be now are very different.”
David Laxton, Autism Society of North Carolina
Most scientists, however, say there is no single agreed-upon cause, and it is likely influenced by a complex blend of genetic and prenatal risk factors and, potentially, pollution and certain chemicals.
“It’s been a busy few months,” Laxton said. “Not everybody is speaking the truth.”
There is an ongoing debate whether the increased diagnosis is due to environmental factors, expanded diagnostic services, and increased public awareness, or some combination of the three.
Medicaid claims data show the rate of children enrolled in the program and receiving care for autism in North Carolina swelled from 1 in 294 in 2000 to 1 in 61 as of 2022. (The prevalence of autism in the state’s overall population of children under age 8—not just those who receive Medicaid—is less clear. An oft-cited estimate from the Centers for Disease Control and Prevention suggests it could be 1 in 39, based on 2016 data.)
As diagnoses have expanded, so has the need for services.
Following federal guidance, North Carolina Medicaid added ABA as a covered service in 2014. The State Health Plan followed suit the next year, and the General Assembly required private health insurers to cover up to $40,000 in autism-related treatment for children every year. . . .
Two weeks after the Medicaid rate cuts took effect, the state Department of Health and Human Services published a range of policy recommendations to cut back on ABA spending, listing the therapy as among those straining its Medicaid budget.
“The fact that more autistic kids are getting care is not a basis to just turn around and say, ‘Okay, let’s cut the care.’”
Michael Easley Jr., attorney representing families of children with autism
The report cited concerns about “excessive utilization” of the therapy and the potential for low-quality service delivery. It also pointed to investigations that uncovered misuse in other states, and suggested several rule changes for North Carolina to curb costs, including strengthening requirements for individualized plans and providers and establishing an off-ramp for children when progress is apparent. Five providers are driving the bulk of the increase, according to the report. . . .
Alongside autism diagnoses, the state’s workforce credentialed to administer ABA therapy has risen sharply, from 214 a decade ago to 7,923 last year, according to Behavior Analyst Certification Board data. That still hasn’t been enough to meet increased demand.
“Kids are being diagnosed at a higher rate than people are being certified to treat them,” said Patel, the behavior analyst at CompleatKidz.
Legislation passed in 2021 removed a requirement that board-certified behavior analysts be supervised by a psychologist, which advocates argued had been burdensome and unique to North Carolina. The law also created a state licensure board to oversee the growing field, and began accepting applications in 2023. . . .
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