A deeply personal and increasingly contentious battle is unfolding in states across the nation, pitting the life-altering benefits of a therapy celebrated as the “gold standard” for autism care against the stark realities of strained public budgets. Applied Behavior Analysis (ABA) therapy, an intensive treatment that has enabled countless children to achieve developmental milestones once thought unattainable, is now at the center of a fiscal crisis. As state Medicaid programs grapple with an exponential surge in expenditures for these services, they are resorting to significant cuts in provider payments and service hours. This has ignited a fierce backlash from families who depend on ABA not just for progress, but for what they describe as precious “moments of normalcy.” The resulting conflict is more than a budgetary dispute; it is a profound policy challenge that forces a difficult choice between fiscal responsibility and the well-being of a vulnerable population, with the future of essential care hanging in the balance.
The Fiscal Collision Course
The Human Stakes vs. The Financial Reality
The profound value of Applied Behavior Analysis is measured not in dollars but in developmental breakthroughs and transformed lives, a reality vividly illustrated by the experiences of families on the front lines. In Alexander, North Carolina, the story of 3-year-old Aubreigh Osborne offers a powerful testament to the therapy’s impact. Diagnosed with autism at 14 months, Aubreigh faced severe challenges with social interactions, emotional regulation, and self-harm, making simple public outings an ordeal for her family. However, after beginning an intensive regimen of 30 hours of in-home ABA therapy per week, her progress was both swift and remarkable. Her mother, Gaile Osborne, reported a cascade of significant “firsts”: Aubreigh has since started preschool, expanded her eating habits, successfully navigated toilet training, and, most touchingly, formed a close friendship with a classmate. For the Osbornes, ABA provided a critical pathway to developmental progress and a sense of normalcy that had once seemed out of reach. This narrative is echoed in Nebraska, where Danielle Westman’s 15-year-old son, Caleb, who is semiverbal and has a history of wandering, benefits immensely from 10 hours of at-home services. The therapy helps manage his severe anxiety by allowing him to receive care within the familiar and safe confines of his own home. For these families and many others, access to ABA is not a luxury but an indispensable component of their child’s development and their family’s overall quality of life.
Juxtaposed against these deeply personal success stories is the unyielding pressure of state budgets confronting an explosive growth in ABA-related expenditures. Medicaid programs nationwide are struggling to manage a financial challenge of staggering proportions. The statistics paint a stark picture of this fiscal crisis: North Carolina’s spending on ABA, which was $122 million in fiscal year 2022, is on a trajectory to surge by an astonishing 423% to $639 million by fiscal year 2026. Other states report even more dramatic increases, with Nebraska witnessing a 1,700% spike in spending in recent years and Indiana experiencing a breathtaking 2,800% rise in costs. This ballooning spending is driven by a confluence of factors, including heightened public awareness that has led to more children being diagnosed with autism and subsequently seeking treatment. The therapy itself is inherently intensive and expensive, with individualized treatment plans often requiring anywhere from 10 to 40 hours per week for each child. A critical catalyst for this growth was the federal government’s 2014 mandate ordering states to cover autism treatments under Medicaid. With universal coverage for ABA not fully implemented in all states until 2022, a wave of pent-up demand was unleashed, pushing state financial systems to their breaking point.
Justification and Drastic Measures
Confronted with these unsustainable cost projections and compounded by general budget shortfalls, state governments are taking aggressive and often controversial actions to rein in spending. The primary lever being pulled is the reduction of reimbursement rates paid to the providers who deliver these essential ABA services. In North Carolina, officials attempted to implement a 10% payment cut across the board, a move that immediately drew widespread criticism. Nebraska took an even more drastic approach, instituting severe reductions that ranged from 28% to as high as 79%, depending on the specific type of service rendered. These are not isolated incidents; the trend is spreading as other states face similar fiscal pressures. Colorado and Indiana are also actively considering or implementing comparable payment reductions, signaling a nationwide shift toward stricter cost-containment measures for autism care. These actions reflect a growing consensus among state budget managers that the current trajectory of ABA spending is financially untenable and that without significant intervention, it threatens to destabilize Medicaid programs, potentially impacting a wide range of other essential health services for low-income populations. The states are thus positioning these cuts as a necessary, if painful, step toward ensuring the long-term solvency of their public health systems.
State efforts to trim spending are further bolstered by mounting concerns over questionable billing practices and potential fraud within the rapidly expanding ABA provider industry. A series of state and federal audits have uncovered significant issues, lending credibility to claims that the system is susceptible to abuse and waste. For instance, a federal audit of Indiana’s Medicaid program estimated that at least $56 million in improper payments were made during 2019 and 2020 alone. The report cited numerous instances of providers billing for excessive hours, including for time when a child was napping, raising serious questions about oversight and accountability. A similar audit conducted in Wisconsin uncovered an estimated $18.5 million in improper payments in 2021 and 2022. The problem extends elsewhere, as demonstrated in Minnesota, where state officials were conducting 85 open investigations into autism providers as of mid-2023. This wave of scrutiny followed a high-profile FBI raid on two providers as part of a major Medicaid fraud investigation. These findings suggest that a portion of the explosive spending growth may be attributable not merely to legitimate need but also to fraudulent activities and systemic waste. This provides state budget managers with additional justification for implementing stricter controls, enhancing oversight, and enacting the very payment cuts that have drawn such a passionate response from the community.
A Community’s Fierce Resistance
Mobilizing Against the Cuts
The states’ sweeping cost-cutting measures have been met with a highly organized and impassioned wave of resistance from those most directly affected. Families who have witnessed the life-changing effects of ABA therapy, alongside providers whose financial viability is directly threatened, are fighting back through a combination of legal action and political advocacy. In North Carolina, the proposed 10% provider payment cut was immediately challenged in court when the families of 21 children with autism filed a lawsuit to block its implementation. A similar legal battle is unfolding in Colorado, where a coalition of providers and parents is suing the state to contest new prior authorization requirements and reduced reimbursement rates that they argue will severely limit access to care. The fight is deeply personal for longtime advocates like Cathy Martinez in Nebraska. Her family once went bankrupt paying $60,000 a year out-of-pocket for her son’s ABA therapy before she successfully championed a state mandate requiring insurance coverage in 2014. Now, she fears that the state’s drastic new rate cuts will cause providers to flee the Medicaid program, effectively negating a hard-won victory and once again leaving low-income families without access to this critical therapy.
The tangible power of this community mobilization was starkly demonstrated in Nebraska, where the threat of a provider exodus nearly became a devastating reality. Following the state’s announcement of severe rate cuts, Above and Beyond Therapy, one of the largest ABA providers in Nebraska, informed families that it would be forced to terminate its participation in the Medicaid program. The announcement sent a shockwave of panic and despair through the community, as hundreds of families suddenly faced the prospect of losing access to services that were integral to their children’s development and stability. The response was immediate and overwhelming. A massive public outcry ensued, with desperate parents flooding the provider and state officials with calls and emails, sharing heart-wrenching stories of their children’s progress and pleading for a reversal. The sheer volume and emotional weight of the community’s response had a powerful effect. Just one week after its initial announcement, Above and Beyond Therapy reversed its decision, committing to continue serving its Medicaid patients despite the financial strain. This dramatic turnaround served as a powerful testament to the influence of organized, grassroots advocacy and highlighted the community’s unwavering resolve to protect access to a therapy they view as non-negotiable.
A Complicated Debate Within the Industry
While the opposition from many providers and families has been unified and vocal, the debate over funding cuts has also revealed complex and diverging perspectives from within the ABA industry itself. Adding a significant layer of nuance to the discussion, Corey Cohrs, the CEO of Radical Minds in Nebraska, publicly applauded his state’s decision to implement rate cuts. He argued that some providers in the industry have adopted a problematic and unethical business model predicated on prescribing a blanket 40 hours of therapy per week to every child, regardless of individual clinical need, simply because it represents the most lucrative billing approach. He likened this one-size-fits-all practice to “prescribing chemotherapy to every cancer patient,” criticizing the lack of tailored clinical decision-making that should underpin any therapeutic intervention. In his view, the new, lower reimbursement rates, combined with a 30-hour weekly cap on services, are not only workable for ethical providers but are necessary to help curb the industry’s excesses. This dissenting viewpoint suggests that the core issue is not merely about funding levels but also about the clinical and business ethics governing how ABA therapy is delivered and billed, pointing to a need for internal reform alongside financial adjustments.
The intense battle in North Carolina ultimately offered a temporary conclusion that underscored the unresolved tensions at the heart of this national debate. Aubreigh Osborne’s essential therapy hours were eventually restored due to her mother’s tireless persistence, and in a significant victory for advocates, Governor Josh Stein ultimately canceled the statewide Medicaid cuts, citing the immense pressure from family-led lawsuits and public outcry. However, this victory came with a stark warning that the underlying budget crisis remained far from solved. In his announcement, the governor stated plainly that “Medicaid still does not have enough money to get through the rest of the budget year,” indicating that the reversal was a short-term reprieve, not a permanent solution. This outcome left the core conflict intact: the celebrated efficacy of a “gold standard” therapy continued to clash with the fiscal unsustainability of its rapid expansion within public health programs. The temporary truce in North Carolina did not resolve the fundamental problem, ensuring that families, providers, and state governments would inevitably continue to clash over the future of this vital service.
