Aubreigh Osborne, a 3-year-old from Alexander, North Carolina, has made significant progress since beginning applied behavior analysis (ABA) therapy for autism. Her mother, Gaile Osborne, said the therapy has helped her daughter develop social skills and accomplish milestones such as making friends and eating more consistently. “That’s what ABA is giving us: moments of normalcy,” Osborne said.
However, in October, Aubreigh’s weekly therapy hours were reduced by half due to state efforts to limit Medicaid spending. This situation reflects a broader trend across the United States where states are reducing payments or restricting access to ABA therapy for children with autism as Medicaid costs rise.
States including North Carolina, Nebraska, Colorado, and Indiana have proposed or implemented cuts to payments for ABA providers. In Nebraska, reductions ranged from 28% to 79%, depending on the service. The move comes as spending on autism therapy has increased sharply in recent years. For example, North Carolina’s Medicaid spending on ABA rose from $122 million in fiscal year 2022 to a projected $639 million in fiscal 2026.
The growth in demand for services is partly attributed to increased awareness and diagnosis of autism. Mariel Fernandez of the Council of Autism Service Providers noted that families often seek intensive treatment ranging from 10 to 40 hours per week.
Medicaid began covering autism treatments following a federal mandate in 2014 but did not universally include ABA until recently. Financial pressures on state budgets and anticipated federal reductions have led officials to reconsider their funding approaches.
Audits have also raised concerns about improper billing by some ABA providers. In Indiana, an audit estimated at least $56 million in improper payments over two years; Wisconsin reported at least $18.5 million; Minnesota had multiple investigations ongoing after FBI involvement regarding potential Medicaid fraud among providers.
These changes have prompted legal challenges from families and providers who argue that limiting access will harm children who depend on these therapies. In North Carolina and Colorado, lawsuits have been filed against payment cuts and new authorization requirements.
In Nebraska, advocates like Cathy Martinez expressed concern that rate reductions could lead providers to withdraw from Medicaid programs altogether. Martinez recounted how her family went bankrupt paying out-of-pocket for her son’s $60,000-a-year treatment before coverage was mandated in 2014. “No family should have to choose between bankruptcy and helping their child,” she said.
One large provider in Nebraska initially announced it would leave the state’s Medicaid program after rate cuts but reversed its decision following public response from affected families.
State officials say that while rates were previously among the highest nationally, new levels remain competitive regionally and aim to keep services sustainable long-term. Some local providers support the caps on weekly hours and believe lower rates can work if businesses do not rely heavily on high reimbursements.
Gaile Osborne was able to restore her daughter’s full ABA services through persistent advocacy within the state’s system. North Carolina Governor Josh Stein later canceled all Medicaid cuts related to autism care after lawsuits were filed by families. “DHHS can read the writing on the wall,” Stein said during his announcement of the reversal.
Osborne—who leads Foster Family Alliance and has decades of experience in special education—said she was initially skeptical about ABA but now views it as essential for her daughter’s development: “It’s not perfect,” she said. “But the growth in under a year is just unreal.”
This story was originally published January 4, 2026 at 6:07 AM.
