A Senator Asked If North Carolina Should Pause Medicaid ABA
On March 11, North Carolina’s Joint Legislative Oversight Committee on Medicaid held a hearing on ABA therapy costs. The numbers that prompted it: ABA spending in the state went from $122 million in fiscal year 2022 to a projected $639 million in fiscal year 2026. A 423% increase in four years.
The number of Medicaid beneficiaries receiving ABA grew from 3,844 to 13,447 over the same period. Five providers accounted for 41% of the spending increase in fiscal year 2023-2024 alone.
Senator Jim Burgin (R-Harnett) asked the question that’s on every regulator’s mind: could the state pause Medicaid coverage of ABA until it figures out what’s going on? “I’m extremely concerned about the dollars versus the services they’re actually getting,” he said.
Senator Ralph Hise (R-Mitchell) asked a different version of the same question: how could ABA have expanded this rapidly when, at least in western North Carolina, there’s a shortage of behavioral health specialists?
Nobody paused anything. But the questions tell you where the political wind is blowing.
47% of North Carolina’s Supervising BCBAs Don’t Live in the State
This statistic came out during the hearing and it’s worth sitting with: of the certified behavior analysts licensed in North Carolina who serve supervisory roles, nearly half don’t live in the state.
That’s not a credentialing technicality. It’s a quality-of-care signal. BCBA supervision is the clinical backbone of ABA treatment. A BCBA who supervises remotely — from another state, via telehealth — faces structural limitations in observing RBTs in natural environments, assessing treatment fidelity during live sessions, and responding to behavioral crises in real time.
Matt Filer, CEO of Charlotte-based Mosaic Pediatric Therapy, testified directly on this point. “Provider quality matters,” Filer told legislators. “There is a lot of variation in quality of providers.”
He identified the specific mechanisms that separate high-quality from low-quality providers:
- In-person supervision rather than telehealth-based oversight
- Customized treatment plans that reflect individual clinical needs, not a one-size-fits-all model
- Appropriate BCBA-to-technician ratios — not stretching supervisors across more cases than they can meaningfully oversee
On that last point, Filer was blunt: “There’s a financial incentive for providers to reduce their supervision.” The less you spend on BCBA hours, the wider your margin on technician billing. And the wider that margin gets, the further supervision quality drops.
The State Auditor Is Coming
At a separate legislative committee meeting, North Carolina Auditor Dave Boliek announced that his office is launching its own deep dive into ABA spending. His description of the decision: ABA is “one area that we did identify that needed a really, really, really close look.”
This is significant. A state auditor’s review operates independently from the legislative oversight committee and from DHHS’s internal processes. It brings a different level of scrutiny — the kind that results in published findings, formal recommendations, and public accountability.
North Carolina isn’t in the HHS OIG’s current seven-state audit series. But with the state auditor running his own review and the legislature asking pointed questions, NC providers face oversight from multiple directions simultaneously.
The Rate Cut That Got Reversed — And Why It Will Come Back
This isn’t the first time North Carolina has tried to rein in ABA spending. In late 2025, NC Medicaid implemented a 10% reimbursement rate cut for ABA services. Families of 21 children immediately sued, arguing the cut discriminated against children with disabilities. A judge froze the rate reduction. The governor subsequently ordered DHHS to restore rates.
But the spending trajectory hasn’t changed. The political pressure hasn’t eased. And now the legislative oversight committee and the state auditor are both actively investigating.
Interim Medicaid Director Melanie Bush’s statement to the committee was careful: “We are committed to making sure the children who need these services continue to receive these services. We just want them provided in the amount, scope, and duration that is appropriate for the individual child.”
“Amount, scope, and duration appropriate for the individual child” is the regulatory way of saying: we’re going to scrutinize whether the hours being billed match the clinical need. That’s the same question Centene’s ABA task force is asking in 29 states. It’s the same question the OIG has been answering in every audit it publishes.
What Actually Distinguishes a Quality Provider
The NC hearing surfaced the right question. The answer isn’t subjective. It’s measurable. Here’s what separates a provider that survives this scrutiny from one that doesn’t:
Individualized Treatment Planning
Not 40 hours for every child. Not 30 hours as a default. Treatment hours that are derived from a comprehensive assessment, justified by specific clinical goals, and documented in a treatment plan that explains why this child needs this intensity.
The CASP evidence paper demonstrates that higher-intensity ABA produces significantly better outcomes — children receiving 30+ hours per week are twice as likely to close cognitive development gaps and three times more likely to achieve everyday functional skills compared to those receiving fewer than 12 hours. But the data only supports individualized clinical reasoning, not blanket prescriptions. Practices that prescribe maximum hours across the board are exactly what Centene’s task force was built to find.
Meaningful Supervision
In-person BCBA supervision at ratios that allow genuine clinical oversight — not a BCBA covering 20 technicians across 15 clients via monthly telehealth check-ins. Supervision logs that document direct observation, treatment fidelity assessment, and clinical decision-making. Not just checkbox compliance.
The 47% out-of-state BCBA number in North Carolina suggests a significant portion of the provider ecosystem may not meet this standard. If your BCBAs are physically present, observing sessions, and documenting meaningful supervision — that’s a differentiator worth demonstrating.
Outcomes Tracking
As we covered in our post on the industry’s shift from growth to proof, the ability to demonstrate measurable clinical progress is what separates “volume-driven” from “outcomes-driven” in a payer’s analysis. Standardized assessments on a consistent schedule. Goal attainment tracking across the caseload. The ability to answer: “For the hours we’re billing, what progress are we producing?”
Documentation That Supports Billing
Every claim backed by a session note that matches the CPT code, includes the rendering provider’s signature, accounts for actual therapy time, and connects to an active treatment plan. The OIG has now audited four states and found 100% deficiency rates. Documentation isn’t a back-office concern — it’s the first thing auditors check.
Credentialing Without Gaps
Every provider delivering services holds active, verified credentials on the date of service. The Colorado OIG audit estimated 1,500 to 2,000 technicians working without mandated training or certification. A credentialing gap doesn’t just put one claim at risk — it puts every claim that provider touched at risk.
This Is Happening in Your State
The NC hearing happened March 11. The WSJ investigation published March 10. The Benesch advisory published March 12. The Colorado OIG audit dropped March 2. This isn’t building slowly. It’s compounding weekly.
For practices operating in North Carolina specifically, the convergence of legislative oversight, a state auditor review, and the broader national scrutiny means the margin for operational slack just disappeared. But the dynamic is the same in every state where ABA spending has grown faster than the infrastructure to oversee it — which is nearly every state.
The question NC legislators are asking — how do we tell good providers from bad? — has a concrete answer. It shows up in treatment plans, supervision records, outcomes data, documentation quality, and credentialing systems. The practices that can demonstrate all five will survive this transition. The ones that can’t will be the case studies cited in the next round of rate cuts.
Questions about how your practice measures up on the quality indicators legislators and auditors are looking for? Reach out at [email protected] — we’re happy to walk through it.
