The Real Impact of Medicaid Cuts on ABA Therapy: What Providers and Families Need to Know
We Need to Pay Attention
Over the past few months, we’ve seen a growing number of proposals to reduce Medicaid funding at both the federal and state levels. While the headlines may sound abstract—budget forecasts, reimbursement reductions, and policy language—the impact could be very real for the families we serve and the companies providing care.
This isn’t about panic. It’s about preparedness.
ABA is one of the most requested services for families with children diagnosed with autism. Medicaid has been a critical pathway for...
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many families—especially those without access to private insurance or who live in states where ABA therapy is only covered through public programs. And now, that pathway may be narrowing.
What the Proposals Actually Say
In New York, for example, the Governor’s proposed budget includes around $30 million in Medicaid reductions over two years, with a focus on behavioral services, including ABA. Health care providers and advocacy groups are speaking out about what that could mean for families and smaller agencies trying to stay afloat.
In Indiana, a federal audit uncovered $56 million in improper Medicaid payments for ABA. The state has since updated its policies, which some providers say has already created barriers for access. Reimbursement rates are under pressure. Waitlists are growing. Smaller providers are trying to understand what compliance will look like moving forward.
At the federal level, discussions continue around limiting Medicaid expansion and reining in costs. And while not all of this is targeted specifically at ABA, it doesn’t need to be. Any reduction in funding or increase in regulation will inevitably ripple into our field.
What This Means for Families
Let’s keep this simple: If Medicaid becomes harder to navigate, some families will lose access to care.
For families of children with autism—especially those relying on intensive services—this isn’t just a matter of convenience. ABA therapy can be life-changing. And if access is disrupted, it could slow or reverse progress, particularly for children in the early stages of development.
We’re not talking about numbers. We’re talking about real people. Children who are learning to communicate. Parents trying to keep their jobs while managing complex care plans. Families who already face enough barriers without needing to fight for basic support.
What This Means for Providers
From my perspective, these changes could hit small providers the hardest. And that matters.
The field of ABA has been growing rapidly over the past decade. But growth doesn’t always mean stability. Many companies—especially those led by a single owner or small leadership team—are still catching up on things like policy development, documentation systems, and financial forecasting. They’re doing amazing work, but they’re under-resourced and overstretched.
If reimbursement drops or administrative requirements increase, we may see more small providers scaling back—or stepping out entirely.
And here’s the thing: when small providers leave, what fills the gap are larger companies. That might sound like a solution, but it’s not always. We already know that larger ABA providers tend to have higher turnover rates, less flexible models, and often more distance between leadership and frontline staff. That can affect quality, culture, and outcomes.
We wrote about that here: ABA Staff Turnover Is Still Out of Control
This Isn’t About Accreditation—It’s About Readiness
Let me be clear: I don’t think accreditation is the answer to this.
In fact, I’ve said many times that for some providers, mandatory accreditation can feel like a tax—a gatekeeping tool that discourages entry or drives out smaller teams. Accreditation has value, but it can’t be the only solution we put forward when trying to “fix” funding challenges.
What we need instead is readiness:
- Do we know how to justify treatment plans with data?
- Can we explain why this client needs this number of hours, in this setting, with this level of oversight?
- Do our internal systems make it easy to demonstrate that we’re delivering what we promised?
That’s what we’ve helped more than 500 practices do—get through audits, prepare for changes, and build processes that support both ethics and efficiency. But this isn’t just about audits. It’s about showing your work in a way that protects your clients and your company—regardless of what changes come.
So What Can We Actually Do?
Here’s what I’m encouraging every ABA owner and leadership team to do right now:
- Talk to Your Families Not to scare them—but to equip them. Let them know what’s happening. Explain how funding changes might affect access. Encourage them to be part of the advocacy effort.
- Reach Out to Legislators and Advocacy Groups Call or email your state representatives, Medicaid offices, and ABA associations. Be clear. Be respectful. Tell them what it means for your staff, your clients, your outcomes.
- Prepare Your Practice Take stock of where you’re vulnerable: Are your treatment plans defensible? Are your systems ready for new billing rules? Are your staff trained on compliance?
- Book a Consultation If you’re not sure where to start, that’s okay. This is what we do. Book a free call with us here
Final Thought
You don’t have to agree with what’s happening. But we can’t afford to ignore it either.
We need to act—not out of panic, but out of principle. These services matter. These families matter. And so do the people doing the work every day to make ABA sustainable, ethical, and effective.
There are other ways to reduce budgets without cutting care for the most vulnerable. We can say that clearly. We can say it together. And we can do something about it—right now.
Sources Consulted:
- CBS News – Proposed Medicaid cuts in New York would hurt autism services for children
- WTHR – Families: Medicaid reimbursement cuts could impact autism therapy
- Insurance News Net – Don’t abandon New York’s children with autism: The impact of Medicaid cuts on ABA therapy
- The Arc – Medicaid at Risk: What Cuts Mean for People with Disabilities—and All of Us
- 3 Pie Squared – ABA Staff Turnover Is Still Out of Control
