By Jaymie Baxley
The parents of more than 20 children with autism notched a recent victory in a lawsuit that accused the N.C. Department of Health and Human Services of discrimination after it slashed Medicaid reimbursement rates for certain behavioral health providers.
During a hearing in Wake County on Nov. 10, a Superior Court judge granted an injunction ordering NC DHHS to temporarily halt the cuts it imposed last month on providers of applied behavior analysis therapy. Medicaid payments for the treatment, designed to help children with autism build communication and daily living skills through intensive one-on-one behavioral interventions, had been reduced by 10 percent amid an ongoing standoff with and within the General Assembly over the state budget.
While all providers of Medicaid-covered services across the state have been subject to cuts of at least 3 percent, the lawsuit filed in late October alleged that the larger reduction for ABA unfairly singled out children with disabilities.
The parents were represented by Michael Easley Jr., who until February served as U.S. attorney for the Eastern District of North Carolina. The son of former Democratic Gov. Mike Easley, he now works at the Raleigh office of Virginia-based law firm McGuireWoods.
In court, Easley warned that children receiving ABA were at “risk of institutionalization and segregation” if the reduced rates remained in place. NC DHHS, he argued, had “committed facial discrimination” by including the treatment of a protected class of patients on the short list of services that received the steepest cuts.
“If everybody across the board was treated the same in Medicaid, we wouldn’t be here right now,” Easley said in his closing argument. “If there were a mathematical equation that applied equally to everybody, we wouldn’t be here right now.”
He noted that Devdutta Sangvai, head of NC DHHS, had attempted to justify the 10 percent reduction in Medicaid payments to ABA providers in an Aug. 11 letter to legislative leaders, writing that “utilization of this service in North Carolina has grown much faster than expected.”
“To ensure children who truly need this care can get timely access and high-quality treatment, NC DHHS is more closely evaluating the reasons for rapidly growing utilization of this service,” wrote Sangvai, who was named as a defendant in the lawsuit. “A rate reduction is being implemented to help control costs while exploring and implementing other controls to manage the program.”
Easley, however, said the surge in demand for ABA is a “good thing.”
“Increased utilization — that’s the word they use for our kids and our families,” he said. “That’s increased verbalization, interaction, decreased segregation, the ability to interact, to hold their mother’s hands, to brush their teeth, to put on their PJs, to live a life just like all of their friends and neighbors can to the best of their ability that God gave them.”
Pleas from parents, providers
Applied behavior analysis therapy consists of having a specially trained counselor working with an autistic child, repeating behaviors over and over until the child feels comfortable doing a task. Sometimes, the therapist may work for hours or an entire day on one behavior.
Although lauded by many for its effectiveness in treating behaviors displayed by many autistic children, ABA has been a subject of debate in recent years.
A 2021 article in the Journal of Autism and Developmental Disorders acknowledged that “concerns with the use of ABA-based interventions have been expressed by autism rights and neurodiversity activists.” Some of those concerns, the authors noted, were rooted in outdated versions of the therapy that incorporated electric shocks, spankings and other “punishment-based procedures.”
While such abusive techniques are no longer prevalent, many critics feel that ABA continues to prioritize skill building over the acceptance of neurological differences in young patients.
That opinion is not shared by the parents and guardians who sued NC DHHS, each of whom submitted signed declarations explaining how their children benefit from ABA services they receive through Medicaid.
Juanita McKoy testified that her 2-year-old son is nonverbal and would “communicate exclusively by pulling” before receiving ABA therapy. With treatment, the toddler has “learned a few words” in American Sign Language and is “babbling more and making more of an effort to communicate verbally,” she said.
“His social skills have increased, and he enjoys playing with other kids and giving hugs,” McKoy said.
If her son’s therapy is disrupted, McKoy fears he “will not be able to continue the progress he has made towards being able to communicate and socialize in an integrated environment.”
Several ABA providers also submitted declarations in support of the lawsuit.
Adi Khindaria, CEO of Compleat Kidz, said more than 100 children are on a waitlist for treatment at the company’s clinic in Rocky Mount. He said it takes an average of six months for a child to move off the list and begin therapy.
“DHHS’ cuts to North Carolina Medicaid reimbursement rates to cover ABA therapy will double this expected timeline, so that it will take a family over a year to come off the waitlist and obtain treatment at that facility,” he said.
Khindaria said Compleat Kidz uses about 70 percent of the Medicaid funding it receives to pay the clinicians and technicians who work at the company’s network of clinics in 24 communities across the state.
“Because every child served requires approximately one full-time position, any funding reduction immediately necessitates a corresponding workforce reduction,” he said, adding that the rate cut would force the company to eliminate 100 jobs. “The consequences of this reduction will be delayed progress, diminished language gains and loss of one-to-one sessions that are essential to high-quality and effective treatment.”
‘Balance of equities’
In his closing argument, Adrian Dellinger, attorney for NC DHHS, contended that the state “did not discriminate” against children with autism.
He noted that reductions of varying size were placed on providers of all Medicaid-covered services, with hospitals and nursing homes also receiving 10 percent cuts.
“An injunction at this point, blocking the rate reduction for [research-based behavioral health treatment] services as a whole, would not be equitable,” Dellinger said. “It would place the plaintiffs, place RB-BHT providers, in an advantageous position over every other service category in the state.”
NC DHHS, he added, “did not want to make these cuts.”
“We are in this situation because we have a statutory requirement to spend no more than what we have appropriated in the reserve fund,” he said.
The cuts were implemented after lawmakers failed to reach an agreement that would fully fund the state’s Medicaid rebase — the amount of money needed each year to keep up with changes in the number of people covered by the program and the cost of caring for them.
In July, the General Assembly approved a stopgap “mini budget” that fell $319 million short of the $819 million NC DHHS had requested for the rebase. Sangvai, the department’s secretary, in August informed legislative leaders that Medicaid reimbursements would be cut if the extra funding was not approved by Oct. 1.
A week before that deadline, the state’s Republican-led Senate and House of Representatives passed separate bills to provide an additional $174 million to Medicaid’s base funding. While less than what NC DHHS had initially asked for, department officials said it would be enough to eke out the remainder of the state’s fiscal year, which ends in June 2026.
But the Senate and House are still at an impasse over other aspects of their dueling bills, neither of which moved forward during the General Assembly’s last scheduled session of the year in late October. Democratic Gov. Josh Stein recently called on the two chambers to reconvene for a special session on Nov. 17.
Dellinger, the DHHS attorney, estimated that the agency still has enough money to operate until May if the stalemate drags on — one of several factors that ultimately led Superior Court Judge Clayton Somers to side with the plaintiffs.
“What we’re left with is the decision by the secretary to do what he did,” Somers said. “He said, ‘I’m going to do it if you don’t do this.’ [The General Assembly] didn’t do what he wanted, and he put the cuts in place. And who’d he cut? He cut the plaintiffs. That’s what he chose to do even though, by your own metrics and your own calculations, you have sufficient funding for at least May.”
He added: “The balance of equities is what really bothers me because the department won’t face any pain until May by its own calculations.”
Cuts remain for other services
The injunction granted by Somers is only temporary, and it does not roll back cuts on other Medicaid-covered services for children with autism.
The reduced rates for salaries for caregivers and other Medicaid-funded services remain a concern for parents like Corey Briskey, whose 9-year-old son has faced medical challenges since he began having seizures at age 3. That’s when Briskey applied for and was granted support through North Carolina’s Community Alternatives Program for Children, a specialized Medicaid program that provides intensive services to children with complex medical needs who might otherwise require hospitalization.
Today, Briskey’s son attends public school in Wake County, where he receives therapies throughout the day from a caregiver under his individualized education program, or IEP. He’s also autistic. Briskey said they briefly tried ABA therapy before deciding it wasn’t a good fit, though she said she understands why other families choose it.
When her son first qualified for the specialized Medicaid program, Briskey said caregivers were paid $15 an hour — a rate that made it nearly impossible to find reliable help for her son’s complex needs. Around 2023, the rate rose to $20 an hour, and she was finally able to recruit consistent support, particularly during the summer when teachers and college students were available.
The recent Medicaid rate cuts reduced that pay to $18 an hour.
“I’m worried that they’re going to find higher-paying positions, because they went from nearly $20 to $18 an hour, which, to be a caregiver to a disabled child, really isn’t enough,” she said. “Many of the candidates I interview are looking for $23 to $25 an hour, so I lose out already.”
No longer able to work full-time while balancing her son’s medical needs, Briskey became her son’s main paid caregiver through the Medicaid program. She still uses some of the Medicaid funding to hire respite care when possible. The job, she said, is far more demanding than typical childcare: “They’re changing him. Helping put shoes on and off. They’re helping him navigate up and down stairs, because he can’t do that safely. They’re making sure that he’s fed, cutting up his food and giving it to him on a fork, making sure he doesn’t choke, giving him bits at a time.”
With the rate reductions still in place, Briskey fears this is just the start. She’s preparing for much worse.
“I know more of my caregiver benefits are going to get cut,” she said. “I’m anticipating it. It’s not right, and it’s a lot of chaos and stress for people who already experienced so much chaos and stress.”
Taylor Knopf contributed to this report.
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