North Carolina’s Medicaid program is watching its autism therapy tab skyrocket, and state leaders are scrambling to catch up. A sharp surge in spending on treatment for children with autism has turned the benefit into one of Medicaid’s fastest growing expenses, putting budget officials and advocates on edge as they hunt for a balance between access and oversight. Families and providers say they are bracing for what comes next as the spike triggers a formal review by the state auditor and a package of proposed policy fixes from the health department.
State projections and what's driving them
A recent policy paper from NCDHHS projects that research-based behavioral health treatment (RB‑BHT), the Medicaid benefit that covers most applied behavior analysis (ABA) and related therapies, will climb roughly 425%, from $121.7 million in SFY 2022 to about $639 million in SFY 2026. The department attributes part of that increase to a growing provider market and a 15% rate bump in 2024. At the same time, officials flagged concerns that treatment intensity and documentation are not always individualized to each child, a combination that has pushed RB‑BHT into the top tier of Medicaid’s most expensive services.
Auditor scrutiny and lawmakers
Republican State Auditor Dave Boliek’s office has opened a detailed review of the spending spike and is recruiting a senior Medicaid audit director to lead the work, according to The Charlotte Observer. Lawmakers scheduled a March 10 briefing where NCDHHS Secretary Devdutta Sangvai was expected to walk legislative committees through utilization trends and the department’s proposed reforms. What started as a technical budget problem has quickly turned into a high-profile oversight fight at the General Assembly.
Rate cuts, lawsuits and restored payments
Facing a projected shortfall, the health department carried out a rebasing in October that trimmed provider reimbursements between 3% and 10% starting Oct. 1, 2025, with ABA services hit with the full 10% reduction. Families and providers responded with immediate legal challenges. Parents secured temporary injunctions that blocked parts of the cuts, and Gov. Josh Stein later ordered rates restored while the state works through the court cases and funding negotiations. Those legal wins and the restored payments have made it harder for officials to find quick budget fixes, according to AP.
What NCDHHS recommends
In its policy paper, NCDHHS laid out a set of proposed steps to rein in spending and stabilize how services are used while preserving access to care. The list includes clarifying the RB‑BHT clinical coverage policy so that treatment plans are clearly individualized, requiring caregiver goals in those plans, publishing a statewide provider manual, standardizing utilization management rules, strengthening documentation and program integrity, and requiring credentialing for ABA technicians. The department says these changes are meant to better align services with national clinical guidelines and tie payment more closely to measurable quality, according to NCDHHS.
Families, providers and the policy trade-offs
Advocates and providers agree that oversight is necessary, but they warn that sudden rate shifts or aggressive clawbacks could shrink the provider pool and cut therapy hours for children who rely on Medicaid. Parents who sued the department argued that the earlier cuts would jeopardize their children’s progress and increase the risk of institutionalization, while budget hawks are pushing for tighter documentation and tougher program integrity measures. Lawmakers are now trying to navigate those competing demands as the state seeks about $319 million in additional Medicaid funding for the current fiscal year, according to reporting by North Carolina Health News.
What comes next
The auditor’s review and the department’s public comment period on the RB‑BHT proposals are expected to shape the next several weeks of oversight activity. Lawmakers say they intend to press NCDHHS for more granular utilization and billing data and may look at targeted rules on billing, credentialing or documentation aimed at curbing outliers without undercutting access to medically necessary care, according to The Charlotte Observer.
