A Wake Superior Court judge on Tuesday agreed to pause North Carolina’s Medicaid rate cut for autism therapy in response to a lawsuit brought by the parents of affected children.
Judge George Collins Jr. granted a temporary restraining order to stop the 10% cut in Medicaid rates paid to providers of autism therapies after parents argued that the state illegally targeted those treatments for deep reductions.
The temporary restraining order will last until Nov. 10, when the court will hold a hearing on a preliminary injunction.
Michael F. Easley Jr., a former U.S. Attorney representing the families, in a statement, called the court’s decision “a victory for every North Carolina family fighting to give their child with autism a far start in life.”
The state Department of Health and Human Services started paying Medicaid health care providers anywhere from 3% to 10% less on Oct. 1.
DHHS leaders claimed the reductions were necessary because the legislature failed to pass a budget that fully funded the health insurance program’s cost increases. Republican legislators argued that DHHS did not need to cut rates immediately and could have continued into next year without a money infusion.
The lawsuit was brought by 21 children through their parents or guardians. The children are benefiting from or are on waiting lists for ABA therapy. Applied Behavioral Analysis aims to improve social skills and communication, increase positive behavior and reduce negative behavior, according to the Cleveland Clinic.
The lawsuit says ABA helped children with autism communicate and regulate their emotions. Without the therapy, they face slower progress or regression, the suit says.
“Those significant threats to plaintiffs’ ongoing treatment and care are the natural consequences of the cuts’ impact on therapy providers, who will be forced to reduce their staffing, cancel or change planned expansions, reduce services to Medicaid patients, and further delay accepting new patients off already long waitlists,” the suit says.
Lawyers representing DHHS opposed the temporary restraining order, writing that other Medicaid services’ rates also received 10% cuts, and there was no evidence that discrimination motivated the reduction for autism therapy.
They also challenged declarations by ABA providers supporting the plaintiffs that their businesses would become unprofitable or have to close because of the cuts. Many of those providers currently operate in states where Medicaid reimbursement rates are even lower than North Carolina’s reduced rate, the state lawyers wrote.
The state Department of Health and Human Services said in a statement that it will comply with the temporary restraining order, and is waiting for the court to put it in writing.
But the court requirement to reverse the rate cut means Medicaid will run out of money sooner, the statement said.
“This order makes the need for the General Assembly to fund Medicaid even more urgent,” the statement said. “Any reinstatement or reversal of the provider cuts without additional funding from the General Assembly means the program will run out of funding sooner, putting the entire state Medicaid system at risk. Without additional funding and implementation of the October 1 rate cuts, North Carolina could run out of NC Medicaid funds as early as April 2026.”
“If the NCGA fully funds NC Medicaid, the Department will reevaluate all cuts and take action to reverse or modify cuts to ensure NC Medicaid can operate within the appropriated budget,” the statement continued.
The statement also said agency leaders understand the cuts are causing hardships for Medicaid providers and patients, but said they were “unavoidable” due to insufficient funding from the General Assembly.
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