A $639 million projection and a 3% pay cut

On April 27, 2026, North Carolina Health News published a piece that should be required reading for every pediatric occupational therapist, physical therapist, and speech-language pathologist in the state. The headline: NC moves to rein in soaring autism therapy costs amid fraud concerns.

The numbers were staggering. But the official NC DHHS policy paper Ensuring Person-Centered Care for Children with Autism Spectrum Disorder in the NC Medicaid Program, released for community feedback in late 2025, tells the underlying story even more clearly. NC Medicaid spending on Research-Based Behavioral Health Treatment (RB-BHT), which is overwhelmingly Applied Behavior Analysis (ABA), grew from $121.7 million in State Fiscal Year 2022 to $329.4 million in SFY 2024, a 171 percent increase in two years. The state’s own actuarial projection for SFY 2026 is $639 million. That is a 425 percent increase in four years, in one service line, in one state.

In 2024, the NC General Assembly authorized a 15 percent rate increase for ABA across all seven RB-BHT CPT codes (97151 through 97157). In the same window, NC Medicaid pediatric occupational, physical, and speech therapy rates received no equivalent increase. They had not received a meaningful increase in nearly 20 years.

Then, on October 1, 2025, NC Medicaid announced a 3 percent rate reduction across multiple service lines due to funding shortfalls. That reduction was applied to ABA, but only after ABA’s recent 15 percent raise. The same 3 percent was applied to pediatric OT, PT, and SLP, on a fee schedule that had not moved in two decades. The OT, PT, and SLP cut was subsequently paused after legal challenges and provider pushback, but the signal it sent is the point. The state was prepared to cut three established, board-credentialed, medically licensed pediatric therapy disciplines while a fourth service line, delivered overwhelmingly by paraprofessionals without medical credentialing, was on a trajectory to consume more than $600 million of the Medicaid budget in a single year.

There is a question buried in those numbers that the rest of this post will try to answer. Medicaid coverage is statutorily anchored to medical necessity. If medical necessity is the threshold, how does a service delivered primarily by individuals with 40 hours of generalist training, no required college, no fieldwork, and no state healthcare licensure receive the lion’s share of the spend, while licensed medical professionals with master’s and doctoral degrees, board examinations, supervised fieldwork, and state licensure receive a rate cut?

This post is not about whether ABA helps any individual child. It does, for some. This is about scale, scope, credentialing, and what happens to the developmentally rigorous, board-credentialed pediatric therapy disciplines when one adjacent discipline absorbs 30 to 40 hours per week of a child’s life, expands faster than its evidence base supports, and triggers fraud investigations that will eventually wash back across all of pediatric therapy.

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A brief history of ABA

ABA’s foundations are in B.F. Skinner’s operant conditioning. The application to autism came from O. Ivar Lovaas at UCLA, whose 1987 paper is, to this day, the citation that anchors most of the field’s claims to insurers, school systems, and state legislatures.

Lovaas reported that 47 percent of children who received 40 hours per week of intensive behavioral intervention for two to three years achieved “normal” intellectual and educational functioning, compared to 2 percent in the control group. That single study is where the 40-hour-per-week prescription standard came from. It is also where the language of “recovery” entered autism intervention discourse.

The methodological problems with Lovaas 1987 are well documented and were acknowledged by Lovaas and his collaborators themselves: non-random group assignment, a sample functioning at a higher cognitive level than typical for autistic children at the time, unblinded outcome assessment, and an outcome definition built around IQ scores and mainstream classroom placement rather than quality of life. The original protocol also included aversives such as slaps and electric shock, which the field has since disavowed but which were central to the methods that produced the cited outcomes.

Despite these problems, Lovaas 1987 became the evidence base cited in every state autism insurance mandate passed between 2007 and 2019. By the time more methodologically rigorous follow-up studies emerged, the reimbursement infrastructure was already built.

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What the research actually shows

The strongest naturalistic dataset on ABA outcomes in the United States is the Department of Defense’s Autism Care Demonstration, which has tracked roughly 16,000 TRICARE-eligible children since 2014. The 2020 DoD Annual Report to Congress reached a remarkable conclusion for a discipline universally described as evidence-based: in their words, the current format of the demonstration project and the delivery of ABA services was not working for most TRICARE beneficiaries. Of the children studied over a one-year window, 76 percent showed no improvement on the standardized outcome measure, 16 percent improved, and 9 percent got worse. The report also stated, and this is the finding that should trouble anyone billing 30-plus hours per week, that “the number of hours rendered does not appear to impact outcomes.” The dose-response curve that justifies high-intensity ABA prescribing did not appear in the data.

TRICARE still has not approved ABA as a basic medical benefit. It has been covered only under demonstration project structure for over a decade because it does not meet TRICARE’s hierarchy of evidence standard for proven medical effectiveness.

In late 2025, the National Academies of Sciences, Engineering, and Medicine (NASEM) published a report commissioned by Congress to evaluate the demonstration. NASEM concluded that comprehensive ABA-based interventions are evidence-based practices and recommended that DHA cover ABA as a basic TRICARE benefit. But the same report explicitly criticized the way ABA is currently delivered: rigid hour prescriptions, mandatory assessments that do not inform treatment, restrictive setting requirements, and outcome measures that do not capture what families actually care about. The NASEM finding is essentially that the principles have evidence, but the delivery system the U.S. has built around them is misaligned with what the evidence supports.

The honest summary: ABA principles, applied skillfully and in moderation by qualified clinicians, have empirical support for skill acquisition. The 40-hour-per-week dosage standard, the universal application to every autistic child, and long-term quality-of-life outcomes do not have the evidence base the field claims when speaking to payers.

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The fraud problem

The NC Health News investigation, and the NC DHHS policy paper that followed, showed in publicly accessible numbers what happens when a payment stream grows 425 percent in four years with weak oversight.

NC Health News obtained spending data through a public records request and found that 80 of the 200-plus ABA providers participating in NC Medicaid received at least $1 million in reimbursement in 2025. Payments to individual companies ranged as high as $64.91 million for a single Utah-based provider with 11 NC facilities. The Private Equity Stakeholder Project reported that 15 private equity-backed ABA companies operate more than 130 facilities in NC, making the state one of the most saturated PE-backed ABA markets in the country.

NC Attorney General Jeff Jackson confirmed at an April 2026 House Select Committee on Oversight and Reform hearing that his office is conducting ongoing investigations into ABA billing in the state, including improper payments and “phantom billing,” which is the practice of submitting claims for therapy sessions that never took place or billing for more hours than were delivered. North Carolina is not alone. Federal prosecutors in Minnesota charged a defendant last year in what they described as the first criminal case tied to a sprawling ABA fraud scheme involving shell companies and millions in fraudulent Medicaid claims.

The four-hat problem

The NC DHHS policy paper named, in the state’s own words, the structural fraud vector that has been hiding in plain sight. From Action 8 of the policy paper:

Some providers have reported to NCDHHS that these requirements in the RB-BHT Clinical Coverage Policy are insufficiently clear on which provider types may make an ASD diagnosis, referral to RB-BHT, or referrals for other ASD services… As a result, providers that do not offer RB-BHT sometimes refer an individual to an RB-BHT provider to make an ASD diagnosis, which raises conflict-of-interest concerns. In practice, the same provider may currently function as the diagnosing provider, the referring provider, the assessing provider and the service provider.

That is the state acknowledging that an ABA company in NC can currently diagnose autism, refer the patient to itself, assess the patient, and deliver the services, all under one organizational roof, all billing the same payer. There is no parallel structure anywhere in pediatric OT, PT, or SLP, where the diagnosing physician or psychologist is institutionally and legally distinct from the treating therapist.

Compounding this: under current Policy 8F, provisional ASD diagnosis can be made by any licensed psychologist, physician, or master’s-level clinician for whom diagnosis is within their scope of practice. For children under 3, a provisional diagnosis is sufficient to initiate ABA services, with full diagnosis required within 6 months. This is a structural funnel into ABA before differential diagnosis is complete, before OT/SLP/PT have evaluated the child, and before the family has been offered the full continuum of services NC Medicaid technically covers.

Federal audits in other states

This is not theoretical. The federal Department of Health and Human Services Office of Inspector General has already audited ABA billing in multiple states:

• Indiana: At least $56 million in improper fee-for-service Medicaid payments for ABA (2024 OIG report)
• Wisconsin: At least $18.5 million in improper fee-for-service Medicaid payments for ABA (2025 OIG report)
• Massachusetts: Documented improper payments in its 2024 MassHealth Annual Report

The findings across these audits are consistent: lack of provider documentation to support the CPT codes billed, lack of documentation for the number of units billed or dates of service, delivery of ABA to members who did not receive required diagnostic evaluations or treatment referrals, and “impossible billing” practices such as billing for more than 24 hours of ABA in a single service date for a single member.

NC has not yet been audited at the federal level for ABA, but the NC DHHS policy paper explicitly signals collaboration with the NC Department of Justice on program integrity going forward. The audit infrastructure is being prepared.

Why this matters for OT, PT, and SLP

Medicaid Program Integrity does not stop at one service category once it is mobilized. When NC DHHS and the Attorney General’s office expand pediatric therapy audits in response to the ABA findings, the standard practice is to extend that scrutiny to adjacent pediatric therapy lines. Outpatient OT, PT, and SLP share the same provider settings, the same referral sources, the same payers, and overlapping CPT code families with ABA. From a program integrity analytics standpoint, pediatric therapy disciplines are a single risk surface.

NC Clinical Coverage Policy 10A already contains explicit Program Integrity language authorizing post-payment review by statistically valid random sampling, with data analytics on provider claims used to instigate review. The infrastructure to audit pediatric OT, PT, and SLP claims is already in place. ABA is the warm-up exercise.

What this means practically: documentation standards that were adequate two years ago will not survive the 2026 to 2027 audit climate. Every evaluation, every plan of care, every progress note, and every outcome measurement needs to be defensible in standardized, ideally interval-level, terms. The defensive posture and the offensive advocacy posture converge here. The same outcome-measurement infrastructure that justifies a better fee schedule also protects practices from recoupment.

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The medical necessity question

Medicaid coverage exists under a statutory framework of medical necessity. The federal Early and Periodic Screening, Diagnostic, and Treatment (EPSDT) mandate, the foundation of all pediatric Medicaid coverage, requires that covered services be medically necessary. State Medicaid programs implement this through clinical coverage policies that define which services are reimbursable, under what conditions, by which providers.

This raises a question that should be uncomfortable for anyone reviewing NC’s ABA spending trajectory: if medical necessity is the threshold, why is the discipline with the lowest medical credentialing floor receiving the largest share of the pediatric therapy spend?

A Registered Behavior Technician, who delivers the vast majority of direct ABA service hours, is not a medical professional under any standard definition. The RBT credential requires a high school diploma, 40 hours of training (frequently online), passage of a brief competency assessment, and an 85-question exam. There is no college coursework requirement. There is no clinical fieldwork requirement. There is no state healthcare licensure in most states, including North Carolina. The RBT is a paraprofessional credential issued by a private certification board (the Behavior Analyst Certification Board), not a state healthcare licensure body.

Compare to the providers delivering OT, PT, and SLP under NC Medicaid: master’s or doctoral-level clinicians with accredited healthcare degrees, supervised clinical fieldwork measured in hundreds of hours, national board examinations, and state healthcare licensure. Even the assistant-level providers in OT, PT, and SLP have associate’s degrees, 16 weeks of supervised clinical fieldwork, national board examinations, and state licensure.

The internal contradiction is plain. A Medicaid system that exists to provide medically necessary services has, in practice, prioritized funding a discipline whose direct-service workforce is not licensed as medical professionals over disciplines whose direct-service workforce is. The state’s own policy paper acknowledges this gap in Action 6, proposing to require BACB Registered Behavior Technician certification “prior to the provision of services” because, as the document notes, NC does not currently require its ABA technicians to obtain even the national BACB certification, much less state licensure. The state’s proposed fix is to require the basic 40-hour BACB credential. That is the floor being proposed, not the ceiling.

This is not a comment on individual RBTs, many of whom are dedicated and skilled. It is a comment on the regulatory framework. If medical necessity is what determines what Medicaid covers, then the workforce delivering medically necessary services should be credentialed as medical professionals. The current NC structure does not meet that standard for ABA, and the spending pattern reflects that misalignment.

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NC pediatric therapy spending: the comparison

Pediatric ABA in NC Medicaid

From the NC DHHS policy paper, official state figures:

• SFY 2022: $121.7 million
• SFY 2023: $199.4 million
• SFY 2024: $329.4 million (171 percent growth in two years)
• SFY 2026 projected: $639 million (425 percent growth in four years)
• 2024 rate increase: 15 percent across all seven ABA CPT codes
• October 1, 2025 rate change: 3 percent reduction (applied after the 15 percent increase)
• Number of Medicaid members receiving RB-BHT in SFY 2024: 8,706
• Average per-child annual spend (NC Health News, FY 2025): approximately $37,600
• Routine prescribing: 25 to 40 hours per week
• No annual hour cap, no combined-discipline cap

Pediatric OT, PT, and SLP in NC Medicaid

NC Medicaid does not publish a comparable line-item breakdown of pediatric outpatient OT, PT, and SLP spending. State OT, PT, and SLP associations should be filing public records requests now to surface that data.

What we do know is the authorization envelope. Under Clinical Coverage Policy 10A and EPSDT pediatric authorization, the practical maximum for a child receiving outpatient OT, PT, or SLP in NC is approximately 156 units per 6 months, per discipline. At 15 minutes per timed CPT unit:

• 78 hours per year per discipline
• 234 hours per year across all three rehab disciplines combined at full ceiling

We also know the rate trajectory: no meaningful rate increase in nearly 20 years, followed by a proposed 3 percent reduction on October 1, 2025 (subsequently paused), on a fee schedule that currently reimburses pediatric OT at approximately $24 per 15-minute unit.

The contact-hour ratio

A child in a typical 30-hour-per-week ABA program receives approximately 1,500 hours of clinical contact per year.

• ABA vs. OT alone at full pediatric annual ceiling: 1,500 hours vs. 78 hours, roughly 19 to 1
• ABA vs. OT + PT + SLP combined at full ceiling: 1,500 hours vs. 234 hours, roughly 6.4 to 1

Even when a child is authorized for the maximum of all three rehabilitation disciplines, ABA delivers more than six times the clinical contact hours.

The dollar math, per child, per year

At the current NC Medicaid pediatric OT rate of approximately $24 per 15-minute unit:

• OT alone at full annual ceiling (312 units): approximately $7,488 per child per year
• OT + PT + SLP combined at full annual ceiling, generous estimate: approximately $22,000 to $25,000 per child per year
• ABA average per child per year: $37,600

ABA spending per child is roughly five times higher than OT alone at full annual ceiling, and approximately 50 to 70 percent higher than all three rehab disciplines combined at maximum authorization. And that comparison assumes the rehab disciplines are billing at ceiling, which most are not, because the ceiling is rarely authorized in full.

The state’s own policy paper acknowledges, in Action 7:

if an assessment finds a member should receive occupational therapy, that may necessitate a lower intensity of RB-BHT based upon a child’s capacity to tolerate and benefit from the intensity of hours across all interventions.

The state is, in essence, conceding that the current spending pattern is wrong: ABA is being prescribed at intensities that displace OT and the other rehab disciplines, even when an assessment would indicate the child needs OT instead of, or in addition to, ABA.

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The credentialing gap

Who actually delivers most ABA service hours? Not Board Certified Behavior Analysts. The vast majority of direct-service ABA hours are delivered by Registered Behavior Technicians.

Registered Behavior Technician (RBT)

Under Behavior Analyst Certification Board requirements:

• High school diploma or equivalent
• Age 18 or older
• Pass a criminal background check
• Complete a 40-hour training course, frequently completed online in two to three weeks, often as part of employer onboarding
• 3 of those 40 hours must cover ethics
• Pass a brief competency assessment with a BCBA
• Pass an 85-question multiple-choice exam
• Total out-of-pocket cost can be under $100
• No college coursework required
• No clinical fieldwork required
• No state healthcare licensure required in most states, including North Carolina

NC DHHS’s policy paper notes that NC does not currently require even the national BACB Registered Behavior Technician certification. The state is now proposing to require it.

Board Certified Behavior Analyst (BCBA)

The supervising clinician credential is more substantial: master’s degree, 1,500 to 2,000 hours of supervised fieldwork, board examination, ongoing continuing education. The BCBA is the responsible clinical decision-maker but typically is not the person delivering the direct service hours.

Certified Occupational Therapy Assistant (COTA)

For comparison, here is what an OT Assistant brings to the same room:

• Associate’s degree from an ACOTE-accredited OTA program, typically two years of college coursework
• Roughly 16 weeks of full-time Level II fieldwork, approximately 640 hours
• Pass the NBCOT national board examination for COTAs
• State licensure
• Continuing education units required for license renewal
• Practices under the supervision of a licensed OT, with supervision frequency and scope defined by state law
• Adherence to the AOTA Code of Ethics and state practice act

Occupational Therapist (OT)

• Master’s or doctoral degree from an ACOTE-accredited program
• Roughly 24 weeks of full-time Level II fieldwork, approximately 960 hours
• Pass the NBCOT national board examination for OTs
• State licensure in every state, including NC
• 15 CEUs per renewal cycle in NC
• Adherence to the AOTA Code of Ethics and state practice act

The contrast that matters

A COTA, who works under the supervision of a licensed OT, has roughly (at minimum) two full years of accredited college coursework, plus 16 weeks of supervised clinical fieldwork, plus a national board examination, plus state healthcare licensure, plus ongoing CEUs before delivering hands-on pediatric therapy.

An RBT, who is the frontline provider for the majority of ABA service hours, has 40 hours of training, no college, no fieldwork, and no state healthcare licensure before delivering hands-on pediatric therapy. In NC, even the basic national BACB credential is not currently required.

A licensed OT or COTA delivering one hour of NC Medicaid pediatric OT, after two years (COTA) or six-plus years (OT) of accredited coursework and clinical training, is reimbursed at a rate that has not risen in nearly 20 years. An RBT, after 40 hours of training, is part of a payment stream that grew 425 percent in four years and is projected to consume $639 million in 2026.

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Where the money is: ABA companies absorbing OT and SLP

A growing trend in pediatric autism services: ABA companies are hiring licensed OTs and SLPs to deliver services within an ABA-organized clinical model. Some practitioners arrive through dual-credentialing pathways, since the BACB has removed degree-field restrictions for BCBA candidates and made the OT-to-BCBA and SLP-to-BCBA transitions more accessible. Others are simply employed to deliver OT or SLP services in-house, but inside a treatment plan organized around 25 to 40 hours per week of ABA.

The result is a structural absorption. Licensed clinicians from the rehab disciplines are increasingly delivering care inside ABA-organized clinical models, rather than the other way around. The treatment plan is built around behavior analysis. OT and SLP become supplemental services to a primary ABA intervention. The child’s calendar, the care coordination, and the parent-facing narrative all center on ABA, with OT and SLP positioned as add-ons.

This is the inverse of what NC DHHS’s own policy paper recommends: whole-person care planning with the full continuum of evidence-based services coordinated by a licensed professional, and ABA used at the intensity clinically necessary rather than as the organizing modality.

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Where ABA infringes on OT scope

AOTA’s scope of practice statement, and every state OT practice act, anchors the profession around occupation: ADLs and IADLs, feeding, eating, and swallowing, sensory processing and integration, fine and visual-motor skills, play, school participation, and meaningful engagement in life situations across home, community, and school contexts.

ABA programs are increasingly billing into the same scope of practice:

• Feeding therapy delivered by RBTs using food chaining, escape extinction, and behavioral feeding protocols. This is historically OT and SLP scope, and the AOTA Practice Guideline on Feeding, Eating, and Swallowing explicitly identifies OTs as uniquely positioned to evaluate and treat these problems due to the integration of sensory, motor, and contextual factors.
• Toileting programs framed as ABA “ADL training,” delivered without the underlying motor planning, sensory processing, interoception, and developmental readiness assessment that an OT brings.
• Fine motor skill acquisition including handwriting, scissor use, and utensil use, delivered as discrete trial training without consideration of grasp development, in-hand manipulation, bilateral coordination, or visual-motor integration.
• Sensory regulation strategies delivered without sensory integration training, often using behavioral reinforcement paradigms that can be in direct conflict with sensory-based clinical reasoning.
• Play skill development delivered as discrete trial training, which structurally cannot replicate the developmental work of OT-facilitated play.

The clinical risk is not theoretical. A child whose food refusal is being treated as behavioral by an RBT-delivered feeding program may have undiagnosed dysphagia, retained primitive reflexes, oral-motor apraxia, sensory-based food aversion, or ARFID. A child whose handwriting is being treated as a compliance issue may have undiagnosed developmental coordination disorder or visual-perceptual deficits. A child whose self-injury is being addressed through behavioral extinction may have undiagnosed sensory dysregulation or pain.

The ICF-CY framework makes this distinction clear. ABA’s traditional outcome targets sit at the body function and activity level. OT’s outcome targets sit at the participation level, in life situations across home, school, and community. These are not interchangeable, and a child whose week is dominated by body-function and activity-level work in a controlled 1:1 setting may never get to the participation work that produces durable, generalizable change.

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The 6 to 8 hour per day problem

The clinical issue with high-dose ABA prescribing is not only what is being delivered in the ABA hours. It is what is not being delivered in the hours that are no longer available.

Many ABA prescriptions land at 25 to 40 hours per week, often 6 to 8 hours per day for preschool-age children. A 4-year-old in ABA from 8 AM to 2 PM has no calendar space for OT, no calendar space for SLP, no calendar space for PT, no time for naturalistic family interaction, no time for play with neurotypical peers, no time for developmentally normative experiences in community settings.

The insurance and Medicaid reality compounds this. When ABA absorbs the weekly therapy budget or the child’s tolerance for therapy, OT, SLP, and PT get cut to 30-minute sessions once a week, or eliminated entirely. The 156-unit ceiling becomes irrelevant when the child has no time on the calendar for those sessions. Families are often not offered a coordinated multidisciplinary plan. They are referred to ABA, that becomes the plan, and the other disciplines are reduced to consultation or eliminated.

Pediatric OT is grounded in distributed practice across natural contexts. A child needs OT-informed strategies woven through meals at the family table, transitions in real classrooms, play with siblings, and community outings. That cannot happen when the child is in a 1:1 controlled clinical environment for the majority of waking hours.

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What pediatric OT must do

The defensive and offensive responses converge. Four priorities.

Build the outcome-measurement infrastructure. Pediatric OT cannot continue documenting in narrative paragraphs and informal goal-attainment scaling and expect to survive the audit climate that is coming, much less to win fee-schedule advocacy battles. The profession needs interval-level outcome measurement using Rasch-grounded instruments that produce defensible, change-detectable, statistically interpretable data, mapped to ICF-CY participation-level outcomes. The next generation of pediatric OT documentation needs to look more like a psychometric report and less like a clinical narrative.

Pursue fee-schedule advocacy with data, not testimony. Personal testimony from therapists about the cost of doing business has not moved the needle in nearly 20 years. What might: a defensible return-on-therapy-investment dataset showing measurable participation-level change per dollar across OT, PT, SLP, and ABA. The legislature responded to the NC ABA spending data because it was specific, quantified, and contrasted. The same approach applied to pediatric OT, PT, and SLP would be hard to ignore.

Defend scope of practice at the state level. State licensure boards, Medicaid coverage policy, and state Practice Acts are the legal mechanisms that define what discipline can deliver what service. Feeding, sensory integration, motor skill training, ADL training, and play-based participation work are OT and SLP scope under every relevant statute and AOTA practice document. Documenting scope encroachment in writing, with case examples, and submitting it to state licensure boards and Medicaid clinical coverage policy reviewers is how scope gets defended.

Build the coordinated multidisciplinary alternative and educate referral sources. The strongest argument is not “ABA is bad.” It is that a coordinated OT plus SLP plus parent-coaching plus targeted developmental behavioral support model, delivered at 6 to 10 total hours per week with measurable participation-level outcomes, produces durable change at a fraction of the cost and a fraction of the developmental opportunity cost. Most pediatricians refer to ABA reflexively after an autism diagnosis. Most parents have never been offered a clear picture of what each pediatric therapy discipline addresses or what an integrated plan looks like. Parent-facing and pediatrician-facing materials, grounded in the ICF-CY framework, would shift the referral conversation.

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Closing

This is not a turf war. It is a question about who is qualified to deliver what, what the actual evidence supports, what a child’s developmental window is best used for, and who is being paid what when public money is involved.

Medicaid exists under a statutory framework of medical necessity. That framework is supposed to mean something. When a discipline whose direct-service workforce is not credentialed as medical professionals receives a 15 percent rate increase, expands 425 percent in four years, and consumes a projected $639 million in a single state budget year, while disciplines whose direct-service workforce is licensed as medical professionals receive no rate increase for nearly 20 years and then a proposed 3 percent reduction, the framework is not being applied consistently. NC DHHS’s own policy paper, released for community feedback in 2025, acknowledges the structural problems: providers diagnosing autism and then referring patients to their own services, treatment plans that are not individualized, ABA being used as primary treatment when less intensive evidence-based therapies would be more appropriate, and audits in Indiana, Wisconsin, and Massachusetts already documenting tens of millions in improper payments.

ABA at moderate intensity, delivered by well-supervised clinicians, can be a useful component of an autism intervention plan for some children. ABA at 30 to 40 hours per week, delivered primarily by paraprofessionals with 40 hours of training, on a payment trajectory that has grown 425 percent in four years, while one provider collects $64.91 million from NC Medicaid in a single year, is a different conversation.

The NC fraud investigations, the proposed Policy 8F revisions, and the NC DHHS policy paper are an opening. Clinical Coverage Policy is being rewritten in real time. The legislature is paying attention. The Attorney General is paying attention. Audit infrastructure is being built that will, predictably, expand to OT, PT, and SLP next.

Pediatric OT has the evidence base, the credentialing rigor, the participation-focused framework, the developmental science, and the ICF-CY anchor. What it needs is the measurement infrastructure to translate clinical work into payer-defensible data, the advocacy coordination to get that data in front of policymakers, and the practice-owner discipline to make documentation audit-ready before the audit arrives.

The pediatric population this profession serves deserves better than what the current system is delivering. So does the profession.

Stephanie, OT/L, MS
Head Wizard

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References and primary sources

NC-specific policy documents

1. NC DHHS. (2025). Ensuring Person-Centered Care for Children with Autism Spectrum Disorder in the NC Medicaid Program. https://medicaid.ncdhhs.gov/policy-paper-ensuring-person-centered-care-children-autism-spectrum-disorder-nc-medicaid-program/open
2. NC Medicaid. Clinical Coverage Policy 8F: Research-Based Behavioral Health Treatment for Autism Spectrum Disorder. https://medicaid.ncdhhs.gov/8f-research-based-behavioral-health-treatment-rb-bht-autism-spectrum-disorder-asd/download?attachment=
3. NC Medicaid. Outpatient Specialized Therapy Services (Clinical Coverage Policy 10A). https://medicaid.ncdhhs.gov/providers/programs-and-services/medical/outpatient-specialized-therapy-services
4. NC Medicaid. October 1, 2025 NC Medicaid Rate Reduction Questions and Answers. https://medicaid.ncdhhs.gov/providers/claims-and-billing/october-1-2025-nc-medicaid-rate-reduction-questions-and-answers

Investigative reporting

5. Baxley, J. (2026, April 27). NC moves to rein in soaring autism therapy costs amid fraud concerns. North Carolina Health News. https://www.northcarolinahealthnews.org/2026/04/27/autism-therapy-costs/
6. Private Equity Stakeholder Project. (2026). Private Equity in ABA: Report on the Behavioral Health Industry. https://pestakeholder.org/wp-content/uploads/2026/04/PESP_Report_PE-in-ABA_2026.pdf

Federal audits and prosecutions

7. U.S. Department of Health and Human Services Office of Inspector General. (2024). Indiana Made at Least $56 Million in Improper Fee-for-Service Medicaid Payments for Applied Behavior Analysis Provided to Children Diagnosed with Autism. https://oig.hhs.gov/documents/audit/10123/A-09-22-02002.pdf
8. U.S. Department of Health and Human Services Office of Inspector General. (2025). Wisconsin Made at Least $18.5 Million in Improper Fee-For-Service Medicaid Payments for Applied Behavior Analysis Provided to Children Diagnosed With Autism. https://oig.hhs.gov/documents/audit/10497/A-06-23-01002.pdf
9. Office of the Inspector General Massachusetts. (2024). MassHealth and Health Safety Net: 2024 Annual Report. https://www.mass.gov/doc/masshealths-applied-behavior-analysis-program-service-providers-oig-2024-annual-report/download
10. U.S. Attorney’s Office, District of Minnesota. First Defendant Charged in Autism Fraud Scheme. https://www.justice.gov/usao-mn/pr/first-defendant-charged-autism-fraud-scheme-0

National evidence reviews and DoD reports

11. National Academies of Sciences, Engineering, and Medicine. (2025). The Comprehensive Autism Care Demonstration: Solutions for Military Families. Washington, DC: National Academies Press. https://www.nationalacademies.org/our-work/independent-analysis-of-department-of-defenses-comprehensive-autism-care-demonstration-program
12. U.S. Department of Defense. (2020). Annual Report on Autism Care Demonstration Program. https://health.mil/Reference-Center/Congressional-Testimonies/2020/06/25/Annual-Report-on-Autism-Care-Demonstration-Program
13. Lovaas, O. I. (1987). Behavioral treatment and normal educational and intellectual functioning in young autistic children. Journal of Consulting and Clinical Psychology, 55(1), 3–9.

Credentialing bodies and scope of practice

14. Behavior Analyst Certification Board. Registered Behavior Technician (RBT) Requirements. https://www.bacb.com/rbt/
15. American Occupational Therapy Association. Occupational Therapy Scope of Practice. https://www.aota.org/practice/practice-essentials/scope-of-practice
16. American Occupational Therapy Association. Code of Ethics. https://www.aota.org/practice/practice-essentials/ethicsstandardsa/code-of-ethics
17. National Board for Certification in Occupational Therapy. https://www.nbcot.org/
18. Accreditation Council for Occupational Therapy Education. https://acoteonline.org/
19. AOTA Practice Guideline. The Practice of Occupational Therapy in Feeding, Eating, and Swallowing. https://www.oregon.gov/otlb/Documents/The%20Practice%20of%20Occupational%20Therapy%20in%20Feeding,%20Eating,%20and%20Swallowing.pdf

Federal Medicaid framework

20. Centers for Medicare & Medicaid Services. Early and Periodic Screening, Diagnostic, and Treatment (EPSDT). https://www.medicaid.gov/medicaid/benefits/early-and-periodic-screening-diagnostic-and-treatment

Trauma and outcomes literature on ABA (referenced in evidence section)

21. Kupferstein, H. (2018). Evidence of increased PTSD symptoms in autistics exposed to applied behavior analysis. Advances in Autism, 4(1), 19–29. Note: Journal issued an Expression of Concern in 2025. Findings should be cited with methodological caveats.
22. Leaf, J. B., Ross, R. K., Cihon, J. H., & Weiss, M. J. (2018). Evaluating Kupferstein’s claims of the relationship of behavioral intervention to PTSS for individuals with autism. Advances in Autism, 4(3), 122–129.
23. McGill, O., & Robinson, A. (2021). “Recalling hidden harms”: Autistic experiences of childhood applied behavioural analysis (ABA). Advances in Autism, 7(4), 269–282.