Texas Medicaid ABA Cuts Could Be Next: How Independent Practices Can Protect Autism Care Revenue

Primary Care Perspective - Texas Edition | Friday, January 2, 2026

Source: Bram Sable-Smith and Andrew Jones | Category: Insurance & Medicare

Texas Medicaid ABA Cuts Could Be Next: How Independent Practices Can Protect Autism Care Revenue

The Hook

States are slashing Medicaid reimbursements for autism therapy by up to 50%, with North Carolina, Nebraska, Colorado, and Indiana leading the charge as spending on applied behavior analysis (ABA) explodes nationwide. While Texas hasn’t announced cuts yet, the writing is on the wall: North Carolina saw a 423% increase in ABA spending over four years, and Texas—with its larger Medicaid population and autism prevalence—is almost certainly facing similar budget pressures. Independent practices offering or coordinating pediatric behavioral health services need to prepare now before reimbursement cuts hit your bottom line.

Analysis

Applied behavior analysis has become the gold standard for autism treatment, and the numbers tell a compelling story about market growth. Nebraska experienced a 1,700% jump in ABA spending; Indiana saw 2,800%. This explosive growth stems from increased autism awareness, earlier diagnosis, and state mandates requiring coverage—creating a perfect storm of demand meeting mandatory payment obligations.

For Texas independent practices, this presents both opportunity and risk. The Lone Star State has one of the nation’s largest Medicaid programs, covering approximately 5.5 million children. With autism prevalence now at 1 in 36 children according to CDC data, that’s a substantial patient population requiring intensive services—often 10 to 40 hours per week at premium reimbursement rates.

But here’s the reality check: When state Medicaid spending on a single service category increases 400-2,800% in just a few years, budget cuts are inevitable. The Texas Legislature meets biennially, and with the next session’s budget discussions already underway, independent practices need to anticipate how potential ABA reimbursement cuts could cascade through your pediatric service lines.

Smart independent practices understand that pediatric behavioral health isn’t just about direct ABA provision—it’s about care coordination, referral relationships, and comprehensive child development services. If you’re currently referring to ABA providers or offering complementary services, those referral partners may soon face financial pressure that disrupts continuity of care for your patients.

The broader lesson extends beyond autism care: When Medicaid spending on specialized services surges, state officials respond with blunt budget instruments. Whether it’s ABA today or diabetes management programs tomorrow, Texas independent practices must build financial resilience against sudden reimbursement changes. This means diversifying revenue streams, strengthening commercial payer relationships, and potentially exploring value-based arrangements that reward outcomes rather than volume.

Consider also the competitive landscape. Private equity-backed pediatric groups and hospital systems can absorb short-term reimbursement cuts through economies of scale. Independent practices don’t have that luxury—but you do have agility to pivot service lines and deepen patient relationships that larger organizations can’t match.

Key Takeaways

• Monitor TMA and state Medicaid communications closely: Texas hasn’t announced ABA cuts yet, but with similar spending growth patterns, changes are likely coming in the 2025-2026 legislative cycle
• Audit your pediatric revenue exposure now: If more than 15% of your practice revenue comes from Medicaid-reimbursed behavioral health services or ABA referral coordination, develop contingency plans for 20-30% reimbursement reductions
• Strengthen commercial payer relationships for pediatric services: Families desperate for autism care will seek practices that can navigate multiple insurance options—become the practice that accepts diverse payers beyond Medicaid
• Document medical necessity rigorously: When cuts come, practices with bulletproof documentation showing patient outcomes and medical necessity will have the strongest position to appeal denials or advocate for exceptions
• Consider care coordination as a defensible service line: Even if direct ABA reimbursement drops, independent practices that excel at coordinating complex pediatric care create sticky patient relationships and potential quality bonus revenue

What Smart Practices Are Doing

Forward-thinking Texas pediatric practices are already stress-testing their Medicaid revenue concentration and building relationships with commercial ABA providers who accept multiple insurance types. They’re also documenting patient outcomes more carefully than ever—creating the evidence base they’ll need if they must justify medical necessity under tightened state guidelines.

Original Source: It’s the ‘Gold Standard’ in Autism Care. Why Are States Reining It In?

© 2025 Primary Care’s Perspective | Texas Edition