The number is what triggered the bill. NC Medicaid ABA spending went from $6 million in 2021 to $660 million in 2025. Beneficiaries grew from 8,704 to 13,447. Average cost per patient: $37,600. The state actuary projects $1 billion or more by 2027 if the curve continues.
Governor Josh Stein signed House Bill 696 on April 30, 2026. The bill does four things, all aimed at the same problem:
- Telehealth restriction. A majority of ABA sessions must now be conducted in person. Telehealth-only assessments by LQASPs are banned outright.
- Out-of-state lockout. BCBAs and QABA-credentialed QASPs not licensed in NC may no longer enroll in NC Medicaid.
- Paraprofessional limits. Tighter caps on the ratio of paraprofessional service hours that count toward the treatment plan.
- Policy 8F redraft. NC DHHS released the new Clinical Coverage Policy 8F draft on May 14, 2026. Public comment closes June 14.
Why this is a Southeast story, not just a NC story
NC was not the first state to feel ABA budget pressure. It is the first state to put a comprehensive structural response into one bill in one session. Georgia, South Carolina, Virginia, and Florida have all watched the NC trajectory closely. The CareSource Georgia 20% rate cut announced March 27, 2026 was a budgetary response to the same underlying actuarial concern. Florida already tightened re-eval rules in 2025. Virginia DMAS layered units-per-CPT requirements in October 2025.
NC HB 696 gives the rest of the Southeast a template. Telehealth restrictions are politically easy to pass, easy to enforce, and reduce utilization quickly. Out-of-state provider lockouts are even easier and they remove a politically convenient target. Expect at least two other Southeast states to introduce parallel bills in the 2027 legislative session.
The operational consequences for your chain
If you operate cross-border BCBAs serving NC clients via telehealth, your NC revenue line is in immediate jeopardy. The bill takes effect on a phased schedule keyed to the Policy 8F final rule. By Q3 2026, you must have an in-state BCBA roster sized to absorb the displaced telehealth volume or you lose those clients.
Even in-state providers need to rebuild authorization workflows around the Policy 8F redraft. The redraft is expected to tighten units-per-week caps on 97153 and add new documentation requirements for medical necessity reviews at 6-month intervals.
What this means for your practice
NC is the bellwether. The model is: stricter telehealth + out-of-state lockout + tighter utilization management. If you operate in any Southeast state with high ABA Medicaid growth (FL, GA, SC, VA), expect a similar package within 18 months. Build your operational response now while the regulatory window is still open.
The chains that win in this environment are the ones with strong in-state BCBA rosters, tight intake-to-billing telehealth audit trails, and the operational discipline to absorb new policy without losing margin.
✓ This week
Pull your NC patient list. Flag any served by an out-of-state BCBA. Model staffing scenarios for Q3 under the assumption that those clients need an in-state BCBA. Then file a comment letter on Policy 8F before June 14.
What to watch next
Three things in the next 90 days. First, the final NC DHHS Policy 8F rule, expected mid-to-late summer 2026. Second, whether Georgia HB 1052 (introduced March 2026) advances with similar telehealth language. Third, whether the Centers for Medicare and Medicaid Services issues guidance on the cross-state provider lockout question (the constitutional Commerce Clause angle is going to be tested).
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