NC HB 696, Dr. Oz revalidation, the Arizona MCO lesson, and the 90-day commercial squeeze.

Six things happened in the last 90 days that change how every ABA chain operates. North Carolina rewrote its Medicaid rules in one bill. CMS Administrator Dr. Oz put every state on a revalidation clock. Arizona's two largest providers got terminated by three MCOs in a single quarter. Indiana stacked the most restrictive rate-cap-cliff bulletin in the country. Colorado's OIG audit recommended $42.6M in federal refunds. And three of the four largest commercial payers tightened ABA policy in the same 90-day window.

Each one of these is a board-level conversation. Together they tell you exactly what to fix this quarter. If this isn't useful, reply with "unsubscribe" and we'll take you off the list the same day. If you have questions, replying gets you a real person on our team.

01North Carolina rewrote ABA Medicaid in one bill.

NC Medicaid ABA spending went from $6M in 2021 to $660M in 2025. That's 11,000 percent growth in four years. Beneficiaries grew from 8,704 to 13,447. Average cost per patient: $37,600. State actuary projects over $1B by 2027 if the curve continues. The political response was inevitable.

Governor Stein signed HB 696 on April 30. The bill bans telehealth-only assessments by LQASPs, mandates that a majority of sessions be conducted in person, blocks out-of-state BCBAs and QABA-credentialed QASPs from enrolling in NC Medicaid, and tightens paraprofessional ratios. NC DHHS released the draft Clinical Coverage Policy 8F on May 14. Public comment closes June 14.

This week: pull your NC patient list, flag any served by an out-of-state BCBA, and model staffing scenarios for Q3 under the assumption that those clients need an in-state BCBA by year end.

02Dr. Oz put every state Medicaid on a revalidation clock.

On April 23, CMS Administrator Dr. Mehmet Oz sent letters to every governor and state Medicaid director demanding swift revalidation of all Medicaid providers, with explicit focus on what he called high-risk categories. In public remarks, Oz cited questionable activities within autism therapy as the motivation. States had 10 days to confirm participation and 30 days to submit a two-year revalidation strategy.

The audit data behind the directive: $285.2M in improper ABA payments identified in 2022 and 2023 alone. $600M+ flagged across multistate OIG reviews (Colorado $77.8M, Indiana $56.6M, Maine $45.6M, Wisconsin $18.5M). Three categories of states will move fastest: the four already named in OIG audits, the five with the highest ABA spend growth curves (NC, AZ, NV, TN, GA), and the four with new MCO contract awards in 2025 and 2026 (GA, KY, LA, MO) where revalidation bundles operationally with MCO transitions.

This week: build a single revalidation tracker for every BCBA, every payer, every state. Date of last revalidation, next due date, owner. If you have us credentialing your BCBAs, our average turnaround sits at 22 days against an industry baseline of 102.

03Arizona showed us what MCO termination looks like.

Between October 2025 and March 2026, three Arizona MCOs (Mercy Care, Arizona Complete Health, UnitedHealthcare Community Plan) terminated contracts with Centria Autism and Action Behavior Centers. Arizona's two largest ABA platforms, dropped in one quarter. Nearly 1,000 Arizona Medicaid-enrolled children lost their ABA provider.

Mercy Care stacked the cuts. A 15 percent rate reduction effective July 2025. Another 25 percent effective October 2025. That's 37 percent in 90 days. The contract terminations came next. The sequence is what to study: stack cuts faster than the provider can adjust, then cite the resulting "issues" as cause for termination, then walk away with no transition plan. Centria filed suit against Mercy Care, AHCCCS, and DDD in December 2025 alleging Medicaid rule violations. Two class action lawsuits are also pending from displaced families.

This week: pull your top 10 payers by revenue. Sort by percentage of total. If any single payer is over 25 percent, that is concentration risk that belongs on your board report.

04Indiana Bulletin BT202627: hour caps, age cliffs, and forced self-reporting.

Effective April 1, Indiana cut nongroup ABA rates by 6 percent, imposed a 30-hour weekly maximum and a 4,000-hour lifetime cap, and restricted ABA to EPSDT-eligible members under age 21 starting October 1. A further 4 percent rate cut is scheduled for April 2027. The trigger was the WSJ March 10 investigation into Piece by Piece Autism Centers, which billed Indiana Medicaid $29M for 84 children in 2023 ($340,000 per child). FSSA terminated Piece by Piece on March 24.

The age-21 cliff on October 1 is the second shock. Indiana ABA Medicaid will no longer cover members 21 and over. Transition-age clients (18 to 25) who relied on Indiana Medicaid for ABA need a different funding source by Q4. Most will not find one. Indiana commercial parity coverage for adults is limited and many transition-age clients aged out of parent commercial plans.

This week: if you have meaningful Indiana volume, model the adult-21 attrition for October 1. Pull every client aged 17 to 21. Compute projected hour totals against the 4,000-hour lifetime cap. Build the family conversation script before September.

05Colorado OIG audit: $77.8M improper, $42.6M federal refund recommended.

On February 28, OIG published its Colorado audit: $77.8M in improper FFS Medicaid ABA payments and a $42.6M federal refund recommended. 100 percent of the 100 sampled enrollee-months had at least one improper claim line. Colorado ABA payments grew from $60M (2019) to $163M (2023). Documentation issues cited included billing while children were napping or watching movies. HCPF launched an emergency rule for Pediatric Behavioral Therapy providers on September 29 in response.

The audit methodology is what should worry every operator. OIG samples 100 enrollee-months, finds documentation gaps in nearly every one, extrapolates to the full population, and recommends a federal refund. The methodology is now repeatable in every state. OIG has recommended $123M+ in combined federal refunds across Colorado, Indiana, Wisconsin, and Maine. No state has refunded any of it in four years. That's the gap the Dr. Oz directive is meant to close.

This week: stand up a monthly internal QA review on a 5 to 10 percent claim sample. Document the methodology, the sample selection, and the findings. Audit-defensible internal QA is the cheapest insurance you can buy.

06Optum, Aetna, and Anthem tightened ABA in the same 90-day window.

Three of the four largest commercial ABA payers tightened policy in the same 90-day window. Optum Behavioral Health now requires billing AND rendering provider NPI plus taxonomy codes on every commercial ABA claim. Soft enforcement October 2025, full denial mode Q1 2026. Missing NPI or taxonomy means automatic claim rejection. No payment, not even partial.

Aetna released a revised ABA medical necessity guide effective January 1, with new Claim Coding Review Program edits beginning March 1. Diagnostic report requirements tightened. Anthem launched a streamlined ABA claim process across multiple states on January 1.

This week: audit your last 100 commercial ABA claims. Check that NPI and taxonomy are populated correctly. Pre-test the next batch against the Optum edit logic. If you want a written audit, our free ABA Denial Audit returns annual leakage by CPT, peer benchmark, and top 3 recoverable opportunities in 4 minutes.

One thing worth 30 minutes this week

Pull your top 10 payers by revenue. Compute concentration. Then pull the contracts. Look for the unilateral rate change clause and the notice of termination clause. If you are concentrated and the contracts are loose, you have Arizona risk on your books. That conversation belongs in next month's board pack.