The state Agency for Health Care Administration’s new rate-setting formula is creating a pediatric health-care crisis for Florida families, a new lawsuit alleges.
Florida’s largest Medicaid pediatric services provider is suing the state Agency for Health Care Administration (AHCA) over “thoroughly botched” rate changes that it says put the health of hundreds of thousands of Florida children at risk.
Pediatric Associates filed its petition challenging the rate changes on June 23 in Florida’s Division of Administrative Hearings. The legal complaint alleges that AHCA’s 2025 policies switched the coverage of what’s called applied behavior analysis (ABA) from a fee-for-service basis to the managed medical assistance program, or MMA. This resulted in what Pediatric Associates said were dramatic reductions in funding for core pediatric care services.
“AHCA’s changes have jeopardized pediatric care for hundreds of thousands of Florida families,” the petition states. “Many pediatricians caring for children on Medicaid are now being paid less than it costs to provide care, placing these doctors in an untenable position: continue to treat children on Medicaid at a financial loss or exit Medicaid altogether.”
ABA services are significantly more costly than core pediatric care due to the prevalence of fraud carried out by ABA service providers, according to Pediatric Associates.
“... AHCA’s consultant’s rate calculations included allocations of ABA funding to infants between 0-2 months old, who are too young to use ABA services,” the complaint says. “And AHCA’s consultant over-allocated funding for ABA in North Florida and under-allocated it in South Florida.”
One of the nation’s largest actuarial companies reviewed Florida’s method of calculating the new rates to managed-care organizations and found that they contain errors that underfund core pediatric care, a spokesperson for Pediatric Associates told the Florida Record in an email.
“... State officials themselves have acknowledged the potential impact: AHCA noted in an April 2026 policy communication that the rate changes could create ‘access issues for children in Florida Medicaid’ if providers face significant financial losses and cannot continue services,” the spokesperson said.
Pediatric Associates attended at least five meetings with AHCA officials in the first half of this year to resolve the issue, but no fix was implemented, according to the spokesperson.
"We have attempted for months to resolve this through good faith, direct engagement, and while the agency understands its error and the impact it will cause, it has failed to act,” April Andrews-Singh, Pediatric Associates’ general counsel, said in a prepared statement. “We were forced to take this step (legal action) because families and their children cannot wait any longer for action."
The AHCA declined a request for comment, saying it does not discuss pending litigation.
The complaint seeks corrections to what Pediatric Associates calls “unfounded methodology,” to apply accurate rates for 2026-2027 and to restore funding that has been cut since February of last year.
Incidents of fraud carried out by ABA providers have been documented nationally and have been a concern of the federal Centers for Medicare & Medicaid Services.(CMS), Pediatric Associates said.
The service provider argues the consequences of the new rate structures include fewer pediatricians being available to treat children, longer waits for care and an increase of emergency room visits to deal with medical conditions that could have been prevented through core pediatric care.
