Virginia Caps Medicaid ABA Hours a Year After Raising Rates

A Reversal In Twelve Months

RICHMOND, VIRGINIA – Virginia’s Medicaid program spent last year trying to fix Applied Behavior Analysis rates that providers said had fallen too far behind the cost of care. This year, it is spending that effort limiting how much ABA the program will pay for.

In the 2025 General Assembly session, Delegate Mark Sickles presented a budget amendment directing the Department of Medical Assistance Services to raise ABA reimbursement rates by 10 percent, effective July 1, 2025. The increase carried $11.3 million in general fund spending and $11.8 million in nongeneral fund spending for fiscal year 2026.

The amendment’s own explanation said Virginia’s ABA rates were based on a study conducted before 2018 and did not adequately cover the cost of delivering the service, a gap it said had made it harder to recruit and retain providers and had constrained family access to care. The increase was intended to bring ABA in line with the rate increase that other Medicaid behavioral health services received in January 2024.

That second budget took effect on July 1, 2026. Governor Abigail Spanberger finalized the 2026–2028 biennial budget on June 29, which includes a provision. The item imposes a 20-hour-per-week cumulative limit on ABA services per Medicaid recipient and requires a confirmed autism spectrum diagnosis before a recipient can receive the service.

What The New Limit Actually Does

The cap is not absolute. Recipients can exceed 20 hours a week if a provider documents medical necessity under the program’s Early and Periodic Screening, Diagnostic and Treatment benefit, known as EPSDT. Children five and under who lack a final diagnosis can still receive ABA under a provisional pathway while that diagnosis is confirmed.

The budget language also directs DMAS to issue guidance to ABA providers and facilities on required documentation, coordinate with Medicaid managed care organizations on periodic reviews of ABA payments before and after they are made, and require those managed care plans to report specific utilization data back to the state.

The 20-hour figure did not appear without warning. A DMAS bulletin issued in December 2025 had already flagged 20 hours a week as a documentation threshold in provider guidance, months before it became a hard limit in the budget. The cap itself originated in the introduced budget under the outgoing Youngkin administration, and it remained in place in the version Spanberger signed.

Where It Leaves Families

The introduced version of the budget assumed that the cap and diagnosis requirement would save $30.8 million in general fund spending each year, plus $32.8 million in nongeneral fund savings in the first year and $39.0 million in the second year.

Advocacy groups organizing opposition to the provision have pointed to a mismatch between the new limit and how long an autism evaluation can take in parts of Virginia, which the campaign says can run up to 18 months. A child waiting that long for a confirmed diagnosis, or a child whose clinical needs exceed 20 hours a week, now depends on the EPSDT exception or the provisional pathway working as intended.

The same campaign has also raised a concern that reaches beyond Medicaid: private insurers sometimes mirror limits that first appear in state Medicaid rules. If that pattern holds here, a cap written for the Medicaid program could shape coverage decisions for ABA recipients on commercial insurance. However, no insurer has moved to adopt the 20-hour figure so far.

Why Now, And Where The Savings Go

The cap did not arrive because Virginia decided ABA was working poorly. It arrived because the state’s Medicaid program is short on money. Virginia faced a general fund need of roughly $410 million for fiscal year 2026 alone and roughly $2.8 billion across the full 2026–2028 biennium. A November 2025 presentation to the Senate Finance Committee showed that ABA is the largest behavioral health service provider by spending within Virginia’s Medicaid managed care program.

Virginia is not alone in seeking to reach ABA limits to close a Medicaid gap. North Carolina, Indiana, and Nebraska have each recently cut or capped their own ABA benefits, making Virginia the latest state to treat the service as a place to find budget savings rather than add to it.

The dollars the cap saves are not earmarked for a new autism program. They are absorbed into the broader Medicaid budget DMAS is managing under the current biennium. What happens next runs through the new utilization workgroup and the State Plan Amendment DMAS still owes CMS, the two processes that will determine how strictly the 20-hour limit gets enforced once the paperwork catches up to the policy.

AT A GLANCE

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