Same $289, New Split: Pediatric Associates Says Florida Shifted Pediatric Care Money to ABA

TALLAHASSEE, FLORIDA – For children ages 1 to 13 in one Medicaid rate category covering Miami-Dade and Monroe counties, Florida’s formula set aside $289.44 per child per month in both its original 2025 rates and a November 2025 revision, according to a challenge filed by Pediatric Associates. The practice says the split changed: the ABA portion rose from $91.23 to $147.93, and the portion for all other care fell from $198.21 to $141.51.

Administrative Law Judge W. David Watkins refused on August 26 to throw out the challenge against the Agency for Health Care Administration (AHCA). A final hearing is set for October 19 and 20.

Florida moved ABA in February 2025 into the managed care plans that cover children’s checkups, sick visits, and specialist and acute care. The state pays each plan a fixed monthly amount per member, and the petition says AHCA uses a consultant, Milliman, to calculate it. Pediatric Associates, which says it serves more than 300,000 children on Medicaid, about 15% of the children in the program, alleges an overall drop of roughly 15% in reimbursement for core pediatric care, and 20% to 30% in some counties, which it blames on how the state divided funding after the ABA transition. It is asking for an order barring the rates and a recalculation going forward, the Florida Phoenix reported.

AHCA argued that the practice had no right to bring the challenge because the state pays the plans, not the doctors. Watkins disagreed, writing that the fact that the practice’s “financial harm flows through MCO intermediaries,” the managed care plans, “does not defeat standing, especially at this stage.” He also found the petition sufficiently alleged that the rates and three methods behind them were rules AHCA never put through formal rulemaking, and that the agency unlawfully handed policymaking power to Milliman. Those conclusions let the claims proceed; they did not establish that the violations occurred. Separately, on September 2, Watkins denied AHCA’s request to reconsider, clarify, or put on hold his August 14 order requiring it to produce documents.

ABA providers are not parties. The challenge is about how AHCA built and divided plan funding after adding ABA, and whether it followed rulemaking law. The petition says there is “nothing inherently wrong” with moving ABA into managed care and that, “if properly executed,” the move can benefit everyone in the program.

As the judge summarized the petition, Pediatric Associates alleges that AHCA included cost data it knew was “tainted by ABA fraud,” inflating ABA’s cost. It also alleges that the ABA-related risk weight is the second highest for the broader eligibility group those children belong to, above the weight for cancer. Risk adjustment shifts payments among plans to reflect expected costs and must be budget neutral, so more money for one group means less for others, the petition notes. The August 26 order treated those claims as allegations; it did not decide whether fraud inflated the challenged rates or whether the risk weighting was improper.

The hearing was supposed to open October 1. On September 25, Watkins postponed it, rejected AHCA’s request to limit what it had to hand over, and gave the agency 14 days, until October 9, to fully produce the documents he had ordered in August. He held off ruling on a September 14 motion for sanctions that Pediatric Associates filed against the agency. The delay, he wrote, was “solely for purposes of allowing Respondent,” meaning AHCA, “to complete the previously ordered discovery.” As of October 13, the public docket listed nothing after September 29, which does not show whether AHCA met the October 9 deadline.

AHCA declined to comment on the pending case to the Florida Phoenix in June and to the Florida Record in September. A report Milliman prepared for AHCA, dated October 1, said the ABA-specific adjustment responded to an unexpected wave of ABA users moving into the Children’s Medical Services Plan and was designed to redistribute ABA funding within each region. The report does not resolve the legal challenge. In April, AHCA told plans to negotiate relief with providers facing losses from ABA in their value-based contracts, and to stop related recoupments until they reached agreement.

Watkins said he may hold a compliance hearing about a week before October 19 to check whether AHCA has turned over the records. Only the rule challenge remains before him, so the judge, not the agency, will issue the final order.

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