Families of children with autism say cuts to provider reimbursements are hurting their daughters and sons.
What You Need To Know
Families of children with autism in lawsuit against NCDHHS contend it did not need to cut reimbursement rates for providers
A judge temporarily paused the cuts until at least Monday
The issue over how much to pay providers for services rendered to patients draws back to this summer in the General Assembly
In a lawsuit filed in Wake County, the plaintiffs sued the North Carolina Department of Health and Human Services for dropping the reimbursement rates for medicaid services by 10%.
Thursday, a judge issued a temporary restraining order that puts a pause on those rate cuts.
Friday, leaders at NCDHHS said it would comply with that order.
Gov. Josh Stein is calling for legislators to return to Raleigh in two weeks to hammer out an agreement to fully fund Medicaid.
The lawsuit contends this is a discriminatory issue.
This issue, which started in the General Assembly’s budget debate, has shown no signs of going anywhere.
The matter of what Medicaid does and doesn’t cover impacts the Morales family, too.
“Unless you have a child with autism, you don’t understand how hard it is to deal with a child with autism,” Naomi Morales said.
Morales’ daughter Addilyn is a 6-year-old with autism.
“She will laugh. It’s the best laugh I’ve ever heard. She. It was very hard to see her laugh or smile. And now she is. She just. She’s completely different,” Morales said.
Morales said it’s been a long road to see progress in her growth and development for a nonverbal child.
She drives Addilyn to speech, occupational and Applied Behavioral Analysis therapies in Wake County from Harnett County.
The services for Addilyn were covered by Medicaid. Her mother said they have made her calmer in real-world settings like grocery stores and at home.
“I don’t know where Addilyn would be without Medicaid. It’s a big part of her and her needs,” Morales said.
Michael Easley Jr. is a former United States attorney now representing the more than 20 families in the lawsuit.
“Which providers across the state have said would jeopardize their ability to provide care to kids who are sitting on waitlists for months or who are even in clinics today,” Easley said.
Easley said they are accusing the department of restricting their child’s ability to receive therapies crucial to hitting key milestones.
“Everybody here has a job to do. The legislature’s job is to appropriate a budget. DHHS’ job is to provide the services with that budget. Our client’s job is to show up for their behavioral health therapy that they’re entitled to under the law, through Medicaid, and they’re doing that,” Easley said.
There are far fewer rural providers of autism therapies, which means less wiggle room for cuts to paying staff.
Because of a dispute between Republicans in the General Assembly, legislators have not passed a new budget this year and the state’s DHHS leaders said the current budget does not provide enough money to keep up with Medicaid’s rising costs.
When the NCDHHS announced a 10% cut to reimbursements for autism care providers in the fall, families without the benefit of closer therapies took note and sued the state’s top health agency. Both the House and Senate have introduced legislation that would fully fund Medicaid, and Republicans contend the current cuts are not necessary.
The NCDHHS shared a statement in response to the lawsuit:
“The North Carolina Department of Health and Human Services will comply with the temporary restraining order related to provider rate reductions for Research Based Behavioral Health Treatment Services. On Nov. 6, 2025, we received the written order issued by the Court.
This order makes the need for the General Assembly to fund Medicaid even more urgent. Any reinstatement or reversal of the provider cuts without additional funding from the General Assembly means the program will run out of funding sooner, putting the entire state Medicaid system at risk.
Without additional funding and implementation of the October 1 rate cuts, North Carolina could run out of NC Medicaid funds as early as April 2026. If the NCGA fully funds NC Medicaid, the Department will reevaluate all cuts and take action to reverse or modify cuts to ensure NC Medicaid can operate within the appropriated budget.
We understand these provider rate cuts are devastating to people, providers and communities that rely on NC Medicaid. NCDHHS did not want to take this extremely difficult step of making these significant reductions for NC Medicaid services, however without additional funding from the General Assembly, it was unavoidable.”
For a single mother of three children Morales couldn’t imagine her daughter going without the help she needs.
“If Medicaid is gone, most of these children who use Medicaid to be able to have those services, will not have them. How will our children progress in life?” Morales said.
The case is scheduled in Wake County Superior Court Monday morning.
Easley said he’ll ask for a continuation of the pause in reimbursements to give everyone more time to work through the issue.
In recent weeks, N.C. House Speaker Destin Hall has criticized the reimbursement rate cuts and said Stein and the NCDHHS are manufacturing a fake crisis.