This week, Pediatric Associates (PA), the largest pediatric primary care provider in Florida, filed a lawsuit against the Florida Agency for Health Care Administration (AHCA), challenging a flawed rate-setting formula that has already drained hundreds of millions of dollars from Florida’s pediatric care system, pushing some clinics to leave the Medicaid program and putting at risk the future of everyday pediatric care that more than 2 million Florida children on Medicaid depend on.
The lawsuit calls on AHCA to correct its rate-setting calculations, apply accurate rates going forward, and restore the funding lost from children’s care since February 2025. “AHCA’s actuarial errors created an access crisis for Florida families covered by Medicaid and for their providers,” said April Andrews-Singh, RN, ALM, JD, Chief Ethics and Compliance Officer and General Counsel of Pediatric Associates. “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. We were forced to take this step because families and their children cannot wait any longer for action.”
How the Error Happened
In 2025, AHCA integrated behavior analysis services – therapies used by a small subset of children with developmental conditions – into Florida’s Medicaid managed care payment system. The way AHCA calculated the resulting funding split in connection with this integration has led to a crisis for providers of primary pediatric care. A renowned independent actuarial firm has reviewed and validated the funding impact on general pediatric reimbursement, confirming our belief that our patients will suffer as a result of this action.
AHCA, with oversight from the Centers for Medicare & Medicaid Services (CMS), creates levels of reimbursement for all Medicaid services. These “rate calculations” dictate payment for providers, but their methodology in 2025 was flawed and differs from both long time precedent and sustainable levels for pediatric care.
AHCA’s 2025 rate calculation assumes that the overall expenses for behavior analysis services are spread evenly across geography and within age groups – but this is not accurate. To cite extreme examples, newborns and adults do not use these services, yet AHCA’s 2025 methodology allocated them reimbursement to cover ABA expenses.
Organizations that have lower exposure to behavior analysis expenses, either because they care for adults or operate in certain geographic regions, were overpaid. And by allocating funding associated with behavior analysis broadly rather than where the expenses occur, AHCA inadvertently transferred money out of the general pediatric care budget.
As a result of AHCA’s flawed calculation, Florida’s pediatric physicians have seen reimbursement for everyday, non-behavior analysis pediatric care fall by roughly 15 percent in the southern rating regions. That cut amounts to about $15 million less per month starting in February 2025, or roughly $300 million over the 20-month period ending September 2026. During those same months, funding for non-behavior analysis services in the 55 and older age band rose by as much as 26 percent in some areas, even though older adults make almost no use of behavior analysis services.
Separately, the rate setting strategy also relied on behavior analysis utilization data that has drawn significant federal scrutiny. Behavior analysis services carry far weaker utilization controls than primary pediatric care, and evidence of fraud by providers of these services is well-documented nationwide. Because rates are set from that utilization, weaker controls let provider spending grow unchecked, drawing funding away from the evidence-based primary care children rely on.
CMS raised Florida-specific concerns in a March 2026 letter to Governor Ron DeSantis and AHCA Secretary Shevaun Harris about the administration’s concerns of widespread fraud in Florida’s Medicaid program. Fraud of this kind not only diverts dollars from general pediatric care, but it also creates barriers for the children who truly need behavior analysis services.
What Is at Stake for Florida
For hundreds of thousands of families served by PA, Medicaid is not a supplement to other coverage – it is the only coverage their children have and a necessity to keep them healthy. When reimbursement falls below the cost of care – which the state’s flawed formula has allowed – pediatric practices are no longer able to sustainably care for Medicaid patients.
“If the children I care for every day lose access to pediatric care, it would be absolutely devastating,” said Dr. Rasciel Socarras, MD, FAAP, Pediatric Associates. “I know from experience that if action is not taken, more families will end up relying on emergency rooms for everyday care – or worse, skipping care entirely. The funding miscalculation we are asking the state to correct is fixable, and fixing it matters for every Medicaid-insured child in Florida, not just the ones in my practice.”
How to Solve the Problem
AHCA must take three specific actions to remedy this state-caused issue and ensure Florida families do not lose access to pediatric primary care:
Correct the methodology today. Revise or revert rate calculations to accurately reflect where behavior analysis services are actually used, and to account for the fraud, waste, and abuse in behavior analysis services that has drawn federal and state scrutiny, so that general pediatric care is funded at the appropriate level.
Apply corrected rates to 2026-2027. AHCA is finalizing next year’s rates now. The same flawed methodology must not carry into another rate year.
Restore the funding for children’s care. Pediatric providers have absorbed real, independently validated losses for care already delivered since February 2025, when the error began. Restoring that funding protects children’s access.
