This week, Pediatric Associates (PA), Florida’s largest pediatric primary care provider, filed a lawsuit against the Florida Agency for Health Care Administration (AHCA), challenging a flawed pricing formula that has already drained hundreds of millions of dollars from Florida’s pediatric health care system, forced some clinics to withdraw from the Medicaid program, and jeopardized the future of routine pediatric care on which more than 2 million Florida children receiving Medicaid depend.
The lawsuit asks AHCA to revise its pricing calculations, apply accurate rates going forward, and restore lost funding for children’s health care starting in February 2025. “AHCA’s actuarial errors have created an access crisis for Florida families covered by Medicaid and their health care providers,” said April Andrews Shinn, RN, ALM, JD, chief ethics and compliance officer and general counsel at Pediatric Associates. “For months, we have been trying in good faith to resolve this issue by engaging directly, but the authorities have failed to act, even though they understand their mistake and the impact it will cause. We are forced to take this step because families and their children can no longer wait for action.”
how the error happened
In 2025, AHCA integrated behavior analysis services, a treatment utilized by a minority of children with developmental disabilities, into Florida’s Medicaid managed care payment system. The way AHCA calculated the funding split associated with this consolidation created a crisis for primary pediatric health care providers. A well-known independent actuarial firm investigated and verified the impact of funding on general pediatric insurance reimbursement and confirmed our belief that patients will suffer as a result of this action.
The AHCA creates reimbursement levels for all Medicaid services, with oversight from the Centers for Medicare and Medicaid Services (CMS). These “fee calculations” determine payments to health care providers, but their methodology in 2025 is flawed and inconsistent with long-standing precedent and sustainable levels of pediatric care.
AHCA’s 2025 pricing calculations assume that the overall cost of behavioral analysis services will be spread evenly across geographic and age groups, which is not accurate. As an extreme example, neonates and adults do not utilize these services, but AHCA’s 2025 methodology allocates reimbursement to cover ABA costs.
Organizations with less exposure to behavior analysis fees, either because they cared for adults or because they operated in certain geographic areas, were overpaid. And AHCA mistakenly transferred funds from the general pediatric health budget by broadly distributing funds related to behavioral analysis rather than where the expenditures occurred.
As a result of the AHCA’s flawed calculations, Florida pediatricians found that reimbursements for routine non-behavioral pediatric care decreased approximately 15 percent in the southern evaluation region. This reduction will be approximately $15 million less per month starting in February 2025, and approximately $300 million less over the 20 months to September 2026. During the month, funding for non-behavioral services in the 55+ age group increased by as much as 26 percent in some regions, even though older adults used fewer behavioral services.
Separately, the pricing strategy also relied on behavioral analytics usage data, which was subject to intense federal government oversight. Behavioral analysis services have far weaker utilization controls than primary pediatric care, and evidence of fraud by providers of these services is well documented nationally. Because fees are set based on usage, weak controls can increase provider spending unchecked and take funding away from the evidence-based primary care that children depend on.
CMS raised Florida-specific concerns in a March 2026 letter to Governor Ron DeSantis and AHCA Secretary Chevaun Harris regarding the administration’s concerns about widespread fraud in Florida’s Medicaid program. This type of fraud not only diverts funds from general pediatric care, but also creates barriers for children who truly need behavior analysis services.
What’s at stake for Florida?
For the hundreds of thousands of families Pennsylvania serves, Medicaid is not a supplement to other insurance. Medicaid is the only insurance these children have and is necessary to stay healthy. When reimbursement falls below the cost of treatment (allowed by the state’s flawed system), pediatric clinics can no longer sustainably treat Medicaid patients.
“It would be absolutely devastating if the children I care for every day were to lose access to pediatric health care,” said Dr. Rasiel Socarras, FAAP, MD, Pediatric Association. “I know from experience that if action is not taken, more families will end up relying on emergency rooms for routine care, or worse, no care at all. The funding miscalculations we are asking the state to fix are fixable, and fixing them is important not just for the children in my clinic, but for every child on Medicaid in Florida.”
How to solve the problem
AHCA must take three concrete actions to resolve this state-created problem and ensure that Florida families do not lose access to pediatric primary care.
Revise your methodology now. Correct or reinstate fee calculations that accurately reflect where behavior analysis services are actually used, account for fraud, waste, and abuse in behavior analysis services that have undergone federal and state scrutiny, and ensure that general pediatric care is funded at appropriate levels.
Revised rates will apply from 2026 to 2027. AHCA is currently finalizing next year’s fees. Do not carry the same flawed method into another interest year.
Restore funding for child care. Pediatric providers have already absorbed actual, independently verified losses for care provided since February 2025, when the error began. Restoring that funding will protect children’s access.
