Can You Negotiate Medicaid ABA Rates? What Providers Need to Know About The Medicaid Fee Schedule

As an ABA provider, you’re probably used to negotiating service authorizations and staff salaries. But did you know that while state Medicaid rates are typically fixed, you may be able to negotiate higher reimbursement rates with Medicaid managed care organizations (MCOs)? When you deliver ABA under Medicaid, the Medicaid fee schedule determines the standard baseline rate. However, while the state’s Medicaid fee schedule is non-negotiable, most ABA services are actually delivered through Managed Care Organizations (MCOs). These are private insurers that contract with Medicaid, and they follow the fee schedule as a baseline, but they may pay differently than the base state rate, depending on their negotiations. 

The November 2024 release of the 2025 Medicaid fee schedule sparked concerns from providers about the 2.83% conversion factor reduction, which has already followed five consecutive years of payment reductions. Rising costs, inflation, and limited staff have already stretched providers thin, and it’s unknown what effect this change will have moving forward. These cuts have come despite a 3.6% projected rise in the Behavioral Health Fee Schedule practice costs by the Centers for Medicare and Medicaid Services (CMS) themselves in the Medicare Economic Index.

ABA is a high-overhead, labor-intensive service model. Excessive rates of staff turnover and inadequate reimbursement rates can evolve into a catastrophic equation (one you’re often on the wrong side of). You, as a provider, should be able to request accuracy for rates, ones that reflect realistic costs in practice. 

“There’s no harm in trying to negotiate with insurance companies. It’s actually encouraged to discuss the terms before signing any contract. As a service provider, you’re already managing a range of expenses, so it’s crucial to ensure your rates keep you in the black, not the red. When these situations come up, agencies have to weigh whether it’s worth accepting the plan or if it’s better to seek out insurers that offer more competitive reimbursement,” said Health Billing Specialist Damaris Rodriguez. 

So if you have been silently absorbing your costs, consider a renegotiation. The Medicaid Fee Schedule is simply a baseline, so here’s what we suggest when you’ve decided it’s time to talk.

A strong argument is supported by measurable evidence and documentation. Large MCOs will not be swayed by anecdotes or emotionally driven statements. You will need to:

Pull your state’s official Medicaid ABA fee schedule. Florida’s is here. Each Medicare Fee Schedule varies from state to state, as do their CPT (Current Procedural Terminology) codes. Start with your most recent contract. Cross-check with your EOBs (Explanation of Benefits) to make sure there are no discrepancies. Look at the CPT codes you are billing most often. 

What does it cost you to deliver ABA services on an hourly basis? All calculations should include labor costs (RBT wages, BCBA salaries, benefits, payroll taxes), administrative overhead (scheduling, billing, credentialing, supervision), facility costs (rent, utilities, insurance, supplies), and tech-related and compliance costs (EMR systems, HIPAA-compliant tools, continuing education/training). Provide a clear comparison between your costs per hour and your reimbursement rates. Point evidence to Medicare’s own projection of the increased costs for 2025, while simultaneously rolling out a reduction in the conversion factor for the Medicaid Fee Schedule. 

Provide documentation on the length of your waitlist and the number of hours currently authorized vs. hours delivered. Identify any underserved areas or any instances of being forced to refuse services to families due to staff shortages or rate-based limits. Don’t forget to share metrics like your client and staff retention rates, average length of time in treatment, and any relevant clinical outcome data. Be sure to note extra services you offer, such as parent training or community services. 

External data can be helpful as well; check out the labor cost inflation in your region, comparable fee schedules from other organizations, and CPT rate data from nearby states. Florida’s practitioner fee schedule is here.

Ask for a review or adjustment of specific CPT code rates with an overview of your supporting evidence. Explain how the current rates will affect the quality of ABA provision if they are not raised.

Who you negotiate with depends on the structure of your contract, and additionally, not all rates come from your state’s Medicaid agency. Many ABA providers are contracted through intermediaries (third parties) or MCOs.

If it’s Medicaid: Start with the Provider Services page.

If it’s through an MCO or third party: Log in to your portal or call the number for provider support. Ask to speak to a Network Representative or Contract Manager.

Request an update after 30 days and document all instances of communication. If you receive a denial or no response, escalate your file to a supervisor or send in a new request with updated numbers after six months. In the meantime, seek out local provider coalitions or reach out to lobbyist groups or legislators. 

“In many cases, agencies need to bring in a credentialing specialist to navigate the process, unless someone on the admin team already knows it inside and out. It takes persistence, close follow-up, and a proactive mindset to get through it successfully. This isn’t a one-and-done task; it requires staying on top of every detail,” added Rodriguez.

Providers who continue to accept rising losses with the Medicaid Fee Schedule risk no change. Qualified staff deserve fair pay, and clients deserve to have access to medically prescribed therapeutic services. Fee schedule reform is within our sights when we fight for what we feel is right.