Kentucky Reverses Planned 4% Medicaid ABA Rate Cut: What Families Need to Know

Kentucky's plan to cut Medicaid reimbursement for ABA therapy by 4 percent, set to take effect August 1, 2026, will not happen after all. On July 22, 2026, Governor Andy Beshear reversed the planned cut just days before it was scheduled to hit providers, using an unexpected state revenue surplus to keep rates where they were.

For the roughly thousands of Kentucky families who rely on Medicaid to pay for Applied Behavior Analysis (ABA) therapy, this is genuinely good news. But it comes with an important caveat: state officials are calling it a "temporary solution," not a permanent fix. Here is what happened, why it happened, and what Kentucky families need to watch for next.

What Was Supposed to Happen on August 1

In June 2026, Kentucky's Department for Medicaid Services (DMS) notified providers of a 4 percent reduction in Medicaid fee-for-service reimbursement rates across 46 provider types, including Licensed Behavior Analysts (Kentucky's ABA provider category) and the technicians who deliver day-to-day therapy sessions. For ABA specifically, the two most commonly billed codes were set to drop:

• CPT 97153 (technician-delivered therapy): from $12.18 to about $11.69 per 15-minute unit
• CPT 97155 (BCBA/LBA-delivered protocol modification): from $21.99 to about $21.11 per unit

The cut was tied to House Bill 500, Kentucky's two-year state budget, which DMS said did not provide enough funding to sustain current reimbursement levels.

Why the Cut Was Reversed

Kentucky received an unexpected revenue windfall: more than $350 million in corporate income tax payments and a $476 million unbudgeted surplus. Governor Beshear directed $255 million of that surplus toward closing the Medicaid funding gap, allowing DMS to cancel the August 1 rate reduction before it took effect.

As a result, ABA reimbursement rates remain at their current levels, $12.18 for CPT 97153 and $21.99 for CPT 97155, and DMS says those rates are protected through June 2027.

Why This Is Not a Permanent Fix

DMS officials and Governor Beshear were careful to describe the reversal as temporary. The governor cautioned against treating a one-time revenue surplus as a recurring source of funding, and DMS has said long-term financing for the Medicaid program remains unresolved. The Kentucky General Assembly will need to revisit the state budget when it reconvenes in January 2027, which is the next point at which ABA reimbursement rates could be back on the table.

This puts Kentucky in a similar position to several other states that have wrestled with ABA Medicaid funding in 2026, including Nebraska, North Carolina, Indiana, Georgia, and New York, all of which have cut rates, tightened authorization rules, or both, as autism therapy spending has grown faster than state budgets anticipated.

What This Means for Your Child's ABA Therapy Right Now

For the moment, Kentucky Medicaid ABA reimbursement is stable. That is meaningfully different from the reduced-hours, provider-closure scenario families were bracing for heading into August. Still, given the "temporary" framing, it is worth taking a few practical steps:

1. Confirm with your provider that rates were not reduced and that your child's hours, session frequency, and Medicaid enrollment are unaffected.
2. Check your coverage type. If your child is covered through a Kentucky Medicaid managed care plan (Aetna Better Health, Humana Healthy Horizons, WellCare, or Passport/Molina), confirm with your care coordinator whether anything changed on the MCO side, since the fee-for-service rate and MCO rates are set separately.
3. Stay engaged ahead of January 2027. Because this is a one-year reprieve funded by a surplus rather than a structural budget fix, the same rate-cut proposal could resurface when lawmakers reconvene. Parent advocacy, including the 275-plus letters Kentucky families sent this summer, was a real factor in this outcome.
4. Keep an eye on your provider's stability. Even with rates held steady, ABA providers are still operating on thin margins nationally. If your practice signals any change in availability, it is worth knowing your backup options.

This article is for general informational purposes only and is not legal or medical advice. For questions about your family's specific Medicaid coverage, contact your managed care plan or the Kentucky Cabinet for Health and Family Services directly.

Finding an ABA Therapy Provider in Kentucky

Whether you are confirming your current provider still accepts Kentucky Medicaid or looking for a new one, ABA Navigator's directory makes it easy to compare providers by location, insurance accepted, and services offered. Find ABA therapy providers near you in Kentucky to explore your options and confirm Medicaid acceptance directly with providers.

This article reflects Kentucky Medicaid policy as of July 2026, including the July 22, 2026 reversal of the planned August 1 rate cut. Reimbursement rates are protected through June 2027 but subject to review by the Kentucky General Assembly starting January 2027; contact your provider or the Kentucky Cabinet for Health and Family Services for the most current information.