A judge found no computation behind New York’s Early Intervention telehealth cuts, in a program for about 70,000 children that now authorizes ABA as its own service.
Key Takeaways
- The cuts: Since July 2025, New York has paid 22 percent less for Early Intervention telehealth visits, including ABA, downstate and in Poughkeepsie, and 10 percent less elsewhere, while in-person rates held steady.
- The ruling: On October 14, Justice William T. Little annulled the telehealth rates and returned them to the Department of Health, finding no computation or methodology behind either percentage.
- The federal approval: CMS approved the same reductions on April 2, effective January 1, 2025. The decision does not mention the approval, and how the department will reconcile the two is unresolved.
- What comes next: The state’s window to appeal runs into mid-November. ACTS says providers are still billing the reduced telehealth rates, and the Department of Health said it could not comment on open litigation.
New York’s Early Intervention Program has paid for therapy for infants and toddlers since 1993, at rates the Department of Health built in the program’s first years from early-1990s wage and cost data. When the department lowered what it pays for therapy delivered by video in 2025, a state judge in Albany was asked to find the arithmetic behind the change. He found none in the record.
On October 14, Justice William T. Little of State Supreme Court in Albany County, New York’s trial-level court, annulled the telehealth rates the department began paying on July 1, 2025, and remanded them to the department “for further proceedings not inconsistent with this Court’s decision.” The rates had cut telehealth reimbursement by 22 percent in New York City, Westchester, Long Island, and Poughkeepsie, and by 10 percent in the rest of the state. Little wrote that there was “no methodology or calculations to support the instant rate cuts.”
The ruling reaches a program that is reorganizing how it delivers applied behavior analysis. Early Intervention is New York’s program under Part C of the Individuals with Disabilities Education Act, and like other IDEA-funded ABA services, it operates apart from the state’s Medicaid autism benefit, even though Medicaid pays for the services of enrolled children. ABA is listed among the Early Intervention services in New York’s Medicaid State Plan, and in June the department told providers that ABA, long authorized as a form of “special instruction,” would now be assigned as its own service type. The ruling also arrives with a federal question attached. Six months before the decision, the Centers for Medicare & Medicaid Services approved the same telehealth reductions, effective January 1, 2025. The decision does not mention that approval.
How New York Set Its 2025 Early Intervention Telehealth Rates
The department explained the cut in a sworn affirmation filed in February by Raymond Pierce, Director of its Bureau of Early Intervention. Telehealth entered the program during the COVID-19 pandemic, Pierce wrote, and was paid at the home and community rate, which is higher than the rate for visits at a provider’s facility. Since then, more providers have wanted to work only by video, while, by the department’s account, most parents ask for in-person services.
To bring telehealth closer to the facility rate, the bureau calculated the gap between facility and home-based rates in each region. In regions with the smallest gap and fewer rural counties, it averaged the difference, which produced the 22 percent reduction. Elsewhere it chose “a more modest 10% reduction,” Pierce wrote, because telehealth “can be a useful tool in the more rural parts of the state.”
The affirmation also traces how the cut entered the budget. For fiscal year 2024-25, the bureau proposed an 11 percent increase for in-person services, a figure recommended by the state’s Early Intervention Coordinating Council, along with three savings measures of its own. The Division of the Budget accepted a 5 percent increase. The savings measures it paired with the increase, Pierce wrote, were not the ones the bureau had submitted that year; they came from the bureau’s proposals for fiscal year 2021-22, and one of them was the telehealth reduction. The Legislature enacted the package in April 2024.
The department submitted the changes to CMS on December 31, 2024. Providers then asked it to start the telehealth cut early, Pierce wrote, to shorten the stretch of retroactive repayments they would face once the federal government approved it. The Division of the Budget agreed on April 22, 2025, providers were notified on June 12, and the lower rates took effect July 1. In-person rates did not change.
Under the telehealth schedule the department filed with the court, a basic telehealth session of occupational therapy, physical therapy, or speech-language pathology in Albany, Saratoga, and Schenectady counties pays $59.09. That is 10 percent below the $65.65 in-person rate cited by Richard T. Rothwell, Chief Executive Officer of Access Therapy Group, a Clifton Park agency that serves those counties and is one of the petitioners. Rothwell told the court that the same visit paid $67 when the program began.
What the Albany Court Found About the Early Intervention Rate Methodology
The case was filed in October 2025 by the Agencies for Children’s Therapy Services (ACTS), an association of 43 agencies that provide Early Intervention and special education services, together with Access Therapy Group and Big Minds Tiny Hands, a Brooklyn agency. It argued that the department had disregarded its own regulation, which directs the Commissioner of Health to “annually determine” Early Intervention rates and says the prices “shall provide full reimbursement” for professional services, occupancy, supplies, and administrative costs.
The state, represented by the Attorney General’s office, argued that the rates were a product of the enacted budget and outside a court’s reach, and that the regulation prescribes no particular method. It also pointed out that both chambers of the Legislature passed bills in 2022 and 2024 requiring a study of rate adequacy, and that Governor Kathy Hochul vetoed both without an override, which the state read as the political branches declining what the petitioners were asking the court to order.
Little did not accept the justiciability argument. He noted that the petitioners had not named the Director of the Budget, whose approval the regulation requires, but excused the omission in part because the state had not raised it. On the merits, he applied the deferential standard New York courts use for rate-setting, under which rates are set aside only when the method behind them is “unreasonable and unsupported by any evidence.” The record, he wrote, supported the department’s reason for favoring in-person care but contained nothing on how the rates were computed. Asked at oral argument how the program’s original rates were built, the state said it “think[s] there were studies that were done,” according to the decision.
A footnote marks the limit of the holding: the decision “makes no finding as to the meaning of ‘full reimbursement.’” In its October 15 statement, ACTS said the department now must revise the rates and ensure that they provide full reimbursement. The decision requires review and revision; it does not set a payment level or define the term.
“The court didn’t agree with the Department of Health,” Roger Bearden, the Bond, Schoeneck & King lawyer who represented the petitioners, told Acuity. The court found that the department had not shown factually that it followed its own regulation, he said, and it is not the court’s role to prescribe how the rates should be calculated, only to require that the data support them.
How CMS Approval of the Early Intervention Rate Amendment Complicates the Ruling
When Pierce signed his affirmation on February 6, the state plan amendment carrying the rate changes was still pending. CMS approved it in a letter dated April 2, 2026. The approved pages raise Early Intervention rates by 5 percent effective October 1, 2024, and reduce telehealth rates for basic and extended home and community services by 22 percent in New York City, Westchester, Poughkeepsie, and Long Island, and by 10 percent in the rest of the state, effective January 1, 2025.
Pierce had told the court what approval would mean. The department was applying the cut only from July 1, 2025, he wrote, and once CMS approved the amendment, the lower rates would be applied retroactively to services delivered from January through June 2025. Briefing in the case closed in February, and the October decision does not refer to the approval. Whether the department has applied those retroactive adjustments, and what it is paying for telehealth now that the state rates have been annulled, are among the questions Acuity put to the department; its response did not address them.
Bearden said the federal approval does not settle the state case. “This is a state-level issue, not a federal one,” he said. The petitioners’ relief was the annulment of the rates, and the department has not proposed new ones or said how it will, he said. “They first must comply on a state level, which isn’t an unusual thing to be done. Rates change all the time in the Medicaid system.” Any new rates for Medicaid-covered services would go back to CMS for approval, according to an ACTS representative. The representative said the department has not yet recouped the reduction for telehealth services delivered from January through June 2025. Providers did receive the 5 percent increase this year, in lump-sum payments retroactive to October 1, 2024, according to ACTS, though the increase was meant to cover services delivered on or after April 1, 2024.
ABA Becomes Its Own Service Type in New York’s Early Intervention Program
For behavior analysts, the case lands in the middle of a reorganization. In a June 18 letter to providers, the Bureau of Early Intervention said its former data system had authorized ABA as a “Special Instruction” service, with ABA recorded as a technique. Its current system, EI-Hub, assigns “ABA services” as a distinct service type, which only Licensed Behavior Analysts, and Certified Behavior Analyst Assistants working under their direction, may be authorized to deliver. Registered Behavior Technicians are not qualified personnel in the program, the letter says, and ABA services may be delivered in home and community settings or at approved facilities.
Special instruction itself is being narrowed to certified teachers. As of January, roughly 8 percent of active special instruction authorizations statewide were assigned to personnel who are not teachers, according to the letter, and all of them must be corrected by March 31, 2027. The department wrote that it is committed to growing capacity for ABA as a unique service type.
The telehealth schedule does not list ABA by name, but agencies bill ABA delivered by video as the same service with a telehealth modifier, Vitale said, so those visits took the same 22 percent cut downstate and 10 percent cut elsewhere. Early Intervention rates are also separate from New York’s Medicaid fee schedule for ABA outside the program, where the state cut its rate for CPT 97153 to $9.63 per unit on October 1, following two earlier reductions, and froze new provider enrollments in July.
What Early Intervention Providers Say About the Telehealth Rate Cut
The petitioners’ filings describe agencies adjusting to the rates rather than absorbing them. Rothwell told the court that telehealth had not become 10 percent cheaper to deliver and that Access Therapy Group had stopped offering it. Initial evaluations, which require at least two licensed professionals, had often relied on clinicians working by video, he wrote, and had become substantially harder to complete. He said the agency might withdraw from the program altogether. The petition says Big Minds Tiny Hands now delivers about 80 percent of its services at its Brooklyn center because of staffing and travel constraints.
Jana Vitale, SLP, BCBA, LBA, President of ACTS, told Acuity that most Early Intervention services are delivered in person, and that telehealth has filled gaps in settings where in-person visits are difficult, such as day care. The lower telehealth rates, she said, pushed some services back to in-person delivery.
New York’s rationale for paying less for video visits tracks a broader turn in state Medicaid policy toward in-person autism services. Georgia now requires a telehealth readiness checklist before remote ABA can be authorized, Indiana ended telehealth billing for five ABA codes in April, and South Carolina removed behavior identification assessment from telehealth in July. The economics of remote delivery have been tested from the provider side as well, most recently in the reported wind-down of the virtual ABA provider Forta Health.
What Comes Next for New York’s Early Intervention Telehealth Rates
The judgment was entered October 14, and counsel for the petitioners filed a notice of entry the next day. Under New York’s civil practice rules, a party generally has 30 days from service of that notice to appeal, which places the state’s deadline in mid-November. When a state agency appeals, enforcement of a judgment is generally stayed automatically while the appeal is pending. As of November 5, the docket showed no notice of appeal. Court challenges to ABA rate cuts have succeeded elsewhere: in North Carolina, a Wake County court blocked a 10 percent ABA rate cut last year before the state restored its rates.
The ACTS representative said the association would not be surprised if the state filed a notice of appeal within the 30 days “to keep all of their options open.”
Asked whether it would appeal, the department said it could not comment on open litigation. “Our priority is to ensure that the 70,000 children served by the early intervention program continue to receive the services they need,” the department said in a statement to Acuity, adding that it remains committed to ensuring that eligible families receive their Early Intervention services and supports.
Vitale said providers have had no contact from the department since the ruling and no guidance beyond the rates posted on its website, and that they are continuing to bill the published telehealth rates, as they were told to. Bearden said that if the state moved forward despite the court’s decision, “it would be illegal,” and providers would be entitled to be paid retroactively and to have new rates set. “I have every expectation that they’ll either be complying or bring it to a higher court,” he said.
The ruling leaves the policy debate where it was. The department maintains that the Public Health Law favors services in “natural environments,” including the home; Little accepted that goal and faulted only the absence of a computation.
ACTS is asking for more than a new telehealth figure. Bearden said the association wants full reimbursement through a “reasonable and rational process” built on the realistic costs of delivering services, with adjustments for regional differences such as those between upstate counties and New York City. The association believes the court took issue with every rate on the schedule, not only the telehealth rates, according to the ACTS representative, who said a new method should rely on current cost data, including the cost of living and of the education clinicians now need.
“Providers are earning less now than providers did in 1994,” Vitale said. “The rate-setting methodology needs to be looked at again. It’s not livable, and it can’t attract or retain providers.” She said rates need to rise across the board, because children who receive ABA typically also need occupational, physical, and speech therapy. “ABA is not the only service impacted. It has a ripple effect on all services provided,” she said. “We want to make sure the Department of Health and the government recognize that this can’t continue.”
