Change to Florida Medicaid leads to lawsuit. How it could affect kids’ checkups

Pediatric Associates, Florida’s largest pediatric provider, is sounding the alarm about a change by the state that could make it difficult for doctors to treat children who are insured through Medicaid in the future.

And it’s suing to stop that from happening.

The group, which has over 95 locations across the state, including several in Miami-Dade and Broward counties, claims in a lawsuit filed Tuesday that the problem stems from a 2025 change the state made to the funding formula that establishes how much providers will be reimbursed for Medicaid services.

The administrative petition says the “flawed” methodology created by the Florida Agency of Health Care Administration has led to doctors being paid less than they had been before for treating kids insured through Medicaid.

The move, which has led to severe reimbursement reductions in pediatric care, has forced some pediatricians to reduce or discontinue Medicaid services, making it harder for kids to get the care they need, the lawsuit alleges. Others, like those with Pediatric Associates, are taking some financial loss, at least for now, every time medical care is provided to a child who’s insured through the government-funded health insurance.

But Pediatric Associates in its lawsuit warns that unless a fix is made soon, it may be forced to stop providing some or all services to kids with Medicaid, a decision it described as having “devastating consequences to its Medicaid patients.”

The provider says it currently serves over 300,000 children, or about 15% of Florida’s pediatric Medicaid population, more than any other healthcare provider in the state. But the reimbursement changes, the pediatric provider claims, make it “economically infeasible” to continue treating pediatric Medicaid patients.

“If the children I care for every day lose access to pediatric care, it would be absolutely devastating,” Dr. Rasciel Socarras, a North Miami-based physician with Pediatric Associates, said in a news release. “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.”

Florida’s Agency for Health Care Administration, which administers the state’s Medicaid program, told the Miami Herald it “does not comment on pending litigation.”

Medicaid, a joint state and federal health insurance program, provides coverage to millions of kids, pregnant women, seniors and people with disabilities in Florida, including in Miami-Dade and Broward, home of the highest enrollments in the state.

Michael Manocchio, market president for Pediatric Associates East Region, told the Herald on Tuesday afternoon that the problem comes from changes that were made to the reimbursement formula.

Under the new formula, millions of dollars that were initially meant to pay doctors for providing primary, specialty and acute primary care to pediatric Medicaid patients are now instead being set aside to pay for behavioral health services, particularly for those with autism spectrum disorder, according to Manocchio.

The prevalence of autism continues to rise in the country, with one in 31 kids estimated to have autism, according to the U.S. Centers for Disease Control and Prevention. In Florida, which has some of the highest autism prevalence in the nation among adults and kids, about 41,000 children are estimated to receive applied behavioral analysis therapy through Medicaid, according to Tampa Bay 28. Medicaid covers autism therapy for eligible patients until age 21.

Manocchio told the Herald that Pediatric Associates supports evidence-based autism therapy and has its own efforts to help kids get the needed care. But the company takes issue with how Florida has allocated the funding. He said the allocation doesn’t account for factors that can impact how often services are used in a given area and how much the provided services cost.

South Florida, for example, has “far higher” autism therapy utilization rates compared to other parts of the state but was underfunded for both autism and non-autism pediatric care, according to Pediatric Associates’ lawsuit.

Miami-Dade pediatricians have also seen a nearly 30% reduction in funding for “core” pediatric services, which more children need compared to autism therapy, according to the lawsuit. “Core” pediatric services encompass all types of care, including primary services such as checkups and vaccinations, specialty care for diabetes and other conditions, and acute care for severe illnesses.

Autism therapy is the second-highest funded line item in the state’s Medicaid budget, at approximately $2 billion annually, even though most children do not have the disorder, according to Pediatric Associates.

The state previously allocated $198 per child ages 1 to 13 per month for “core” pediatric services and $91 per child per month for autism therapy. After the November 2025 “fix,” it now allocates $141 per child per month for non-autism therapy pediatric care and $147 per child per month for autism therapy services, according to the court document.

For families, that means there’s a risk their pediatricians will reduce the number of core services he or she is willing to offer Medicaid patients — or that they will stop treating Medicaid patients altogether, according to Manocchio.

“It becomes that much harder to get an appointment. It becomes that much harder to get to develop a trusted relationship with a doctor. Maybe it means going to the emergency room more,” Manocchio said, describing it as a problem that could impact the access and quality of care patients can receive, similar to how patients with commercial health plans sometimes need to find new doctors if their existing provider goes out-of-network.

Florida’s Agency for Health Care Administration is responsible for creating the “rate calculations” that determine how much providers are paid for providing care to children with Medicaid.

The federal Centers for Medicare and Medicaid Services (CMS) has to give the green light before states can adjust rates, but Pediatric Associates believes the federal agency did not have enough details to detect the reimbursement issues. The Herald has contacted CMS for comment.

Pediatric Associates said it met with the state agency at least five times between January and May 2026 but that “while AHCA has acknowledged the importance of the problem, it has taken no action to mitigate, let alone solve, this problem.” The lawsuit points to a letter from the state agency that appears to indicate it was aware the change would have “the potential to result in access issues for children in Florida Medicaid to the extent a provider experiences significant financial loss and is unable to continue to provide services.”

The state agency, in the letter, said it expects managed care organizations — health companies or health plans that are paid by the state to contract providers to provide services to Medicaid patients — to independently negotiate “mutually agreeable terms” with providers to help doctors navigate any potential financial fallout with the inclusion of autism therapy services in their contract.

Manocchio said the problem is that those groups often declined to negotiate, telling pediatricians that they were following the rates set up by the state, while also being paid more under the new reimbursement rates for any adults undergoing autism therapy.

Manocchio said Pediatric Associates is dedicated to caring for its patients and that he’s confident the state will “ultimately do the right thing.”

But, if it doesn’t get fixed, “then certainly there are hard decisions we would have to make,” he said.

For now, Pediatric Associates is asking the judge to restore funding for pediatric care. It wants the state agency to revise or revert the existing rate calculation to “accurately reflect” when autism therapy services “are actually used.” It also wants the state agency to “apply correct rates to 2026-2027,” part of a budgetary process that is now being finalized.

©2026 Miami Herald. Visit miamiherald.com. Distributed by Tribune Content Agency, LLC.