AHCCCS Approved the Terminations. 37 of 300 Transitioned.

37 of 300. That’s the number from an AHCCCS court declaration filed by agency representative Christina Quast in early 2026, reporting how many of the 300 Action Behavior Centers clients on Mercy Care’s Medicaid plan had successfully transitioned to a different applied behavior analysis provider before the contract termination took effect. ABC’s Mercy Care coverage ended at the end of March 2026. The other 263 children were the families’ problem to solve.

This isn’t a story about whether ABA is the right treatment, or whether private equity should be running it, or whether Mercy Care’s reimbursement-rate position is reasonable. Those questions are real and disputed. This is a narrower story about the gap between what AHCCCS approved and what AHCCCS’s own court filing says happened.

What Happened, In Order

In July 2025, Mercy Care, one of the managed care organizations AHCCCS pays to run Medicaid behavioral health for many Arizonans, cut Centria Autism’s reimbursement rates by 15%. According to Centria’s December 2025 complaint, the provider absorbed the cut. In September 2025, Mercy Care demanded an additional 25% cut. Centria refused, saying the combined reductions were unsustainable.

On October 17, 2025, Mercy Care terminated its contract with Centria. Mercy Care later moved to terminate its contract with Action Behavior Centers. Arizona Complete Health terminated its contract with ABC around the same time. ABC alleges that Arizona Complete Health terminated without cause. AHCCCS approved the network changes after the managed care organizations requested permission.

Centria and two parents, Tiana Brandon and Jessica Parisi, sued on December 15, 2025 in Maricopa County Superior Court, naming AHCCCS, Mercy Care, and the Department of Economic Security as defendants. On February 6, 2026, parents of 11 children filed a separate class-action complaint, this one against AHCCCS only, in the same court. Tim Nelson of The Nelson Law Group is lead counsel, with Michael F. Easley Jr., Jonathan Y. Ellis, and Ryan Y. Park of McGuireWoods LLP appearing pro hac vice.

The Number Inside the Number

The class-action complaint estimates “upwards of 1,000” Arizona children lost or were about to lose access to their ABA provider when the contract terminations took effect. AHCCCS’s own court filings supply the discrete number for one chain on one plan: 37 of 300 ABC clients on Mercy Care had successfully transitioned to a new provider as of the agency’s February 2026 declaration. The end of March 2026 cutover hit the remaining 263 families.

The Network Adequacy Claim

The class-action complaint alleges AHCCCS violated the federal Medicaid Act, which requires state Medicaid programs to ensure access to care for eligible beneficiaries. The complaint adds claims under the Americans with Disabilities Act and the Arizona Constitution. Co-counsel Michael Easley framed the operational problem to the Arizona Mirror in plain terms: managed care organizations “intentionally make it difficult for enrollees to access care,” using what advocates call ghost networks that list providers who have no openings, don’t actually take Medicaid, or have closed.

The Centria complaint argues that even when families can locate an alternative provider, the realistic wait is six months in many cases, during which the complaint says regression and irreparable harm are likely. One mother’s affidavit, attached to the class action, said the alternative she could find was 40 minutes from her home. AHCCCS rules require continued behavioral health services to be made available within 45 days of identification, per the KJZZ summary of the complaint.

How AHCCCS Has Responded

AHCCCS’s position, both in court and in statements, has three parts. The agency says contracting decisions between managed care organizations and providers aren’t its decisions to intervene in. Spokesperson Johnny Cordoba’s emailed statement to the Arizona Capitol Times said managed care organizations “have discretion to manage their provider networks, provided they ensure members have reasonable and timely access to covered healthcare services through a sufficient and well-distributed network of contracted providers, and they comply with contractual requirements.”

The agency told the Arizona Mirror that it requires health plans “to minimize disruption and to support members through any transition, including offering assistance with scheduling, identifying comparable providers, and facilitating transfer of prior authorizations,” and pointed families to its Clinical Resolution Unit.

In a January 9, 2026 court filing, AHCCCS attorneys characterized the parents’ affidavits as describing “emotionally charged preferences” tied to existing provider attachments. The filing argued those concerns “do not rise to the level of irreparable injury.” AHCCCS representative Christina Quast’s declaration defended the agency’s oversight work: “That AHCCCS has not done some of the specific things that Plaintiffs want does not mean AHCCCS has not engaged in proper oversight of its MCOs.”

Mercy Care’s vice president Jessica Clemens submitted a separate declaration detailing a time-and-distance analysis of network capacity. Per the declaration, with the exception of “a small number of members in rural areas,” every Centria or ABC member had at least one alternative ABA provider with capacity in the same geographic area.

Where This Connects to the Other Story

This investigation reports the contract-termination story on its own terms. It also intersects with prior reporting on the structural background-check gap in Arizona’s pediatric behavioral health framework, which Brendan Franks documented in Arizona’s autism-therapy background-check gap. Both pieces concern AHCCCS oversight of an applied behavior analysis market that has scaled rapidly under private-equity capital. The earlier piece names the four PE-backed AZ chains operating dozens of clinics; Action Behavior Centers, owned by Charlesbank Capital Partners since August 2022, is one of those chains and is also the chain whose Mercy Care termination is documented here.

The pattern across both stories is the agency’s reach. AHCCCS’s 2025 Managed Care Program Annual Report identifies ABA providers as a current Qlarant UPIC audit target at the program-integrity tier. The Quast declaration shows AHCCCS counting transitions at the network-adequacy tier. What it doesn’t show is AHCCCS independently verifying that the 263 children who had not yet transitioned by late February had a real path to care. That gap is what the litigation seeks to close.

What Records Would Settle the Question

The complaint alleges the network capacity that Mercy Care declared and the network capacity that exists on the ground differ. The records that would resolve the dispute are AHCCCS’s contemporaneous network-adequacy filings for Mercy Care and Arizona Complete Health, the Clinical Resolution Unit’s case logs for families seeking help during the transition, and the provider directories the managed care organizations supplied at the relevant cutoff dates. Brandon Millam’s guide to Arizona negligent hiring law for pediatric behavioral health covers the related litigation framework where staff-level conduct is at issue. Stephanie Ramirez’s guide to vetting an Arizona ABA provider walks families through the specific questions to ask their health plan during a transition. For the broader oversight picture, see the child abuse practice overview and the autism-therapy background-check investigation.

I’ve drafted requests under ARS 39-121 to AHCCCS, the Department of Economic Security, and the Division of Developmental Disabilities for the time-and-distance analyses, the network-adequacy submissions tied to the Mercy Care and Arizona Complete Health terminations, and the Clinical Resolution Unit case data covering October 2025 through April 2026. I’ll update this report with what each agency provides, what it withholds, and the stated basis for any denial.

What the Data Means

A managed care organization cutting reimbursement rates is a commercial dispute. A managed care organization terminating a contract is a network decision. A state Medicaid agency approving the termination is a regulatory choice. The dispute the courts will decide is whether that choice complies with federal Medicaid Act access requirements when the agency’s own court filings show 37 of 300 children at one chain had landed somewhere new before the door closed. The other 263 are the test of whether the network the state approved was real.