January 2026 Policy and Law Updates Affecting Schools and Clinics

This update summarizes notable federal and state-level policy changes taking effect in January 2026 that affect private schools, alternative education programs, and therapy clinics serving students with disabilities. It focuses on operational impact rather than legislative detail.

Medicaid and Insurance Pressures on ABA and Therapy Services

Beginning in 2026, many states are adjusting Medicaid reimbursement structures and utilization controls for autism-related services, including ABA. These changes stem from broader federal budget measures enacted in 2025 that reduced long-term Medicaid funding growth and increased state discretion over rate-setting and service limits.

Operational impact for clinics:

• Increased prior authorization scrutiny

• More frequent eligibility redeterminations for families

• Reimbursement rate reductions in some states

• Greater variability in coverage stability depending on payer mix

Private clinics relying heavily on Medicaid should expect more administrative overhead and should review staffing, documentation, and authorization workflows accordingly.

State-Level Insurance Mandate Changes

Several state insurance laws affecting autism services take effect January 1, 2026. These changes are not uniform across states.

Examples include:

• Removal of mandatory repeat autism re-diagnoses to maintain coverage in certain states

• Elimination of fixed visit caps in favor of utilization review models

• Alignment of autism coverage with mental health parity enforcement

Operational impact for clinics:

• Reduced re-evaluation burdens in some markets

• Continued payer-specific interpretation of “medical necessity”

• Ongoing need to verify plan-level rules rather than relying on state summaries

Schools should note that these changes affect clinical coverage, not educational obligations.

Medicare Telehealth Permanence for ABA Codes

As of January 1, 2026, CMS has made ABA-related CPT codes permanently eligible for Medicare telehealth billing. While Medicare rarely funds pediatric ABA, this change signals broader acceptance of remote behavioral services within federal payment systems.

Operational impact:

• Limited direct effect on most pediatric clinics

• Potential downstream influence on commercial payer policies

• Continued requirement to comply with state licensure and telehealth rules

This change does not alter IDEA, school-based services, or private school obligations.

IDEA Funding Structure Proposals Remain Unenacted

As of January 2026, no statutory changes to IDEA have taken effect. Proposals discussed in federal budget planning, including consolidation of funding lines or block-grant concepts, remain proposals rather than enacted law.

Operational impact for schools:

• No change to IDEA eligibility, IEP requirements, or FAPE obligations

• Continued uncertainty for long-term federal funding levels

• Increased importance of state-level budgeting decisions

Schools should distinguish between enacted law and budget proposals when communicating with families.

Autism CARES Act Reauthorization Continues Through 2029

Federal autism research, training, and coordination funding authorized under the Autism CARES Act remains in effect through fiscal year 2029.

Operational impact:

• Stability for research, workforce training, and technical assistance programs

• No direct mandate changes for schools or clinics

• Continued reporting and compliance obligations for grant recipients

Authorization does not guarantee full appropriations, and programs dependent on grant funding should monitor annual budgets.

Increased Scrutiny of Enrollment and Dismissal Practices

Across states, there is growing attention to how private schools and clinics communicate enrollment criteria, capacity limits, and dismissal policies. This trend is driven more by complaints and civil rights enforcement than by new statutes.

Operational impact:

• Greater importance of clear intake documentation

• Consistent application of enrollment standards

• Clear distinction between accommodations and services offered

Programs with ambiguous or informal policies face higher risk than those with clearly articulated boundaries.

What Did Not Change in January 2026

The following remain unchanged:

• IDEA does not apply broadly to private schools

• Diagnoses alone do not guarantee services or enrollment

• Compliance does not require programs to alter their fundamental model

• Private programs retain discretion within non-discrimination limits

Much confusion in early 2026 stems from policy discussions rather than enacted changes.

Why This Update Matters for Schools and Clinics

January 2026 reinforces an ongoing pattern rather than introducing a single disruptive shift. Funding pressure, payer variability, and enforcement through complaints continue to shape the landscape more than new statutory mandates.

Programs that succeed tend to:

• Communicate scope clearly

• Separate educational and clinical services cleanly

• Avoid overpromising to families

• Monitor state-level changes rather than relying on federal headlines

Update Methodology

This update reflects enacted federal policy changes effective January 1, 2026, published agency guidance, and state-level insurance and Medicaid updates available as of January 2026. It does not include pending bills or proposals unless explicitly noted.

Special Needs Law and Policy Guide for Schools and Education Programs

This page provides plain-language summaries of major U.S. laws and policy frameworks affecting special education, disability services, and related educational and therapeutic programs. It is written for school leaders, clinic operators, program directors, and administrators who need a working understanding of legal boundaries without navigating statutory text.

This resource is informational only. It does not provide legal advice and should not be used as a substitute for counsel.

SPCN updates this page regularly as new laws come into effect. 

Federal Laws Governing Special Education and Disability Services

Federal law establishes baseline protections for students with disabilities. States may add requirements, but cannot reduce these minimum standards.

Individuals with Disabilities Education Act (IDEA)

IDEA governs special education in public systems.

IDEA applies to public schools and public agencies providing special education services. It also applies indirectly to private providers when they are contracted by a public entity to deliver services under an IEP.

IDEA requires public schools to provide a free appropriate public education to eligible students with disabilities. This includes individualized education programs, procedural safeguards, parent participation, and placement in the least restrictive environment appropriate to the student’s needs.

IDEA does not require placement in a specific school or program. It does not guarantee identical services across districts or states. It does not apply wholesale to private schools or clinics operating independently of public contracts.

For private schools and clinics, IDEA typically affects referrals, evaluations, service coordination, and funding arrangements rather than direct compliance obligations.

Section 504 of the Rehabilitation Act

Section 504 is a civil rights law that applies to any program receiving federal financial assistance.

Most public schools and many private schools fall under Section 504. Some clinics and programs may also be covered depending on funding sources.

Section 504 requires non-discrimination and equal access for individuals with disabilities. It requires reasonable accommodations that allow participation in programs and activities.

Section 504 does not require specialized instruction, IEPs, or specific therapies. It does not mandate program modifications that would fundamentally alter the nature of a program.

Enforcement is generally complaint-driven and handled through federal civil rights offices.

Americans with Disabilities Act (ADA)

The ADA applies broadly to public entities and places of public accommodation.

Public schools, private schools, clinics, therapy centers, and many education programs are covered.

The ADA requires accessibility and non-discrimination. This includes physical access, communication access, and policy-level access where applicable.

The ADA does not require individualized educational programming or specific treatment models. It does not require programs to accept all applicants regardless of fit or capacity.

For schools and clinics, ADA compliance often overlaps with Section 504 but extends to facilities, websites, intake processes, and communications.

Elementary and Secondary Education Act (ESEA) and ESSA

ESEA, as amended by the Every Student Succeeds Act, governs general education accountability, funding, and reporting for public schools.

ESEA requires states and districts to include students with disabilities in accountability systems and academic standards, with limited exceptions.

ESEA does not govern private schools or clinics directly. Its relevance to special education providers is indirect, primarily through coordination with IDEA, public funding streams, and district-level planning.

Education Programs Versus Clinical Services

A common source of confusion is the legal distinction between education and clinical services.

Schools are governed primarily by education law. Clinics are governed primarily by healthcare, insurance, and licensing law. Hybrid models must navigate both.

Educational obligations under IDEA and ESEA apply to public schools. Clinical obligations under Medicaid, insurance mandates, and licensure rules apply to therapy providers.

Families often assume rights transfer seamlessly across settings. In practice, rights, funding, and enforcement mechanisms change significantly depending on whether a child is in a public school, private school, or clinic.

Public Schools and District Programs

Public schools have affirmative obligations under IDEA and Section 504. They must identify eligible students, provide services, follow procedural safeguards, and ensure access to due process.

Enrollment is generally compulsory based on residency. Dismissal options are limited and regulated.

Private Schools and Education Programs

Private schools generally have more discretion over enrollment and dismissal. They are not required to provide FAPE or IEPs unless acting under a public contract.

Many private schools are subject to ADA and Section 504 non-discrimination rules, but these do not create IDEA-level obligations.

Funding is typically private pay, tuition-based, or limited public placements.

Clinics and Therapy Providers

Clinics are governed by state licensure, insurance mandates, Medicaid rules, and federal parity laws.

They do not provide education under IDEA unless contracted by a public agency. They may provide services that complement education but operate under different compliance frameworks.

Coverage, authorization, and reimbursement vary significantly by state and payer.

State Law Variability

While federal law sets baselines, state law drives many operational realities.

States differ on:

• Insurance mandates for autism and ABA
  
  

• Medicaid coverage levels and caps
  
  

• Licensing and supervision requirements
  
  

• Early intervention age cutoffs
  
  

• Transition and adult services
  
  

Schools and clinics operating in multiple states must account for these differences rather than relying on federal summaries alone.

Common Legal Misconceptions

Private schools cannot deny enrollment solely due to disability, but they may deny enrollment if they cannot reasonably accommodate the student without fundamentally altering the program.

A diagnosis alone does not guarantee services. Eligibility, funding, and service models depend on setting and law.

Compliance does not guarantee enrollment stability. Programs may be compliant and still face capacity, staffing, or funding limits.

IDEA rights do not automatically apply in private placements chosen by parents without district agreement.

Compliance and Visibility

Legal compliance and public visibility are separate issues.

Many compliant programs remain difficult for families to find. Many visible programs operate at the edge of compliance.

Families typically search by location, diagnosis, and service type. Legal accuracy influences trust, but discoverability influences enrollment.

Updates and Methodology

This page is reviewed periodically to reflect changes in federal guidance, funding structures, and significant state-level developments.

Sources include federal statutes, agency guidance, state education departments, insurance regulators, and published policy analyses.

Corrections are made when errors are identified or laws change.

Navigation

Visitors may use this guide to explore services available in their state or to understand how legal frameworks shape program availability.

Legal and Compliance FAQ for Private Schools and Clinics Serving Students with Disabilities

This FAQ addresses common questions from founders and operators of private schools, alternative education programs, and therapy clinics. It reflects how disability and education laws are typically applied in practice, not edge-case litigation scenarios.

This is informational guidance only, not legal advice. For important matters, please consult with an attorney.

Do private schools have to follow IDEA?

No.

IDEA applies to public schools and public agencies. Private schools are not required to provide IEPs, FAPE, or IDEA procedural safeguards unless they are operating under a direct contract with a public school district.

Private schools may still interact with IDEA through referrals, evaluations, or publicly funded placements, but IDEA does not automatically govern private school operations.

Can a private school legally deny enrollment to a student with disabilities?

Yes, in many cases.

Private schools may deny enrollment if they cannot reasonably accommodate the student without fundamentally altering their program, staffing model, or educational approach.

However, blanket exclusions based solely on disability can raise issues under non-discrimination laws if the school is covered by them. Decisions should be tied to program fit and capacity, not diagnosis labels.

Are private schools required to provide accommodations?

Sometimes.

If a private school is subject to federal or state non-discrimination laws, it may be required to provide reasonable accommodations that allow access to the program.

Reasonable accommodations do not include services that would change the essential nature of the program, require one-to-one staffing if not part of the model, or replicate public special education services.

Do clinics and therapy providers have to follow IDEA?

No.

Clinics are not education providers under IDEA unless they are delivering services under a public school contract.

Clinics are governed primarily by state licensure laws, Medicaid rules, insurance mandates, and federal parity requirements, not education law.

Can a clinic refuse a client?

Yes, within limits.

Clinics may decline clients based on capacity, scope of practice, payer mix, safety concerns, or clinical appropriateness.

Refusals should be based on operational or clinical criteria, not protected characteristics. Documentation and consistent intake standards matter.

Are ABA clinics required to accept all insurance plans?

No.

Insurance participation is optional unless tied to specific funding agreements or state programs.

However, if a clinic accepts a payer, it must comply with that payer’s authorization, documentation, and billing rules.

Does having a diagnosis guarantee services?

No.

A diagnosis alone does not guarantee enrollment, funding, or coverage.

Eligibility for services depends on the setting, the funding source, and the provider’s scope. This is one of the most common misunderstandings among families.

What is the difference between a school accommodation and a therapy service?

Accommodations are adjustments that allow access to an educational program. Examples include modified schedules, sensory supports, or communication tools.

Therapy services are clinical interventions governed by healthcare rules. Examples include ABA, speech therapy, or occupational therapy delivered as treatment.

Schools are generally not required to provide clinical therapy unless they are public schools obligated under IDEA.

Can private schools dismiss a student?

Yes, more easily than public schools.

Private schools typically have broader discretion to dismiss students for behavioral, academic, or program-fit reasons, provided those reasons are applied consistently and are documented.

Public schools face stricter procedural requirements and due process obligations.

Do hybrid school-clinic models face additional legal complexity?

Yes.

Programs that combine education and therapy must clearly define which services are educational and which are clinical.

Blurring these lines can create confusion around licensing, billing, staffing qualifications, and parent expectations.

Clear contracts, handbooks, and intake explanations are essential.

Does compliance guarantee enrollment stability?

No.

Legal compliance does not guarantee full enrollment, retention, or financial stability.

Many compliant programs struggle because families cannot find them, misunderstand what they offer, or expect services the program does not provide.

Compliance protects against liability. Visibility drives enrollment.

What mistakes do new school and clinic owners commonly make?

Common issues include:

• Overpromising services to families
  
  

• Assuming IDEA applies to private programs
  
  

• Underestimating state-level licensing requirements
  
  

• Mixing education and therapy without clear boundaries
  
  

• Relying on compliance alone to attract families