ABA and the Medicaid budget—what’s next for therapy for children with autism
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Families seeking support for a child with an autism spectrum disorder diagnosis might soon face a potential hurdle: as soon as April, Indiana’s Medicaid program could cap reimbursements for Applied Behavior Analysis therapy, or ABA, at 30 hours per week for a maximum of three years.
When Rep. Becky Cash—a Zionsville Republican who credits ABA intervention with saving her daughter’s life—heard about the proposal, she said that she was “horrified.”
“I don’t know of any other medical therapy that we max out at three years,” Cash said. “… the potential devastation is so far reaching that it would be hard to even qualify.”
But state regulators say the growth in demand is unsustainable. In 2023, Indiana’s Medicaid program shelled out $639 million in state and federal funding for the therapy, up from $276 million two years earlier.
Those high payouts caught the attention of federal oversight agencies, who recently released an audit flagging $133 million in improper or potentially improper claims. One provider paid regulators $2 million to resolve fraudulent billing accusations.
Cora Steinmetz, the state’s outgoing Medicaid director, summarized the state’s efforts to contain growing costs last month. Establishing a reimbursement rate in January 2024 brought costs down to an estimated $474 million but costs are expected to creep back up to $645 million by 2026.
Steinmetz acknowledged the importance of the therapy for the roughly 7,300 Hoosiers utilizing ABA but said the proposed cap would save the state an estimated $115 million over the next two years. Much of Indiana’s revenue growth over that period is projected to be absorbed by growing Medicaid costs—making the proposal more appealing to Indiana’s budget writers.
“Certainly that’s a concern that we’re looking at very closely … that we’re not unduly burdening individuals and their ability to seek these services,” Steinmetz told lawmakers in December about the proposal. “…taking all of the factors into account…we feel that the recommendation of a cap of 30 hours is appropriate.”
But not all lawmakers agree.
Cash told the Indiana Capital Chronicle that she planned to file a bill forcing the state to halt the proposed cap until the Medicaid program files a report on potential consequences. The bill wasn’t yet publicly available as of publication.
“I’m not advocating for cutting Medicaid anywhere. But we definitely do not need to cut it on the back of our special needs families,” Cash said. “And I’ll be honest, I don’t believe that this proposal will save any of that money because the waiting list for kids getting into ABA services is so long.”
ABA background
Though Indiana only recently established reimbursement rates for ABA providers, the therapy has been used to help patients gain new skills and reduce unwanted behaviors for decades.
ABA, part of the larger field of behavioral science, has gained prominence as an early intervention for children with autism spectrum disorder. As autism diagnoses surge, demand for the service has also grown, even as field experts disagree on key points like training, service assessments or caseload guidelines.
“There are not nearly enough providers to be able to be able to serve the demand that’s out there,” said Erick Dubuque, the director of the Autism Commission on Quality and a behavior analysis expert.
Rep. Robb Greene knows about the struggles to find appropriate services all too well.
Greene described himself as “the skeptical one” when it came to ABA therapy following his son’s autism diagnosis. His wife diligently visited facilities and finally chose one in Indianapolis, more than an hour from his home in Shelbyville. Within a week, Greene reported seeing a difference.
“For our family, we found ourselves opting out of social settings—not going to restaurants anymore, not going out to events…because of his inability to cope (and) sensory challenges,” Greene said. “Seeing how he was able to immediately integrate into the center and how the therapy allowed him to be around other children who were on the spectrum…from there, I became a believer.”
Greene recalled hearing his son say, “I love you” for the first time—a developmental milestone other parents might take for granted.
But the techniques used to share those skills might not make sense to outside perspectives, Dubuque said. For example, teaching a patient how to make a request might look like stopping a child mid-swing on the swingset and waiting for their signal—whether verbal, signed or through a communication device—to continue pushing.
Though treatments are highly individualized, practitioners rely on guidelines from The Council of Autism Service Providers, which dictate the three tiers of certification and define comprehensive treatment as up to 40 hours per week. Some providers warn that shortchanging those hours may harm a child by taking away from the early intervention services they need to meet developmental milestones.
Takeaways from the audit
But several issues plaguing the relatively young industry came to the forefront of the federal audit in Indiana, which explicitly reviewed the state’s payment system and not the quality of services.
The report analyzed 100 “enrollee-months,” or all of one child’s claims over a month, and reported that 97 included at least one improper payment. Every randomly sampled enrollee month had at least one potentially improper payment.
“The State agency made improper and potentially improper payments because it did not provide effective oversight of (fee for service) Medicaid ABA payments,” the report concluded. “Specifically, the State did not provide sufficient guidance to ABA facilities for documenting ABA. In addition, the State agency did not perform a statewide postpayment review …”
Improper payments fell into three categories: session notes falling short of documentation requirements; services provided by staff who didn’t have the appropriate credentials; and services provided to children who didn’t have diagnostic evaluations or treatment referrals.
These infractions cost the state and federal governments an estimated $57 million, most due to session note issues.
But Indiana paid for ABA services for some children who hadn’t received a diagnostic evaluation for autism—which is required—or the diagnostic evaluation was done by someone who wasn’t qualified. These were some of the costliest errors, as it meant that the state improperly paid for the entire month of services.
Many of the concerns related to potentially improper payments stemmed from vague session notes. In their review, auditors said providers didn’t detail what ABA techniques they used or how long they used it. Meal breaks, naps or recreational activities may have been charged as an ABA service.
Additionally, over one-third of the reviewed enrollee-months included group activities charged as individual therapies. In all, potentially improper payments cost the Medicaid program nearly $77 million.
In response to the report, the state said it will review the 100 enrollee-months and “where improper payments exist … will recover the payments from providers in an effort to refund the federal share.”
What’s next for ABA services?
Despite the documented issues, there’s a broad consensus that ABA services can be beneficial for children with autism.
And business is booming. The Family Social Services Administration, which oversees the Medicaid program. reported that there were 797 Medicaid-enrolled individual ABA therapists in 2020. By the end of 2024, that number had grown to 2,534.
With such an explosion in services, oversight has scrambled to keep up. One child in the federal audit had an ABA referral in 2014 but no follow-up to determine if she still required such intensive services. By the summer of 2020, the child was still getting ABA services five days a week with over seven hours of therapy each day at the age of 8—four years after starting ABA. Her parents had apparently taken over her education and, at 11, she was still getting ABA services.
Following the audit, providers now have an authorization “checklist” to review diagnostic testing evaluations and documentation. A November release geared toward ABA providers, they must now document: a comprehensive diagnostic evaluation and a behavior assessment—both of which are completed before services.
Treatment plans now must have specific goals and time frames as well as a justification for the number of services hours. Lastly, session notes must have session-specific targeted skills and more detail about the date, time, location and duration of services.
Whether ABA services will be limited remains to be determined. Budget writers have explicitly targeted Medicaid for anticipated cuts and caps, with waitlists established for both seniors and disabled Hoosiers.
But Greene, the state representative from Shelbyville, pointed to the benefit of early intervention for children with autism, despite its up-front cost.
“There’s a lot of concern over what we spend now versus what we spent then. And ABA is the very definition of that because…the time that you intervened earlier, the hours that you (devote to) that child on the front end will pay dividends down the road,” Greene said.
As a member of the budget-setting Ways and Means Committee, Greene said he had a role when it came to educating his peers from a parent’s perspective.
“… if you’re able to catch this early (and) get them the interventions, then they can go on to have better outcomes in terms of their degree of independence and less reliance on (public) services,” Greene said.
The Indiana Capital Chronicle is an independent, not-for-profit news organization that covers state government, policy and elections.