Several large autism service providers in the U.S. are undergoing a wave of layoffs and closures.
Notably, applied behavior analysis (ABA) therapy services providers 360 Behavioral Health and The Center for Autism & Related Disorders (CARD) have collectively reduced their staff by the hundreds. Yet, these are not the only ABA providers considering layoffs.
Social media posts reveal a sweeping trend of staff reductions across autism service providers.
This comes at a time when autism rates are on the rise. Autism impacts 1 in 44 children in the U.S., according to the CDC. Boys are four times more likely to be diagnosed with autism than girls. Roughly 1 in 6 children are diagnosed with a developmental disability.
“Reimbursement is a major factor in so many ABA providers deciding to downsize or to close operations,” Rob Marsh, 360 Behavioral Health CEO, told Behavioral Health Business. “Rates from the payers and reimbursement have been very stagnant, and unfortunately, as the entire country knows, the pressure on wages has been increasing over the course of the last few years. To a point, it just becomes unsustainable. My hope is that the payers’ reimbursement will catch up with the rates.”
360 Behavioral Health, which offers ABA therapy and other services for children with autism and other developmental disabilities, laid off 503 employees in California, according to the state’s Worker Adjustment and Retraining Notification (WARN) report. The company was founded in 2018 when it brought together a collection of service providers.
The Chatsworth, California-based company has centers across California and Idaho. Despite these layoffs, the company’s website currently lists dozens of career opportunities, including direct care staff, clinical positions and business development.
“It really came down to evaluating our portfolio of services, looking at the different programs where we were offering services and the markets that these programs were operating in. [Then] making some decisions on either consolidating and combining clinics or exiting certain markets altogether,” Marsh said. “So the decision was really multifactorial. When we looked at each one of the clinics, we considered the labor market, we looked at the rates that we were able to achieve, the payers, the availability of the CPAs and other clinicians. And those are the factors that went into our decision.”
This isn’t the only center to undergo changes.
CARD will be closing all 10 of its Oregon Centers. Thes closures have resulted in 156 layoffs, according to an Oregon WARN report. These layoffs include clinicians, administrators and technicians.
Founded in 1990, CARD is owned by investment group Blackstone Inc. As of February 2022, CARD offered services that include ABA therapy at 221 locations in 24 states.
In February, CARD shook up its leadership team. Jennifer Webster came on board as CEO to replace Tony Kilgore, who resigned for undisclosed reasons.
“After careful consideration, we have made the difficult decision to close CARD Centers in Oregon effective August 15, 2022,” the company wrote in a statement to BHB.
“We have come to this disappointing outcome following negotiations with our healthcare plan partners to secure adequate reimbursement rates reflective of the increasing costs and staff shortages affecting our services. While some of our healthcare plan partners recognized and addressed the need for increased reimbursement, we, unfortunately, were not able to achieve adequate overall levels from all our partners necessary for sustainable, continued, long-term operation.”
A spokesperson for the company said its top priority is facilitating a smooth transition for existing patients, families and caregivers.
Social media posts have also indicated a surge of layoffs elsewhere across the industry. Dozens of former Elemy employees report recent layoffs. Elemy, a virtual care provider specializing in pediatric behavioral health, raised $219 million in October 2021, bringing its valuation to $1.2 billion.
“Last week, we cited current economic conditions as the driving force in a restructuring that required us to make meaningful changes in how we plan to operate. In the near future, our focus will be on efficiently scaling our California, Florida, and Texas markets – by far our largest,” Amanda Taggart, chief communications officer at Elemy, wrote in an email to BHB. “This restructuring impacted only a small percentage of our community, and families will still be receiving continuity of care with our ABA therapists for the months ahead.”
A Reddit post names national autism providers CARD, Elemey and Acorn among the provider groups making cuts. However, Acorn’s CEO said in a LinkedIn post that the company is actively recruiting.
“You may have heard that there are major staff reductions happening in the ABA Industry,” Vicki Kroviak, CEO of Acorn Health, wrote on Linkedin. “I want you to know that Acorn Health is actively hiring in almost every market to expand our reach. We are a company founded by and led by women, and every day we strive to move kids with autism towards more independent and meaningful lives.”
BHB reached out to Kroviak on LinkedIn, but has not yet heard back.
While autism service providers may be downsizing, the market has recently seen a series of private equity deals in the autism and ABA therapy space.
In July, Five Arrows Capital Partners-backed The Stepping Stones Group purchased Oceanside.
Earlier this year, Frontline Healthcare Partners acquired stakes in Tennessee-based ABA and autism service providers JoyBridge Kids and Bay Area Clinical Associates.
Additionally, Enhanced Healthcare Partners announced that it acquired Los Angeles-based autism service provider Howard J. Chudler & Associates.
Companies featured in this article:
360 Behavioral Health, Elemy, The Centers for Autism & Related Disorders
