Hopebridge CEO: Low Medicaid Rates, Inflation Costs give ABA Provider ‘No Other Choice’ But to Pull Out of Colorado

Hopebridge will end its applied behavior analysis (ABA) services and slash its footprint in Colorado due to the low Medicaid rate and rising operating costs.

The Indianapolis-based autism therapy provider will close six out of eight locations, effective Aug. 11. The remaining two locations will only provide speech therapy and occupational therapy for children with intellectual or developmental disabilities (IDDs).

Hopebridge’s CEO, David McIntosh, attributes the cuts to Colorado’s insufficient Medicaid reimbursement, intractable state officials and significant increases to state operating costs.


“Colorado Medicaid has left us no other choice than to withdraw from ABA services,” McIntosh said.

Hopebridge isn’t the only autism provider facing these challenges. Low Medicaid rates are typical of safety-net health plans across the country. However, they are often especially low for most behavioral health services. 

Further, inflation across the U.S. has effectively eaten away at the value of stagnant fee-for-service rates for several payer types.


Nationally, consumer costs have increased 18.7% compared to May 2019 and 2023, according to U.S. Bureau of Labor Statistics (BLS) data. In Colorado, prices increased 19.8%, similar to the Western region of the U.S. which saw a 19.4% increase.

Operating in states like Colorado that have a higher-than-typical cost of living can create additional staffing challenges too.

“We can no longer serve the autism population sustainably through ABA therapy, but we can continue to make a profound impact on these families through our speech and occupational therapy service offerings,” a spokesperson for the company told Behavioral Health Business.

The two remaining centers — in Greeley and Westminster — will offer occupational and speech therapy to “an additional population,” the company told BHB. These two offices will inform how to improve and expand these services through Hopebridge’s 360 Care model.

Hopebridge operates in 12 states. McIntosh said that the company is also opening locations in Thompson’s Station, Tennessee, and in Northport, Florida, and is also expanding speech and occupational services to all Tennessee locations.

The company has prioritized expanding supporting services via 360 Care through Hopebridge’s footprint, McIntosh previously told BHB.

Hopebridge is owned by the New York City-based private equity firm Arsenal Capital Partners. The deal was announced in May 2019.

Hopebridge isn’t the only provider facing these challenges. In recent weeks, another large private equity-backed autism therapy company announced it would shutter operations in a number of states, including Colorado. Invo Healthcare announced it will close its in-home and in-office care divisions. The move will result in over 1,000 people losing their jobs, 239 of whom are in Colorado.

The specifics related to Invo Healthcare’s departure from Hopebridge differ at a fundamental level. Invo Healthcare did not have a large Medicaid patient base; “It was a tiny percentage for them,” according to a spokesperson for the company.

Low reimbursement without a moderating force

While Hopebridge wouldn’t disclose the share of its business that comes from Medicaid reimbursements other than to say that it serves “a large Medicaid population in Colorado and our eleven other states.”

The company’s high exposure to Colorado’s low Medicaid rate made it especially vulnerable to the increased cost of operating in the state. McIntosh said that inflation and cost of living rates seen at the company are 20% higher than the other states it operates in.

On top of the local economic forces, Hopebrige’s struggle in Colorado demonstrates the challenge of engaging with state Medicaid programs.

Autism therapy providers, along with other behavioral health providers, suffer from little enforcement of federal rules that require behavioral health services to be compensated at parity with physical health care services.

Because of autism therapy’s focus on the pediatric population, it lacks the moderating influence of Medicare, the federal health plan for seniors.

“If you think about the reimbursement for health care services that treat all age ranges, you have Medicare providing a sort of middle ground of what most provider will accept as the standard,” Jeffrey Hulbert, chief revenue officer for Henderson, Nevada-based Center for Autism and Related Disorders (CARD), told BHB. “Then, around that (Medicare), most commercial plans pay higher than that and most Medicaid plans pay lower than that.”

Other segments of health care can balance sources of health plan revenue when all three — commercial health plans, Medicare and Medicaid — cover a patient population, Hulbert said. However, ABA services skew heavily toward Medicaid because most patients are children, covered by part of Medicaid that covers children, Children’s Health Insurance Program (CHIP).

CARD presently operates 130 locations in 14 states, 9 of which are in Colorado.

Hulbert estimates that Medicaid and commercial reimbursement rates can differ by about 5% to 10%. That differential can be higher in states where Medicaid reimbursement is low and commercial health plan reimbursement is high.

“Some states (New Jersey) have higher reimbursement rates for ABA services, while others may have lower rates,” Stacy DiStefano, CEO of Consulting for Human Services (CHFS), told BHB. “At CFHS we counsel our clients to have a portfolio mix and not rely on any one type of service.”

Lessons learned from Hopebridge and Colorado

ABA providers in Colorado may be a canary for other autism providers accepting Medicaid across the country. Hopebridge opened its first location in the fall of 2020, persevering through the onset of the coronavirus pandemic. It had planned to open in early 2020.

The company announced in February 2020 that it would open its first two locations in Denver and Aurora and that it intended to open as many as 12 over the next 1.5 years.

Colorado has some features that make it an attractive state to do business. It’s one of the fastest-growing states in terms of population. DiStefano said the state is known for being interested in creating greater accessibility to services. She pointed to a 2015 law that removed age and total payment caps on mandated autism coverage.

ABA coverage is not covered by the state’s Medicaid managed care organizations; providers contract directly with the state.

That creates a handful of issues, according to Hulbert. CARD has grappled with Colorado’s electronic verification system and other administrative requirements, making working with the state “particularly more burdensome than … some of the MCO states where the Medicaid plans are through a health plan.”

MCOs are often part of larger health insurance conglomerates with more savvy in handling health plans. Further, working with the same overarching organization’s MCO and commercial health plans can lead to easier administration of claims.

Colorado Medicaid has left us no other choice than to withdraw from ABA services

David McIntosh, CEO of Hopebridge

However, the CEO of a Colorado-focused ABA company said his company hasn’t had a similar administrative struggle working with the state. Regardless of the administrative aspect, the low rate and lack of meaningful increases have had and will likely have an impact on the direction of his company.

“We want to serve Medicaid; it’s core to our mission of what we want to do,” the source told BHB. “At some point, we’re going have to stop taking Medicaid or substantially reduce the number of Medicaid kids we treat or create waitlists.”

BHB granted the CEO anonymity because of the importance of the Colorado market to the company’s operations and to allow frank insights.

This CEO said the company would always take some Medicaid patients but wouldn’t jeopardize the company’s sustainability by doing so.

Like in other instances, the coronavirus pandemic touched off many of the challenges that autism providers face. CARD held up the pandemic as the driving force that led it into bankruptcy. Medicaid rates in Colorado were tight, the CEO said, but the pandemic made them unsustainable.

“[Low rates] force providers into things that really harm care quality,” the CEO said, “for example, driving high [patient] ratios, adding lots of clients under one BCBA, penny-pinching with RBTs.”

Still, the direct proximity to the entity setting rates for ABA creates an opportunity for lobbying to lead to better future rates.

Some states have changed their tune on reimbursement. Hulbert pointed to efforts in Louisiana in 2022. Lobbying efforts led to what he described as a “pretty significant increase in their Medicaid rates.” That bill passed in June 2022.

Colorado is undergoing an administrative process to reassess its Medicaid rates. The Medicaid Provider Rate Review Committee is holding a public meeting on July 14 that is slated to include behavioral health generally and pediatric behavioral health specifically.

“I would point to something like [the Louisiana rate increase] as an example to show that if the parties can come together, they might be able to find a solution, that may not be perfect, but may work for both sides,” Hulbert said.

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