The year 2023 saw several autism therapy organizations make dramatic — sometimes painful — adjustments to an evolving marketplace. And the landscape is set to shift even more heading into the new year.
While the echoes of the coronavirus pandemic fade, inflation and stagnant payer rates put the squeeze on providers. On top of that, leveraged autism therapy platforms faced the added stressor of exponentially higher interest rates, turning once affordable debt into a lead weight.
This caused a number of high profile stumbles.
The Center for Autism and Related Disorders (CARD) underwent a bankruptcy sale process. The company’s founder and long-time CEO, Doreen Granpeesheh, bought the company in partnership with Sangam Pant for $48.5 million, much less than the $700 million that the investment and financial services firm Blackstone Inc. (NYSE: BX) paid to acquire a majority stake in the company in 2018.
Now back under Granpeesheh’s ownership and leadership, the company seeks to remake itself.
Invo Healthcare, a Doylestown, Pennsylvania-based autism and related therapy provider, shut down its home-based and center-based autism therapy segments, laying off 1,000 employees. Indianapolis-based Hopebridge pulled its applied behavior analysis (ABA) business out of the Colorado market; other providers did so as well, highlighting the challenge of working with state Medicaid programs.
Still, the autism therapy segment had its bright spots in 2023.
Houston-based BlueSprig Pediatric acquired Lakewood, Colorado-based Trumpet Behavioral Health, adding 37 locations to the BlueSprig footprint. San Diego-based Cortica announced a $75 million funding round that dovetailed with the acquisition of two companies.
And Gracent, backed by the investment firms KKR and Altamont, launched a reset of ABA assets focused on sustainability.
Going into the new year, we reached out to several CEOs in the space to get their insights on the year that was and the year to come. Here’s a sample of what they told Behavioral Health Business. Responses are edited for clarity.
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If you could redo 2023 again, what would your organization do differently, knowing what you know now?
Overall, 2023 was a great year for Behavior Frontiers. We grew by over 45%. Looking back, we would have preferred to open more of our autism centers earlier in the year, to help more clients access our services. While we opened 13 centers this year, we believe that we could have opened more [of them] sooner. We wish we had started building out our scheduling software sooner to help our clients better access our exceptional ABA treatment. Adding this module to our proprietary software, PrioraCare, will round out our practice management software, further empowering the clinical community and patients seeking treatment.
— Helen Mader, CEO, Behavior Frontiers
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We are in a unique situation, having bought CARD at a bankruptcy auction late in 2023. These past four months have actually answered that question as we’ve worked to turn things around—increase patient services, attract and retain staff, and position CARD to build access to ABA again.
— Doreen Granpeesheh, CEO and founder, Center for Autism and Related Disorders
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We would have revamped our talent acquisition approach and been more proactive in responding to rate demands and wage pressures. The talent out there — the RBTs and BCBAs — are looking for a lot of things, and we would start differently with some of the incentives we developed. For example, we established a more flexible hybrid model of work that led to better talent attraction [for BCBAs]. At the beginning of the year, we had this rigid approach to some BCBAs being on-site or remote. Most people in supervisory positions are looking for the flexibility they need to do their work but also for their lives.
— Rob Marsh, CEO, 360 Behavioral Health
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What do you predict will be the defining issue of 2024?
I think there will be two defining issues: One will be the role of ABA alongside other needed therapies and interventions. No one should dispute the evidence and power of ABA. It’s evidence-based and can make really meaningful gains in autism. But I think we’re also recognizing that it’s just not sufficient for all that a child and family needs. There’s more that can be delivered alongside it and really be synergistic with behavioral therapy. The other is a transition from fee-for-service to value-based payment. Health plans are getting more and more comfortable with the metrics that they want to pay for — that are a combination of process and outcomes metrics.
— Dr. Neil Hattangadi, CEO, Cortica
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Helping to define and lead industry standards for clinical quality, processes and outcomes will be a critical focus in 2024. While there has been much amazing work accomplished in this area, there is still a disconnect between best clinical practice, funder expectations and what providers do on a daily basis. As our field approaches heightened consistency with expectations, we will likely move toward more consistent quality care models.
— Amber Valentino, Chief Clinical Officer, BlueSprig Pediatrics
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I expect to see many positive changes that remove barriers to our patients’ access to ABA, so I’m hopeful that increased access to top-quality services will be the hallmarks of 2024. That said, I am concerned about ABA hours being reduced for patients who need more intensive care. I hope the issues surrounding what is an appropriate recommendation will be resolved in the coming years so that payers and providers can be on the same page and move forward with more collaboration.
— Doreen Granpeesheh, CEO and founder, Center for Autism and Related Disorders
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The ABA industry is maturing, which is great to see. In 2024, we predict that there will be an emphasis on tech-enabled clinical outcome data, as well as AI applications for electronic scheduling, assessment, and reporting, which will enable the creation of value-based care models and more informed dialogues with our clients, payor partners, and community stakeholders. At Behavior Frontiers, we have already started to focus on studying our clinical outcomes in order to demonstrate the success that our unique clinical protocols bring.
— Helen Mader, CEO, Behavior Frontiers
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How will autism therapy companies look to grow in 2024?
BlueSprig’s vision for 2024 aligns with our commitment to internal growth. Our focus extends beyond professional development to encompass the overall well-being of our team, fostering a collaborative atmosphere that resonates with our goal of creating a thriving workplace. This commitment to internal growth seamlessly integrates with BlueSprig’s broader plan for service growth in 2024. Rooted in our mission, our expansion efforts will broaden our reach and comprehensive care offerings. Prioritizing inclusivity, we will actively increase access to care for underserved populations, providing specialized services for older clients and those with severe behaviors while bridging accessibility gaps in areas with limited ABA options.
— Jason Owen, president and CEO, BlueSprig Pediatrics
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Although growth has slowed down across the industry, I’m sure we’ll continue to see private equity investments play a role, whether that looks like organic growth or more of those mergers we’ve started to see. Idealistically, I hope we’ll see companies expand their services across a broader set of demographics.
— Doreen Granpeesheh, CEO and founder, Center for Autism and Related Disorders
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We have seen an increased number of organizations that have approached 360 Behavior Health looking for M&A opportunities. So, I absolutely believe that M&A activity will increase in 2024. We’ve already seen some signs of that with Trumpet. And then I absolutely believe that the majority of providers that are out there are focused on same-store growth, increasing their revenue by offering different modalities by pivoting from all in-home to in-home and in-clinic and vice versa. This includes allocating some focus to telehealth and getting into schools.
— Rob Marsh, CEO, 360 Behavioral Health
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There is a shift now to grow responsibly. There has sometimes been a growth-at-all costs mentality. Now, this growth mindset comes in terms of offering the highest level of clinical quality and financial sustainability.
— Neil Hattangadi, CEO, Cortica
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What regulatory issues are on your radar going into 2024?
At the federal level, we are focused on the growing enforcement of the Mental Health Parity & Addiction Equity Act (MHPAEA). The Departments of Labor, Health & Human Services, and Treasury have made extraordinary progress in their efforts to enforce MHPAEA.
Autism is the only diagnosis with its own working group at EBSA, which is tasked with enforcing MHPAEA violations involving ABA/autism, and we will continue to help increase awareness of MHPAEA violations that hurt our families. We are also working with the National Coalition for Access to Autism Services (NCAAS) to ensure the recently convened ad hoc committee at the National Academies of Science has everything it needs to address the concerns arising from recent reports to Congress that mischaracterize ABA’s effectiveness.
— Doreen Granpeesheh, CEO and founder, Center for Autism and Related Disorders
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At the federal level, we are carefully watching the continued evaluation of the Comprehensive Autism Care Demonstration Program through TRICARE and the National Academies study that is just getting underway. The proposed federal revisions to network adequacy requirements will impact providers and may impact contracting and rate negotiation for both commercial payors and Medicaid Managed Care.
Finally, the push to add language surrounding generally agreed upon standards of care has the potential to decrease arbitrary denials that are being made based upon standards that are not publicly available, or accessible, and that are proprietary in nature, such as the Milliman Care Guidelines (MCG). At the individual state level, we will be monitoring previously passed legislation related to RBTs in the classroom (FL, CO), expedited credentialing (CA) and corporate practice of medicine language (IL). Also we will be closely monitoring state Medicaid agencies for rate and policy changes.
— Mariel Cremonie-Fernandez, Regulatory Affairs Specialist, BlueSprig Pediatrics
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How do you predict payer relations will change in the coming year?
There has to be a reckoning in 2024 to offset the mismatch between the rates at which wages have gone up and the rates that plans are paying. I think this is going to be the defining issue of 2024. Our wages have increased by 20% or so over the course of the last 18 months, and the rates that we get from the payer have increased between about 2% and 4%. We’ve got to move the rate that we’re getting from the payers to offset the wages that we’ve had to increase for our employees.
I think it’s pretty clear that organizations are going to choose not to work with plans that they don’t think compensate them at an adequate rate for the care that they’re providing. Also, I think there’s going to be much more energy between the payers and the providers as we move forward. Payers in California are approaching us to discuss what the continuum of care really looks like for the clients and the members that we’re serving.
— Rob Marsh, CEO, 360 Behavioral Health
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It’s going to be more collaborative. Payers, in the beginning of the autism coverage mandates, were simply trying to build networks as fast as possible and just wanted access for members. Now, they’re thinking about the right way to partner with providers to deliver higher levels of clinical quality particularly for the amount of spend. I think they’ll also start to think about whole-person care because it’s what every payer is talking about in every area of health care.
— Neil Hattangadi, CEO, Cortica
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In the coming year, payers will likely be looking to partner with providers of scale that are sophisticated clinically and from a data perspective as far as measuring client progress. Behavior Frontiers has already met with the majority of our payors to demonstrate our robust data analysis capabilities, which we will continue to refine next year with regard to identifying the variables contributing to the best clinical outcomes and ensuring that those practices are widely implemented.
— Helen Mader, CEO, Behavior Frontiers
