Indiana’s Medicaid program wants to cap coverage of applied behavior analysis (ABA) for children and roll out additional workforce regulations.
At a state budget committee on Dec. 17, officials with Indiana Medicaid unveiled a plan to limit ABA coverage to “30 hours per week for a duration of no longer than three (3) years,” according to a proposal document.
“Following the maximum 3-year duration, ABA recipients would be permitted to continue limited hour, behavior-specific, focused ABA, if medically necessary,” the document states.
The move is motivated by ballooning costs within Indiana Medicaid to cover ABA, a therapeutic cornerstone of autism therapy. The proposal document states that ABA cost the program $398 million in the state fiscal year 2024. Without the caps, spending is estimated to reach $574 million in total for the year ending March 31, 2026.
The caps are estimated to lower expenditures by $333 million cumulatively across fiscal years 2025 to 2027.
The move has angered local providers and raised concerns of national autism therapy industry advocates who say such cuts would impact those with the most severe forms of autism and degrade the feasibility of treating children who access care via Medicaid.
Some are also concerned about what they say is the sudden arrival and potential implementation of these policies.
“They’re trying to push it through really quickly, and that’s cause for concern,” Emily Roche, vice president of payer contracting at Westfield, Indiana-based Bierman Autism Centers, told Autism Business News. “These are policies that really can be detrimental to the kids that need services.”
Bierman Autism Centers operates five of its 21 centers in Indiana. It also operates in Arizona, Massachusetts, New Jersey, North Carolina, Ohio and Rhode Island.
Indiana Medicaid proposes that the caps take effect April 1, even though federal law requires that the U.S. Centers for Medicare and Medicaid Services (CMS) approve the change in policy before it becomes effective.
Advocates believe that these caps violate Indiana Medicaid’s internal rules for clinical considerations and the federal parity regulations.
Indiana Medicaid similarly ruffled feathers when it altered its reimbursement structure a few years ago.
In 2023, Indiana Medicaid set fixed rates for ABA services for the first time after previously reimbursing 40% of whatever providers billed. Those rates amounted to 45% reductions for services provided by a registered behavior technician (RBT) and 28% reductions for a board-certified behavior analyst (BCBA). At that time, advocates and providers said treating children covered by Medicaid would become much more difficult and much less attractive from a business perspective.
Similar concerns arise with the lifetime and weekly hour caps. Those concerns are magnified by another new regulation the Indiana state government issued in November that became effective on Dec. 18.
Medicaid released a bulletin that ostensibly clarified documentation requirements for ABA requirements. However, it established new requirements and procedures for operating within the program and being admitted to it. For example, the bulletin also requires providers to conduct the Behavior Assessment System for Children, Parenting Relationship Questionnaire (BASC PRQ) before ABA starts. It also requires that all RBTs be credentialed through Medicaid before their services can be billed.
“We’re going to have this huge bottleneck where providers won’t have staff approved by Medicaid to provide care,” Roche said. “Other insurances don’t have that wait time for credentialing. So it’s going to be easier for providers to just drop Medicaid kids and serve kids other funding sources.”
Diagnosis of autism has increased dramatically in the last several years. About 1 in 36 children was estimated to have autism in 2020, according to the CDC, compared to 1 per 150 in 2000. That’s a roughly 300% increase in the rate.
Demand for services has skyrocketed and insurers of all types are trying to cut down on apparently runaway costs by keeping rates flat, despite inflation, and cutting them in some cases. The result has been diminished access to services. In 2023, Indianapolis-based Hopebridge pulled out of Colorado, citing untenable Medicaid rates. Generally, flat and stagnant reimbursement rates have been an insurmountable challenge for some organizations. 2022 in the autism therapy industry was defined by turmoil caused by closures and layoffs partially driven by reimbursement rates.
The increased spending by Medicaid programs on ABA has caught the attention of federal regulators.
In December, the Office of Inspector General (OIG) for the U.S. Department of Health and Human Services (HHS) released a report that states that Indiana improperly paid out an estimated $56 million for ABA services, $39.4 million of which was covered by the federal government.
Advocates point out that the state’s actions in the last few months touch on several issues identified in the report, including the state’s failure to ensure that claims were appropriately documented, that clinicians were appropriately credentialed and that certain diagnostics were performed before paying out claims.
Several other states are grappling with increased spending and potential actuarial missteps in accounting for elevated costs with behavioral health care in Medicaid programs generally, Mariel Fernandez, vice president of government affairs at the Council of Autism Service Providers (CASP), told ABN.
“We’ve seen that in Pennsylvania, Nebraska, Indiana, Utah,” Fernandez said. “That is a trend of costs not aligning, and then the state making moves either to restrict access or reduced rates.”
Two days ago, the Indiana Family and Social Services Administration posted notice of a written comment period for the proposed care cap regulations that ends Feb. 14.