New years bring new starts. That includes new legislative sessions, executive administration and potential changes to the regulatory landscape.

The challenge of understanding state-level regulatory changes is multiplied 50 times over. Given the lack of a specific division within the federal government to oversee autism therapy, state providers must watch the patchwork of state rules and regulations that make up the industry’s oversight.

Unlike the rest of the behavioral health world, autism therapy isn’t overridingly tied to a facility type or especially tied into a public health program such as psychiatry services or addiction treatment services. That means that state oversight makes up for the specific regulation of the relatively isolated autism therapy industry.

Despite the challenge of keeping up with state-level policy changes, this oversight structure makes such activity essential.

“If you’re not aware of [what’s going on] and what the impact could be, you could end up in a really unfortunate situation,” Mariel Fernandez, vice president of government affairs for the advocacy and accreditation nonprofit The Council of Autism Service Providers (CASP), told Autism Business News. “Because our local legislators can’t be an expert on everything, if a constituent or an organization comes to them with an idea because it impacts them, what they end up deciding is a fix for that issue could impact the industry in a really adverse way.”

The movement to mandate autism therapy service coverage at the state level was one of the most crucial developments in ABA access and investment. In 2019, Tennessee became the 50th state to mandate that health plans cover autism therapy services.

“A ton of the advocacy for ABA coverage has been state- and grassroots-driven,” Emily Roche, vice president of contracting and payer relations at Westfield, Indiana-based Bierman Autism Centers, told ABN.

Here’s a rundown of issues to be aware of early on in 2025.

Caps on hours and rates

Several states have sought to rein in growing spending within their Medicaid programs with direct cuts or capping hours in a given period. Both have the same effect, limiting money spent on services such as ABA.

In Indiana, the state’s executive branch had previously rolled out caps on what the state’s Medicaid program would pay for. In December, the leaders in the Indiana Medicaid program said payments for ABA would be limited to “30 hours per week for a duration of no longer than three (3) years.”

The efforts to cap spending on ABA reflect the ballooning use of the treatment by provider organizations and patients alike. Indiana Medicaid previously said it had spending that would reach $574 million for the trailing 12 months ending March 31, 2026.

The state’s new governor has stepped into the fray and is taking charge of the issue. A few weeks ago, newly inaugurated Indiana Gov. Mike Braun announced the creation of a working group that would include representatives from the state’s Family and Social Services Administration, Department of Education and Department of Child Services, legislators and other constituent representatives.

On Feb. 18, National Public Radio affiliate WFYI reported that Indiana Medicaid had released a new version of the caps that would create tiers based on symptom severity.

Rate caps have also popped up in New York. A bill in the New York State Senate (SB S5107) would enumerate a 680-hour-per-year cap on ABA services and open the definition of treatments for autism spectrum disorder to include DIR-Floortime.

Nebraska recently rolled out a 30-hour-per-week cap for Medicaid reimbursement. State officials said in a statement that payment on ABA over the last three years has increased 1,200%.

Rate cuts

The landscape is highly varied when it comes to rates among the states. Staying with New York, advocates are pushing for the state’s governor to reject $28.5 million in cuts to Medicaid funding specified for ABA services.

“These populations have waited years for the implementation of the ABA Medicaid benefit, and we should not introduce new roadblocks but instead clear a path,” the New York State Association for Behavior Analysis said in a statement.

Rates are often most directly conceptually paired with the workforce challenges in the autism therapy space. Low reimbursement rates often lead to lower rates for clinicians — especially front-line care staff such as registered behavior technicians (RBTs) — and fuel the turnover and retention problem that bedevils nearly every organization in the space.

This, in turn, creates patient care access issues.

“In some states, the reimbursement rates are so low that no provider wants to go there and lose money,” Rick Loewenstein, CEO of TeamGame Advisors, told ABN. “They shouldn’t lose money. They need to make money. I don’t care if it’s a for-profit or a nonprofit.

“To deliver the best quality service, they need to be paid fairly for their services. … I’m all about things being fair.”

In some cases, state legislatures can be quite responsive to rate funding concerns. In Colorado, the state legislature approved an emergency funding increase of 20% for autism therapy services as its relatively low rates caused several closures. An example: Indianapolis-based Hopebridge ended its ABA services in Colorado in 2023. The company’s CEO at that time, David McIntosh, said the Medicaid rates “left us no other choice than to withdraw from ABA services.”

But those funding increases are on the table for a potential cut, according to local media.

Accreditation across the nation?

Last year, Massachusetts’ Medicaid program, MassHealth, said it would require its managed care organization to only contract with ABA providers that were accredited by entities such as the Council of Autism Service Providers (CASP) or Jade Health’s Behavioral Health Center of Excellence.

The mandate went into effect at the start of 2025. MassHealth-contracting entities are required to get accreditation by Jan. 1, 2027. All autism therapy providers are to be accredited a year later.

In short, accreditation is a voluntary process by which a health care entity has its policies, processes and services assessed by an ostensibly objective third party to ensure that an organization is up to snuff when it comes to best practices and care quality. Because it’s voluntary and often includes private entities, it’s fundamentally different from state licensure or professional board certification.

While ABN didn’t detect any other states newly adding an accreditation mandate, it’s worth noting because state legislators and regulators tend to copy or borrow concepts from other states. In this case, Massachusetts’ accreditation mandate came after the state’s attorney general reached a settlement with two ABA providers over inappropriate billing practices with MassHealth. And earlier in 2024, before the accreditation mandate, a Massachusetts inspector general released a report that found, in part, that Medicaid managed care organizations didn’t ensure proper supervision, according to previous ABN reporting.

The Office of Inspector General (OIG) for the United States Department of Health and Human Services (HHS) released a report late last year finding that the Indiana Medicaid program had improperly paid out an estimated $56 million for ABA services. The report found that questionable Medicaid payments were made frequently with improper documentation and that RBTs weren’t appropriately vetted or supervised.

The news of this review rippled across the industry. Indiana is home to several leading ABA companies, especially Hopebridge. For example, Nebraska’s state government cited the federal OIG report on billing issues in its announcement about capping hours.

“I think people need to be paying really close attention to their state Medicaid agency this budget and legislative season … because state Medicaid agencies communicate with each other,” Fernandez told ABN. “Issues in Indiana have already impacted other states.”