This is an exclusive BHB+ article
Applied behavior analysis (ABA) therapy has long been considered essential for autism care — but as diagnoses surge, payers are facing increasing financial pressure.
Currently, 1 in 31 children are diagnosed with autism spectrum disorder, which is up from 1 in 45 just 10 years ago. In turn, that has made the demand for services skyrocket.
These factors have spurred three trends reshaping the industry: state and commercial Medicaid payers are slashing rates, providers are being expected to demonstrate clear value for their services, and more stakeholders are pushing for the integration of non-ABA therapies into autism care.
“We’ve seen state Medicaid authorities reduce their rates, and then commercial payers try to follow suit, despite the increasing pressure on access,” Jim Spink, CEO of Autism Care Partners, told me during a recent webinar. “So for the provider, it’s really difficult.”
Autism Care Partners is a multi-specialty autism therapy provider operating in Massachusetts, Vermont, New Hampshire, Rhode Island and New York.
Still, many providers are seeking innovative ways to collaborate with payers and deliver additional services.
“I really think we’re at a point where all providers need to figure out what their identity is when it comes to value proposition, what differentiates you from other providers in the space, but also to be forward thinking about more diverse service offerings and integrated approach to caring for these learners with autism care spectrum disorder,” Scott Semmel, senior vice president of payer relations at Acorn Health, told me.
Acorn Health is an autism service provider operating in Florida, Illinois, Maryland, Michigan, Pennsylvania, Tennessee and Virginia. It is backed by the Ontario Teachers’ Pension Plan (OTPP).
In this BHB+ Update, I will explore:
– How states are looking to cut ABA spend
– Why is it critical that ABA providers demonstrate value
– Smart strategies for diversification
In the news
Medicaid is the No.1 payer of ABA services in the U.S. Therefore, it’s no surprise that we’ve seen some of the biggest rate cuts from state Medicaid agencies.
As states scramble to address Medicaid funding gaps resulting from the One Big Beautiful Bill Act, many are turning to ABA. Colorado and North Carolina have both proposed cuts to autism funding. However, in both cases, providers and patients are taking the states to court to fight these changes.
At the same time, other states are going forward with cuts.
The state of Indiana is poised to undergo significant changes for its ABA industry. In January, the state unveiled a plan to cap coverage of ABA services and implement additional workforce regulations. Then earlier this week, a working group revealed 20 recommendations for the future of ABA. These recommendations include lifetime caps on ABA hours, aligning ABA utilization with clinical evidence and a temporary moratorium on new ABA therapy sites.
In July, the state of Nebraska, which once had one of the highest ABA reimbursement rates in the country, announced a 48% cut in reimbursement for direct therapy provided by a behavior technician.
In addition to cuts, we’ve seen at least one Medicaid change that could shake up autism services reimbursement at the state level. Earlier this week, my colleague Chris Larson reported that Idaho’s state Medicaid program announced that “behavior modification and consultation,” including ABA, would no longer be covered through its behavioral health managed care organization.
Instead, it will be covered through the Children’s Habilitation Intervention Services (CHIS) program and covered under “behavioral intervention” services.
It’s unclear what this will mean for services in the state, but Magellan will no longer be able to reimburse CPT codes related to ABA.
It’s not just state Medicaid departments that are seeking to curb spending on ABA services, either. Centene Corp. (NYSE: CNC) has repeatedly cited problematic spending on ABA services during its earnings calls.
In October, the company announced that it was forming an ABA task force to address spending on these services. The task force has already worked with a state partner to increase” precision in ABA clinical service definition as well as more stringent supervisory and caregiver engagement requirements.”
Show your work
The good news for providers is that there are some potential paths forward. Payers across the behavioral health sector are increasingly interested in outcomes and measurement-based care.
There could be an opportunity for providers to demonstrate the efficacy of their care.
“We work with many payers who are seeing that providing early intensive ABA services through the clinical outcomes that we provide to them … is actually the most cost-effective route for them, because these children can graduate from the therapy programs and then they no longer require lifelong services from that payer,” Behavior Frontiers CEO Helen Mader told me.
Behavior Frontier is an autism services provider that includes 26 centers and home-based care branches across 12 states.
Payers have also begun to invest in research to show the efficacy of ABA services. And there could be some wins in this space.
Historically, TRICARE only covered ABA services through a demonstration program, which began in 2014. However, in September, a new report released by the National Academy of Sciences, commissioned by the U.S. Department of Defense’s Defense Health Agency, found that ABA was clinically effective, but that policies within the current demonstration complicated care for beneficiaries and providers.
This research could pave the way for ABA services to become a covered service in TRICARE.
While value-based care arrangements are still scarce in the autism care space, I foresee these deals becoming increasingly popular as payers demand results. One provider working in this space is Cortica.
Cortica is an autism provider that focuses on the whole-child approach to autism. This differentiator has propelled it to enter value-based care arrangements.
“The model just works better in a value-based care environment,” co-founder and CEO Neil Hattangadi told me in April. “Out of necessity and out of a vision for what the future of the field could look like, we embarked on this a few years ago. Our approach has always been that it’s a whole-child program construction, where you need these different pieces to come together in order to create value-based relationships. The components of value span a few different areas. One is around these outcomes that I’m talking about. One is around cost savings, primarily coming from these areas of unwanted spend.”
Autism beyond ABA
Cortica is actually a great example of another trend in autism: an emphasis on autism care beyond just ABA services.
The provider offers medical care for common comorbidities with autism, such as seizures, sleep disorders and gastrointestinal symptoms, as well as developmental therapies, including speech and occupational therapy.
Having these offerings in one place can help reduce the administrative burden for parents, better coordinate care, and, importantly for providers, diversify revenue.
While Cortica is uniquely positioned to care for patients’ physical health as well as behavioral health, providers are increasingly looking to integrate developmental therapies, such as speech and OT services.
Some savvy providers are already moving in this direction. For example, JoyBridge Kids expanded its arsenal of developmental therapies with its acquisition of Pediatric Advanced Therapy earlier this month.
”[Pediatric Advanced Therapy’s] reputation for clinical excellence and their focus on speech, occupational, physical therapy plus counseling perfectly complements our model of joyful, progressive ABA therapy,” Mike Cairnes, CEO of JoyBridge Kids, said in a news release.
JoyBridge Kids is an autism therapy provider that operates 24 sites across North Carolina, Georgia and Tennessee.
Adding new service lines beyond ABA could not only simplify care for children and caregivers but also future-proof organizations amid rate cut conversations.
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