Indiana panel to consider ABA therapy cost controls

Yahoo

09-05-2025

A psychologist takes notes on a clipboard in a therapy session for children. (iStock/Getty Images Plus)
Twenty-one agency leaders, health industry professionals, disability advocates and others will look to contain Medicaid spending on Applied Behavior Analysis (ABA) therapy — while ensuring continued care for thousands of young, autistic Hoosiers — the Indiana Family and Social Services Administration (FSSA) announced Friday.
Gov. Mike Braun directed the agency to create the working group in a February executive order. A report featuring three cost-containment recommendations is due by December.
ABA therapy is commonly used to improve social, communication and learning skills in children and young adults with autism or other developmental disorders. Some critics, however, object to the teaching tool and say it encourages compliance over independence. Additionally, some practitioners coupled it with electroshock therapy as late as 2022.
Indiana Medicaid spending on ABA therapy has risen over time:
2019: $120 million
2020: $102 million
2021: $276 million
2022: $420 million
2023: $639 million
Source: Indiana Capital Chronicle reporting
Nevertheless, it's increasingly popular. Families, however, often struggle to access the therapy because of the price, limited insurance coverage and other health care industry stumbling blocks.
State coffers are also taking a hit.
Indiana Medicaid expenditures for ABA therapy rose from about $14 million in 2017 to $120 million in 2019, according to FSSA, then dipped to $102 million in 2020 — still the second-highest in the nation, per U.S. Health and Human Services' Office of Inspector General.
The cost surge prompted the federal office to audit Indiana's 2019 and 2020 ABA payments. The 2024 report found at least $56 million in improper payments — citing problems with documentation, diagnostic evaluations, staff credentials, referrals and more. It recommended that Indiana refund more than $39 million to the federal government.
Soaring totals since then have prompted greater scrutiny from Hoosier leaders worried Medicaid costs are growing too much, too fast. The financial pressure has only worsened.
A grim April revenue forecast forced lawmakers to cut $2 billion in spending out of the state's next two-year, now-$44 billion budget.
Braun's order charged the working group with evaluating cost-containment strategies that 'minimize the negative impact felt by enrollees and their families.'
He directed the group to evaluate the 'best' clinical care models to provide the right therapy in the right setting at the right ages. The order sought recommendations for 'a better coordinated experience' for children, 'but in a financially sustainable manner.'
Under the order, group members must also consider potentially implementing quality metrics for ABA services, caps on the number of therapy hours per week, caps on the number of months children can receive the therapy, an appeals process for 'extenuating circumstances' along with new provider enrollment and billing requirements.
The 'comprehensive review' of ABA therapy in Indiana should 'identify key drivers of Medicaid expenditures,' Friday's news release read.
An evaluation must be completed by September 30. A written report has to include three recommendations for 'meaningful' cost-containment, plus the advantages and disadvantages for each recommendation. That's due to Braun by November 30.
The working group's members include:
FSSA staff, some of whom lead disability and Medicaid utilization efforts
Health care industry representatives, including a pediatrician, psychiatrist and a health insurance company lobbyist
Autism, other disability and special education organization advocates
State lawmakers
Other parents
Controversy over ABA cuts ensnarled Braun's predecessor, former Gov. Eric Holcomb. Families rallied repeatedly, urging Holcomb and his FSSA to reconsider.
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