By Leslie Bonilla Muñiz, indiana Capitol Chronicle
Service quality and program management were also focuses.
Parents of autistic children — and ABA therapy providers — may soon encounter new usage limits, reimbursement rates and other changes as Indiana attempts to slow rising Medicaid spending.
About 20 recommendations, released Wednesday morning by a state-backed panel, could shape upcoming service shifts for thousands of Hoosiers.
“There will still be growth, just not as much, and it still protects the current ABA access for children and families who need it,” said Eric Miller, the deputy secretary and chief of staff for the Indiana Family and Social Services Administration.
Miller was among the nearly two-dozen state leaders, health professionals and others charged with evaluating “cost containment” strategies that “minimize” the negative impact on enrollees. Gov. Mike Braun directed FSSA to organize the working group in a February executive order.
Applied behavior analysis, or ABA, therapy is often used to improve communication and learning skills in children and young adults with autism or other developmental disorders.
Its popularity has surged in recent years. More than 8,000 Hoosiers rely on Medicaid to pay for ABA therapy, with most of them between three and eight years of age.
“This is something that’s very valuable — but at the same time, we know it’s unsustainable, the current cost trajectory,” said Miller. His agency, FSSA, administers the state’s Medicaid program.
Two of Miller’s own children have benefitted from ABA therapy.
Other recommendations are meant to boost quality and improve oversight, in response to a revealing federal audit.
Program updates on the way — again
Indiana’s Medicaid program began covering ABA services in 2016, spending about $21 million over the following year.
Expenditures peaked at $611 million in 2023, and dropped slightly to $445 million in 2024, after former Gov. Eric Holcomb’s administration set lower reimbursement rates.
His FSSA also moved to limit services.
A Medicaid State Plan Amendment, which was set to take effect April 1, would’ve capped treatment to 30 hours weekly for three years — retroactively. That would have cut off about half of the children using the service immediately.
Braun’s administration pulled that proposal.
“The governor decided this was cruel and unusual punishment, and we weren’t going to do that,” FSSA Secretary Mitch Roob said.
The agency filed another State Plan Amendment, with a July 1 effective date, that would’ve raised weekly limits for enrollees with higher needs — and applied prospectively. But it’s also getting scrapped.
FSSA plans to use Wednesday’s findings to draw up a new slate of changes.
Without intervention, costs could reach an estimated $825 million in 2029. Officials say that the state can’t afford that.
“The working group and the whole package of recommendations … is projected to reduce that annual growth rate (to) around 7%-8% instead of 13%,” Miller said.
There’s no dollar amount in anticipated savings available yet, however.
“We don’t make these choices in a vacuum, right? We provide services to 1.8 million people,” Roob said.
The agency plans to bring an ABA proposal — and a new Medicaid revenue forecast — to the State Budget Committee in December.
It could submit an updated State Plan Amendment to the federal government by the end of the year. The U.S. Centers for Medicare and Medicaid Services must approve the modifications for them to take effect.
Key usage, rate changes
The working group recommended doing away with weekly limits and tiers of care on “comprehensive” ABA therapy, opting to instead pose a “lifetime” allocation of 4,000 hours.
That is fewer hours than the previous proposals would’ve allowed over a three-year period, but it is more flexible, Miller emphasized — and it’s not retroactive.
Once that cap is hit, enrollees would be eligible for up to 15 hours of “targeted” therapy per week.
Cuts to reimbursement rates for one-on-one therapy are likely, although the group didn’t agree on a specific number or range to endorse in the report.
“FSSA may reduce current rates for individual ABA therapy as deemed necessary to stay within the agency’s appropriated budget,” the recommendation reads.
Rates for group therapy, however, may be raised.
The state’s “significantly” lower reimbursement has driven low utilization, the working group found.
Hiking rates to “financially viable” levels would promote “one-on-one therapy time for children with the most significant needs, while providing a cost-effective, appropriate ‘step-down’ option for others.”
Decisions on rates are expected closer to FSSA’s presentation before the State Budget Committee next month, according to Miller.
Parents could also be required to get involved in their children’s therapy. The working group recommended nine to 18 hours of coaching or training per six-month authorization period.
“This therapy is usually done (outside) the home, which means the parent … can choose to be less engaged,” Roob said. “If the taxpayer’s spending that much money on helping this child, we believe that parent or caregiver needs to be engaged.”
Other recommendations seek to help children transition out of comprehensive care, when appropriate, and move on to lower-intensity or alternative forms of support.
“It’s (about) what’s next for the child … once they graduate (from) ABA therapy,” Miller said.
He recalled transition planning beginning “almost immediately” for his children, like if they’d continue being home-schooled or move on to public or private schools. Therapy activities can change depending on those goals, Miller noted.
FSSA has been following cohorts of enrollees who began therapy in 2020, according to the report, and found “no observable decline” in average weekly hours after three years of care.
Accreditation, location changes for providers
Indiana has more than ABA 320 therapy locations, per the report. The number of providers shot up by 25% between just 2023 and 2025.
The state currently doesn’t require any accreditation or licensure for ABA therapy organizations to bill Medicaid — or have any other limits on provider growth.
The working group agreed that should change.
“We really saw that there was an increased need for that oversight to ensure that the growing number of providers really are providing high-quality ABA therapy,” Miller said.
The report suggested requirements cover quality, service ratios and outcomes monitoring; risk management and patient safety; and more..
The state could use an existing accreditation body like the Autism Commission on Quality, or an external vendor. Miller said there have been “pre-conversations” with ACQ.
“What I would say is, over the next month or two, we’d be putting the details out there, and then it’s probably like a yearlong process, because we’ve got to go through all the providers,” he added.
The working group also took aim at areas with overly high concentrations of ABA sites in hopes of encouraging expansion in underserved communities.
Sites are mostly in urban locations in central and northern Indiana, with “noticeably fewer” providers southwest.
Under one recommendation, FSSA would request federal approval to temporarily block new providers or sites in designated counties from billing to Medicaid. The six-month moratorium could be extended.
The agency would “evaluate the implications” to avoid unwanted consequences, like providers establishing sites in neighboring counties that serve the same areas or starting in-home ABA services.
In the meantime, FSSA would create “incentives” for providers to expand to areas with fewer options. It’s unclear what form those strategies might take, however.
“To be determined,” FSSA spokesman Marcus Barlow wrote.
Private insurers took some heat in the report, too.
“Evidence suggests that, in general, private insurers pay below Medicaid rates for ABA,” working group members wrote. They asserted that’s creating “perverse incentives” for providers to prefer Medicaid-covered children. And, Medicaid has to pay the difference between the private and public rates for those who have both insurance types.
Braun’s administration should consider supporting legislation to require group health insurers to adopt a rate schedule above Medicaid rates, they recommended. Group plans are purchased by employers from state-regulated insurance carriers. However, 70% of Hoosiers with private insurance have employer-funded plans, which are regulated at the federal level.
The working group additionally recommended that Indiana beef up its third-party liability processes, which the Medicaid program uses to identify and collect payments from other responsible parties — like private insurance companies. The report emphasized that those insurers are the primary payer when coverage exists, with Medicaid being the “payer of last resort.”
Under another recommendation, FSSA would work with schools on their responsibilities. When ABA is medically necessary, Medicaid or private insurance funds it, but when the therapy is a behavioral support, schools fund it. State rules and federal law guarantee disabled children the right to a free and appropriate public education.
The report calls for FSSA to create a dedicated program office within the agency, which could implement many of the suggested strategies.
Right now, a trio of divisions hold ABA-related responsibilities, according to the report. One is the Office of Medicaid Policy and Planning.
“Their job is to pay claims,” Roob said. “A claim comes in; they pay it, right? That’s what they’re told to do, right? They’re not told to be managing a program. They’re paying a claim.”
The new entity would have staff with clinical expertise, too.
There’s no set timeline. Miller said FSSA would start “as soon as we can find a qualified person” and build it out from there.
Several of the recommendations the program office could handle focus on improving service quality and fighting waste, fraud and abuse.
In a 2024 report, the U.S. Health and Human Services’ Office of Inspector General audited Indiana’s 2019 and 2020 ABA payments and found $56 million in improper payments and an additional $78 million in potentially improper payments. It recommended that Indiana refund more than $39 million to the federal government.
The audit cited problems with documentation, diagnostic evaluations, staff credentials, referrals and more. Cheaper group work was charged as more expensive individual therapies, or billed time included non-therapeutic activities like meal and bathroom breaks, for example.
FSSA is auditing the claims identified in the federal report and requiring refunds of any identified overpayments, according to the working group. The agency also initiated a program integrity review of Medicaid claims paid for ABA therapy from 2022 through 2025, and when it’s done, will make providers refund overpayments and go through compliance training.
