ABA Therapy at Risk as Indiana Slashes Medicaid

Shaunna Thompson faced a challenging situation as she struggled to find suitable childcare for her daughter. After Abbie was expelled from daycare in 2022 due to being “all over the place,” Thompson felt overwhelmed. While she managed to find an in-home provider, she was told that Abbie was “too much” to care for on a daily basis.

These experiences pushed Thompson to seek help for her daughter, who was missing key developmental milestones. In October of last year, Abbie, now 3 years old, was diagnosed with autism spectrum disorder. The diagnosis motivated Thompson to find the right support for Abbie.

By March, she enrolled her in applied behavior analysis (ABA) therapy, a structured approach focused on enhancing communication, social, and motor skills. The therapy took place at a local facility in northern Indiana, where Abbie attended 40 hours a week. Remarkably, after being mostly nonverbal, Abbie eventually said her first word: “Mom.” Thompson reflected on this milestone, saying, “It brought tears to my eyes.”

However, families like Thompson’s, who depend on Indiana’s Medicaid for coverage, are concerned about significant changes set to take effect in January. These changes aim to reduce costs as the state attempts to cut the size of the low-income healthcare program, which could greatly affect access to critical therapies like ABA.

According to Indiana’s Family and Social Services Administration, the costs associated with Medicaid reimbursement for behavioral therapy have surged in recent years. This increase is largely due to the rising number of children seeking these essential services and the amount billed by providers. The state is now proposing a universal hourly reimbursement rate for ABA therapy, but it falls below the average that providers have historically received.

Advocates and therapy centers are apprehensive about the impact of these changes, fearing that they may have to limit their patient intake or even close their doors entirely, as seen in other states like Colorado this year. “Companies just kept leaving and it just kind of turned into a crisis situation,” remarked J.J. Tomash, who leads an ABA provider in Colorado, highlighting the challenges posed by insufficient Medicaid reimbursement rates that have not kept pace with living costs.

Since Medicaid began covering these services in 2016, providers in Indiana were allowed to set their own rates. However, with the new proposed rates being considerably lower than the statewide average of $97 per hour, many centers are expressing deep concern. Indiana Act for Families, a coalition opposing the new rates, claims that the proposal is about 10% below the actual operating costs for providers. Although the state argues that the new rates are aligned with those in other states, the coalition contends that outdated data was used for this comparison.

Miles Hodge, the owner and co-founder of Shine Pediatric Therapy in Indianapolis, anticipates that the ramifications of the new rates will unfold over time. The state plans to review the rates every four years, a timeline Hodge believes does not adequately reflect the reality of inflation. “It could leave a lot of people underwater,” he explained.

In 2022, approximately 6,200 children and young adults in Indiana received Medicaid-funded ABA therapy services. With a typical patient-to-therapist ratio of 1-to-1, Hodge pointed out that ABA is an “extremely staff intensive model.” Across Indiana, he expects that the changes will negatively impact staff pay and benefits, potentially leading to high turnover rates and inconsistent care for patients.

Hodge predicts that his center will need to limit the number of Medicaid patients they accept due to these changes, further complicating access for families in need. The Indiana agency responsible for overseeing Medicaid stated that ABA therapy is the only major service category without a uniform reimbursement rate, and the rising costs had become unsustainable. In fact, ABA expenditures rose over 50% annually for the past three years, culminating in $420 million in Medicaid spending on ABA claims in 2022 alone.

The overall Medicaid expenditures for the state reached more than $16 billion in the same fiscal year. These developments coincide with the unwinding of pandemic-era protections that previously kept millions enrolled in Medicaid. In Indiana, Medicaid enrollment had steadily increased each month from March 2020 until May 2023, when federal budget law ended those protections. Since then, enrollment has declined each month.

While establishing universal rates is a common practice among states, low reimbursement can jeopardize access to vital services for individuals with disabilities. Jennifer Lav, a senior attorney with the National Health Law Program, warned that lower rates during a period of high inflation could lead to staff turnover and shortages, particularly affecting rural areas.

Despite some criticism of ABA therapy, many families find it invaluable. Zoe Gross, advocacy director at the Autistic Self-Advocacy Network, voiced concerns that ABA aims to eliminate behaviors deemed autistic, pushing children to conform to neurotypical standards. “It teaches you that the way you naturally behave is not OK,” she said.

On the other hand, families who have experienced the benefits of ABA therapy struggle to envision a future without it. Natasha Virgil, a resident of Westfield, a suburb of Indianapolis, shared how her 6-year-old son, Elijah, significantly improved in his ability to engage in activities outside their home since beginning ABA therapy. “My biggest thing is making sure that he has a fighting chance to be able to live in this world and have the skills to survive,” she expressed, watching Elijah joyfully play with soap bubbles near their Christmas tree.

The demands of caring for children with disabilities often make it challenging for parents to maintain employment due to the numerous therapy sessions and doctor’s appointments. “I don’t think I would ever be able to be where we are if we didn’t pursue ABA,” Virgil stated.

Chanel McClure, mother of 2-year-old King, voiced her anxiety about the impending changes. After interviewing several centers to find the right fit for King, who was on a waiting list for nearly a year, McClure emphasized the importance of finding appropriate ABA therapy. Now almost 3, King is nonverbal and receives a range of therapies including speech, occupational, and developmental therapy. Since starting ABA, McClure noted significant progress in King’s communication skills and social interactions. “King just bloomed like a flower,” she said, sharing her hope for his continued growth.