Families say autism therapy helped their kids. Indiana's Medicaid cuts could put it out of reach

Starting with the new year, Indiana will implement a universal reimbursement rate for a therapy commonly used by children with autism, at a rate significantly less than what healthcare providers received on average in the past

Shaunna Thompson was running out of childcare options. Her daughter Abbie was expelled from daycare in 2022 because of “all over the place” behavior. Thompson found an in-home provider for the toddler, but was told Abbie was “too much” to watch every day of the week.

The experiences motivated Thompson to seek assistance for her daughter, who also was missing developmental milestones. Abbie, now 3, was diagnosed with autism spectrum disorder in October of last year.

By March, Thompson enrolled her in applied behavior analysis — a therapy based on learning and behavior focused on improving communicative, social and motor skills — at a local facility in northern Indiana for 40 hours a week. Abbie, nonverbal most of her life, has since said her first word: “Mom.”

“It brought tears to my eyes” Thompson said.

But Thompson and other families reliant on Medicaid worry changes coming in January will limit access to the therapy as Indiana attempts to limit the cost and, along with other states, cut the size of the low-income health care program.

Indiana’s Family and Social Services Administration said the cost of Medicaid reimbursement for the behavioral therapy, commonly referred to as ABA, has ballooned in recent years because of the growing number of children seeking the services and the amount that providers have billed the state. The state plans a universal, hourly reimbursement rate for the therapy, but the planned amount is lower than what providers have previously received on average.

Advocates and centers worry this will mean accepting fewer patients or even closing, as has happened in other states such as Colorado this year.

“Companies just kept leaving and it just kind of turned into a crisis situation,” said J.J. Tomash, who leads an ABA provider in Colorado called BehaviorSpan. He blamed Medicaid reimbursement rates that have not kept up with the cost of living.

Medicaid began covering the services in 2016, and providers in Indiana set their own rates until now. But centers say the new rates are still not enough to keep them running and are far below the previous statewide average of $97 per hour.

Indiana Act for Families, a coalition opposing the new rates, said the proposal is 10% below providers’ operating costs. Although Indiana has said the new rates are aligned with pay in other states, the coalition argued the state used outdated data in their comparison.

Miles Hodge, owner and co-founder of Shine Pediatric Therapy in Indianapolis, said the effects of the new rates will take their toll over time. The state said the rates will be up for review every four years, a time frame Hodge said does not keep up with inflation.

“It could leave a lot of people underwater,” he said.

About 6,200 children and young adults received the services under Medicaid in 2022, the state said.

With a standard patient to therapist ratio of 1-to-1, ABA is an “extremely staff intensive model,” Hodge said. Across the state, he expects staff pay and benefits to be hit, which he said could lead to high turnover and inconsistent care for patients.

Hodge predicted his center will have to take fewer patients who are on Medicaid because of the changes.

The Indiana agency overseeing Medicaid said the therapy is the only major service category that did not have a uniform reimbursement rate, and the rising cost of the services was unsustainable. ABA expenditures increased more than 50% per year for the last three years, according to the agency.

In 2022, ABA claims represented $420 million in Medicaid spending, the state said. Total Medicaid expenditures in state fiscal year 2022 totaled more than $16 billion.

The move comes at the same time as states unwind pandemic-era protections that kept millions of people covered by Medicaid. In Indiana, the number of people enrolled in Medicaid steadily grew every month from March 2020 until May 23, when the federal budget law ended the protections.

Indiana’s total enrollment has fallen every month since then.

States setting universal rates is common, but low reimbursement endangers access to key services for individuals with disabilities, said Jennifer Lav, senior attorney with the National Health Law Program.

Lower rates in a time of high inflation can lead to staff turnover and shortages, issues that can compound in rural areas, she said.

ABA is not without critics. Zoe Gross, advocacy director at the Autistic Self-Advocacy Network, said ABA’s goal is to eliminate behaviors considered autistic and teaches children to conform with neurotypical behaviors.

“It teaches you that the way you naturally behave is not OK,” she said.

But families who have found it helpful find it hard to imagine a future without access.

In Westfield, a suburb of Indianapolis, 29-year-old Natasha Virgil said her family's ability to participate in activities outside their home markedly improved once 6-year-old Elijah Hill began 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,” Virgil said, holding her 4-month-old daughter and watching Elijah play with soap bubbles near the family's Christmas tree.

It's difficult already for parents of children with disabilities to hold jobs between numerous therapy sessions and doctor’s appointments, Virgil said.

“I don’t think I would ever be able to be where we are if we didn’t pursue ABA,” she said

Chanel McClure, mother of 2-year-old King, said she has lost sleep over the pending change. She interviewed multiple centers before finding the ABA therapy she wanted for King. He was on a waiting list for another 11 months.

Now almost 3, King is nonverbal and attends speech, occupational and developmental therapy. Since beginning ABA, McClure said he has learned new ways to communicate and is comfortable playing with other children. His therapists are working to address elopement or wandering that can be common in children with autism.

“King just bloomed like a flower,” McClure said.