Indiana Medicaid improperly spent $56 million to $77 million over a two-year period on applied behavior analysis (ABA) provided to Hoosier children diagnosed with autism, according to a new federal audit.
The inspector general of the U.S. Department of Health and Human Services said it investigated Indiana Medicaid's ABA spending because it soared from $14.4 million in 2017 to $101.8 million by 2020 — the second-highest amount in the nation.
Records show Indiana's fee-for-service Medicaid spending on ABA has continued growing and hit $210.7 million during the 2023 calendar year, and totaled $639 million last year when Medicaid managed care payments are included.
ABA is a commonly used therapy for managing autism symptoms, usually focused on improving social and communication skills, that can be provided individually or in a group setting. Early treatment for autism is important because proper care can reduce children’s difficulties while helping them build on their strengths and learn new skills.
The federal audit found, however, massive amounts of improper billing by ABA providers in 2019 and 2020 for allegedly provided services lacking session note documentation; charges for periods when children were eating, taking a break, napping or engaged in other non-ABA activities; and group ABA services billed at the individual rate.
In addition, the audit uncovered multiple instances where ABA was provided to children by staff lacking proper credentials, as well as to children who did not receive the required diagnostic evaluations or treatment referrals for ABA.
The audit requests Indiana Medicaid repay the federal government between $39 million and $53 million to reimburse the federal share of the improper ABA payments permitted by the state during the audit period.
It also urges the state agency to offer additional guidance to ABA providers on billing and documenting ABA services, and for Indiana to more frequently review ABA payments to ensure compliance with all relevant laws and regulations.
According to the audit, state officials neither agreed, nor disagreed, with the findings. Instead, they pledged to attempt to recover any inappropriate payments to ABA providers and to continue implementing other measures aimed at ensuring Indiana Medicaid only is covering justified ABA expenses, including setting specific ABA rates rather than paying a percentage of billed charges.
In addition, outgoing Indiana Medicaid Director Cora Steinmetz told the State Budget Committee Tuesday that Indiana is seeking federal approval to limit ABA services beginning in April to 30 hours a week for a maximum of three years, with few exceptions.
But even if that change is approved, Steinmetz noted for lawmakers: "Total expenditures are projected to be $473 million for this calendar year. However, at the current rate of ABA recipient, and more notably, utilization growth, ABA expenditures are expected to again rise to prior levels and total $650 million by calendar year 2026."
In response, Senate Democratic Leader Shelli Yoder, D-Bloomington, said limiting ABA access to save money only will compound the challenges faced by families already navigating the complexities of autism care.
"Families shouldn't have to fight for every hour of therapy or worry that essential care will be taken away," Yoder said. "We need to focus on strengthening oversight while protecting access to these vital services."
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