Applied Behavioral Analysis Therapy

The Indiana Family & Social Services Administration, and its Office of Medicaid Policy & Planning, pays for coverage of Applied Behavioral Analysis (ABA) therapy. This therapy can improve social, cognitive, and behavioral outcomes in some children with autism spectrum disorder as well as the overall wellbeing of the child and their family.

Medicaid first began covering these services in 2016. Because there was not meaningful data on which to set base rates at that time, FSSA has paid providers a percentage of the amount they chose to bill the state rather than a transparent statewide rate for ABA therapy services.  That has resulted in widely different reimbursement amounts for the same service, and a 2022 claims payment amount of $420 million,  which is not sustainable. In addition, Indiana’s reimbursement  amounts  are significantly higher than other states providing similar services.

FSSA began work in 2022 to lay the groundwork to establish a uniform rate. This included reaching out to ABA providers and seeking information about their costs. We’ve learned how other states reimburse for this service, and we’ve reviewed public data sources such as the Bureau of Labor Statistics, the Internal Revenue Service, and the Indiana Department of Workforce Development.

We shared initial findings from the provider survey in January and recently met with providers to discuss their questions. Now, we’ll begin the work of transitioning away from individual reimbursement amounts that are essentially set by providers and move to a transparent statewide ABA rate that promotes uniform access for families and allows providers to retain a stable workforce.

We will finalize the new ABA rates in the next months and share the information broadly — well before new rates are implemented. Providers will be impacted differently by a statewide rate. Some may have substantial increases in reimbursement amounts, some may have little change and others may have a decrease in their reimbursement.

The rates will be included in the Medicaid rate matrix, which means rates will be reviewed at least every four years using an evidence-based rate methodology. A yearly index will provide adjustments annually when necessary. These are both important steps toward setting a path for long-term sustainability.

ABA is the only service on the rate matrix for which no established rate has been set.

You can read more about the rate matrix here.

Below are frequently asked questions and additional resources.

Frequently Asked Questions

When did Medicaid coverage for ABA Therapy Services begin?
Coverage for ABA Therapy Services was added to Indiana Medicaid programs in 2016. Demand for those services has grown significantly since that time.

How many children or young adults receive these Medicaid services and how much does it cost?
In 2022, Indiana Medicaid programs provided ABA Therapy Services to about 6,200 children and young adults each month, resulting in $420 million in annual claim payments to ABA providers.

What were the results from the provider survey regarding their costs for ABA Therapy Services?
You can find that information here.

What is the Medicaid rate matrix?
Here is information about the rate matrix.