Indianapolis, Indiana – In a decisive move to rein in soaring Medicaid costs while maintaining critical care for children with autism, Governor Mike Braun has signed an executive order aimed at curbing the rising expenses of Applied Behavior Analysis (ABA) therapy in Indiana. The order seeks to ensure fiscal responsibility without compromising the quality of treatment for thousands of Hoosier children who rely on this essential therapy.
ABA therapy is a widely recognized treatment for autism, providing early interventions that improve the quality of life for individuals and their families. However, the cost of providing this therapy through Indiana Medicaid has skyrocketed in recent years. From 2017 to 2019 alone, Medicaid payments for ABA therapy ballooned from $14.4 million to $120 million—a staggering eightfold increase. Projections indicate that these costs could reach $645 million by 2026, covering approximately 8,000 children across the state.
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Concerns over this rapid increase prompted a federal audit conducted by the U.S. Office of the Inspector General in 2019 and 2020. The audit uncovered at least $56.5 million in improper Medicaid payments, largely due to provider credentialing issues, lack of required evaluations, and incomplete documentation. In light of these findings, Governor Braun emphasized the urgency of addressing inefficiencies within the system.
“Indiana’s $1 billion Medicaid budget shortfall last year means we need to take bold action to contain costs where they are clearly getting out of hand. When the price our state pays for one service is soaring from $14 million to $120 million in just two years, with over $39 million of improper payments identified in an independent audit, something is clearly wrong and needs to be addressed immediately,” said Governor Mike Braun. “We’re taking decisive action to contain these massive cost increases while maintaining quality of care for the Hoosiers that rely on these treatments.”
The executive order establishes a working group composed of parents, legislators, medical experts, ABA providers, and other stakeholders. Their task is to develop concrete recommendations to curb spending without compromising service quality. The group will evaluate various measures, including establishing better clinical models, enhancing coordination of care, improving transition plans for children as they grow, and setting quality benchmarks for ABA services.
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Additionally, the group will assess potential caps on weekly therapy hours and total months of service, while also considering an appeals process for families facing extenuating circumstances. Stricter provider enrollment and billing requirements may also be implemented to prevent the financial mismanagement identified in the federal audit.
This initiative marks a significant step in addressing Medicaid’s budgetary challenges while ensuring that children who need ABA therapy continue to receive it in a financially sustainable manner. As Indiana moves forward, Governor Braun’s administration is committed to striking a balance between responsible fiscal policy and the well-being of Hoosier families.
The working group is expected to present its findings and recommendations to the governor in the coming months, setting the stage for meaningful reform in how ABA therapy is funded and administered in Indiana.
