Indiana: Medicaid paid $639M for ABA in 2023; proposal to cap at "36mo over a lifetime"

June 27, 2025, Journal Review: What families need to know about the 36-month cap on ABA therapy 

https://www.journalreview.com/stories/what-families-need-to-know-about-the-36-month-cap-on-aba-therapy,346654?

Nothing has been spared in the recent budget overhauls at the state level, including funding for individuals receiving Applied Behavior Analysis therapy, the most common and data-supported intervention for children on the autism spectrum. But recent billing discrepancies and lack of regulation flagged by state and federal regulators, coupled with climbing Medicaid payouts, prompted scrutiny that could limit the amount of therapeutic services available to kids with Autism Spectrum Disorders (ASD). As proposed, Applied Behavior Analysis services would be capped at 36 months over a lifetime.

As the 2025 Legislative Session kicked off, Indiana Capital Chronicle reported that state regulators say a jump in demand and cost of services, which hit $639 million in 2023, was “unsustainable.” The cost had been $120 million in 2019, then climbed to $276 million in 2021 and $439 million in 2022. Federal oversight agencies flagged the payouts and audited providers, noting $133 million in improper or potentially improper claims. The Chronicle reported on one provider who resolved fraudulent billing accusations by paying back $2 million.

Representative Becky Cash (R-Zionsville), whose child receives ABA services, proposed HB 1414 to force a study and prohibit limits to Medicaid funding until the study reported to the General Assembly. Her bill didn’t pass, and Gov. Braun’s office, in response to advocacy, responded in writing this week, saying:

“Changes to ABA therapy coverage are proceeding through administrative action by the Family and Social Services Administration (FSSA) ... These changes include the implementation of a 36-month lifetime cap on comprehensive ABA services.” Capping services began on April 1 and was not retroactive, but will apply going forward, so families will have full coverage through April 1, 2028, but after those 36 months have expired ‘coverage for high-intensity, comprehensive ABA services will be limited after that time.’ His office noted that ‘families may still qualify for focused ABA therapy if it is determined to be medically necessary. Focused ABA is a lower-intensity, targeted form of treatment, often addressing specific behaviors or skills rather than broad developmental goals.’”

To understand the situation, the League of Women Voters spoke with Ophelia Weir, director of operations at Indiana Full Spectrum Therapy, which operates in Waynetown and Attica. Weir, who is also a board-certified behavior analyst and has worked at two different companies, acknowledges that there are valid reasons for the state and federal audits.

“One of the things that was found with those audits was that Medicaid essentially allowed,” Weir said. While Indiana Full Spectrum set its rates to align with insurance rates, which tend to be more uniform, other companies didn’t.

One state audit found that 97% of sampled claims contained at least one improper payment due to inadequate oversight, including services provided by uncredentialed staff, undocumented sessions, and therapy during children’s naps. This led to new funding restrictions that will reshape autism support across the state. . . .

The surge in demand, Weir said, is due to diagnostic expansion: Earlier autism assessments and increased parental awareness have led to more children qualifying for services and the breadth of services that comes with a growing recognition of co-occurring conditions (e.g., OCD) requiring behavioral support beyond core autism symptoms. . . .

 “The three-year cap will be a major barrier. What if a child exhausts their coverage early, then develops new behavioral needs at school later? We’re not set up for that reality,” Weir said.

Under the proposed policy, after exhausting the 36 months of treatment, families may only access limited “focused ABA” for specific behavior and will lose out on comprehensive developmental support. . . . .

Indiana’s Medicaid restructuring aims to curb fraud but imposes rigid constraints on a therapy supporting over 7,300 individuals statewide-- The governor’s office anticipates 8,000 children will receive services in 2026. The tiered-hour system and lifetime cap prioritize fiscal control over clinical flexibility, potentially leaving families without sustainable long-term solutions. As the 2025 implementation approaches, balancing oversight with adaptable support remains critical — especially for those whose needs extend beyond arbitrary time limits.