Why Are Funding Cuts Happening?

Indiana’s proposed cuts to Medicaid-funded ABA therapy are rooted in a real problem—but the solution is putting vulnerable families at risk.

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Over the past several years, Medicaid spending on ABA therapy in Indiana has grown rapidly. One major reason for this is that the state previously used a reimbursement model that paid providers based on a percentage of whatever they billed rather than a standardized rate.

 

This structure provided little oversight on pricing and created an environment where unethical service providers engaged in price gouging. In some cases, providers billed hundreds of dollars per hour, far above national averages, contributing to a dramatic surge in Medicaid spending.

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At the same time, audits have raised concerns about how Medicaid dollars were used. Reviews found tens of millions of dollars in “improper payments” for autism services in Indiana, including issues like missing documentation or services that did not meet required standards. These findings suggest that not all funding consistently went toward high-quality, medically necessary, direct care.

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Medicaid spending on ABA became one of the fastest-growing areas in the budget. As a result, state leaders have moved to rein in costs, implementing rate reductions, steeper authorization requirements, and new limits on duration of services.

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However, the cascading effects of these cuts are deeply concerning to families and providers, many of whom - like us - followed consistently ethical billing practices.

 

Rather than targeting waste, fraud, or inefficiencies directly, many of the current policies enact sweeping and indiscriminate cuts: reducing reimbursement rates, limiting hours, and increasing administrative burdens regardless of individual need or quality of service.

 

Rather than providing a solution, these cuts reduce access to medically necessary care for vulnerable families and will likely force small, local providers to scale back services or close, leaving families with even fewer quality options for essential support.

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Yes, costs increased rapidly due to poorly structured reimbursement policies and limited oversight.

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Yes, reform was needed to ensure accountability and sustainability.

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But the current approach shifts the burden onto children and families who rely on ABA therapy as medically necessary care.