Indiana Governor Mike Braun has launched an initiative to address escalating expenses in the state’s Medicaid-funded autism kid therapy program, following recent federal scrutiny of the service.
The governor signed an executive order establishing an interagency task force to examine and streamline the program’s operations. This move comes in the wake of his administration’s decision to reverse a previously proposed measure that would have restricted access to Applied Behavior Analysis (ABA) therapy for certain children beginning April 1 – a plan originally drafted during the previous administration.
“I’m committed to protecting this program for the families that need it,” Braun said Wednesday. “But in the future, we got to run it efficiently and make sure that we marshal the resources to keep it sustainable.”
The executive order establishes a comprehensive task force combining representatives from multiple state agencies. Members will include experts from the Family and Social Services Administration, the Department of Education, and the Department of Child Services, alongside legislators and affected families.
By November 30, the task force will present recommendations addressing several key areas: optimal clinical care models, enhanced care coordination, and strategies for transitioning children from ABA therapy to alternative settings. The group will also evaluate potential limitations on service hours and duration, develop appeals procedures, and implement new billing protocols to address concerns raised in the federal audit.
The initiative follows ongoing efforts by FSSA to control program expenses since 2023. When Indiana’s Medicaid office began covering ABA therapy in 2016, providers were reimbursed based on individual billing rates. Program costs have since skyrocketed from $14 million in its first full year to $120 million in 2019, then surged to $420 million in 2022. Projections indicate costs could reach $645 million by 2026.
This dramatic cost increase stems from both growing enrollment and rising per-child expenses. In response, the agency implemented a standardized reimbursement rate in late 2023, replacing the previous system of variable hourly charges. While providers broadly supported rate standardization to prevent system abuse, many expressed concerns that the new fixed rate could lead to staff reductions or facility closures.
The state’s ABA therapy program has faced multiple policy shifts in recent months. After more than 40 legislators petitioned then-Governor Eric Holcomb regarding FSSA’s initial low reimbursement proposal, the agency negotiated a compromise rate that became effective in January 2024.
In December, during Holcomb’s final weeks in office, FSSA proposed significant restrictions to the state’s Medicaid plan: a 30-hour weekly cap on ABA therapy services with a three-year lifetime limit per child. The controversial proposal would have applied retroactively, potentially terminating services for children who began therapy three years ago by April 1.
The timing of this proposal coincided with the release of a federal audit by the Health & Human Services Office of the Inspector General. The investigation of Indiana’s 2019-2020 ABA claims identified $56 million in “improper” payments, representing over one-third of audited claims. FSSA officials initially cited this audit as justification for their proposed restrictions.
However, following consultations with stakeholders and lawmakers, the Braun administration revised the proposal. The new plan, pending federal approval, introduces a flexible tiered system based on autism severity and professional assessment. Notably, it eliminates the retroactive application that had alarmed advocates.
Republican Representative Robb Greene, whose child received ABA therapy, praised Governor Braun and FSSA Secretary Mitch Roob for their responsiveness to feedback. “This goes beyond policy and politics for me, and I want the Governor to know that I’m grateful to him as a dad,” Greene said in a statement. “This is a great first step, and I am excited to continue the work we are doing.”
During a Wednesday press briefing, Roob acknowledged being caught off guard by the implications of the original April 1 deadline. “And there was no plan to deal with these children,” he said. “There was no connection to the school. There was no connection anywhere else. And I think that’s why you saw the understandable outrage on the part of the parents. And so as soon as we found that out, we knew we had to change that.”
The policy revisions have drawn praise from advocacy groups, though some push for further changes. Kim Dodson, CEO of The Arc of Indiana, characterized the modifications as a “major victory,” while maintaining that the three-year limit should be eliminated.
“We thank the families and advocates who took the time and effort to educate their legislators and the governor on the importance of ABA therapy,” she said. “Their efforts truly made a difference.”
The Braun administration plans to develop an additional state plan amendment and may revise the three-year service limit, according to Secretary Roob. He emphasized that the administration is not targeting specific enrollment numbers.
