Subscribe
Share
Share
Embed
Health Affairs This Week places listeners at the center of health policy’s proverbial water cooler. Join host Jeff Byers, editors from Health Affairs Publishing, and guests as they discuss health policy’s most pressing news and trends.
Hello, welcome to Health Affairs This Week. I'm your host, Byers. We are recording on 08/24/2026. First up, next month, September 16, we have a great insider event on artificial intelligence and health care. Panelists include Holly Teko, Paige Nong, and Jonathan Ketchum.
Jeff Byers:Check it out, it's going to be a great event to learn what's next in the AI healthcare space from this group. Today on the program to discuss the business of autism treatment, we have Dan Arnold from Brown University. Dan, welcome to the program.
Dan Arnold:Thanks for having me, Jeff.
Jeff Byers:Yeah, so in May, both you and the New York Times wrote about the business of autism treatment. So you're in great company there. You wrote in Forefront about private equity implications regarding autism treatment for state Medicaid programs. So real quick, let's back up. So how is autism treatment incorporated into Medicaid?
Dan Arnold:So this came out after the Affordable Care Act. So a few years after the law gets passed in 2010, in 2014, CMS issues guidance essentially telling Medicaid, you're going to have to cover medically necessary behavioral health services for children with autism. And so that brings in ABA and potentially other kind of treatments, but ABA is is the most used kind of autism treatment at the moment. Mhmm.
Jeff Byers:And what's that real quick?
Dan Arnold:That's applied behavior analysis, is what ABA stands for. So that's gonna be medically necessary and covered according to CMS in 2014. So then the states have to go through and decide, like, exactly what it what medically necessary means, what treatments that's gonna cover. So ABA could be one. They have to actually make the decision that they deem ABA to be medically necessary, whatever else they decide to be medically necessary.
Dan Arnold:And then things like they have to decide which providers are gonna qualify as providers for this. So some states require you have to be a BCBA, board certified behavior analyst, in order to have kids under your treatment care doing ABA. And so the states go state by state and decide, like, what are the credentials for providers? What age kids are gonna be covered? And so there's a lot of kind of implementation that goes along with after the guidance gets issued in 2014.
Dan Arnold:But by 2022, essentially, this is set up in every state that Medicaid is covering all these things.
Jeff Byers:Okay. Just real quick as a follow-up then. So you said the states set their own definitions of what's medically necessary. Is that correct? So if that's correct, have you found that states are different when with what they cover kind of thing?
Jeff Byers:Just, you know, this could be someone's first episode in that topic.
Dan Arnold:Yeah. And they do. So one of the things that happened is advocacy groups essentially went to certain states and said, the definition of medically necessary that you came up with isn't what the mandate requires. So they had contended that certain states Florida was one of them. There was a few others that whatever they came up with as medically necessary, it didn't kind of fit the definition of what advocates had in their mind.
Dan Arnold:So there were some legal battles that, like, this is why it kinda took a while between 2014 and 2022 to get this, like, all set up. But at the moment now, it seems ABA is kinda covered everywhere, in The States through Medicaid.
Jeff Byers:So, Medicaid spending on autism treatment has blossomed in recent years. That's my understanding. Is that right?
Dan Arnold:That's right. Yes. And we had seen
Jeff Byers:Go on. Yeah.
Dan Arnold:So the in 2019, you have spending of 660,000,000, and then by 2023, so in a span of four years, you're up to 2,200,000,000. So the increase in four years is it's over three times the spending in just a matter of four years. So people will hear that there's this notion that autism prevalence, like kids getting diagnosed with autism, is going up. That's certainly true, but that's a doubling of the prevalence rate over two decades, essentially. So if you look at what the CDC, puts out in terms of what the prevalence of autism is, it was one in a hundred fifty kids in the year 2000.
Dan Arnold:It's one in thirty one now. So that it's certainly increased over the last two decades. But to triple the spending over four years, that's not matching kind of the the increase of of autism cases that you would expect to go along with that in increase in spending.
Jeff Byers:Got any particular reason for that mismatch at all that you know of?
Dan Arnold:So this we get into this a little bit, and there's anecdotal evidence that this is the case that the new providers of ABA, which is often private equity companies, are doing more hours per kid than previous providers did. So the way, like, you get kinda get reimbursed, in ABA, it's, like, by the hour. So a lot of kids will have you know, you could have twenty hours of ABA services a week. You can get insurance kinda to reimburse, and this kinda varies a little bit. Some states have put caps on, like, how many hours you can actually bill in a week.
Dan Arnold:Others didn't have caps at all, and so kids were doing sort of forty hours a week in ABA. So if you look at kind of what's driving the spending, it's more kids. That's certainly part of it, but it's also more hours per kid that increases the spending quite
Jeff Byers:a bit. When you say more hours per kid, is this just like having more services being administered to a kid? Is that what that means?
Dan Arnold:That's what that means. So it's it's essentially time with their ABA therapist. There's an ABA therapist that's with the kid, and and they do various activities with the kid. And as it used to be, like, the kid would have ten to twenty hours a week with that therapist, you're seeing now more more times than not, like, thirty to forty hours a week with that kid. And so that since it's billed by the hour, that essentially doubles your your billing right there even if you have the same number number of kids.
Jeff Byers:So the forefront article that you and colleagues wrote, the article is titled The Business of Autism Treatment, Private Equity Implications for State Medicaid Programs. We already kinda touched on this, but is there anything else from private equity factoring into Medicaid and autism treatment? Anything else that, you know, just scene setting that you want to get into? And if not, that's okay.
Dan Arnold:No. So, yeah, the concern is one of the things about ABA is it's supposed to be kind of like this individualized approach. So you're supposed to kind of diagnose the child and then see how much kind of ABA they need a week. So some with less severe cases will need five hours. Some will might need the forty hours.
Dan Arnold:What seems to be happening here is that that's kind of a blanket everyone getting as many hours as they can. So from, like, a quality that's, like, one immediate quality concern is that this even by ABA standards, it's supposed to be, like, case by case, the the the number of hours should vary. If you see all the kids getting the maximum amount of hours, that alone is a problem. And I think we're seeing that sometimes in some of these private equity takeovers. So that's a concern.
Dan Arnold:There's also and this is still anecdotal, but as you mentioned up front, there's a number of outlets that have already covered this, The New York Times and The Wall Street Journal. There are things going on, and this might not be all private equity, so I'll I'll just take that. But in the ABA space, there are things like a kid has to be awake for a certain amount of each fifteen minutes in order for that fifteen minutes to be billed. So they have to be and this is what the New York Times covered is you have to be awake for the majority of that fifteen minutes. So one thing they found is kids would be asleep for seven minutes, and it's like, okay.
Dan Arnold:This kid now has to be woken up so that the remaining eight minutes, that kid was awake and, you know, we can bill for those fifteen minutes. So these are just, like, terrible kind of quality stories you hear. I think there's needs to be more, like, looked into this, but certainly some of the anecdotal stuff that's coming out is is not good.
Jeff Byers:Going on that, was there is there any other, like is there any research on patient treatment trends over time that you wanna point people to?
Dan Arnold:There's not really, and particularly not in this because so much of this is kinda new, just given that the guidance only came out in 2014 and it took states a long time to get going. That's why you're seeing kind of a lot of the spending numbers that are coming out or, like, spending from, like, 2021 to 2025. So that's really kind of the study period you wanna look at when a lot of this is going on. So because of that, there's not really kind of a national coverage of what has happened yet. That's that's something we wanna do in future research, and we're we're trying to do that.
Dan Arnold:But I don't have, like, a great kinda national study to point to on what the outcomes are looking like.
Jeff Byers:Gotcha. That makes sense. Yeah. And I guess that would be the same for potentially patient outcomes as well.
Dan Arnold:Yeah. That's right.
Jeff Byers:Okay. Fair enough. So what should interested parties be on the watch for? So autism is in the news quite a bit, thanks to HHS. Like, anything you think people especially at the intersection of health spending, what should people be on the watch for?
Dan Arnold:So certain states are getting a better hold on this in terms of they are putting more caps on, like, hours and things like that and being more cognizant of, like, what the hourly rate is, making sure that's not out of line of what it should be. So those things will help spending. But one thing I I'm worried about, and particularly with all the news about autism things in terms of, like, the fraud space that's going on in autism that has come out of the the federal government is looking into fraud and autism quite a bit, is that between the fraud that's going on and the rapid increases in spending, there's gonna be quite a pushback against, like, some of these services, like, having them available to families at, like, the current levels. So one thing I worry about is kind of this incredible spending increase and the fraud is going on at the same time in such a way that it's like, it's going to potentially take access away on some of these services in certain states. Because it it it is true that, like, if your autism budget goes completely out of control, you know, that's gonna interfere with other services through Medicaid that you're supposed to you're trying to do.
Dan Arnold:So I I understand the point that, like, oh, we can't let this completely go wild, but you also can't, like, take access away from these families that, like, really need it. So as this, like, continues on, that's, like, the thing I'd have people watch out for the most is, like, we we don't need, like, a blunt kind of rule that's like, okay. This is out of control. Let's just stop it now and then, like, cut off access. That's one way to cut spending.
Dan Arnold:It's gotta be, like, a more kinda careful way of of reducing spending in this area.
Jeff Byers:So, Dan Arnold, as we wrap up, anything you wanna point listeners to that you got going on? Lots happening at Brown University in the health care space. Anything you wanna highlight?
Dan Arnold:Yeah. We'd I mean, we have the this blog post on Health Affairs Forefront on the business of autism. I'd start there. We have a lot of people in just kind of the private equity space in general looking into the ownership transparency issues that go along with private equity and how that can help things. So, yeah, that's where I'd point people.
Jeff Byers:Well, fantastic. Dan Arnold, thanks again for joining us today on Health Affairs This Week. If you, the listener, enjoyed this episode, please send it to a friend, and we will see you next week. Thanks all.