Nebraska DHHS probes Medicaid service for autistic youths as costs escalate

Max Perry, 15, and his dog, Moe Marbles. The Lincoln teen receives applied behavior analysis therapy, which helps youths with autism spectrum disorder build social and other skills. Some advocates fear potential changes related to the Medicaid program could reduce access to services. (Courtesy of Perry family)

LINCOLN — Max Perry was ousted from day care as a tot.

His special needs became so intense that his mom quit her job to be nearby 24-7. His parents once chartered a private plane to transport Max, challenged by autism and epilepsy, to a major surgery because commercial flights sent him into panic mode, frantically kicking, screaming and peeling off clothes.

Max Perry, left, with parents Mitch and Nikki. The photo represents "a big win for the team," Nikki said, as it was a rare time when they were able to plan and attend a family get-together for a short while. (Courtesy of Perry family)

Max and his family eventually found doses of calm, joy and progress through a widely known therapy called applied behavior analysis (ABA), which has been shown to help autistic kids function better in society.

Now 15, Max has gained the reading ability of a first grader and social skills that allow the Perrys to plan a quick trip to a family get-together or a drive to a Kansas City doctor appointment.

"We were living in hell," said Nikki Perry, a law school graduate who left a pharmaceutical sales job to be more involved in her son's treatments. "If you don't live it, you don't get it. Truly our lives changed through ABA to where we could function as a family."

But the Lincoln mom and other advocates now face a different anxiety, worried that such services could be jeopardized for a growing number of Nebraska's most vulnerable youths. Experts say one in 36 youths has autism.

Skyrocketing expense

Advocates cite a recent notice sent out by one of the three mega insurers that manage health care benefits for Nebraskans enrolled in Medicaid. They said the state contractor had sought to slash Medicaid rates paid to ABA providers by as much as half.

Advocates feared that such a change could lead to reduced access to services and would perhaps drive away providers they say are scarce enough already in Nebraska.

Matt Ahern, interim director of the Medicaid and Long-Term Care division in the Nebraska Department of Health and Human Services, said he was aware of the situation and has made it "absolutely clear" to the contractor that access to services can't be compromised.

However, in the broader picture, Ahern said that providers, families and others should brace for more restrictive guardrails and controls next year related to ABA — a service area where costs over a three-year period have skyrocketed more than 1,000%.

Max Perry plays a memory game as part of applied behavior analysis therapy. His mom says the game helps with social interaction, rules, coping with loss, celebrating wins and more. (Courtesy of Perry family)

According to state data, Medicaid claims paid to ABA providers in the state leaped from $4.6 million in 2020 to nearly $52 million in 2023. Medicaid-eligible youths who were served during that period multiplied from 169 to about 1,150, a nearly 600% jump.

Acceleration continued in 2024, and Ahern said the spend by year-end could reach $75 million, which would mean a 1,500% increase since 2020.

"It is definitely a sharp increase, probably one of the sharper increases I've actually seen across any service line," Ahern said.

'Perfect storm'

Driving the surge is a combination of factors, he said, including pay rate increases to service providers. The Nebraska Legislature approved a 17% hike in behavioral health services in 2023. Ahern said Nebraska Medicaid rates paid to ABA providers now are among the highest in the country.

Matt Ahern, interim director of Medicaid and Long-Term Care, Nebraska Department of Health and Human Services. (Courtesy of DHHS)

In addition, a "big relaxation" of telehealth services during the pandemic opened the door to young people in rural areas who before hadn't had as much access. Ahern said several providers came into the state without establishing a physical presence, though some have since opened offices and hired local staff.

Moreover, Ahern said, ABA providers operate under "looser controls" than many other disciplines, which, he said, can lead to overauthorization of services.

"That kind of made the perfect storm for the rapid increase," he said.

DHHS more recently has tightened telehealth services, such as requiring the on-site presence of a registered behavior technician who can be supervised by a higher authority, a board-certified behavioral analyst.

Currently, Ahern said, DHHS is focusing on developing clearer definitions and parameters related to ABA therapy. He said the state does not aim to reduce access to services needed by youths with developmental disabilities, but wants to ensure that billing practices are appropriate and services are sustainable.

He foresees a rollout of potential changes early next year.

"The door's been a little too open for our liking," Ahern said.

Nudging DHHS to re-examine the program is recent scrutiny by federal auditors looking at other states' behavioral health programs to ferret out possible misuse, fraud and inefficiencies. Ahern said his team wants to be proactive.

He pointed to a 26-state analysis last year by the State of Indiana, which showed Nebraska as having the top pay rate among those states for ABA services reimbursed by Medicaid.

"If this isn't managed appropriately, if left unchecked … that means an increased expense for taxpayers," Ahern said.

The federal government covers about 57% of Medicaid insurance costs, while the state covers about 43%.

Pay more in long run

State Sen. Machaela Cavanaugh of Omaha, who has been a DHHS watchdog, said she plans to keep both eyes on the DHHS process. She suspects state contractors such as Optum/United HealthCare — the managed care organization that sought ABA provider pay rate cuts — are trying to widen their profit margin.

State Sen. Machaela Cavanaugh of Omaha. (Zach Wendling/Nebraska Examiner)

"I think the state should be putting more consumer protections into the contract," Cavanaugh said.

Cavanaugh and behavioral health care providers interviewed are wary of potential disruptions in services to youths with autism spectrum disorder. They say taxpayers could pay more in the long run if those affected land in jails or institutions.

On a per participant average in 2023, Medicaid claims paid to providers for ABA services in Nebraska reached about $45,000. Ahern projects that cost will rise this year to about $58,000 per participant.

Amy Nordness, director of clinical services at the University of Nebraska Medical Center's Munroe-Meyer Institute, said the level of ABA care rendered depends on the youth.

Services provided by Munroe-Meyer typically range from a few hours a week to about 20 hours, sometimes in individual sessions and sometimes in groups.

Some other providers focus mostly on home-based therapy.

An example of therapy might be the use of virtual reality environments to show a child how to cross a street safely. A child afraid of a dentist would work through steps to overcome that discomfort.

One way to serve more kids, Nordness said, is to beef up the number of front-line ABA technicians whose work is monitored by higher-level therapists.

Recruiting therapists is 'challenging'

Mariel Fernandez of the Council of Autism Service Providers, which represents members across the nation, said she was aware of potential Medicaid changes in Nebraska.

Without incentives such as higher-than-average payment rates for ABA providers, she said, Nebraska may be hard-pressed to build professional capacity to serve a growing number of children struggling with autism.

People are attracted to big cities, Chicago, New York, Los Angeles. It is challenging to recruit to Kansas, Nebraska, Montana and the Dakotas.– Mariel Fernandez, Council of Autism Service Providers

"People are attracted to big cities, Chicago, New York, Los Angeles," Fernandez said. "It is challenging to recruit to Kansas, Nebraska, Montana and the Dakotas."

Leila Allen of the Indiana-based Lighthouse Autism Center called Nebraska an autism service desert.

The shortage is what inspired the company to start opening Lighthouse centers across Nebraska this year — a fourth is set to open soon in South Sioux City with about 35 staff members. A fifth is planned.

Allen said her company received the notice a couple of months ago that Optum/United Healthcare was to cut rates. But she said that since then, the contractor started negotiating rates with Lighthouse.

Optum/United Healthcare officials, in a statement to the Nebraska Examiner, said they were working with providers: "We're committed to keeping care accessible for our members by working with providers to maintain rates that are competitive with what we pay in other states and allow for a sustainable Medicaid program."

Small breakthroughs

Uncertainty still looms among parents and advocates.

Nikki Perry said her son's needs and professional therapy have evolved as he has grown.

Max Perry, diagnosed with autism spectrum disorder and epilepsy, is on a "community outing" to buy three shirts and learn about money transactions. This is part of the ABA therapy that his parents say has been a "life-changer." (Courtesy of Perry family)

She recalls how she and her husband, Mitch, would take turns carrying Max to doctor visits, holding him tightly because he was terrified of surrounding stimuli.

He's 5-foot-8 and 140 pounds now, too big to swaddle. With the help of ABA, he has become "the most amazing kid on the planet, funny, creative, he is a shining light," said mom.

Indeed, one of Max's ABA providers also provided training to the parents so they can reinforce the learning process by identifying deficits and creating lessons and experiences to help overcome them.

Perry said her family so far hasn't felt a disruption in their services, which in part are funded by Medicaid. She strongly believes that her son's progress depends on continued therapy.

Lately Max has been learning about consequences, and why not to act out dangerous stunts he sees actors perform on TV. (He accidentally broke his thumb jumping down the staircase.) He's sorted through why he shouldn't throw his dog over the fence (something he once did on impulse).

"Some are things people just take for granted," said Perry. "For us, these small breakthroughs are the biggest things in the world."

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