New bills filed in the Illinois legislature may undo a previous effort to bring more regulation to autism therapy ownership that some say has created a major burden for operators in the state.
Twin bills (Senate Bill 3807 and House Bill 5171) were filed in February by Democratic lawmakers Sen. Mary Edly-Allen and Representative Laura Faver Dias. If made law, they would undo a section of the state licensing law established in 2022 that forbade anyone other than licensed practitioners from owning practices. That previous regulation made Illinois one of two state outliers regarding who may or may not own autism therapy practices that include applied behavior analysis (ABA). The other is New York.
The bills would also add occupational therapists to the list of clinician types that may own an ABA practice, would allow ABA practices to exist in the same corporate entity as other mental health or rehabilitation practices, and expressly forbid non-licensed individuals from making health care decisions.
Describing the current regulatory structure of autism therapy practices in Illinois,
John Saran, a partner with the law firm Holland & Knight, told BHB that the establishment of something akin to a corporate practice of medicine rule for autism therapy shows that “we [state officials] don’t care just about licensure; we also care about corporate control, who’s really in charge of clinical matters.”
The current regulation forbids new autism therapy practices from being owned by anyone but licensed practitioners. Extant practices have until January 15, 2027, to either divest ownership, overhaul their corporate structure or become licensed practitioners to comply with the law.
The arrival of the ownership regulations may have required practices now founded and owned by practitioners to create a completely new legal identity. In turn, that may require a redo of every legal engagement a practice has, Darren Patz, a partner with DLA Piper LLP, told BHB.
“You’ve got immense operational and financial challenges to changing your whole ownership structure,” Patz said. “You may have to upend your payer contracts, including any contracts that you have with managed Medicaid payers or with the state. So it’s not just finding those new owners and doing the legal work. There are consequences to changing everything.”
Beyond all the specific challenges, this comes at a cost that may be prohibitive for smaller provider organizations or those that cater to disadvantaged populations, which often come with thin reimbursement.
While focused on giving clinicians ownership power, Patz notes that many clinician founders eventually exit their businesses and sell to investors because they don’t want to be professional owners.
Some provider organizations, in response, have turned to attorneys to help establish professional corporation-managed services organization (PC-MSO) models. On paper, a clinician may own the professional corporation over the clinical practice. But an accompanying services agreement with the corporate-focused managed services organization ties these distinct organizations together.
These structures are more familiar to the regulation of physicians and other physical health care providers, who often go out of their way to specialize and refer to services outside their practice. Modern autism therapy is fundamentally different. Most autism therapy entities seek to employ multiple specialists — especially speech, occupational, physical and feeding therapists — to ensure holistic and convenient care.
The current paradigm in Illinois “is a square peg through a round hole,” Barry Alexander, office managing partner at the law firm Polsinelli, told BHB.
“A lot of mom-and-pop ABA providers were started by clinicians; some of them were built by individuals who then hired the BCBAs and the therapists, and all of a sudden they have to figure out a way to completely reorganize our structure,” Alexander said.
The passage of the law would make it easier for organizations to continue to build multispecialty models, Alexander said.
The bill would still include protections to expressly forbid corporate intrusions in clinical practice, Tani Weiner, co-chair of the behavioral health law group at Polsinelli, told BHB.
“That’s what we were trying to get to in the first place, without all of the legal window dressing and structure and cost and complexity,” Weiner said. “I think everybody can agree on that, and it’s maybe a little bit more practical and easy to understand and to achieve the protection the statute originally intended.”
The sponsors of the bills did not respond to a request for comment.