Off and on for the last several weeks, I’ve been digging through public Medicaid spending data to better understand the autism therapy spending landscape on a granular level.
In this analysis I identified the provider organizations that made the most money from working with Medicaid plans as well as other measures that helped illustrate what this part of the industry looked like.
While Behavioral Health Business published those data last week, I want to go deeper in this BHB+ Update and provide a frank analysis of what these data illustrate in the wider context of the moment.
And what a moment it is.
In the midst of a broader metamorphosis, state Medicaid programs are beginning to curb their autism spending. The federal government has effectively put autism therapy in the crosshairs for added scrutiny following the revelations of criminal exploitation of Minnesota’s public benefits programs. National media have made the industry its new whipping boy to stand in for the systemic failings of the American healthcare system.
I’m now of the mind of how influential the board-certified behavior analyst (BCBA) workforce, especially those who make the jump into leadership roles, is and can be for their organizations and for the industry as a whole. In brief, this industry runs through BCBAs. How this collective of professionals has behaved in the past has given us the industry’s present. How they act today will shape the future.
I’ll explore four insights that lead me to this perspective:
— The reality of aberrant practices and fraud
— The representation of founder-/clinician-owned practices among high earners
— The lack of a true market leader
Questionable practices are not the same as fraud
On the whole, looking at these data confirms what we already know: there are organizations and individuals who operate in ways that shock the consciousness of most ethically minded people. But they do so because the systems established by those in power clearly don’t do enough to stop people from operating in gray areas and turn a blind eye to outright fraud.
The data I reviewed were descriptions of payments made to providers. That means that when I see the small Indiana providers that clearly commanded disproportionate reimbursement and landed among the highest-paid providers in the nation, I’m seeing money dispensed after some payer entity looked at a claim and said, “This is fine.” But for that claim to exist in the first place, a BCBA had to come up with a treatment plan, oversee technicians, and say to themself, “This is fine,” as well. Now the industry as a whole will likely have to pay for these misdeeds.
The work of the New York Times and Wall Street Journal over the past few months has highlighted the practices of a handful of specific companies: Piece By Piece Autism, compleat KiDZ and The Perfect Child. While the practices highlighted represent unacceptable practices, they are not representative of the industry as a whole.
Fraud is clearly real. But what the national media have shined a light on when it comes to dubious practices is a far cry from the out-and-out fraud that has been executed against the Minnesota public benefits system, which has been perpetrated by an international cabal of fraudsters exploiting their affinity with immigrant populations from Eastern Africa, according to the prosecutions of the U.S. Department of Justice.
In all of these settings, simply to pass the basic checks and balances there are in the system, these organizations would have had to have BCBAs put their names to this kind of work, at least in the form of treatment plans. Had it not been for compliant BCBAs who went along with these practices, they might not have taken off.
Independent practices topped Medicaid payments overall
One assumption I had going into exploring these data was that private equity-backed providers would overwhelmingly be the organizations that had compiled the most revenue from Medicaid providers. While there is strong representation of PE-backed firms at the very top of payment-getters, 10 of the top 20 are either family-, founder- or clinician-owned.
After publication, I expanded my review to include the top 40 all-time Medicaid payment-getters. Here is how the general ownership structure breaks down:
— For-profit, not backed by PE: 19
— Private equity-backed: 14
— Unidentified: 3
— Nonprofit: 3
— Corporate-owned: 1
In learning from and studying these non-PE-backed organizations, a few common patterns emerge: they tend to be older than most of the other organizations in the set, they are often started by a BCBA, there is often a clear familial connection to autism and the organizations tend to concentrate in either a state, region or model type.
At least historically, this clearly demonstrates that there is a viable business lane for clinician-entrepreneurs in the autism therapy space. A lot has changed since a lot of these organizations got started. So the paths to success will be different, maybe even more difficult. However, the growing hate toward the corporatization of autism therapy will be a powerful tool for these new organizations when it comes to family and staff recruitment.
Clinician-entrepreneurs have a special sensitivity to the needs of patients and employees as they establish business systems. Historical evidence shows that this sensitivity plays a role in the success of organizations. I believe that this remains the case today. The industry would be better off if more BCBAs made the plunge into entrepreneurship.
The lack of a clear market leader
It’s also clear from these that data providers can step into gaps in the marketplace. Part of this is indicated because there is no clear national market leader, the kind of organization that shows up almost by default in most major metros.
In fact, I would argue that there is ample capital looking for those who know how to do autism therapy right.
One of the general insights that ran its way through the Autism Investors Summit West (AIS-W) this year is that growth and clinical quality initiatives go hand in hand. Also, there is still an interest in establishing organizations that reach patients where they are through multimodal models, Doug Shinkle, a partner at Lorient Capital, said during a presentation at AIS-W.
“There is an opportunity to build the next industry leaders with an ABA… mainly through a focus on technology and quality,” Shinkle said.
Lorient Capital has previously backed some of the industry’s best-known companies, including Action Behavior Center, Centria Healthcare and Behavior Frontiers.
The opportunity is even more obvious the more minor a community is to the larger, more concentrated markets.
This is the kind of space where a BCBA could thrive. Typically, payment rates are commensurate across a wider region or the whole state. Real estate costs are lower (if they opt for center-based care). The power of their persona goes much further. There is likely a noted lack of competition from capitalized providers.
If there is a wider vision for what the collective BCBA workforce wants to see in the world, it’s more likely to be built by them in the communities that actually need expanded access to care. And as the industry matures, there are both clinicians and business folk who have been there and done that to help new entrants on their journey.
Wrapping it up
Everything that we have seen so far and what we hope will come in this industry will come from BCBAs — what they will and won’t do, what they are enabled to do, what they are prevented from doing.
Setting aside their power as clinicians and thinking of BCBAs as a workforce, they have tremendous leverage with employers. Other recent work I’ve done shows that demand for BCBAs in this industry is so powerful as to bend, if not mute, the systemic pressures holding women back in the American workforce.
The patterns and practices that prompted scrutiny of this industry were influenced by BCBAs who developed and executed high-hour plans or enabled their employers to jack up the rates they charge payers. Again, I maintain that that kind of behavior is aberrant in the autism therapy industry.
The vast majority of the folks who make up this industry are on the right side of things. They care deeply about their patients and the practices they espouse and tolerate. And that should give everyone tremendous hope that the industry has a bright future ahead as it navigates these turbulent times.