WolfePack Wisdom

It is estimated that an average of one in every 59 children are born with autism. For those living with autism, Applied Behavior Analysis (ABA) therapy, which focuses on improving social skills, communications, reading, academics, hygiene, grooming, domestic capabilities, punctuality, and job competence is absolutely critical. As a direct result of ABA Therapy, individuals on the autism spectrum have been able to integrate into mainstream schools, pursue professional careers, and generally live more independent lives. ABA therapy is highly intensive, and studies show it is most successful when the individual receives 25-40 hours of therapy per week.  

As expected, this also means ABA therapy is costly. Fortunately, in more recent years, most states throughout the country, including Florida, have adopted mandates requiring insurers to cover ABA therapy. Thus, autistic individuals can obtain insurance coverage for this expensive treatment under state programs, like Medicaid, and through individual or employer-based commercial insurance plans.  

The Moratorium 

Unfortunately, however, perpetrators throughout the state began fraudulently billing Medicaid for ABA services, capitalizing on enhanced access and insurance reimbursement, as discovered by the Florida Agency of Health Care Administration (“AHCA”)’s Bureau of Medicaid Program Integrity.  In response, AHCA sought from the Centers of Medicare and Medicaid (“CMS”) a Moratorium for ABA therapy in Miami-Dade and Broward Counties, which became effective on May 14, 2018 (the “Moratorium”).  

In order to obtain the Moratorium from CMS, AHCA needed to demonstrate that the action will not adversely impact beneficiaries’ access to medical assistance.  According to Federal law, the State Medicaid agency may extend the Moratorium in perpetuity in six-month increments, so long as it can document the necessity of extending the Moratorium. CMS grants considerable deference to the state Medicaid agency to determine whether the Moratorium continues to be necessary. 

The “temporary” ABA Moratorium, was requested so that AHCA could conduct a fraud and abuse investigation for ABA therapy services in South Florida, is still in large part in effect today. Although individual ABA therapy providers may join group providers already enrolled in Medicaid, new ABA group providers cannot enroll in the Medicaid program.  

Health Care Clinic Licensure 

Historically, AHCA did not require group ABA therapy providers to be licensed by the state. However, in an effort to get more control, AHCA declared that, effective December 1, 2020, all ABA group providers must obtain a Health Care Clinic license, which is required for many other types of providers in the state, or otherwise meet a Health Care Clinic licensure exception set forth in Fla. Stat. § 400.9905.   

On June 30, 2020, Florida’s Congress made some significant changes to the Health Care Clinic Act, including promulgating new exceptions to licensure under Fla. Stat. § 400.9905. Under HB 731, group providers are not considered “clinics”, and therefore do not require a Health Care Clinic License, if they participate in the Florida Medicaid program.  Thus, any ABA group therapy provider who participates with Medicaid will not be required to seek a Health Care Clinic license. Further, AHCA confirmed in a recent presentation to ABA therapy providers that ABA group therapy providers participating in Medicaid do not need to seek a “Certificate of Exemption as a Health Care Clinic” from AHCA. 

Impact of the Moratorium and State Licensure Requirements 

The Moratorium and new Health Care Clinic licensure requirements will continue to have a substantial impact on the ABA therapy industry in South Florida. 

First, with no ABA group therapy providers able to enroll as Medicaid providers for over two years, there has been an uptick in waiting lists for Medicaid-eligible individuals seeking this necessary and life-changing care.  

Second, ABA therapy groups who are barred from becoming Medicaid providers during the Moratorium period will be forced to obtain Health Care Clinic licensure, unless they qualify for another exception under the statute. To obtain this licensure, providers must meet specific financial stability and projection requirements, go through background checks, and hire a medical clinical director.  These prerequisites may disqualify the provider, or the expenses involved may become cost-prohibitive. As a result of this new licensure requirement, we likely will see increased consolidation in the market and/or highly qualified providers leave the market.  This consolidation and provider flight would likely reduce competition and could, in turn, drive up the cost of care.  

Third, the Moratorium has impeded sale/acquisition transactions in this space, as any change in ownership greater than 51% requires the ABA therapy group practice to obtain a new Medicaid provider number.  Due to the Moratorium, this is not a possibility.  Therefore, this has created more uncertainty and caused the buying and selling parties to engage in more complicated transactions, including longer-term interim management services agreements and leaseback agreements. 

AHCA has taken an overzealous approach to fraud and abuse in the ABA therapy space – much more than for other practice areas known for heightened instances of fraud and abuse, such as laboratories and substance use disorder services.  Keeping high-quality providers out of the market impedes those living with autism, especially Medicaid enrollees. Thus, one must wonder whether AHCA’s approach for ABA therapy and the continued Moratorium extension are connected to the considerable expenses tied to these long-term and highly intensive services. 

1. CDC, Autism Prevalence Slightly Higher in CDC’s ADDM Network (April 11, 2018). 
2. Applied Behavior Analysis (ABA) Association for Science in Autism Treatment. Accessed December 28, 2016. Applied Behavior Analysis (ABA), Autism Speaks.
3. Fla. Stat. 627.6686  & 641.31098; see also https://www.ncsl.org/research/health/autism-and-insurance-coverage-state-laws.aspx.
4. Initial Request for State Implementation Moratorium, Agency for Health Care Administration (May 4, 2018).
5. Id., AHCA Announces Moratorium on Enrollment of New Behavioral Analysis Providers, AHCA(May 14, 2018); 42 CFR § 455.470 (state agencies can seek approval from CMS for temporary moratoria on Medicaid enrollment of new providers or provider types). 
6. Id. ACHA advised CMS there were sufficient Medicaid providers to treat Medicaid beneficiaries with autism in its initial request for Moratorium. These numbers have not been updated by AHCA in the past two years. 
7. Id. 
8. Moratorium Extension: Behavior Analysis Provider Enrollment in Miami Dade & Broward Counties, AHCA (May 22, 2019).
9. Health Care Clinic Frequently Asked Questions Specific to Providers of Behavior Analysis Services, AHC
10. HB 731. 
11. Fla. Stat. § 409.901(5).