The state of Indiana has, for the better part of a decade, been locked in an escalating financial reckoning over how it pays for one of the most common treatments for autism. Applied behavior analysis, or ABA, arrived on Indiana’s Medicaid rolls in 2016 as a modestly funded benefit. Within a few years, spending had multiplied at a pace that startled regulators, enraged fiscal hawks, and left providers and families caught in the wreckage of a system struggling to keep up with its own growth.
Now, with a bulletin issued on February 26, 2026, the Indiana Health Coverage Programs has laid out the most sweeping set of changes to ABA therapy services since the state began covering the benefit in 2016. Bulletin BT202627, published by the IHCP, introduces changes effective April 1, 2026, that touch virtually every aspect of how ABA is delivered, billed, supervised, and accessed through Medicaid.
The document reads less like a routine policy update and more like a blueprint for restructuring an entire service category. Rate cuts, new billing modifiers, a lifetime cap on comprehensive therapy hours, the elimination of telehealth for key service codes, age restrictions, supervision mandates, caregiver coaching requirements: the changes are numerous and interconnected, each one carrying real consequences for the providers who deliver ABA and the families who depend on it.
A Benefit That Grew Faster Than Anyone Planned
To understand the bulletin, it helps to understand the trajectory that made it necessary, at least in the eyes of Indiana’s policymakers. Fee-for-service Medicaid payments for ABA in Indiana rose from $14.4 million in 2017 to $101.8 million by 2020, according to a federal audit by the Office of Inspector General. Total Medicaid spending on ABA, including managed care, grew from roughly $21 million in 2017 to $611 million by 2023, according to the state’s ABA Working Group report. After Indiana established fixed reimbursement rates effective January 2024, expenditures fell to an estimated $474 million, according to the state’s outgoing Medicaid director, Cora Steinmetz. But projections suggested costs could climb back to $645 million by 2026, serving roughly 8,000 children. That kind of trajectory—a roughly 30-fold increase in under a decade—turned ABA into one of the most scrutinized line items in the state’s Medicaid budget.
The federal government noticed, too. A December 2024 audit by the U.S. Department of Health and Human Services Office of Inspector General found that Indiana made at least $56 million in improper Medicaid ABA payments in 2019 and 2020, with an additional $76.7 million flagged as potentially improper. Every single one of the 100 enrollee-months the OIG sampled contained at least one improper or potentially improper payment. The deficiencies ranged from session notes that didn’t meet documentation standards to services rendered by staff without appropriate credentials to children who had never received the required diagnostic evaluation.
Governor Braun signed Executive Order 25-31 in February 2025, establishing a 21-member working group to develop recommendations for containing ABA costs while preserving care quality. After months of public listening sessions, written submissions, and data review, the Family and Social Services Administration announced a reform framework in November 2025. The February 2026 bulletin translates many of those recommendations into enforceable policy.
Under 21 Only: The EPSDT Gate Closes
Perhaps the most consequential change in the bulletin is the restriction of ABA coverage exclusively to the Early and Periodic Screening, Diagnostic and Treatment program. Under federal law, EPSDT services are available to Medicaid-eligible individuals under 21 years of age. The practical effect is that Indiana will no longer authorize or reimburse ABA therapy for adults 21 and older beginning October 1, 2026.
The bulletin provides a six-month transition window, from April 1 through September 30, 2026, during which members 21 and older who are currently receiving ABA may continue accessing services when deemed medically necessary. The IHCP encourages providers to partner with members and their managed care entities or fee-for-service care managers to develop individualized transition plans.
The decision represents a reversal from a 2021 court ruling that declared Indiana Medicaid’s previous age restriction on ABA coverage unlawful, citing potential discrimination under the Americans with Disabilities Act. That ruling held that there was no evidence ABA therapy ceased to be medically necessary simply because a patient turned 21. The new bulletin does not reference that legal history, but it effectively reinstates an age barrier—this time by tethering coverage to a federal program that, by statute, ends at 21. Whether this approach survives potential legal challenges remains to be seen.
Rate Cuts in Two Phases
The financial centerpiece of the bulletin is a phased reduction to maximum fee rates. For dates of service on or after April 1, 2026, the IHCP will apply a 6 percent rate cut to all nongroup (individual) ABA therapy services. A second reduction of 4 percent will follow on April 1, 2027, applied to all ABA procedure codes including both individual and group services.
The bulletin includes a detailed rate table. For CPT code 97153—the workhorse billing code for technician-delivered adaptive behavior treatment, billed in 15-minute units—the current rate of $17.06 per unit will drop to $16.04 in 2026 and $15.39 in 2027. For BCBA-level services billed under code 97155, rates fall from $27.63 to $25.97 and then to $24.93. The pattern repeats across every individual service code.
These are not Indiana’s first rate adjustments. In late 2023, the state approved fixed reimbursement rates for ABA for the first time, effective January 1, 2024, replacing a system that paid providers 40 percent of whatever they billed. Under that old formula, known informally as “BILL40,” paid hourly rates for ABA services averaged $91 but ranged from $46 to $222, according to an FSSA presentation reviewed by the Indiana Capital Chronicle. The new rates landed well below those averages: FSSA initially proposed $55.19 per hour for RBT-delivered services, a figure that drew protests outside the governor’s residence and pushback from Lt. Governor Suzanne Crouch. The final approved rate of $68.24 per hour for RBTs, while higher than the initial proposal, still represented a roughly 25 percent decrease from the prior statewide average. Providers and advocates said at the time that the new rates made treating Medicaid-covered children significantly less attractive from a business perspective. The reductions in BT202627 compound atop that earlier recalibration
Group Therapy Gets a New Structure
The bulletin introduces a tiered rate system for group ABA services, stratified by group size. Where providers previously billed group codes at a flat rate regardless of how many participants were in the session, the new structure assigns different rates based on whether the group contains two, three, or four to eight members. New billing modifiers—U4 for groups of two, U6 for groups of three, U8 for groups of four to eight—must be appended to claims.
The rates for smaller groups are notably higher than the old flat rates, while rates for larger groups are lower. For example, under code 97154 (group adaptive behavior treatment by a technician), the current flat rate of $4.87 per unit jumps to $9.21 for a group of two but drops to $4.61 for groups of four to eight. The incentive structure appears designed to encourage providers to offer group therapy while compensating them more generously when groups are small, which arguably requires more individualized attention per participant.
The IHCP frames group therapy as a modality that supports social competence, peer interaction, communication, and cooperative engagement. For an industry that has long favored one-on-one treatment as its primary delivery model, the financial nudge toward groups represents a meaningful philosophical shift in how the state envisions ABA service delivery.
A Lifetime Clock Starts Ticking
One of the bulletin’s most novel provisions is the introduction of a lifetime service allocation for comprehensive ABA therapy. Effective April 1, 2026, eligible individuals may receive up to 4,000 hours—16,000 units in billing terms—of comprehensive ABA therapy over their lifetimes. Once a member exhausts that allocation, they may transition to up to 15 hours per week of targeted ABA therapy, which focuses on specific behavioral goals rather than the broad-based intervention model that defines comprehensive treatment.
Comprehensive ABA is defined as an intensive treatment model typically used with young children, requiring 16 or more hours per week and addressing multiple developmental and behavioral domains simultaneously. Targeted ABA, by contrast, concentrates on a limited set of behaviors or skill areas—communication, social skills, self-help, sleep disruptions, aggression—and may be delivered for up to 15 hours weekly.
The bulletin does include a safety valve: if further comprehensive therapy is found to be medically necessary after the 4,000-hour cap is reached, coverage may continue under EPSDT following review by FSSA, the member’s managed care entity, or a delegated entity. School corporation-provided ABA services are exempt from the lifetime cap. A new modifier, UA, must be appended to both prior authorization requests and claims when services are delivered as comprehensive ABA, enabling the state to track utilization against the lifetime allocation.
The IHCP will also build portal enhancements allowing providers to see how many hours a member has used against their lifetime allocation during eligibility verification, though the state cautions that this data will be subject to billing and processing lags.
More Practitioners, More Supervision, Less Telehealth
The bulletin expands the list of practitioners who can render services under CPT code 97153, which was previously billable only when delivered by a Registered Behavior Technician. Beginning April 1, BCaBAs, BCBAs, BCBA-Ds, and health service providers in psychology may also deliver the service, each billing under a designated modifier. The change opens a wider staffing pipeline for providers, particularly those operating in workforce-constrained markets.
RBTs will now require a minimum of one hour of supervision by a BCBA or other IHCP-approved clinician for every eight hours of technician-delivered services, more than doubling the national baseline set by the Behavior Analyst Certification Board, which requires 5 percent of total service hours, or roughly one hour per 20 hours of direct care. The requirement reflects what the bulletin describes as a need to maintain treatment quality, uphold ethical practice standards, and support ongoing professional development.
Telehealth takes a significant hit. The IHCP will no longer allow CPT codes 97151, 97152, 97153, 97154, or 0373T to be billed with the synchronous telemedicine modifier. These codes cover assessment, protocol development, and adaptive behavior treatment—services the state says require direct, in-person interaction and real-time behavior observation. Telehealth became a critical delivery mechanism during and after the COVID-19 pandemic, and the restriction will force providers who have incorporated remote service delivery into their models to recalibrate.
Caregiver Coaching Becomes Mandatory
The bulletin mandates the inclusion of caregiver coaching in all ABA therapy prior authorization requests. Providers must include up to 18 hours of caregiver coaching over a standard six-month authorization period, or a proportionally reduced amount when the total treatment plan is smaller. The IHCP says it will apply special consideration for members whose caregiving circumstances differ from a traditional family setting, including youth in the custody of the Department of Child Services or in foster care.
The requirement codifies what many in the field consider a best practice. The clinical literature broadly supports the idea that ABA outcomes improve when caregivers are trained to reinforce behavioral strategies outside of structured therapy sessions. By mandating it, Indiana signals an expectation that ABA providers are not merely delivering clinic-based hours but building the capacity of families to sustain therapeutic gains in the home and community.
What It Means for Providers and Families
Taken individually, each change in the bulletin addresses a specific policy objective: cost containment, program integrity, clinical quality, or administrative transparency. Taken together, they represent a fundamental restructuring of how Indiana’s Medicaid system approaches autism treatment. Providers will need to navigate new modifiers, adjust to lower rates, meet supervision ratios, incorporate caregiver training, and pivot away from telehealth—all while managing the clinical needs of children and families who may be anxious about what these changes mean for their care.
For multi-state ABA companies, Indiana’s moves fit within a broader national trend. Medicaid programs across the country are grappling with similar cost pressures as ABA utilization has surged alongside rising autism diagnoses. The OIG has announced a series of ABA payment audits targeting multiple states, and state Medicaid Fraud Control Units have publicly identified ABA as an enforcement priority. In Massachusetts, an ABA provider was indicted in 2025 for allegedly fabricating documentation to support over $1 million in false claims. The OIG released a Colorado audit in 2026 identifying $285.2 million in improper and potentially improper payments.
The Indiana bulletin does not emerge in a vacuum. It arrives after more than a year of contentious debate, public listening sessions, a gubernatorial executive order, a working group process, and significant pushback from families and providers who argue that rate cuts and service caps will harm the very children Medicaid is supposed to protect. During debate over the state’s earlier proposed caps in early 2025, State Representative Becky Cash publicly questioned whether the proposed savings would materialize, noting that the waiting list for ABA services in Indiana was already long enough that limiting hours might not meaningfully reduce costs. That skepticism has persisted as the state has moved from proposal to policy.
What is clear is that Indiana has chosen to act. Whether these changes achieve their stated goals of strengthening program integrity, promoting sustainability, and supporting consistent service delivery will depend on implementation, provider adaptation, and the experiences of the roughly 8,000 children whose therapy hangs in the balance. The transition begins April 1.
