Cut inefficiency from Medicaid autism spending

Late to the party, Louisiana needs to go after sketchy Medicaid autism treatment and diagnoses aggressively.

Starting a few months into the second term of Republican Pres. Donald Trump, the federal government began reviews of select state Medicaid spending on treating autism, specifically applied behavioral analysis outlays. It found massive fraud in Minnesota leading to legal action, and across it and three other states extrapolated a disturbing pattern of rapidly escalating expenses capped off by some $200 million improperly paid and another $400 million in incorrect billings.

The Democrat Pres. Barack Obama Administration pushed through a rule mandating Medicaid coverage of autism not long after diagnosis guidelines were relaxed that qualified far more children so that those even slightly eccentric-acting qualified. This resulted in a near-quintupling of autism diagnoses since the turn of the century so that now over one in three children receive it, while in eight states that provide specific data on autism Medicaid spending costs sextupled to $2.2 billion in just a few years.

Partly to blame is overdiagnosis followed by the use of ABA therapy, which is designed for intense, not mild, cases. Further, records show often mild cases receiving intense therapy even though for those kinds of cases after a minimal point additional therapy prompts little or no improvement. Note how this overuse hurts children, as the extra hours they spend on that could go to regular schooling or on other kinds of therapies.

Yet while criminal behavior gets headlines, it’s the more mundane aspects of program administration that almost encourage inefficiency if not abuse of taxpayer money. Little front-end justification and lax back-end oversight allow for enormous billings that accomplish little substantively for clients. The very nature of the open-ended rules – billed as regular Medicaid means the federal government picks up the lion’s share of expenses – discourages cost controls at the state level. It’s no wonder that the rate of increase in expenditures on autism treatment by private insurers is just 40 percent of that of Medicaid, because the private sector vets both at the front-end and back-end and has caps on payment.

Louisiana hasn’t seen as dizzying increases as other states studied, with spending on ABA increasing 41 percent over the past three years, driven not by the state raising its hourly reimbursement rate, but by more children receiving the therapy and by children receiving more hours of treatment. But with a reimbursement rate this year for its Children’s Health Insurance Program at 77.48 percent, the temptation is there to resist bending over backwards to vet.

The Louisiana Department of Health should resist that. Nearly a quarter saved is nearly a quarter earned and far more than the cost of increased enforcement. The state also could mandate regular referral reassessment – because by definition the therapy supposedly reaches an end state of client independence and shouldn’t go on indefinitely – along with pursuing general family Medicaid requalification and should require diagnosis independent of service provision (some providers combine the two, a clear conflict of interest). Also, it could make payments fixed by level of diagnosis and not open-ended in increments billed.

Other changes would have to come at the federal level, such as putting the funding into block grants and capping it. Still others would have to come from the medical profession, such as a more realistic diagnosis of alleged mild cases.

Overburdened Louisiana taxpayers shouldn’t have to foot the bill for inattentiveness, sloppiness, and fraud. LDH says it’s working on the issue, and it should resolve it posthaste.