Nebraska hearing: Medicaid ABA spending surged; DHHS cuts rates, pledges oversight as providers warn of access losses

Nebraska lawmakers and health officials spent a full-day interim hearing examining a steep rise in Medicaid spending on applied behavior analysis (ABA) and state actions to contain costs while trying to preserve access to care.

Chairman Brian Harden, senator and chair of the Health and Human Services Committee, opened the Sept. interim hearing on LR 191, the committee study of ABA sustainability, saying the review grew out of concerns about payment levels, program integrity and workforce stability.

The Department of Health and Human Services told the committee that between 2020 and 2024 Medicaid payments for ABA in Nebraska rose from 4,600,000.0 to 85,600,000.0 — an increase department witnesses described as extraordinary — and that the state adjusted service definitions in January and reduced reimbursement rates effective Aug. 1 to bring Nebraska closer to surrounding states. “Between 2020 and 2024, Medicaid payments for ABA services in Nebraska increased from 4,600,000.0 to 85,600,000.0, an increase of nearly 1800%,” said Matthew Ahern, deputy director for the Division of Medicaid and Long Term Care, Department of Health and Human Services.

Why it matters: the federal Office of Inspector General (OIG) has identified improper payments for ABA in other states, and large, rapid spending increases raise the risk of federal audit findings and potential repayment obligations. Department witnesses said rate reductions and clarified service definitions are intended to protect beneficiaries and state taxpayers while preserving medically necessary care.

What the state has done - In January the department published revised ABA service definitions that tightened medical-necessity criteria and added utilization guardrails, including hour thresholds and supervision expectations. Those definitions set maximums that can be exceeded only with documented medical necessity. - After a comparative rate study, Nebraska reduced Medicaid payment rates effective Aug. 1 and submitted a state plan amendment to the Centers for Medicare &…