Case study: Applied behavioral analysis coverage and management

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Milliman was asked by an employer-sponsored plan in a large Midwest mandate state to help it understand the risks and costs of adding applied behavioral analysis (ABA) coverage.

ABA for autism spectrum disorders (ASD) is one of the fastest growing state benefit mandates. Today, 46 states mandate some form of autism coverage with varying degrees of benefit coverage and limits.

The growth in state mandates is driven by significant increases in the prevalence of ASD as well as the legislative success of the autism advocacy community, pushing for greater awareness and treatment options at the state level.

The general goal of ABA is to improve socially significant behaviors to a meaningful degree. Targeted behaviors include a vast array of adaptive living skills such as gross/fine motor skills, social skills, communication, reading, eating, and dressing. The ABA treatment regimen, which has its roots in the behavioral psychology of B.F. Skinner, involves highly structured, intensive interventions for up to 30 hours per week. The course of treatment can last many years, from diagnosis at early ages (e.g., ages 3 to 4) through adolescence (and sometimes beyond).

While self-funded employer-sponsored plans are not required to comply with state mandates under federal law (ERISA), they are not immune from the trend toward greater ABA coverage in the states. Challenges for plan sponsors include:

  • Medical necessity. Medical carriers will often advise that ABA is not medically necessary because it is unproven, experimental, investigational, or educational.
  • Cost. Assuming conservatively the average age of diagnosis is 4 years and average age of completion is 15 years, adding this benefit can be a long-term expense to the plan. Cost estimates range between $25,000 and $50,000 per case.
  • Utilization management (UM) and network management. While ABA can be costly, school-based services and other factors play a significant and progressive role in offsetting plan costs. As demand for ABA services grows, plan sponsors may want to review network utilization to assure ongoing access to qualified providers for these services.
  • Compliance. Plan sponsors must not run afoul of the Mental Health Parity and Addiction Equity Act (MHPAEA) which prohibits plans from restricting mental health benefits more so than physical health benefits.
  • Related benefits. Even if a plan specifically excludes coverage for ASD treatment and ASD diagnosis, members with autism are most likely already receiving related, medically necessary physical health benefits such as physical therapy and speech therapy (habilitative and rehabilitative). It is important to understand the inter-connectedness of benefit administration.


The solution steps involved 1) educating the plan sponsor on the ABA treatment model, 2) assessing population exposure, 3) estimating plan costs, and 4) proposing a UM strategy.

  • Educating plan sponsor: Milliman reviewed medical policies and reviewed primary and secondary research on the efficacy and effectiveness of ABA. We addressed multiple client concerns, including the fear that ABA would become ‘”day-care” for families needing a break from caregiving.
  • Assessing population exposure: Using client demographic data, Milliman estimated the treated prevalence in the population based on age distribution and assumptions about continuation of services.
  • Estimating plan costs. We estimated plan costs using plan demographics and cost methodologies available from similar research, adjusted for local area factors and plan design and cost offsets due to school resources.
  • Proposing a utilization and network management strategy: Milliman recommended a set of management controls that met basic needs yet did not overburden the membership seeking services. These controls included prior authorization, continued review, and accessibility analysis.
  • Mental health parity: In order to comply with MHPAEA parity requirements, we recommended adding new prior authorization requirements to any member seeking physical therapy, occupational therapy, or speech therapy services (not just members seeking ABA services).


We reviewed the experience and found the overall cost impact after year 1 was negligible, primarily because the cases were aged 6 to 15 years, which means school resources offset a substantial portion of the potential plan liability. Members were complying with UM requirements and there were no reported problems accessing qualified network providers.


Milliman’s employer plan sponsors work hard to balance their members’ needs with their fiduciary duties and compliance obligations under law. Our solution helped this plan expand benefit coverage in an administratively efficient way while preserving member access to needed health services.