Ronit Molko - Ronit Molko, Ph.D., BCBA-D | Investment Consultant

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April 30, 2019March 3, 2021

What is Covered? The Insurance Landscape for Autism Services

In today’s health care ecosystem, the availability and quality of a field of services are dependent on insurance coverage. In the world of autism services, the tableau of insurance coverage is decidedly mixed.

Children with autism spectrum disorders are generally covered by health insurance for services they require, but not universally. All but two states require private health insurance to cover autism services. Other states may require limited coverage under mental health provisions. Federal employee health benefit plans cover ABA with prior approval and certain restrictions.

ABA is a critical piece

Because early intervention ABA programs are critical to successful treatment, this might sound like good news, and it generally is. Insurance coverage provides access to treatment for many families who could not otherwise afford it.

But it is a qualified success.

There are two major issues with insurance coverage for autism services. One is the amount or intensity of services funded. The other is quality.

As a group of genetic neurodevelopmental disorders, autism is not something to be “cured.” Treatment is optimal when it is intensive and sustained over many years. The best treatments available for those on the autism spectrum are rooted in the science of applied behavior analysis (ABA), a mostly one-on-one treatment approach based on understanding behaviors and how they are affected by the environment. ABA therapy is costly—though foregoing ABA therapy is far more expensive in the long run.

On average, ABA therapy costs $17,000 annually for a child on the autism spectrum, according to the Centers for Disease Control. For many individuals, this number is closer to $45,000-$100,000 annually. Many states mandate private insurance cover up to $36,000, with some as much as $50,000 annually. But others don’t.

The impact of insurers

Even when coverage is mandated, that may not be a panacea. One private insurer, with whom I have had numerous frustrating conversations, reimburses at rates no provider can accommodate without significantly reducing quality and hiring interventionists who are not well-trained. The rates are fabricated on minimum wage pay as a baseline, precluding the necessary growth of clinical skills in technicians and advanced educational training, not to mention any ability to invest in recruitment and retention of talent. At this wage level, service providers are competing with companies such as Walmart or Starbucks for skilled ABA behavior technicians whose work with vulnerable children requires many hours of ongoing training and supervision to meet quality standards. This is not an easy job, often requiring many hours of commuting between clients’ homes and management of complex family issues.

What we are left with are employees paid as if they are unskilled and fungible while tasked with building the brains of our precious children, teaching them the skills critical to communicate, learn, and become functioning, independent adults.

Even more important is what health insurance covers. As you are likely aware, lacking a consensus in the industry about outcome measurements, insurance companies are stepping into the breach and dictating their own standards. Because insurance companies are just learning about ABA they generally have limited appreciation for the complexity of maintaining a good ABA therapy program, and this is distorting the provision of care.

Cutting corners and thinking short-term

Let’s look at an example. Many programs require providers to demonstrate short-term outcomes, such as whether a child can respond to their name, often ignoring long-term goals such as developing the skills to care for themselves as an adult. Insurance companies have a short time horizon because they are not likely to provide coverage beyond age 18. Their entire worldview with respect to children with ASD is narrowly focused on childhood. Not surprisingly, recent studies of adults with autism have revealed a distressing lack of personal independence and quality of life.

A recent court case against United Healthcare illustrates the issues our industry has with insurance. A U.S. District Court judge ruled the company adopted coverage guidelines for people with disabilities that focused more on its bottom line than on patient care.

The subject concerns all of us; not just those connected to people with autism. Many people on the autism spectrum have spectacular neurodevelopmental assets in addition to their deficits, and that potential is being wasted. In addition, each child with autism whose treatment fails to prepare them to achieve any kind of self-reliance as an adult will continue costing families and society between $1.4 million and $3.2 million over their lifetime. It is an immense waste of human potential, both financial and otherwise, and we all pay the cost.

Article written for Forbes.com.

April 17, 2019March 2, 2021

Light It Up Blue for Boys, But Don’t Forget the Girls

Why do we Light It Up Blue? For years, prevalence data in the field of autism held that the condition primarily affects boys, by ratios described as four or five to one generally and up to 10-1 among those without intellectual handicaps.

Indeed, in the early days of identifying autism and Asperger’s Syndrome, autism was described as “an extreme form of maleness.” Active British psychologist Simon Baron-Cohen theorizes that autism may be caused in part by exposure to high levels of testosterone in the womb. Although no one has definitively identified autism’s roots, there has been a general consensus that boys require a smaller amount of exposure to whatever the cause than girls do to inspire a diagnosis.

Symptoms are more subtle in girls

The result is that in the world of autism, girls often get lost in the shuffle. Diagnostic criteria for autism are disproportionately based on characteristics in boys, potentially revealing a point of bias between diagnosing the two sexes. Not surprisingly, it takes longer to diagnose girls, even compared to boys with the same severity of autism.

Autism symptoms may be subtler in girls than in boys, and girls may be more adept at masking them than boys. Research suggests that girls are able to study people and their behavior, and learn social rules through observation more easily than boys, thereby camouflaging their autism because they mimic socially acceptable interactions.

Researcher Somer Bishop of UCSF describes an encounter with a seemingly well-socialized girl who shook her hand, complimented her outfit and answered her questions. It wasn’t until a second encounter when the conversation was repeated nearly word-for-word, that Dr. Bishop realized the girl had simply practiced a set of neurotypical responses. The result may be that many autistic girls fly under the clinical radar.

Viewing autism through a male prism

Indeed, a 2014 study found “higher functioning” autistic girls tend to have fewer social impairments than boys do—just as neurotypical girls tend to be better socialized than neurotypical boys. Indeed, neurological testing has found that the brains of females with autism tend to look like those of typically developing males of the same age, with reduced activity in regions of the brain normally associated with socialization.

It’s clear now why we Light It Up Blue, and regardless of the complicated history of autism diagnoses, the tradition is worthwhile. However, viewing autism through a male prism has complicated the diagnostic process for girls and resulted in misdiagnosis and underdiagnosis. By definition, no one knows the exact scope of the issue, but it does call into question the long-held wisdom that autistic boys outnumber girls by four or five to one. The reality is that the ratio is likely much closer to 2:1 or an even 1:1, but because girls are often diagnosed with eating disorders or anxiety disorders when the root cause is actually autism, we see diagnostic numbers skew towards boys.

Why is this significant? Among the challenges facing individuals with autism is naivete about people being dishonest with them and difficulty recognizing social cues, often leading women with autism into abusive and dangerous situations. Almost every autistic woman I have interviewed has shared a story of finding herself in a compromised position, often with a traumatic outcome. Misdiagnosing girls with autism means we fail to teach them the social skills they need to navigate the world.

Some in the autism community suggest that clinicians apply sex-specific norms when diagnosing autism, to better define what autism looks like in girls. While we certainly should Light It Up Blue this month, it is pretty clear that much more distaff-focused research needs to be done, and clinicians need to be on the alert for subtle signs of the condition in girls.

Further reading on issues shaping autism services can be found in my book, Autism Matters: Empowering Investors, Providers, and the Autism Community to Advance Autism Services

April 4, 2019March 3, 2021

Measure What Matters: Redefining Neurotypical Intelligence Standards for Autistic Individuals

Man Hands Holding A White Paper Sheet With Two Faced Head Over A

I’ve written previously about how we misunderstand the intelligence of people on the autism spectrum. We evaluate their intelligence with tests and observations that measure a narrow slice of the intelligence continuum and then judge them by their ability to socialize with us.

Neurotypical vs. Autistic Culture
Neurotypical people—a term for individuals without autism coined by people with autism—living in a neurotypical world, consider our present culture and socialization methods to be “correct,” and never pause to think how woefully we socialize with autistic people based on those standards. For example, we may become flustered while conversing with an autistic person when they fail to make eye contact with us. They might just as easily perceive us as poorly socialized when we insist on staring at them during a conversation.

Neither group is wrong; we’re just different. In order to better help autistic people navigate the neurotypical world, perhaps we ought to re-shape parts of that world to conform to their differences. This is precisely what we’re doing when we build ramps for people in wheelchairs or post signs in other languages for foreign visitors.

I’ve spoken about this at length with Dr. Sue Fletcher-Watson, a Chancellor’s Fellow at the University of Edinburgh’s Centre for Clinical Brain Sciences. She has done significant research on intelligence and socialization of individuals on the autism spectrum. Her conclusions reverberate with me and my experiences in the field.

Some Simple Adjustments
An autistic friend visited Dr. Fletcher-Watson for dinner and asked in advance what time she should leave. She knew that she would not be able to read the subtle cues neurotypical people understand as indicating it is time to go. Armed in advance with a time to leave, her departure avoided the awkwardness that might otherwise have ensued.

Dr. Fletcher-Watson has proposed involving autistic people in designing environments for others like them. She is also developing peer support models that match newly-diagnosed autistic adults with those who have learned how to accommodate their autism to the neurotypical world and pairing parents of autistic children with autistic adults.

Dr. Fletcher-Watson described for me how that might work: “Just imagine having an autistic guy come ’round and look in your house and say, ‘The hum from your fridge is very loud for me, so maybe you can find a way to make that quieter.’ Or, ‘These lights are very harsh.’ Or, you know, ‘This fabric feels uncomfortable.’ Articulating all of those things that maybe a child would not be able to articulate.”

Let’s Measure What Matters
Greater dedication to the real-world needs of autistic people might lead us to a different set of metrics. Maybe reading and writing aren’t nearly as important for some autistic people’s ability to function in the world as other skills and areas of learning. For example, a young man I know runs a food delivery business. He takes orders from various companies, reliably gets the orders right and makes correct change, and generally possesses the skills necessary to complete the job.

As a boy, he was removed from public school because of his behavioral issues. When his parents brought him home, they eliminated many of the sensory inputs in his home environment and were able to foster his learning and independence through different therapeutic approaches. Now, with a little support and mentoring, he has a job, a girlfriend, a roommate, and a self-determined life. Maybe he can’t check all the right the boxes on an assessment test of skills that measure standard conceptions of intelligence, but he is functioning well in the neurotypical world.

A more strategic approach to analyzing how we measure success for individuals with autism is indicated, to replace the rudimentary box-checking now in place. It must take into account real-world skills that accrue to the long-term benefit of those affected. Accomplishing this would be one small but significant step forward in their care and education.

You can find further reading on this and other subjects in autism services in my book, Autism Matters.

March 30, 2019August 13, 2026

Autism Case 1: Donald Triplett

By Ronit Molko, Ph.D., BCBA-D

Donald Triplett was born in 1933 to Mary and Beamon Triplett in Forest, Mississippi. At that time, no one had ever identified the behaviors he exhibited as an infant and toddler. The Tripletts understood that their son was encyclopedic in certain areas but emotionally distant and violently opposed to minute changes in his daily routines. A year after institutionalizing Donald on their doctor’s advice, the Tripletts made the monumental decision to bring their four-year-old son back home. It was a decision that changed his life — and put him on the path to helping revolutionize our understanding of autism.

The Tripletts brought their son to renowned child psychiatrist Leo Kanner at Johns Hopkins. Kanner had seen other children with similar symptoms — children mesmerized by things and numbers but disconnected from people. Donald joined Kanner’s study of 11 children with, what he called, “autistic disturbances of affective contact.”

He labeled Donald “Case 1.” Donald Triplett is still autism case 1 today, at the age of 85, a testament to the dual powers of science and love.

The story in between is a remarkable journey of failure and ultimate triumph. Advantaged by a wealthy family and a supportive, tight-knit hometown, Donald has lived a happy life, learning to care for himself in the house in which he grew up. He graduated from high school and college and works at the bank his family owns. He has traveled the world and learned to show interest in others, even if it’s in his own quirky ways.

The road to acceptance and understanding for children with autism has been bumpy and winding. The 30s and 40s were the heyday of eugenics, which called for the sterilization — or worse — of people with mental disabilities and often led to institutionalization. Early researchers, including Kanner, blamed mothers for withholding affection. In the 90s, vaccinations were erroneously linked to autism, sparking widespread fear in parents — a fear that lingers with parents to this day.

Even today, the care and education of individuals on the autism spectrum remains inconsistent and fragmented. People employ methods designed to achieve outcomes that don’t always reflect real-world needs or apply to managing adulthood successfully. Most autism services end at age 18, leaving many adults isolated and unable to participate in society.

The case of Donald Triplett, Case 1, demonstrates that successful integration into society is possible through awareness, accommodation, and acceptance from the community. Of equal importance is an education focused on the skills needed for success in adulthood. It is instructive that Donald was taught to drive, but not until age 27, long after education ends for most people with autism.

Though Donald Triplett may have been the first recognized case of autism, the care and support of his family and his community is strikingly modern — a model for all the children who have followed him.

March 20, 2019March 3, 2021

The Social Intelligence of Autistic Individuals, Part 1

Selfie Of Young Smiling Teenagers Having Fun Together. Best Frie

If a perfectly intelligent American were to find themselves catapulted into a foreign world with its own traditions, customs, culture and language, all totally unfamiliar to the person transported there, it would not be surprising for the people of this world to consider their visitor unintelligent, viewing intellect through the narrow lens of their own experiences.

Not only would our American visitor be unable to communicate verbally, but he or she also would not be particularly adept socially, unfamiliar as they would be with the cultural norms of this utterly alien place.

There is a certain analogy here with individuals along the autism spectrum. In my recent interview with Dr. Sue Fletcher-Watson, a developmental psychologist at the University of Edinburgh, she noted we often evaluate intelligence via a test that measures only very specific functions that don’t play to the strengths of those on the spectrum. But how would we view people with autism differently if we employed autistic-centric criteria?

Fletcher-Watson and her team of researchers conducted experiments using a familiar tool – the game of telephone, where a story is passed orally from one person to another down a chain of people until it hardly resembles the original story. This is called a diffusion chain and the rate of degradation in the story is fairly predictable.

The researchers conducted this experiment with a group of neurotypical subjects and with a group of autistic subjects and the rate of message degradation was the same for the two groups. But something very different occurred when the neurotypical and autistic individuals were mixed. The story degraded at a much faster rate.

For autistic individuals, “the issue is not that they don’t have social skills. It’s more that there’s a mismatch between their style of sociality, and the style of the kind of neurotypical majority,” Fletcher-Watson told me.

Another issue that those with autism face is the inadequacy of average. A neurotypical person with average intelligence is simply viewed as average, just an ordinary person with friends and loved ones, weaknesses and strengths.

Because people with autism are often stigmatized as anti-social savants, those lacking the savant element are simply stigmatized as anti-social, when in fact, they have much more in common with ordinary people of average intelligence.

In fact, high-functioning, highly-verbal autistic individuals are in some ways the most debilitated. Autistic individuals who can navigate the intellectual world but come unglued in overwhelming sensory environments might score high on an IQ test but would have difficulty navigating life without support. Indeed, highly verbal adults with autism have a suicide rate eight times the average for neuro-typical adults.

When we take an asset-based approach and focus on the strengths of autistic people and their ability to function on their terms, we give them a much greater opportunity to succeed.

“I know a man who doesn’t speak. He’s in his 30s. He doesn’t read or write, but he owns his own sandwich-making business,” Fletcher-Watson told me. “Everyone buys those sandwiches from him for lunch, and he makes a good living, and obviously he has someone to help him with the paperwork.”

“But, you know… he passes his hygiene inspections because he’s very good at following rules.”

You can read further on this topic and more in my book, Autism Matters. And make sure to connect with Dr. Sue Fletcher-Watson for more of her expert insights and updates on her work!

February 28, 2019March 3, 2021

Why Identity-First Language Matters to Autistic Individuals

By Ronit Molko, Ph.D., BCBA-D

Are there autistic individuals in your life? Or are they people with autism? This is a critical distinction and a topic of debate in the autism community, one which recognizes that words matter and shape how we think.

Half a century ago, people with developmental disabilities were referred to using all kinds of pejorative terms. For many in the autism community, the sting of those dehumanizing terms lingers and informs their opinions on how they choose to identify themselves.

The debate happens between person-first language (people with autism) and identity-first language (autistic people). For many years, and especially in the professional and scientific communities, person-first language that acknowledges a person’s humanity first and their identity second is preferred and recommended.

The person-first preference is easy to understand. We are all people and individuals before we are our condition. Person-first language acknowledges that a person is not their condition. The condition is part of them but doesn’t define them.

But person-first language can feel cumbersome and stilted, and often offensive, especially to those at whom it is directed. And now, as we approach 25 years since the autism diagnosis became more prevalent and awareness began to increase, we have a large group of autistic adults to inform us about growing up with autism and how they see themselves in the world.

I have discussed this with many autistic individuals and their parents to better understand what this issue means to them. Many of these young adults, who often refer to themselves as self-advocates, describe that their autism is core to their identity and how they have known themselves since birth. Referring to them as a “person with autism” negates this. Many have said to me that using person-first language is designed to make me feel better, but actually dishonors who they are.

More to the point, autism is not an accusation, but a statement of fact. Autism is an inherent part of a person’s identity, just as gay, or Jewish, or female are. Before the general population can understand autism as a condition that bestows strengths as well as challenges, those in the autistic community must adopt this identity-first point of view and make their language reinforce that mindset.

In the 1960s, African Americans demanded to be described as “black,” as part of the Black Power movement. It was a point of pride, rather than a label of oppression that had scarred them for 200 years. People began chanting “Say it loud; I’m black and proud!” With this shift, blackness became and remains a core aspect of that community’s identity. Those activists restored power, and thus humanity, to “black” as an identifier.

Using the term “autistic person” or “autistic individual,” as I do in my written and oral presentations, affirms the value of the autistic identity. Individuals don’t have autism, the way they have the flu, they are autistic, a condition that describes the wiring of their brain and suggests the unique, complex and interesting individual they are.

February 21, 2019March 2, 2021

Looking Ahead to Next Evolution of ABA

Most professionals and families in the autism community would agree that over the past 30 years, ABA has served autistic individuals well, providing many of the skills and supports necessary to improve functioning and enable individuals to participate more fully at school and within family systems. So inevitably, it is time to evolve.

All companies and industries evolve or wither. Forces of change—internal and external—demand new approaches, innovative solutions, or a new direction. Successful companies and industries are always thinking about what is next.

Businesses generally follow an S-curve in their growth. After a period of investment and company-building, there is rapid revenue growth as the marketplace becomes aware of the business’s products and services and recognizes its relevance. Then the market catches up and growth stagnates unless the company innovates. When it does, it reaps the benefit of accelerated growth again.

I believe the autism services industry is at the inflection point of the S-curve. With great benefit to many thousands of people with autism spectrum disorders, ABA services are considered by most researchers, payors, legislators, and service providers to be the gold standard of treatment. In the process, and with the heightened demand for intervention, the delivery of ABA services has transformed into an industry. With over 30 financial investments in autism companies last year alone, the industry is quickly reshaping as investors look to scale services, leverage technology, and improve infrastructure and processes. But storm clouds are gathering.

We face a growing population of autistic adults who lack the necessary skills to live independently and whose parents are aging, unable to care for them much longer. What’s more, a growing number of children with autism are coming of age, many of whom lack the skills necessary for independent living, finding and maintaining employment, and forming intimate relationships. If the goal of the autism services industry is to prepare individuals with autism to live their lives as successfully as possible, there is a great deal of room for improvement.

An external force is at work as well and could be the main catalyst for evolution: third-party payers. Absent a coherent set of outcomes from the industry itself, insurance companies are beginning to dictate the rules of conduct in autism services, even though many lack the in-depth knowledge and expertise to do so. The best interest of autistic individuals risks getting lost in the maelstrom.

If we look at our industry objectively, we see one driven by short-term outcomes and often narrow commercial interests, rather than one united by a desire to discover and invest in the approaches that result in the best long-term outcomes for the population we serve. A regrettable lack of data sharing reduces industry-wide knowledge. Furthermore, a lack of universal standards and common measurements of outcomes stymies innovation across the industry. Without those clearly-defined, measurable outcomes that serve the long-term needs of our clients, we’re left with payors developing often poorly-conceived, short-term outcome values that fail to support the programs needed for adults so they can function independently.

As an industry whose purpose is humanitarian, we have our work cut out for us. We can stagnate and wither on the S-curve, or as an industry, we can innovate through the present challenges and reach a new age of growth, both in scale and quality of service. Any well-intentioned person in this industry prefers the latter. So, the questions as we look towards the future of our industry are: how willing are we to reject misaligned commercial interests and resist the temptation of shortsighted results? Can we instead work together, share information, develop common outcomes, and improve the results for our clients?

If we’re going to do it, we have to do it now.

For more on the future of ABA and autism services, check out my book, Autism Matters.

January 30, 2019March 3, 2021

The Opportunities for Investors in Autism Services

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By Ronit Molko, Ph.D., BCBA-D

The landscape for investment opportunities in autism services is growing and changing at a dizzying pace. As the diagnosis rate of children identified with autism spectrum disorder approaches 2.5 percent—nearly tripling since 2002—the demand for services is mushrooming.

The marketplace is also beginning to demand more sophisticated models of care and opportunities for autistic individuals. There have been multiple recent acquisitions of autism service providers and the land grab continues.

Considered the gold standard for autism treatment modalities, reimbursement for ABA is now mandated in 46 states, twice as many as in 2010. ABA is a scientifically-validated approach that encourages family involvement in treatment. ABA focuses on techniques that bring about positive changes in behavior, particularly in improving individuals’ abilities to care for themselves.

Recent acquisitions—including FFL’s investment in ALP, Blackstone’s investment in CARD, TA’s investment in BHW, and many others—illustrate the intense, continued interest in this sector. Although valuations are high and questions persist about the quality of management at many providers, other large investors are reported to be shaking the trees, searching for the best point of entry into the industry.

The investment space is not yet mature, making this the time to get in. Industry leaders are just now beginning to recognize the need for standardized outcome measurements that reflect the actual experiences of autistic children as they grow into adults.

Autism services offer investors interested in social impact a financially profitable opportunity. The autism services industry is badly fragmented, typically characterized by well-intentioned, clinically-focused, but inefficient businesses lacking the ability to attract top staff or scale and manage growth. It is primed for savvy-but-conscientious investors who can improve outcomes while generating a financial return on investment.

The combination of good business practices, shrewd servant leadership and focus on clinical outcomes can improve both the bottom line and the lives of people with autism spectrum disorder.

The autism services industry is ready to reward investors who bring those three together, which is why we’re already seeing the leading edge develop in a big way.

January 24, 2019March 2, 2021

Individuals with Autism Need Love Too

One of the most persistent misconceptions about people with autism spectrum disorder is that they are automatons without emotion. This arises from the fact that autism is at its core a communication disorder. People on the spectrum often struggle to show emotion, which can give the impression that they are uncaring.

Studies have shown that people with autism can have even more capacity for feelings than neurotypical people but lack the ability to express them.

In fact, the desire to connect with others and build satisfying relationships is universal, even for those whose style of communicating is not typical.

For adults on the autism spectrum, dating and romance are fraught with challenges. Dating is a complex, abstract dance whose rules are sometimes irrational and difficult to understand. For people already facing difficulty communicating and reading social cues, it can be maddening.

In addition, some of the subtle social cues – and even some of the more overt – can elude an individual on the autism spectrum. They might not realize that it is inappropriate to pursue a romance with someone already in a relationship, or who has expressed that they are not interested, or who is in a teacher or caregiver role or is under 16. The result can be humiliating and confounding.

Movies, YouTube tutorials, and websites dedicated to dating and romance for people with disabilities like autism spectrum disorder proliferate on the Internet. Among the most searched autism-related questions on the web is about whether people with autism can get married. (Of course they can, and many do.) At UCLA, a program called PEERS teaches social interaction skills to teens and young adults with autism spectrum disorder.

Despite this, most autism services are aimed at early intervention. Very little formal treatment addresses the topic of dating and romance for people on the spectrum, even though this is an essential part of a happy life.

Because the young adults targeted by the PEER program think concretely, many of their lessons lay out step-by-step guidance for how to act in various situations, including dating. Covered topics include how to ease into conversation and establish rapport before proffering a date request, and how to smile an appropriately coy smile, rather than a toothy grin when flirting.

Many individuals on the spectrum have an aversion to touching, though this varies widely from person to person. For many neurotypical adults, it would be difficult to date someone unable or uninterested in physical displays of affection.

With Valentine’s Day right around the corner, let’s not forget that people with disabilities possess the same innate need for love – platonic and romantic – as the rest of us. They may just express it differently.

To read more about the challenges facing the autism services industry plus ways we can advance care and improve outcomes for these individuals, check out my book!

December 30, 2018March 2, 2021

Five Factors Investors Should Consider When Exploring Autism Services Companies

The field of autism services is experiencing considerable growth; a trend that looks to continue for some time. An increase in diagnostic prevalence, as well as an aging population of adults living with autism, will continue to increase the demand for services for the foreseeable future. As the demand for autism services continues to grow, the field has become even more attractive for investors. In my book, Autism Matters: Empowering Investors, Providers, and the Autism Community to Advance Autism Services, I discuss how investors can play a vital role in advancing the autism services industry.

But with so many providers, how do investors know which are strong investments? Through my diligence work with investors, I have determined five of the major factors investors should consider before investing in an autism services company:

#1. Payer Concentration/Diversity

Autism services providers are typically paid by third parties, whether they be insurance companies, governments, or school districts. Many providers, but mostly smaller providers, experience payer concentration lending risk to future growth and revenue prediction. Just recently a prominent commercial payer handed down a significant rate cut to their ABA providers.

It’s also important to look at the state and federal laws surrounding funding. Is funding relatively secure or is it vulnerable to political change? If funding laws did change, how much funding could be at risk?

#2. Fraud and Legal Compliance

There are several things to consider in regard to compliance. Each area deserves due diligence when investing:

Is the company in compliance with payer contracting requirements? Every insurance company and government agency will have their own requirements regarding credentialing of staff, billing requirements, medical necessity criteria and service delivery, to name a few.
Is the company billing in a manner which prevents fraud? Fraud is prevalent in the autism services industry, occurring both intentionally, through billing and credentialing fraud, as well as unintentionally, due to lack of understanding of billing regulations and requirements.
Is the company compliant with state licensing laws, state psychology board regulations, and any other legal, operational requirements?
Is the company abiding by HIPAA and taking steps to protect consumer information?

#3. Revenue Model

Autism services are offered in different settings to serve different needs, and to meet varying funding compliance regulations. Some services are center-based, where individuals come into an office or facility. Other service providers offer in-home or in-school services models where the provider travels to the home or school for service delivery. And other companies offer hybrid approaches combining both in-home and center-based services. It serves investors well to understand what services a company offers and in what settings, so they may better understand the revenue model and the regulations that guide service delivery.

#4. Clinical Model and Outcomes

On a more personal and socially-focused level, in my book, I also stress the need for long-term, quality of life outcome measures in autism intervention therapy. The goal of intervention is to provide the skills necessary for successful adult lives and many programs fail to focus on this long-term outcome of service delivery.

#5. Workforce Classification

As the industry grows, some providers have taken to building staffs of independent contractors rather than hiring actual employees. While this provides lower overhead and prevents a provider from dealing with employee benefits, it also presents a risk to the investor on two levels. From a legal perspective, treating staff as independent contractors often violates the legal requirements for workforce classification. On a service delivery and clinical level, independent contractors are scrutinized less, undergo less training, and have no vested interest in the company they are contracted by. To ensure the integrity of service and quality outcomes, only the best suited should be employed, and companies should be accountable for training and quality assurance. While many contractors are skilled and knowledgeable, companies that rely on them to comprise their workforce are putting too much distance between themselves and their consumers.

While there are many important factors to look at, these five key areas will allow investors to quickly and critically assess some of the most vital aspects of an autism services company before committing to investing. For further information on these topics and others related to autism services, please read my book, Autism Matters: Empowering Investors, Providers, and the Autism Community to Advance Autism Services, and follow my blog for more news and insights.