Stagnant fee-for-service reimbursement rates, along with rising inflation and interest rates, strained the autism sector in recent periods, cooling down the frothy activity seen in 2019-2021. The June 2023 bankruptcy of The Center for Autism and Related Disorders (CARD), which was the largest autism therapy service provider in the U.S., was a wake-up call for owners and investors.
However, other ABA practices are continuing to grow. ABA Center of America is expanding into Texas, Georgia, Tennessee and the Washington DC area. They already operate in Florida, Massachusetts, New Hampshire and New Jersey. The private equity firms KKR and Altamont Capital resurrected autism therapy assets from a previous platform company and set them up in a new company, Gracent LLC. In April 2023, Cortica, a San Diego based whole-child pediatric autism care provider acquired Springtide Child Development, a Connecticut based provider of behavioral services and Melmed Center, an Arizona based provider.
The demand for autism services is still high, witness the CDC press release of March 2023, where one in thirty-six (2.8%), 8-year-old children have been identified with autism spectrum disorder, according to an analysis in CDC’s Morbidity and Mortality Weekly Report. The new findings are higher than the previous 2018 estimate that found a prevalence of one in forty-four (2.3%).
Technology, combined with data-driven therapies look to be the factors that will define successful behavioral healthcare providers. Cortica has secured value-based care arrangements with a number of health plans. These type of collaborations look to be the future for delivering care. Typically these value-based arrangements have a monthly rate combined with a pay for performance element for meeting specific process measures.
Say Hello to the new healthcare model and get ready to jump onboard!
