This year, as part of our end-of-year coverage, NJTechWeekly.com asked some New Jersey startups and established companies to look into their crystal balls and tell us what’s ahead for them in 2020.
For CentralReach (Matawan), the key is to continue to help its customers — who, in turn, help autism patients — navigate an increasingly complex regulatory, compliance, payor ecosystem, while still maintaining profitability.
CentralReach, the leading electronic medical record (EMR) software and services provider for Applied Behavior Analysis (ABA) clinicians who serve people with autism spectrum disorder (ASD), is gearing up for another high-growth year. And we are looking forward to helping our customers navigate the complexities the autism therapy space will bring in 2020.
Currently, the Centers for Disease Control and Prevention (CDC) estimates that 3.5 million people have been diagnosed with ASD, a number that’s growing at a rate of 10 percent annually. But, with only 36,000 clinicians to serve those on the spectrum, waiting lists are lengthening, and ABA organizations are tasked with scaling fast enough to meet demand, navigate regulatory pressures, and remain profitable — all while maintaining quality of care.
As a result, below are some of the trends we expect to see in 2020, and that we are helping our customers prepare for.
Practices will see an increase in regulations and government oversight.
Now that ABA therapy coverage has been mandated across all 50 states, the level of claims reimbursement from payors to provider practices is increasing dramatically. With rising reimbursement dollar volume naturally comes increased scrutiny, regulation and compliance requirements. As a result, we are seeing a rapid increase in regulations and overall compliance constraints, which will force these practices to show accountability across all aspects of their organizations.
A great example of this trend in action is a recent federal policy mandated by the 21st Century Cures Act of 2016, concerning Medicaid reimbursement based on Electronic Visit Verification (EVV), which requires ABA practices that receive Medicaid reimbursements to collect, store and report on key data points that prove service delivery, including: type of service, individual receiving service, individual providing service, date, geo-location, and start/end time. The Congressional Budget Office expects EVV to save the federal government $290 million over 10 years by preventing Medicaid fraud; and ABA organizations that are unable to comply with this new requirement will not be reimbursed, even if the services were legitimately provided.
ABA practices may see more payor (insurance) involvement in what’s deemed reimbursable care, but practices can get ahead of this via measurable clinical programming.
The payors will begin to require that the ABA market shift from reimbursement for activity or time spent to outcome-based or medically necessary reimbursement, as has already occurred in the majority of the more established healthcare verticals. Luckily for ABA practices, payors are only in the research phase, which will enable ABA practices to take the reins, leveraging the wealth of outcome data that practices already have to partner with payors in identifying what programming, activities and assessment protocols truly drive positive outcomes for the population, and which practices should be reimbursed, and thus encouraged, and which should not.
At CentralReach, we are planning to equip our ABA practices with measurable, fully digital, and evidence-based clinical programming integrated directly into our platform, so practices can tie their treatment plans directly back to the outcomes delivered. This full-circle loop will help practices, not payors, lead the way in deciding what is deemed medically necessary.
Increased private equity investment in the ABA space is bringing clinical and financial performance under a microscope.
We have seen a dramatic increase in private equity (PE) investment in the ABA practice market over the last several years, with deal volume up 58% last year, according to the Braff Group. And while the momentum in this area has been significant, investors believe that we are only scratching the surface of this market’s potential, especially considering that some believe the market to be in the neighborhood of $15 billion.
With more sophisticated investment, especially by investors who have significant experience in other, more mature healthcare markets, ABA practices are also going to see a greater emphasis on financial and clinical performance that supports the investment. And, given that the industry hasn’t quite defined what “success” is yet, primarily on the clinical side, we’ll start to see a shift towards more complex reporting and data-collection needs that the manual workflows currently deployed by many in the industry won’t be able to support. On the small-business end of the market, practices will also need to invest in technology more quickly than in the past, as the regulatory burden and the increased need for efficiency in order to successfully compete in the market will make operating by paper and pencil a near impossibility.
Profitability and reimbursement rates will require closer attention.
Although the demand for therapy services has increased exponentially over the past few years, the increase in some of the aforementioned trends (regulations, compliance, payor involvement, etc.) all will take a toll on profitability and reimbursement rates if ABA organizations aren’t careful. We believe that we will see a greater demand for trend analysis around these two areas, and this will help practices monitor any downward trends they may see by source, service code and so on. It will also help practices make data-driven decisions that will help them pivot or improve operations to ensure that profitability is maximized, which is essential for supporting the resources they need to deliver high-quality care at scale.
While the market is becoming more complex, CentralReach is prepared for, and looking forward to, helping our customers navigate these complexities with ease while they grow, so they can do what they do best — helping people with ASD live richer and more independent lives.
[CentralReach was a finalist for the Innovative Company of the Year Award from the New Jersey Tech Council in 2019]