Parents and clinicians say private equity’s profit fixation is short-changing kids with autism (2022)

ATLANTA — When a new person comes into his living room, a giggly “E” smiles and passes a balloon her way. His fifth birthday was a few weeks ago, and these half-filled remnants still loiter around his suburban house. Suddenly, E darts upstairs for a moment alone, his wispy brown hair bouncing with each step.

There, in his room, is a corner with a tiny armchair, a short bookshelf, and a stuffed octopus. It’s where he goes to calm down when scared or overwhelmed.

A few months ago, E’s sudden trips upstairs were much more common. Then, he was getting a popular form of autism therapy called applied behavior analysis. It’s designed to cut down on unwanted behaviors and improve language and social skills. But E’s mom said it caused his anxiety to skyrocket. For the first time, he started having meltdowns. E’s provider told his mom, Laura Zambrano, he was being manipulative, and said they were moving into a phase of treatment that would cause even more meltdowns. She warned Zambrano it might be hard to watch.

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Those weren’t the only red flags the Zambranos encountered with the autism therapy, more commonly referred to as ABA. More than three dozen other families, clinicians, and experts interviewed by STAT outlined still more. Some said the providers, which are meant to deliver highly individualized treatment plans for each patient, instead used cookie-cutter templates. Many parents described being hounded to bring their kids to more and more therapy. Nearly all who spoke with STAT, including the Zambranos, described a severe provider shortage and constant turnover among burned-out clinicians, depriving kids with autism of the thing they need most: consistency.

It appears that ABA, broadly, is in crisis, too. Providers across the country have been billing insurers for more therapy than they could possibly deliver, or even double billing, according to lawsuits and audits in multiple states. One single person in Nevada, for example, asked to be paid for providing 65 hours of therapy in one day — an obviously impossible feat. Now, a federal watchdog agency has launched a national investigation into the industry’s practices.

“It’s just mind-boggling to me that this is the option that parents are left with,” Zambrano said. “Kids are being so ill-served.”

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ABA has long been viewed as the gold standard for kids with autism, so much so that every state mandates insurance coverage. For some families, it is the only option that insurance will cover at all.

But like other pockets of the health care industry, this one has been transformed over the past decade by a flood of investments from private equity firms, drawn by the promise of insurance reimbursement and the rising rate of autism in children across the U.S., now estimated at 1 in 44 kids.

Families and clinicians who once believed fully in the promise of ABA say the financial investors’ fixation on profit has degraded the quality of services kids receive, turning it into the equivalent of fast food therapy. They’ve grown disillusioned with the industry, they told STAT. Some are now questioning whether the therapy is helpful at all, or even harmful, especially after a recent Fortune article detailed an allegation of physical abuse at one chain.

“Bad ABA can at worst traumatize and injure a child,” said Michele Trivedi, who manages The Arc of Indiana’s Insurance Advocacy Resource Center and whose daughter has autism. “At best, you’ve wasted that child’s time, you’ve wasted that family’s time, you’ve wasted a lot of their money because they’re paying copays. You’ve wasted the health insurer’s money, taxpayers’ money. This is not a victimless crime.”

ABA providers, for their part, rejected assertions that they’re failing to provide individualized treatment plans. To the contrary, they said tailoring services to each client is their top priority. They also said financial investors don’t dictate how many hours they prescribe.

Some companies said they’re struggling with staff shortages and high inflation, and are trying to get health insurers to pay more for services.

‘This is what they need to work on — just like all the other kids’

From its start, ABA was intended to be tailored to each person. Before kids start therapy, they get an in-depth assessment of their language and social skills and a plan to specifically address their needs. The idea is to create a program designed for a particular child’s learning capacity, family situation, and rate of progress.

“You can’t just walk in and hand people a book and say, ‘This is what we’re doing this week,’ because you’re going to totally miss the point of what this individual child and the parents need,” said Eric Larsson, executive director of clinical services for the Lovaas Institute Midwest, a private ABA provider that’s not private-equity-owned.

But several people working in the industry say that private equity, in an effort to save money on time-intensive assessments, often uses “cookie cutter” treatment plans that are at times simply copy-pasted from one client to the next, which they said runs counter to how the therapy is intended to work.

When Julie Bauer worked as a technician at Autism Learning Partners in San Diego, for example, she’d often find a different client’s name in a new client’s plan.

“It would literally be copy-pasted from somewhere else,” Bauer said. “I would tell them, ‘I need you to go back and edit this and make it more appropriate to what we’re doing.’ All the time that would happen.”

Bauer recalls having four long-term clients who had been given oddly similar treatment goals, many of which she questioned to her supervisor. When she sat in for other clients when their main technicians were out, she noticed they had the same goals, too.

“It’s pretty scary that you’re getting a cookie cutter assessment like, ‘This is what they need to work on — just like all the other kids,’” Bauer said.

One board-certified behavior analyst — the master’s-level clinicians who supervise ABA technicians — said she was shocked when she started working at Autism Learning Partners in Texas. It was very different from her experience running a small, independent ABA firm there that shut down during the pandemic. She said she felt like a “billing machine, trying to make as much money for private equity as possible.”

There, she noticed every child’s plan called for the same number of hours. The treatment goals were remarkably similar.

“I started to push back and say, ‘I’m not comfortable with these treatment plans because I haven’t observed these deficits,’” recalled the analyst, who spoke on the condition of anonymity because she still works in the industry. “I’m supposed to be delivering medically necessary services. I can’t say with confidence that this is medically necessary. And it looks a lot like that guy that came in last week from the same assessor.” (Some chains have clinicians who only perform assessments, a controversial practice in the field.)

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Jennifer Hinostroza, a parent of a child with autism in the Los Angeles area, described a similar experience. On a video call in 2021, an aggressively sales-focused clinician with the Center for Autism and Related Disorders outlined an ambitious, 40-hour-per week treatment plan for her son — before speaking with him.

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Her son’s psychologist had recommended just 15 hours per week of ABA.

“They were abusing the fact that these children need help and they’re trying to suck out money from these parents who need help,” she said.

The biggest complaint Trivedi, of The Arc of Indiana, hears from parents of kids with autism is that the treatment isn’t individualized. Instead of molding a program around each child, she said private equity has its templates — the 20-hour or 40-hour per week versions, for example — and expects kids to fit into those.

For their part, private-equity-owned ABA companies pushed back on allegations that they’re not individualizing their treatment plans.

Autism Learning Partners said in a statement that delivery of high-quality care is its top priority.

“Every treatment plan we develop is customized to the individual patient, informed by the Behavior Analysis Certification Board guidelines and the assessment of our Board Certified Behavior Analysts after meeting the patient and their family,” the company said. “Our investors have no say in the delivery of care.”

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Similarly, BlueSprig said it’s committed to providing the highest-quality ABA, with individualized treatment plans for each client. The company said its investors support that mission by providing the resources necessary to ensure high levels of clinical care for every family it serves.

The Center for Autism and Related Disorders, the company Hinostroza called, said providing high-quality care tailored to patients’ unique needs has always been its top priority. Jeff Cho, the company’s vice president of field operations, said in a statement that while he could not comment on individual cases, the actions described would be unacceptable and against company policies. “The premise of these claims about our business are simply false.”

Some also say insurers deserve blame for what’s happened to the industry. Larsson, of the Lovaas Institute Midwest, said providers — private-equity-owned or not — can be forced into standardized treatment approaches because insurers won’t fully cover the cost of performing thorough assessments and treatment planning.

“As a layperson, you don’t realize how much work goes into every week adjusting the treatment plan to keep the child moving forward and to avoid running into dead ends and creating problems,” Larsson said. “Whereas with a cookie cutter approach, you can go online and look up: What should I be doing this week?’”

‘She was hustling me for more hours’

Elissa Couron and her husband loved their Vancouver, Wash., ABA provider when they first sought therapy for their son “T,” back in summer 2020. T’s main provider was personable. She made it clear that the number of hours of ABA she prescribed was only a recommendation. The family could do what was right for them.

“I really felt like I was getting the support I needed,” Couron said.

At the time, her clinic was in the process of transitioning to a new owner, the private-equity-backed ABA chain Kadiant. T’s clinician left, and his replacement didn’t communicate as much and didn’t involve her in the training as often.

From there, it got worse. The new clinician reassessed T, whose full name is being withheld to protect his identity, and insisted he needed 30 hours per week, more than double his regimen at the time. Couron balked. Not only was she working, but T was also in physical therapy, speech therapy, occupational therapy, and day care. She told the provider that 15 hours was her maximum.

“I felt like she was hustling me for more hours,” Couron said. The long back-and-forth eroded Couron’s trust in T’s care team, and in ABA more broadly.

“ABA shouldn’t be a burden, it should be an asset,” she said. A representative with Kadiant, which is now undergoing another ownership transition, declined to comment.

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Couron’s experience was shared by four other parents who used private-equity-owned ABA providers, and 10 former and current clinicians described similar practices where they had worked. The parents — two of whom asked to speak anonymously to ensure their current providers wouldn’t retaliate against them for sharing negative experiences with the industry — described feeling pressured to accept more hours of ABA per week than their kids or their families’ schedules could handle.

Many kids with autism are receiving multiple therapies like speech and occupational therapy in addition to ABA, plus they’re attending school. That’s a packed schedule for a 5-year-old. It doesn’t leave much time for them to just be kids, to hang out with their families, or to decompress.

“This is like a full-time job for a young child,” said Zoe Gross, director of advocacy for the Autistic Self Advocacy Network, a nonprofit run by people with autism that opposes the use of ABA. “It’s shocking to me that without any science, 40 hours per week has become the standard in some places.”

Jon Bailey, who is on the faculty of Florida State University’s master’s program in ABA, has operated an ABA ethics hotline for the past decade that fields inquiries from people working in the field at both private-equity-owned and independent ABA firms. He’s heard about the practices private-equity-owned companies use to rake in hours. In some cases, he’s heard of management telling behavior analysts, who oversee the technicians, to threaten to fire clients for missing therapy sessions. He doesn’t think that’s fair, as the life of a child with a disability is not always predictable or easily controlled.

“It’s sort of like having a bill collector call you up every day wanting to know when you’re going to pay off your Visa card,” he said.

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Another parent in the Los Angeles area whose son uses Autism Learning Partners said he recently had to cancel sessions when his son got sick, and said he received a “scalding text message like we did it on purpose.” He and his wife also got pushback when they tried to lower his hours from 20 per week.

“We always felt like it should be up to us,” said the parent, who asked his name not be used because his son still receives services from Autism Learning Partners. “I don’t see why they should be the ones to decide how much we do.”

Gross said it’s concerning that kids would spend so much time in a therapy that her organization believes is harmful because it’s designed to make autistic people appear less autistic. Her group is especially worried about private equity’s involvement in ABA because it’s expanding the number of kids getting the treatment and maximizing the number of hours they take on. Many of the group’s members had ABA as children and say it damaged their self-esteem or relationships with food, since food can be used as a reward.

The conversation about hours is complicated by the fact that ABA was founded on the principle of intensive intervention beginning as early as possible. ABA pioneer Ole Ivar Lovaas touted 40 hours per week as the optimal dose based on his 1987 study, and some practitioners still insist on that. Recent literature reviews, however, have cast doubt on the evidence supporting that many hours. A 2018 Cochrane review of ABA found only limited evidence that that much therapy might be effective for some children with autism.

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Larsson, of the Lovaas Institute Midwest, said parents sometimes think his practice is hounding them to accept more hours, but it’s simply what some kids need to have the best shot at one day living independently. Parents aren’t always ready for that, and will ask for half a program or a summer program, but his organization is focused on intensive therapy.

“Kids need around-the-clock treatment if they’re going to recover to the maximal extent,” Larsson said. “They need a lot of help just to get a leg up on their future. With an intensive program you can do that.”

The founders behind another private-equity-owned ABA provider, Kyo Care, headquartered in California, said they actively avoid pushing high-intensity programs. They believe it’s important to let kids spend time with their families.

“We really strive to be that provider that is making the most efficient use of people’s time and payers’ dollars,” said Melissa Willa, Kyo’s chief clinical officer. “We think we’ve figured out ways to do that.”

High rates of turnover, in a space where consistency is key

The singular focus on hours doesn’t just strain kids and families, it puts constant pressure on ABA providers to maximize their hours with clients, becoming, as the behavior analyst in Texas put it, a “billing machine.” Former employees said private-equity-owned companies would set billing quotas, reward top billers with bonuses, and question any holes in their schedules.

The dynamic, they say, contributes to the industry’s already sky-high turnover.

“My experience has been just being run into the ground,” said Nirvana Kowlessar, a board-certified behavior analyst in Portland, Ore. “It’s just such a shame because there are really good people and talented clinicians and everybody works so hard.”

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When Sanjukta Mukherji joined one of the country’s biggest ABA chains in 2019 as a board-certified behavior analyst — a position that oversees the technicians who deliver most ABA therapy — some of the first things she learned about were revenue, billing, and hitting the numbers for her Houston clinic.

As a clinical supervisor, she was responsible for developing clients’ therapy programs and training technicians and parents. Mukherji had to hit a billing quota, with bonuses if she surpassed it. Gaps in her calendar had to be explained and made up. The company would regularly praise locations with the highest billing through emails or social media posts. They were treated like rock stars, she remembers.

The pressure kept her from providing the best care for the young kids she was meant to supervise, which included some of her clinic’s more complicated cases.

“But I don’t have time because now I have the pressure of billing, I have the pressure of completing my quota,” she said, “and then I have 14 more clients to go to who all need pretty significant time and effort from me. I really feel the quality suffers.” Mukherji has since left that chain.

Burnout is a common experience among ABA providers, some of whom said they left large chains for smaller companies or quit the industry altogether. The work can be grueling. Not only are the hours long, but clients can have challenging behaviors. Employees say they’re not treated well by the large chains, often denied lunch breaks, for example. The same allegations came up in a lawsuit in California.

Not only that, technicians are low-paid paraprofessionals with little training, a population that tends to see higher turnover. Becoming a technician requires a high school diploma, being 18 years old, completing 40 hours of training and passing a competency test.

Cycling through providers each month is bad for kids with autism, who need consistency and time to build rapport with new people, many clinicians and parents agreed. When turnover is high, technicians provide less actual therapy because so many weeks are devoted to just getting to know one another. Especially in cases when kids are nonverbal, clinicians have to learn the best ways to communicate.

“You’d get used to somebody, they’d leave Friday and you’d expect to see them Monday and they’d never come back,” said Meghan Barnes, whose son received therapy at a Hopebridge center in the Phoenix area for roughly two years.

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Hopebridge founder Kim Strunk said in a statement the ABA industry has had to contend with challenging staffing shortages. To address the problem, Hopebridge established technician development and therapist fellowship programs.

To make a profit, private equity firms typically cut costs on the staffing side, said Trivedi, of The Arc of Indiana. That means providing less training, cutting down on technician supervision, hiring less experienced people, and not performing rigorous background checks. Parents, because they’re not clinicians, typically aren’t trained to recognize when ABA is going poorly, she said.

“We shouldn’t have to accept substandard care because we’re vulnerable,” Trivedi said. “We shouldn’t have to accept substandard care because access is limited. Because our community is so vulnerable, we should demand quality care, not scraps of substandard care that someone thinks they can provide and make a quick profit and get out.”

In the early days of Covid-19, Kowlessar, the behavior analyst from Portland, was trying to help an overwhelmed mom over Zoom care for her 12-year-old son at home. The boy was getting aggressive — breaking hinges off doors, for example — and the mom cried, asking how to support him and stay safe.

Kowlessar, who worked for a private-equity-owned chain at the time, brought the issue to her clinical director. Her first response was to ask whether they should bill insurance for more parent education hours.

“I’m explaining this woman’s life to you and you’re like, ‘Do we need to ask for more billable hours?’” she said.

Like many others working for large chains, Kowlessar said she ran into the problem that her billing quota didn’t account for drive time, administrative tasks, or filling out session notes or time sheets. That meant she’d often work seven days per week for about 10 hours a day, get home and work on non-billable tasks off the clock. She has since formed her own practice and has more work-life balance.

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Autism Learning Partners paid almost $1 million in 2021 to settle former California employees’ allegations that it used a time rounding system that failed to pay workers for all hours worked, including overtime. The settlement also covers allegations that the company required employees to work “off the clock” while traveling from client locations, failed to provide meal or rest breaks, failed to maintain accurate records of hours worked, and failed to pay out employees’ final wages after they left.

Bauer, the former Autism Learning Partners employee, became aware of that lawsuit when she received a check for around $50, her portion of the settlement, after she quit her job as a technician in May. The check arrived the day after she filed a lengthy report with Autism Learning Partners’ third-party grievance investigator detailing her concerns about her docked pay, lost hours, and other concerns.

“To be working so hard to make the job work and to be treated so poorly, it was very dehumanizing,” Bauer said. “It’s been so much better after I left.”

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Some working in the field said the issues of standardized treatment plans, maximizing hours, staff shortages, and billing irregularities exist in companies of all ownership types, not just those with private equity backing.

Others argue that private equity has benefited the industry. Some credit financial investors with helping expand access by adding more centers and virtual services. Anna Bullard said after her daughter was diagnosed with autism in 2007, she had trouble finding ABA providers that served rural Georgia, where they live. That changed when private equity started investing a few years later.

“I didn’t have to drive one and a half hours one way,” said Bullard, who serves as vice president of government relations for the Behavioral Health Center of Excellence, an accrediting body that develops industry standards. “That’s the case for a lot of families.”

Parents and clinicians say private equity’s profit fixation is short-changing kids with autism (1)
Parents and clinicians say private equity’s profit fixation is short-changing kids with autism (2)

Impossible days, impossible weeks, and a national investigation

The allegations come from nearly every corner of the country, and involve both providers with private equity backing and those without. In Nevada, some 1,000 individual clinicians sent bills to the Medicaid program that suggested they delivered 24 hours of therapy in a single day — or in some cases, more hours than that, according to an audit of four years of paid bills. One clinician billed for 65 hours in a single day.

Florida ABA providers, too, bill for those “impossible days,” or send bills to the state’s Medicaid program that suggest they provided more than 40 hours of therapy in a week, Medicaid’s limit — impossible weeks. Sometimes providers send bills for so many consecutive days of service that it would mean they never took a break for weekends, holidays, or sick days. One estimate suggested the fraud could have cost state taxpayers hundreds of millions of dollars in Broward and Miami-Dade counties alone.

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Tricare, the agency that handles veterans’ health care, has found ABA companies frequently billed for services as though they were delivered by a supervisor when they were actually delivered by a lower-level provider. In one example, the agency paid $125 per hour when it should have paid $50 per hour. Tricare has also uncovered payments for services while kids were napping, payments to unauthorized providers, and payments for which there wasn’t reliable documentation.

In South Carolina, an ABA provider illegally billed the state’s Medicaid program and Tricare for services it never provided, or for time traveling to and from meeting clients, sitting in restaurants, or waiting in driveways. Employees who met their billing goals would get rewards like gift cards or even free vacations, according to a successful whistleblower lawsuit.

Now, it’s gotten so bad the federal government is stepping in. The Health and Human Services Department’s Office of Inspector General is working on a sweeping audit of Medicaid claims for ABA. The final report is due this year.

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Everyone pays for fraud, whether they use ABA services or not. Taxpayers cover the bills for Medicaid, Tricare, and other government programs, and people with private insurance help cover other members’ costs through their monthly premiums.

“If they have a policy that says they always bill for nap time, that’s probably $300,000 to $400,000 a year on nap time,” said FSU’s Bailey, who operates the ABA ethics hotline. “If you look at the scale of this, it can be huge.”

Florida has been taking some steps to root out problematic providers — of which there are many. In fiscal year 2019 alone, Florida’s health department kicked 645 ABA providers off Medicaid for suspected fraud and abuse – three-quarters of all provider terminations that year.

STAT+:

It’s unclear whether private equity ownership correlates with more billing fraud, because few of the audits distinguish between ABA firms’ ownership types.

But several people interviewed for this article were critical of the billing practices they observed at private-equity-owned companies. One example is the use of treatment plans that call for more services than is necessary for that client, like the behavior analyst in Texas described.

Lawsuits against individual companies also draw a link between private-equity-owned companies and problematic billing practices. The company in South Carolina that gave employees rewards for meeting billing goals, the South Carolina Early Autism Project, was purchased by private-equity-owned ChanceLight in 2012. After the acquisition, ChanceLight directed the firm’s executives to teach its other franchises in the Southeast about the company’s business practices. By 2015, the provider was billing more for ABA therapy than any other firm in the country. (ChanceLight paid a $9 million settlement after the practice’s executives were convicted of Medicaid fraud; it has since sold its ABA assets.)

Last year, the former owner of a Texas ABA provider called The Shape of Behavior paid the government $2.7 million to settle claims that its bills to Tricare had excessive hours on single days, misrepresented providers’ identities, and couldn’t be substantiated in medical records. BlueSprig had purchased the company in 2018.

ABA proponents tend to argue it’s not so much a fraud problem as insurers and government agencies having overly complex documentation requirements. In most cases, they say it’s not that providers are trying to commit fraud, it’s that they’re struggling to comply with all the different rules.

“It’s not that you have a rash of providers who say, ‘We’re trying to steal money from these funding sources,’ it’s more that providers struggle to keep up with the documentation requirements imposed and they’re messing up,” said Erick Dubuque, vice president of quality for the Council of Autism Service Providers, a nonprofit association that supports the autism provider community.

‘I’m thankful we never got far with it’

It was around age 1 that Zambrano and her husband first wondered whether something was different about their son. All toddler boys are rambunctious, but E’s energy level was off the charts. When they suspected a language delay, they chalked it up to recurrent ear infections. What kid can learn if he can’t hear?

When E finally did start speaking, it was to recite texts he’d memorized — one of his picture books or 20 minutes of a movie, for example. He’d even mimic the tone and accent, like the South African filmmaker in his favorite documentary, “My Octopus Teacher.

Held off by the pandemic, the diagnosis didn’t come until E was 4. The Zambranos were overwhelmed. Even with four master’s degrees between the two of them, they found it difficult to navigate the different therapies E needed and to discern which ABA companies were reputable. They hired a consultant to help.

As is the case for so many families, ABA was far and away the cheapest option for the Zambranos. Their insurance covered everything except a 12% copay, which came out to around $120 per week for five sessions. These days, they’re paying close to $400 per week for occupational and speech therapy, after insurance, which covers a much smaller share.

“Everyone’s knee-jerk reaction is ‘ABA, ABA, ABA,’” Zambrano’s husband said. “There’s so many people lined up for this because no one can afford to pay out of pocket.”

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Today, Zambrano believes ABA wasn’t just useless, it was harmful — a practice designed to mask the traits that make her son unique and mold him to fit neurotypical norms.

“I’m thankful we never got far with it,” she said.

Months after she pulled E out of the therapy, Zambrano is still going back and forth with Autism Learning Partners about what she believes are overcharges. Though E’s original intake assessment took place on Dec. 20, her bill shows two identical charges: one on Dec. 20 and the other on Dec. 21. Same billing code, same charge: $336. When Zambrano asked about that, she said Autism Learning Partners explained one charge was for performing the assessment, the other was for writing the report.

“It’s kind of like they were just inventing additional ways to charge for services that were either spurious or unnecessary,” she said.

The family would also be charged twice for sessions whenever the higher-ranking behavior analyst monitored the technician’s work through video: One charge for the technician, another for the behavior analyst’s “treatment guidance.”

“What was alarming to me is they essentially compensate for the fact that they send someone who is poorly trained to your home by then charging you for the supervision,” Zambrano said.

Private insurers have their own policies, but it’s worth noting that some government programs deny claims where two individuals bill separately for one ABA session.

Today, Zambrano said E is responding well to his other therapies. He’ll soon start kindergarten at a school advised by autistic self advocates. It’s not cheap, but it’s a place where E’s parents hope he’ll feel affirmed and that’ll help him grow up to feel pride in who he is.

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Meanwhile, E, happily oblivious to all this, wraps himself around his dad’s leg for a labored lap around the kitchen table. He squeals with laughter, like nothing has ever been more fun.

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