Autism Spectrum Disorder (ASD) is the fastest-growing developmental disorder in the United States, impacting as many as one in 68 children.¹ To address this increasingly common challenge, every state has mandated commercial insurance for autism therapy, such as applied behavioral analysis (ABA), covering over 200 million people. Alongside commercial payers, Medicaid coverage has grown to include all 50 states, becoming another pivotal funding source.

Here, we discuss the M&A momentum being fostered by the combination of this increasing societal need and more favorable reimbursement dynamics.

A Growing Need for Care

With the surge in autism diagnoses comes a stark supply-and-demand imbalance: Children often wait months or even years for access to therapy, given limited capacity among existing autism services providers. Filling the therapy gap is a key priority, creating an opportunity for innovative autism services providers and their investors to grow in-demand businesses that make a difference in people’s lives.

At the same time, tracking outcomes is increasingly important as payers continue to focus on building out value-based care models, providing a differentiation opportunity for more sophisticated providers. "We’re at a point in autism therapy where a handful of larger, multi-site platforms are developing their infrastructure, boosting operational acumen, and delivering and tracking better patient outcomes,” notes James Clark, a managing director.

Caravel Autism Health is an exemplar of such innovative businesses. With more than 50 locations across eight U.S. states, Caravel is one of the nation’s largest and most sophisticated autism therapy providers. “We believe our focus on clinical and operational excellence and our responsible growth strategy have been key to our success,” says Caravel CEO Mike Miller. “That approach has helped us grow while optimizing density in key markets, boosting operational efficiencies, and achieving benefits of scale.”

Taylor Will, a director, adds that Caravel emphasizes clinical standards, outcomes data gathered by proprietary technology, and operational excellence. In addition, its thoughtfully designed center-based clinical model is focused on market density. “Caravel takes a methodical, data-driven, and highly replicable approach to site selection, clinician recruitment, and de novo launches to build density within and beyond its current footprint,” says Will.

This highly scalable model enables quality control, standardization, and engagement with clinical staff, clients, and families. And as Caravel has grown, it has invested in infrastructure and protocols to help disseminate best practices and high performance across centers.

One example is Caravel’s proprietary PathTap technology. This innovative system helps clinicians track therapy and outcomes more easily and efficiently, so they can spend more time engaging with patients. In addition, PathTap aids clinician retention by providing a better digital experience than competitors typically offer. PathTap is also essential to gathering the outcomes data so critical to demonstrating strong value to payers and securing optimal reimbursement.

“Payers favor providers like Caravel that are willing and able to partner with them, amassing and sharing data,” says Will. “As the coverage and reimbursement outlook continues to embrace value-based care models, being able to demonstrate outcomes is an important advantage.”

An Opportunity to Help

The growing need for autism therapy shows no signs of abating. That challenge gives scaled and sophisticated multi-site providers like Caravel the opportunity to help more people get the care they need, assure payers of strong value for money, and offer investors the chance to support resilient growth businesses.

“This is a space where thoughtful investments, operational expertise, and a focus on smart growth can unlock substantial value while generating better health outcomes,” concludes Clark. “It’s a dynamic we’re seeing across behavioral health, and we’re excited to see growing M&A momentum in this important sector.”

To learn more about emerging opportunities in behavioral health and autism therapy, please contact our senior professionals.

1. National Institutes of Health