Selling, buying, or expanding an ABA practice in Indiana: the license, the records, and the deal

Change of ownership: equity versus asset in Indiana

Indiana's equity-versus-asset decision turns on IHCP enrollment, and the merger notice statute applies to either structure if the parties are health care entities.

• Equity sale. The buyer acquires the entity, which keeps its IHCP enrollment subject to ownership disclosure and revalidation, its managed care entity contracts, and its employment of the licensed clinicians. The statute defines a merger to include any change of ownership, including a purchase of stock, so an equity sale between health care entities at $10 million in total assets is noticed.
• Asset sale. The buyer takes assets but not the entity, so the buyer must hold its own IHCP enrollment as an applied behavior analysis therapist provider and credential with each managed care entity before billing, and takes possession of the Medicaid records under 405 IAC 1-20-5 with a three-year duty. An acquisition or transfer of assets is a merger under the statute and is noticed on the same test.
• The practical consequence. Indiana favors equity structures for enrollment continuity; neither structure avoids the notice, and the ninety days plus the Attorney General's forty-five-day analysis window is the minimum timeline for a deal within the definition.

The first question in an Indiana deal is whether both parties are health care entities, because that decides whether the closing date is the parties' to set.

No license strands; the Attorney General notice depends on a definition

Indiana licenses behavior analysts under IC 25-8.5, as the Indiana licensing page explains, and the license follows the clinician; there is no facility license for outpatient ABA, as the Indiana facility page covers. What can gate a transaction is the merger notice chapter enacted in 2024.

Three things decide whether an ABA sale is inside the chapter. First, whether the practice provides rehabilitative care: the statute does not define the term, no published Attorney General guidance addressing ABA was found, and counsel on both sides will have a view. Second, the 2025 carve-out: subsection (b), added by HB 1666 effective July 1, 2025, excludes from the definition a health care provider that is majority-owned, or will be majority-owned after the transaction, by licensed Indiana practitioners who routinely provide care in the practice, which reaches a practice majority-owned by IC 25-8.5 behavior analysts or psychologists and takes a practitioner-to-practitioner sale out of the notice. Third, the buyer: a private equity partnership acquiring a health care entity is itself a health care entity under subdivision (6), so an investor acquisition of an ABA practice that is within subdivision (1) is noticed even if the practice was practitioner-owned before. The notice must include each entity's name, representative, a description of the transaction, and copies of any materials submitted to federal or state agencies, certified before a notary; the Attorney General reviews within forty-five days and may issue a written antitrust analysis or an investigative demand. The threshold's application to combined assets versus a single party is unsettled in commentary (IC 25-1-8.5-2(a), (b); IC 25-1-8.5-4(a), (b), (c); HEA 1004 (2024) as amended by HB 1666 (2025)).

Expanding into Indiana: IHCP enrollment and the notice test

For an out-of-state operator, Indiana entry is an enrollment exercise with a notice test at the end:

• Foreign registration or a parallel entity. The operator registers the home-state entity or forms an Indiana entity; the professional corporation is elective and a psychologist and a licensed behavior analyst may co-own.
• Credential and enroll. Analysts hold IC 25-8.5 licenses; the entity enrolls with the IHCP under the applied behavior analysis therapist specialty on an HSPP license or BCBA certification and credentials with the managed care entities.
• The notice test. Entering by acquiring an Indiana practice is noticed if both parties are health care entities and $10 million in total assets is met; an operator that is a private equity partnership is a health care entity by definition, and an operator that is practitioner-majority-owned may fall within the carve-out on the buy side.

The practical rule for entry is that Indiana is an enrollment state whose notice statute watches the buyer as closely as the seller.

Ownership restructuring on entry

Indiana's professional corporation form is elective, and its health care professional definition lets a psychologist and a licensed behavior analyst co-own, as the Indiana ownership page and the Indiana entity page explain. The transaction point is that since July 1, 2025 ownership is also the exemption from the merger notice: a practice that stays majority-owned by actively practicing IC 25-8.5 or psychology licensees after closing is outside the health care entity definition, while a practice that becomes investor-majority-owned is inside it and its investor is a health care entity in its own right. A buyer that wants both control and the carve-out cannot have both; a buyer content with a minority position and a fixed-fee management arrangement can keep the practice outside the notice.

IHCP re-enrollment and the transferee records duty

IHCP enrollment is personal to the enrolled provider; an equity change is disclosed and revalidated, and an asset buyer enrolls in its own right under the applied behavior analysis therapist specialty before billing, with the application mechanics to be confirmed. Every Medicaid provider keeps records that independently document the service for seven years from the date of service, and the change-of-ownership rule adds a transferee duty (405 IAC 1-1.4-2(b); 405 IAC 1-20-5; 405 IAC 5-22-12).

• The practice with in-house diagnostics. A health service provider in psychology holds the IHCP specialty in that capacity and performs the diagnostic evaluation; the psychologist's enrollment and license follow the individual, so the diagnostic path is a retention item, and the psychologist's file carries the IC 16-39-7-1 seven-year statutory duty.
• The ABA-only practice. Its BCBAs hold the specialty in their own right, diagnoses come from outside, and the buyer inherits referral relationships.

The Indiana Medicaid page covers the coverage rules, prior authorization, and the documentation the module requires.

Records custody on a transfer

Client records must remain with a custodian bound by IC 16-39, and Indiana is unusual in putting a records duty on the buyer by rule.

The transferee's three years is a floor added on the buyer, not a release of the seller: the transferor's seven-year duty under 405 IAC 1-1.4-2 continues, a psychologist's seven-year duty under IC 16-39-7-1 continues, and the equal-parental-access rule in IC 16-39-1-7 and the mental health records rules in IC 16-39-2 travel with the file. In an equity sale the records stay with the entity; in an asset sale, custody must be specifically addressed so a responsible custodian holds the full seven years and the transferee's three-year floor is honored, and the forty-five-day breach clock under IC 24-4.9-3-3 is allocated. The Indiana facility page covers the retention schedule and the breach rules (405 IAC 1-1.4-2(b); 405 IAC 1-20-5; IC 16-39-7-1; IC 16-39-1-7; IC 24-4.9-3-3).

Non-compete enforceability in Indiana

Indiana has no general non-compete statute; behavior analyst covenants are tested under common law, and the state's physician-specific statute does not reach them.

• The common law standard. Indiana courts enforce a covenant that is reasonable in duration, geography, and scope of restricted activity and that protects a legitimate interest such as goodwill or confidential information; overbroad covenants are not judicially rewritten, but a court may blue-pencil by striking divisible unreasonable terms, so covenants are drafted in severable parts.
• The physician statute. IC 25-22.5-5.5 restricts physician non-competes and, since July 1, 2025, bars them for physicians and hospital-related entities in specified circumstances; it does not reach behavior analysts or psychologists.
• The sale-of-business context. A selling owner's covenant tied to goodwill is the most reliably enforced category.

The practical rule is to draft to common law reasonableness in severable parts, to place selling owners' covenants in the sale-of-business context, and to have counsel confirm any legislative change since this page was written.

Diligence flags specific to Indiana

The state-neutral diligence workstreams are covered in the ABA due diligence playbook. The items that change specifically in Indiana are:

• Notice test. Determine whether both parties are health care entities: whether ABA is rehabilitative care, whether the practice is practitioner-majority-owned before and after closing, whether the buyer is a private equity partnership, and whether $10 million in total assets is met; calendar ninety days plus the forty-five-day analysis window if so.
• IHCP enrollment. Confirm a clean enrollment under the applied behavior analysis therapist specialty and each managed care entity credentialing; plan the buyer's own enrollment for an asset deal.
• Psychologist dependency. If the practice diagnoses in-house, confirm the HSPP's license, enrollment, ownership position, and intent to stay.
• Records. Confirm the seven-year duty is honored and write the 405 IAC 1-20-5 transferee floor into the agreement.
• Covenants. Confirm covenants are severable and reasonable; place seller covenants in the sale-of-business context.

Reading the Indiana transaction friction

Putting the pieces together, Indiana is a moderate-friction state whose friction is a definitional question with a ninety-day consequence. No license strands, the professional corporation is elective, and a practitioner-to-practitioner sale is outside the merger notice since July 2025. But a practice that provides rehabilitative care, if ABA is that, and that is bought by an investor or a non-practitioner-majority entity at $10 million in total assets owes the Attorney General ninety days and a notarized filing, IHCP enrollment is personal, and the transferee inherits a three-year records duty by rule. The archetype decision shows up in the psychologist's statutory records duty and in who counts as a practitioner owner for the carve-out. None of this is legal, tax, or financial advice; it is the structure you would plan around with counsel and advisors.

How this connects to the rest of your compliance stack

This transaction page pulls together threads from across the guide:

• Facility and Medicaid. The IC 16-39 records statute that names psychologists and not behavior analysts, the forty-five-day breach clock, and the seven-year Medicaid rule are on the facility page; the IHCP specialty and prior authorization rules are on the Medicaid page. See the Indiana facility-licensure page and the Indiana Medicaid page.
• Licensing and credentialing. The IC 25-8.5 license that makes a behavior analyst a licensed Indiana practitioner for the 2025 carve-out is on the licensing page. See the Indiana licensing page.
• Ownership and entity. The elective professional corporation and psychologist plus LBA co-ownership are on the ownership and entity pages. See the Indiana ownership page and the Indiana entity page.
• The state-neutral deal mechanics. Diligence, deal structures, private equity, expansion, and wind-down are covered on the spoke's concept pages, linked below.

Sequencing an Indiana deal or expansion

1. Run the notice test. Decide with counsel whether ABA is rehabilitative care under IC 25-1-8.5-2, whether the practice is practitioner-majority-owned before and after closing, whether the buyer is a private equity partnership, and whether $10 million in total assets is met.
2. Calendar the Attorney General. If within the chapter, prepare the notarized notice with each entity's information and all federal and state filings, and file at least ninety days before closing; allow for the forty-five-day analysis window.
3. Choose the structure. Prefer equity to preserve IHCP enrollment; for an asset deal, complete the buyer's enrollment under the applied behavior analysis therapist specialty and managed care entity credentialing before closing.
4. Preserve the diagnostic path. Retain or replace the HSPP whose enrollment and license carry the in-house evaluation.
5. Settle records custody. Carry the seven-year duty and the 405 IAC 1-20-5 transferee floor into the agreement, with the IC 16-39 access rules and the forty-five-day breach clock.
6. Draft covenants to common law. Severable parts, reasonable scope, sale-of-business context for sellers; the physician statute does not apply.

Indiana transaction variables at a glance

Frequently asked questions