For millions of kids with autism, a life-changing therapy can help them navigate the world around them with greater confidence and understanding. Sadly, the current Medicaid system of paying for this therapy has led to a shortage of providers for children in need, plus millions of dollars of waste paid for by taxpayers.
Applied Behavioral Analysis (ABA) involves a provider walking a child through examples of social situations that he or she might find challenging. The provider breaks the task into small, digestible steps and coaches the child to replace inappropriate behaviors with more constructive ones. The child receives positive reinforcement for each instance of good behavior, which could be as simple and as sweet as a high-five.
Learning appropriate behavior is the gateway for many children with autism to succeed at school and in life. The principle of breaking down a task can be applied to anything from brushing your teeth to making new friends to solving an algebraic equation. While no one therapy is perfect for every kid, the U.S. Surgeon General and the American Psychological Association both consider ABA to be “evidence-based.” Millions of families consider it a lifeline. Some therapy centers consider it a cash cow.
ABA is the fastest-growing service in Medicaid. Direct payments from state Medicaid programs to autism therapy providers grew from $660 million to $2.2 billion in just four years. That doesn’t count the fees paid by Medicaid Managed Care companies, which likely amount to hundreds of millions more.
Why is this one type of therapy so lucrative for providers? Many state models allow the same company to diagnose a child with autism, recommend the number of treatment hours for that child, provide the therapy, and then send the bill to Medicaid. These clinics can essentially write themselves blank checks paid for by taxpayers, regardless of how much treatment a child truly needs. Adding to the problem is the fact that ABA is usually reimbursed by the hour, creating an incentive for providers to maximize their billable time.
This system creates a huge moral hazard. Sadly, kids with autism end up paying the price. Past employees of ABA therapy centers describe being told to provide services kids did not need, over-prescribing therapy, even limiting children’s naps to seven minutes to maximize the amount of billable time, in a disturbing New York Times report.
Investigations suggest that Medicaid ABA fraud is rampant. Earlier this year, the Department of Health and Human Services (HHS) exposed $77.8 million in improper ABA payments in the state of Colorado alone. Last year, HHS found $18.5 million in improper ABA payments had been made to providers in Wisconsin. Similar multi-million-dollar fraud has been found in Indiana and Maine, bringing the total amount of ABA fraud in those four states to over $500 million.
Data from other states suggests more fraud is yet to be uncovered. In Nebraska, Medicaid payments for ABA topped $85 million in 2024, up from just $4.6 million four years prior. This exponential growth far outpaces the growth in autism diagnoses. In Indiana, the Wall Street Journal found an autism therapy company billing nearly $340,000 per child.
We would be naïve to think Georgia is immune to the waste of resources uncovered in other states. Thankfully, HHS has begun a 50-state probe into potential improper ABA payments. But states need not wait for the results of that probe to take action that will protect taxpayers and ensure kids get the services they need.
State Medicaid plans can, and should, kick fraudsters out of their networks. Identifying this fraud will require more oversight, which is sorely needed.
The increasing prevalence of autism makes the need for integrity in billing even more urgent. Every dollar lost to waste, fraud, and abuse is a dollar that cannot go towards helping a child in need.
Angela Morabito is the director of media outreach at the Defense of Freedom Institute and a senior fellow at Independent Women.
