Waste of the Day: Autism Medicaid Misspending
Topline: The Department of Health and Human Services’ inspector general identified $200 million in improper payments that Medicaid made for autism services between 2019 and 2024 in Maine, Indiana, Colorado and Wisconsin. Until now, the four states had never audited the payments.
Key facts: Improper payments are not necessarily criminal fraud, but they do mean the government sent money to the wrong person or for the wrong reason.
Medicaid as a whole made $37.4 billion worth of improper payments in 2025. But the ongoing audit of autism services, which began in 2022, found that mistakes are especially high in the Applied Behavior Analysis (ABA) program, which is supposed to cover therapy and caregiver training for autistic children.
Many of the children being treated were officially diagnosed with autism, including 47% of patients reviewed in Maine. Some of them were being treated by staff who had no credentials, the audits found.
In some states, supposed “therapy” sessions consisted of playing video games or napping.
“If the documentation just says they’re sitting there watching ‘Frozen,’ did Medicaid just pay for someone at these rates to watch a movie?” asked Patrick Cogley, an HHS auditor, in an interview with the Wall Street Journal.
Several therapists were paid for overlapping sessions. They claimed to be working with a child from 9 a.m. to 11 a.m., for example, but also claimed to be with a different child from 10 a.m. to noon.
In Indiana, HHS estimated that 37% of all ABA claims were improper. One child was diagnosed with autism in 2014 at age 2 and received $677,448 in treatment over the next nine years. They were never reevaluated to see if treatment was still necessary.
In Colorado, the company Action Behavior Centers billed an average of 33 hours of weekly therapy per child in 2023.
Medicaid spending on autism services has skyrocketed nationwide. The HHS Open Data Platform shows that ABA claims cost $24.2 million in January 2019 but increased almost eightfold to $191.6 million by May 2024.
Medicaid pays autism therapists $61 per hour and does not require a college degree. Providers only need a high school diploma and a certification. Therapists with advanced degrees only see their rate rise modestly to $75 per hour.
The Wall Street Journal previously found some ABA providers in Indiana billing the government up to $800 an hour for basic therapy. Indiana approved the bills without checking if they were logical.
There are three other states currently being audited, but the federal government has not revealed which.
Search all federal, state and local salaries and vendor spending with the world’s largest government spending database at OpenTheBooks.com.
Summary: Fiscal errors can sometimes be difficult to detect, but many of the state-level improper payments for autism care could have been prevented with even the most basic due diligence.
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