The Boom in Autism Therapy Is Medicaid’s Fastest-Growing Jackpot

The bet paid off. In 2023, the state paid Mitchell’s company, Piece by Piece Autism Centers, $29 million to provide therapy to just 84 patients—about $340,000 a child—according to a Wall Street Journal analysis of Medicaid billing records.

That amount surpassed what Indiana Medicaid typically spends in a year treating a newly diagnosed lung-cancer patient or covering a year of nursing-home care.

Piece by Piece became one of Medicaid’s most expensive providers in part by raising its prices, triggering reimbursements as high as $640 an hour for routine therapy that can be administered by workers with little more than a high-school diploma. Its highest payments were more than 10 times higher than the nation’s average.

Mitchell said her company complied with Indiana’s rules and the state never objected to her prices.

“I don’t think Indiana really had any oversight, or not much,” said Mitchell, who bought a series of properties, including a $2.5 million home on Florida’s Sanibel Island and a $600,000 waterfront house on the Tippecanoe River in Indiana, while her company’s Medicaid billings soared.

The state has since changed some of its reimbursement practices.

The business of providing therapy to children with autism has surged in recent years across the U.S., fueled by taxpayer-funded Medicaid payments. Some companies have found lucrative opportunities to capitalize on the growing need for such care, sometimes outpacing regulators’ oversight, the Journal’s analysis found.

The number of companies offering such therapy—individualized treatments meant to help patients manage behavior and develop daily living and social skills—almost doubled between 2019 and 2023. Direct payments from state Medicaid programs to autism therapy providers grew to $2.2 billion in 2023, from $660 million just four years earlier, according to the data. Private insurers administering Medicaid benefits paid hundreds of millions more.

That made applied behavior analysis, or ABA, as the therapy is called, the fastest-growing service in Medicaid, the state-run program for low-income and disabled people. Federal taxpayers financed about 70% of Medicaid spending during that period. Entrepreneurs and investors, including some private-equity firms, have piled into the business.

The Trump administration has recently zeroed in on alleged Medicaid fraud in Minnesota, where a broader investigation into social-services organizations swept up a pair of autism therapy providers operated by members of Minneapolis’s Somali community. Prosecutors alleged the owners of the two centers paid illegal kickbacks to parents and billed for services never delivered, collecting $20 million in Medicaid payments.

President Trump cited the alleged fraud in ordering his immigration crackdown in the state, which is led by Democratic Gov. Tim Walz, who was the vice presidential candidate on the Democratic ticket in 2024.

The Department of Health and Human Services’ inspector general has begun a state-by-state investigation into Medicaid autism-therapy billing errors, such as payments made despite missing documentation. The office has so far found widespread flaws in Maine, Wisconsin, Indiana and Colorado.

Its auditors analyzing a sample of ABA claims in each of those states found errors in every case, including billing for therapy while patients napped or watched videos, practices largely prohibited by Medicaid guidelines. The audits didn’t examine providers’ overall costs or billing patterns.

If the documentation “just says they’re sitting there watching ‘Frozen,’” said Patrick Cogley, an official in the inspector general’s office who oversaw the audits, “did Medicaid just pay for someone at these rates to watch a movie?”

“It’s an immature industry,” said Cogley.

While individual treatment varies, the therapy can include teaching young children to follow directions, practicing chores like folding laundry or learning communication skills, and is mostly administered by registered behavior technicians, the lower-wage workers. More highly trained behavior analysts, typically with master’s degrees, oversee the therapy.

The Journal’s analysis examined providers’ payments per patient as well as the overall number of hours billed per patient. Many providers nationwide billed a high number of hours of therapy for nearly every patient, the Journal found. Experts say that therapy plans should be tailored to individual children’s needs, and thus the number of hours should vary.

Mendy Minjarez, a University of Washington psychologist who oversees an autism treatment program for Medicaid patients at Seattle Children’s Hospital, said she never recommends 40-hour weeks, the most many states will cover. “It’s a very, very rare situation” where a child needs full-time therapy in a clinic, she said.

On average, autism-therapy patients received about 14 hours of therapy per week in 2023, according to the Medicaid billing data.

In Indiana, Minnesota, Colorado and Florida alone, 61 different autism-therapy companies out of about 1,100 in the Journal analysis billed an average of 30 or more hours of weekly therapy per child in 2023.

Private-equity backed Action Behavior Centers, one of the largest U.S. providers, billed Colorado’s Medicaid program for some of the most hours per patient of any autism provider, according to the Medicaid data.

Its children received an average of 33 hours of therapy a week in 2023, with more than three-quarters getting full-time therapy in at least one week. Action received $18 million in Medicaid payments from the state that year.

Colorado officials confirmed in an interview that Action was among the top 10 billers in terms of hours of therapy per patient in the state.

Evidence-based, broadly accepted “guidelines do not exist for autism care,” said Kim Bimestefer, the executive director of Colorado’s Department of Health Care Policy and Financing, which oversees Medicaid. “That reality creates an enormous area of exploitation.” She said state and federal officials are working to build clearer standards.

Action said its practices are based on research and guidance from groups including the Council of Autism Service Providers. The company specializes in treating young children needing comprehensive therapy, said Charna Mintz, Action’s chief clinical officer.

“There is a range of recommended hours between 30 and 40 hours a week,” she said. When young children don’t qualify for that level of therapy, the family is generally referred elsewhere, she said.

Action, with locations in nine states, was acquired by Charlesbank Capital Partners in 2022. Last year, the firm explored a deal for the company, projecting revenue would quadruple to nearly $6 billion over the next five years with profit margins hovering around 25%, a document reviewed by the Journal shows. The company focused on patients with private insurance and Medicaid was a limited slice of its business, the document said.

Former Action employees in several states say that behavior analysts felt pressure to consistently recommend treatment plans with high numbers of therapy hours.

“I would never ask that,” said Mintz, adding that Action has no policies calling for children to receive a set number of hours of therapy.

Kristin Tilley, who worked at an Action center in Spring, Texas, as a behavior technician in 2024, said the hours were too much for some kids, who were unable to focus and wanted to go home by midafternoon.

“It was pretty much being institutionalized, but you get to go home at night,” she said. “It’s all day, every day, for nearly every kid.”

Behavior analysts at Action were paid bonuses for working more hours of “treatment delivery” services, starting at 30 hours per week, according to a document reviewed by the Journal. The incentives could be worth as much as $15,000 a year, according to the document. Former employees said such services were typically the ones that were billable.

Action said it doesn’t accept Medicaid in Texas. Mintz said therapy schedules are adjusted to suit children’s needs. She said the hours that count toward bonuses can include care that isn’t billable, such as services a particular insurer doesn’t cover.

Applied behavior analysis “is a massive problem,” Oz said in an interview last week, adding that his agency would police potential fraud in both Democrat- and Republican-led states. In the Minnesota cases, he said, “part of the problem for us is, why wasn’t this picked up ahead of time and what do we do to make sure this doesn’t continue in the future?”

Authorities have charged the owners of two Minnesota autism-therapy centers—Smart Therapy and Star Autism Center—with wire fraud.

Both centers were among the nation’s highest Medicaid billers per patient in 2023, the Journal found. Smart Therapy received an average of $99,000 for each of 25 patients the state paid it to treat in 2023, while Star received $87,000 for each of its 17 patients.

Lawyers for the owners, who pleaded guilty, declined to comment or didn’t respond to requests for comment.

Another Minnesota provider, Health Innovations of America, peaked at nearly $112,000 per patient in 2021, the data show. The payments were driven in part by HIA billing an average 10.5 hours of therapy a day for each patient.

The company also billed heavily at times for developing mental-health treatment plans—a service for which Minnesota pays about $95 an hour—with five or more different workers billing that service for a single patient on the same day in hundreds of instances, according to the data.

The company billed more than $17,000 per patient in 2023 for such planning services, the Journal analysis found.

HIA’s founder, Mohamed Al Riyo, didn’t respond to requests for comment.

A spokesman for Minnesota’s Medicaid agency said rapid increases in treatment availability and loosened Covid-era guidelines could explain the high billing, adding, “high utilization alone does not indicate fraud.”

The Journal’s analysis relied on individual Medicaid claims submitted to state programs that reporters accessed under a federal research agreement. The analysis excluded claims paid by private insurers. A separate public data set on Medicaid billings recently released by CMS contained less detailed data and didn’t account for errors such as duplicative records that the Journal removed.

Medicaid spending on autism surged—from $21 million in 2017 to $611 million in 2023, according to a state report.

“Over time you saw an explosion of the children who were diagnosed and in billing practices that in my opinion were the epitome of abuse,” said Mitch Roob, the current secretary of the state’s Family and Social Services Administration and interim Medicaid director.

No one monitored providers’ billing practices during those years, said Roob, who was appointed last year. “If you’re a kid and no one was looking at the cookie jar and the lid was off, would you take another one?”

It’s rare that federal investigators have pursued allegations of fraud over inflated charges. In 2006, Tenet Healthcare agreed to pay $788 million to resolve allegations it artificially inflated its list prices to receive higher Medicare payments for certain hospital patients.

The billing records show one autism-therapy provider, Succeed ABA, which provides home-based services in several states, received as much as $800 an hour for routine therapy services in early 2023. Its Brooklyn, N.Y.,-based owner, Abraham Fried, didn’t respond to requests for comment.

Another top hourly biller in 2023, Stepping Stones Behavioral Solutions, got $250 an hour by the end of 2023 for routine therapy, for a total of $9.9 million in payments from the state. Stepping Stones’ chief executive, Veronica Napier, disputed the Journal’s analysis and said she was prohibited from discussing her rates under a contract with the state.

“I’ve never been like, am I going to feel bad about making what I make?” she said.

Allison Taylor, Indiana’s Medicaid director until August 2023, declined to comment. The state scrapped the old billing system in 2024, replacing it with a flat rate of $68 an hour for services paid for by the state. Officials are planning an additional 6% cut this year and also plan to cap lifetime hours of service at 4,000 per child.

She said in the interview that she aimed to bring autism services to Indiana’s more rural communities and began expanding within months. The company now has seven locations.

“I have basically built my entire business model off of Medicaid,” in part because private insurance doesn’t always cover the services, she told a local magazine in August 2019.

At first, Piece by Piece charged a typical rate for Indiana autism-therapy providers, about $200 an hour for therapy services by behavior technicians. Under Indiana’s 40% rule, the state paid the company $80 an hour.

In 2021, the billing records show, Piece by Piece doubled its fees, then increased them again the next year. Around that time, former employees said, many received big raises, boosting some lower-wage behavior technicians up to $25 or $30 an hour, compared with the $20 or so that is typical in the industry. Mitchell said the raises helped the company remain competitive during a workforce shortage.

The company threw Christmas parties with an open bar at local country clubs and a downtown Indianapolis karaoke bar. The owners hosted tailgate parties for staff at Purdue University football games and rewarded workers with free tickets.

In 2022, Mitchell bought the Sanibel Island and Tippecanoe homes, along with other properties, according to county records. Soon after she paid off a mortgage on the Sanibel Island home.

In October 2023, months before the state’s 40% system was scrapped, Piece by Piece boosted its therapy prices again, raising them to $1,600 an hour, resulting in payments of $640 per hour. Indiana paid far less for the labor of more highly skilled workers, for instance, about $75 for hourlong sessions with psychologists at that time.

“Every year, we just increased our pay schedule due to increased costs,” Mitchell said, citing rising labor, equipment and real-estate expenses.

Asked what specific costs supported such high payments for services with labor costs as low as $20 an hour, Mitchell said, “I really don’t have an exact reason for that.” She said one of her business partners, Seth Parker, oversaw the process of setting rates.

Parker, her high-school friend and an investment adviser at a local wealth manager, didn’t respond to requests for comment.

Mitchell added in an email that Piece by Piece had undergone routine audits of its billing and clinical practices by government health programs, insurers and a third-party auditor it retained. “Across all of these reviews, there have been no material findings and no evidence of fraud, abuse, or intentional wrongdoing,” she said.

From 2019 to 2023, Indiana Medicaid paid Piece by Piece about $58 million, not including payments from managed-care companies that cover many Medicaid patients.

Mitchell said the state’s standardized payment of $68 an hour has significantly impacted her company’s profits.

“We have not cut salaries of people, but we have had to limit raises and bonuses and additional things we always loved to do, like holiday parties,” she said.

In 2024, workers said, the company hosted a Christmas party that featured a cash bar at a local bowling alley.