States Crack Down on Medicaid Fraud in Autism Services Amid Federal Funding Expansion

Tightening the Rules on Autism Therapy

North Carolina has implemented strict new regulations on Medicaid-funded autism services, including limits on telehealth and bans on out-of-state providers, following a 300% surge in spending on applied behavior analysis (ABA) therapy to $505 million in 2025. As NC Newsline reports, state audits found 12% of claims showed irregularities, prompting lawmakers to act against fraudulent billing practices.

Meanwhile, Minnesota is investigating 15 autism providers for potential $3.7 million in fraudulent claims, with a recent audit finding the Department of Human Services failed to verify 40% of provider credentials. 'We're seeing therapists billing for services never rendered,' said State Auditor Julie Blaha in testimony.

Federal Funding and Oversight Expand

These state actions come as federal support reaches new heights. The Autism CARES Act was reauthorized in 2024 with $2 billion through 2029, allocating:

• $1.2B for NIH research on early detection and interventions
• $600M for HRSA training programs and regional centers
• $200M for CDC surveillance

The Department of Health and Human Services has appointed 21 new members to the Interagency Autism Coordinating Committee (IACC), which coordinates federal autism research and services. 'The IACC ensures research translates to real-world help,' explained new member Dr. Sarabeth Broder-Fingert in an HHS briefing.

Balancing Access and Accountability

While anti-fraud measures enjoy support, advocates warn of unintended consequences. North Carolina's telehealth restrictions could impact 23,000 rural families who rely on remote ABA therapy, according to Autism Society data. Bans on out-of-state providers may leave 12 counties without any ABA clinicians.

'We support accountability but can't sacrifice access to evidence-based care,' said Autism Speaks policy director Judith Ursitti in testimony. With record funding now flowing, states face the challenge of preventing fraud while maintaining quality services.