Federal officials urged states to step up oversight of autism therapy providers after CMS data showed payments for applied behavior analysis rose 421% from 2021 to 2025, while autism diagnoses increased 67%. The government released a toolkit to help states detect fraud, protect families, and ensure treatment is based on medical need. Officials warned that unchecked profit motives and wasteful spending can divert funds from children who genuinely need care.
Medicaid Tightens Oversight of Autism Therapy: Federal Toolkit Targets Fraud and Soaring Costs
Health Secretary Robert F. Kennedy Jr. said the recommendations unveiled Tuesday are targeted at "fraud schemes that exploit children with autism and misuse funds from American taxpayers." File Photo by Jim Lo Scalzo/UPI
Federal officials on Tuesday urged state governments to increase scrutiny of providers delivering autism therapies after new Centers for Medicare and Medicaid Services (CMS) data showed dramatic increases in spending for applied behavior analysis (ABA).
CMS reports payments for ABA rose 421% from 2021 to 2025, far outpacing a 67% increase in the number of children diagnosed with autism during the same period. Medicaid spending on autism therapy climbed to $10 billion in 2025, up from $2 billion in 2021, according to reporting by The New York Times.
New Toolkit for States
The federal government released a toolkit of recommendations intended to help states detect potential fraud, protect families, and ensure treatment decisions are based on medical necessity rather than financial incentives. Officials said the measures are designed to identify improper billing, unqualified providers, and other practices that can drive wasteful spending.
“This toolkit gives states practical tools that may be used to identify bad actors, protect families, and hold providers accountable,” said Health Secretary Robert F. Kennedy Jr.
Caprice Knapp, principal deputy director at CMS, told The New York Times the agency had seen "quite an explosion in costs" and wants to ensure profit motivation does not overtake children's best interests.
CMS Administrator Dr. Mehmet Oz added that the initiative aims to make sure services are delivered by appropriately qualified professionals and are clinically appropriate. "Every dollar lost to fraud or waste is a dollar that cannot reach a child who genuinely needs it," he said.
Individual Cost Trends
At the individual level, median annual costs for autism therapy rose from $8,903 in 2021 to $21,203 in 2025, the Times reported. Federal officials emphasized that oversight steps are intended to protect both families and taxpayer funds while preserving access to needed care.
The federal recommendations give states a range of practical tools and best practices for monitoring providers, improving billing oversight, verifying provider qualifications, and responding to suspected fraud.
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