HHS Finds Up to $600M in 'Improper' Medicaid Payments for Autism Services

Audits in four states reveal billing errors in 100% of claims examined

Published on Mar. 3, 2026

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Federal auditors found $198 million in 'improper payments' for Medicaid-funded autism services in Indiana, Wisconsin, Maine, and Colorado, with another $410 million in potentially improper billings. The Department of Health and Human Services examined 100 monthly bills in each state and found potential payment errors in every single one, including caregivers failing to properly document therapy sessions, lacking appropriate credentials, or patients not being properly diagnosed with autism.

Why it matters

Medicaid spending on autism care has skyrocketed 298% nationwide in recent years since new federal rules required coverage in 2014. This rapid growth, combined with lax oversight, has created opportunities for fraud and abuse, raising concerns about the stewardship of taxpayer funds and the quality of care provided to vulnerable patients.

The details

The audits found that Indiana made at least $56 million in improper payouts, Wisconsin $18.5 million, Maine $45.6 million, and Colorado a whopping $77.8 million. In addition, the audits flagged separate 'potentially improper payments' in each state, totaling up to $77 million in Indiana, $22 million in Maine, $94 million in Wisconsin, and $207 million in Colorado. These payments were for issues like billing for non-therapy time, recreational activities, and lack of proper documentation.

  • Between 2019 and 2025, Medicaid spending on Applied Behavior Analysis (ABA) therapy—the primary treatment protocol for children with autism—has skyrocketed 298% nationwide.
  • In 2014, new federal rules required Medicaid to cover autism care. Since then, autism spectrum disorder (ASD) prevalence in the United States has nearly doubled, from about one in 64 children in 2014 to one in 36 in 2020.

The players

Department of Health and Human Services (HHS)

The federal agency that conducted the audits revealing the improper Medicaid payments for autism services in four states.

Chris Medrano

An analyst at the free-market health care research group Paragon Health, who claims states may be incentivized to turn a blind eye to overbilling to redirect Medicaid funds into their general budgets.

Daniel Arnold

A health policy researcher at Brown University who says the increases in autism care spending seen in some states are 'astronomical' and that when private equity firms acquire autism centers, 'the price [of care] increases, the intensity of services increase as well.'

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What they’re saying

“There's a big myth that needs to be busted, is the idea that states and the federal government equally share the goal of reducing improper spending.”

— Chris Medrano, Analyst, Paragon Health (The Post)

“The increases you're seeing in some states are astronomical [...] When private equity comes in usually the price increases, the intensity of services increase as well. In the ABA space this would mean more hours at a higher price.”

— Daniel Arnold, Health policy researcher, Brown University (The Post)

What’s next

The federal government has requested the return of millions of dollars in improper payments from each of the four states. No companies have been prosecuted for fraud related to the HHS audits at this time.

The takeaway

This case highlights the need for stronger oversight and accountability in Medicaid-funded autism services, as rapid growth in spending has created opportunities for fraud and abuse. Policymakers must find ways to ensure taxpayer funds are being used responsibly and patients are receiving appropriate, high-quality care.