Medicaid spending on Applied Behavior Analysis (ABA), one of the most widely used therapies for children with autism, has surged past $5 billion — drawing intensifying scrutiny over potential fraud and the stewardship of taxpayer dollars.

ABA therapy uses structured, one-on-one sessions to help children with autism develop communication, social, and daily living skills. As the evidence-based treatment has gained acceptance, nearly every state has moved to mandate insurance coverage for autism therapies, and a 2014 CMS bulletin clarified that Medicaid programs must cover medically necessary ABA services for children under the Early and Periodic Screening, Diagnostic, and Treatment (EPSDT) benefit. Those policy shifts, combined with rising autism diagnosis rates documented by the CDC, helped transform Medicaid into the largest single payer for ABA services nationwide.

Between 2018 and 2024, Medicaid providers disbursed more than $5.15 billion under a specific ABA billing code, with three providers alone receiving approximately $685 million in reimbursements during that period. The rapid expansion has also attracted private equity investment into autism therapy chains, accelerating clinic openings and corporate consolidation within the sector. Billing experts caution that the data alone does not explain why certain reimbursements reached such high levels, noting that unusually large payments can stem from a range of factors.

Officials at the Centers for Medicare & Medicaid Services (CMS) told Fox News Digital that the agency has observed "significant growth" in Medicaid spending on ABA therapy in recent years.

"While access to medically necessary services remains a priority, rapid program growth also underscores the importance of ensuring services are clinically appropriate, delivered by qualified providers, and supported by strong program integrity safeguards," a CMS spokesperson said.

As spending has climbed, federal prosecutors have pursued multimillion-dollar fraud cases involving ABA providers. In May, two Minnesota autism clinic operators were charged with allegedly billing Medicaid $46.6 million for services that prosecutors say were either unnecessary or never rendered. In a separate case, another Minnesota woman pleaded guilty in a $14 million Medicaid autism fraud scheme.

Investigations by The Wall Street Journal and The New York Times have also documented allegations that some providers billed for services that were never delivered, inflated therapy hours, and aggressively expanded operations as Medicaid spending surged.

The heightened scrutiny coincides with a broader push by the Trump administration to eliminate fraud, waste, and abuse across federal programs, with Medicaid identified as a central policy priority during the president's second term.

States have responded in different ways. Florida reports recovering more than $72 million in improper Medicaid payments over the past year. Republican Florida Governor Ron DeSantis recently announced a statewide Medicaid Integrity Initiative aimed at strengthening provider screening, enhancing fraud detection, and increasing oversight.

While Florida has prioritized fraud enforcement, Georgia lawmakers have focused on reimbursement rates. Industry representatives testified that utilization of autism therapy services in the state has increased by more than 300% in recent years.

The divergent approaches reflect the difficult balance between rooting out fraud and preserving access to a therapy that many families describe as life-changing for their children. How states and federal regulators calibrate that balance in the coming months — through tighter credentialing standards, revised billing-code oversight, or new CMS program-integrity guidance — is likely to shape both the ABA industry's trajectory and the availability of services for families reliant on Medicaid coverage.