Autism therapy spending quintuples, prompting federal push for state oversight
Medicaid spending on autism therapy quintupled in four years, climbing to $10 billion in 2025 from about $2 billion in 2021, The New York Times reports.
Autism therapy expenses surged fivefold over the last four years, reaching $10 billion in 2025 from $2 billion in 2021, according to a recent New York Times report. The rate of increase in therapy costs far exceeded the 67% growth in autism diagnoses during the same period. To address this issue, the federal Medicaid office released a 173-page toolkit containing best practices for regulating autism clinics.
The guidelines advise states to set limits on the number of therapy hours a provider can bill, require prior authorization for high volumes of therapy hours, and monitor clinic outcomes more closely. Caprice Knapp, a Medicaid senior policy official, expressed concern that the profit motive may be overshadowing the best interests of children receiving therapy.
The article highlights several examples of clinics allegedly overprescribing therapy hours and urging families to keep children from school to receive more treatment, driven by the desire for greater profits. Medicaid typically reimburses therapy providers in 15-minute increments, and some North Carolina clinics were found to have children napping for only seven minutes out of a 15-minute therapy session to maximize billing opportunities.
Critics also point to the involvement of private equity firms in opening hundreds of clinics nationwide, with some prescribing up to 40 hours of therapy per week for young children. The federal guidelines suggest that 40 hours a week of therapy is not a best practice and may not lead to improved outcomes. The guidelines caution that excessive therapy hours can take away time for essential activities like toileting, napping, and eating.
The Council of Autism Service Providers recommends a range of 30 to 40 hours per week for comprehensive treatment, but emphasizes that individualized decisions should be made by the child's clinician. Recent audits of Medicaid programs in states like Indiana, Colorado, Wisconsin, and Maine revealed instances of clinics billing for nontherapeutic activities such as lunch and playground trips.
The new guidelines urge states to scrutinize documentation more rigorously. Some states, such as North Carolina, have already enacted laws requiring special reviews of treatment plans for more than 16 hours of therapy per week. Dan Brillman, overseeing Medicaid for the Trump administration, stated that every state faces similar challenges, and the newly released guidance aims to assist state Medicaid directors and governors in collaborating with their legislatures to address the issue.
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