In the past decade, there has been a significant increase in the utilization of Applied Behavioral Analysis (ABA) therapy, in large part because of expanded coverage under all Medicaid programs since 2022. Both federal and state regulators and enforcement authorities have turned their attention to the coverage and payment of these ABA services and potential fraud and abuse. This blog provides some quick takeaways for stakeholders.
What Is ABA Therapy?
ABA therapy is an umbrella term that captures behavioral therapeutic techniques designed to help children and young adults with Autism Spectrum Disorder (ASD) with managing symptoms and improving social and communication skills.
ABA services can take a variety of forms. For example, Discrete Trial Training (DTT) involves a therapist in a one-on-one setting with a patient in a controlled environment where desired behaviors are supported with positive reinforcement. There can also be group-based ABA activities where multiple patients engage in activities to practice social interactions under the supervision and instruction of a therapist.
Is ABA Therapy Covered by Government Healthcare Programs or Commercial Insurance?
The Social Security Act requires state Medicaid programs to provide the Early and Periodic Screening, Diagnostic, and Treatment (EPSDT) benefit to children and young adults, which includes more robust coverage than the Medicaid benefit package required for adults.
In July of 2014, the Centers for Medicare and Medicaid Services (CMS) issued guidance regarding the inclusion of treatment for children and young adults with Autism Spectrum Disorder under the EPSDT benefit. While CMS took notice of ABA therapy at that time, it did not explicitly require coverage of this treatment modality. By 2022, however, all state Medicaid programs had extended coverage to include ABA therapy. As expected, the Medicaid payments for those services have increased significant since the 2014 guidance.
ABA service providers are typically paraprofessionals certified by the Behavior Analyst Certification Board (BACB), which is a nonprofit corporation that is recognized by many states to provide Board Certified Behavior Analyst (BCBA), Board Certified Assistant Behavior Analyst (BCaBA), and Registered Behavior Technician (RBT) training. However, each state Medicaid program establishes its own rules and requirements.
For example, Indiana’s Medicaid program requires BCBAs (who typically have graduate-level degrees in ABA-related fields) to enroll as Medicaid providers but does not require RBTs (who may only render services under the supervision of a BCBA) to enroll. Indiana Medicaid also requires the submission of prior authorizations for ABA services, which must include clinical documentation such as the patient’s diagnostic evaluation and referral, and an individualized treatment plan for the patient.
In short, there are strict documentation and other billing requirements for providers to receive reimbursement from state Medicaid programs for ABA therapy.
All 50 states have taken legislative action to require meaningful coverage for the treatment of autism through state autism insurance laws. These laws apply to commercial insurers and correspond with both rising utilization of ABA services and disputes related to coverage and costs.
Are There Risks for Providers of ABA Therapy?
Given the expansion of ABA therapy coverage and payment in the past decade, there has been scrutiny of potential fraud and abuse at both the federal and state level.
In December 2024, the US Department of Health and Human Services Office of Inspector General (HHS-OIG) issued an audit report related to Medicaid claims and payment for ABA services by Indiana’s Medicaid Program. The HHS-OIG audit found that, based on sampling and statistical extrapolation, Indiana Medicaid paid at least $56 million in “improper” fee-for-service payments to ABA providers. Specifically, HHS-OIG found that nearly all the sampled “enrollee-months” of services did not meet the state’s documentation requirements.
The audit report also detailed other systemic issues that would render reimbursement for services potentially improper. For example, the report noted that the sampled documentation for some enrollees indicated that the provider had billed the state for Current Procedural Terminology (CPT) codes for individual therapy, but the clinical documentation reflected group therapy sessions.
HHS-OIG issued a similar audit report of Wisconsin’s Medicaid program in July 2025, finding at least $18.5 million in “improper” payments. The recent audit activity shows that HHS-OIG has identified ABA therapy as a risk area for state Medicaid programs to closely monitor.
Representatives of state Medicaid Fraud Control Units (MFCUs) have also publicly identified ABA therapy as an enforcement priority. At the recent American Health Lawyer’s Association Fraud and Compliance Forum, Kevin Lownds, Division Chief at the MFCU for the Massachusetts’s Attorney General’s Office, stated that ABA therapy was an area of behavioral health where fraud and abuse is rampant. In particular, Lownds noted that the high reimbursement for ABA services has enticed potential fraudsters into the space.
Lownds went even further, stating that his unit was often seeing fraud warranting criminal charges, most often in cases where providers were billing for services that were never actually provided to patients. Indeed, in June 2025, the Massachusetts Attorney General’s Office indicted a Medicaid-enrolled autism service provider that allegedly fabricated documentation to support over $1 million in false claims for ABA services that were never provided. It is not surprising that increased enforcement scrutiny has arrived in the wake of the increased audit activity by HHS-OIG.
Key Takeaways
ABA therapy is an important service for children and young adults with autism. However, as with many newer therapies and treatments, the advent and focus on these services has also led to increased scrutiny from federal and state regulators. HHS-OIG has identified ABA therapy as an area for increased audit activity, and state MFCUs are primed to investigate and pursue enforcement investigations related to fraud allegedly perpetrated by ABA providers. Stakeholders should be aware of this activity, adopt and maintain controls around proper billing and documentation, and prepare for potential audits and/or enforcement activity in this space going forward.