In the world of Medicaid billing, the details matter. A signature at the bottom of an assessment. A notation in a session log describing which goals were addressed. A data point, recorded and filed, showing that a child made progress or didn’t. These are the procedural breadcrumbs that, in theory, connect a service rendered to a payment made, and a payment made to a child helped. When the breadcrumbs go missing, auditors tend to notice.

The U.S. Department of Health and Human Services Office of Inspector General noticed in Maine. In an audit released January 22, federal investigators concluded that the state made at least $45.6 million in improper Medicaid payments for rehabilitative and community support services provided to children with autism. The federal share of those payments, some $28.7 million, must be returned to Washington.

The finding lands at a moment of intense scrutiny for an industry that has expanded with remarkable speed. Applied behavior analysis (ABA), the intensive therapy at the center of the audit, has become the dominant treatment for children on the autism spectrum—and the subject of mounting questions about whether the systems designed to oversee it can keep pace with its growth.

An Industry in Overdrive

The numbers tell a story of demand outrunning infrastructure. A recent analysis by Trilliant Health found that ABA visits nationwide increased 267 percent from 2019 to 2024, with Medicaid-covered services growing even faster—up 298 percent over that span. The number of clinicians providing the therapy more than doubled, increasing 135 percent. In some states, the growth has been more dramatic still: Nebraska saw a 761 percent increase in ABA providers over five years.

The expansion tracks a broader epidemiological shift. The Centers for Disease Control and Prevention reported in April 2025 that one in 31 American children is now identified with autism spectrum disorder, up from one in 36 just two years earlier and one in 150 in 2000. Researchers attribute much of the increase to improved screening and broader diagnostic criteria, but the result is the same: more children qualifying for services, more families seeking care, more providers entering the market to meet them.

Maine’s experience mirrors the national pattern. Payments for rehabilitative and community support services climbed from $52.2 million in 2019 to $80.6 million in 2023, an increase of more than fifty percent in four years. In Indiana, Medicaid spending on ABA grew from $21 million in 2017 to $611 million in 2023. North Carolina projects its autism services spending will reach $639 million by fiscal year 2026, up 423 percent from fiscal year 2022.

Growth on that scale is not, by itself, cause for alarm. ABA can be transformative for children with autism, helping them develop communication skills, manage challenging behaviors, and navigate daily life. In 2014, the Centers for Medicare and Medicaid Services mandated that state Medicaid programs cover comprehensive autism services for children; by 2022, every state Medicaid program covered ABA. The therapy is intensive—comprehensive treatment typically involves 30 to 40 hours per week—and expensive.When demand rises and coverage expands, spending follows.

But rapid expansion can outpace the systems meant to keep it in check: the assessments that determine whether a child qualifies for services, the documentation that tracks whether those services are delivered as promised, the oversight that ensures taxpayer dollars flow to their intended purpose. In Maine, the OIG found, those systems broke down.

What Went Wrong?

The audit’s findings read like a checklist of compliance failures. Some children received services without undergoing the comprehensive assessments that federal and state rules require. Others were assessed, but the paperwork was incomplete: signatures missing from clinicians, signatures missing from parents and guardians. Session notes (which are supposed to document what happened during each appointment) often failed to describe the services provided, the goals addressed, or the data collected.

The OIG did not mince words about the implications. These deficiencies, the report noted, “could have had a significant effect on the quality of care provided to children with autism.” Without a proper assessment, there is no way to know whether a treatment plan fits the child. Without proper documentation, there is no way to know whether the plan is being followed. The paperwork is not just paperwork; it is the evidence that care is being delivered thoughtfully, consistently, and well.

Inspector General T. March Bell put it more plainly. “The integrity of Medicaid programs is non-negotiable,” Bell said. “Improper payments undermine public trust and divert resources from those who need them most.”

A Broader Pattern

Maine is not alone, and the audit is not an isolated exercise. It is the third in an ongoing OIG series examining Medicaid-funded ABA services, with additional state reviews in progress. Indiana was found to have made at least $56 million in improper payments in 2019 and 2020; auditors there noted that some providers had billed for excessive hours, including during children’s nap times. Wisconsin came in at $18.5 million in improper payments for 2021 and 2022, with an additional $94.3 million flagged as potentially improper. In both Indiana and Wisconsin, all 100 enrollee-months sampled by auditors contained at least one improper or potentially improper claim.

Beyond the federal audits, state-level investigations have uncovered more troubling patterns. In Massachusetts, the state inspector general identified up to $17.3 million in overpayments tied to inadequate supervision ratios, documentation failures, and what investigators termed “impossible billing.” In Minnesota, the picture is darker still: federal prosecutors have charged individuals in what they describe as an “industrial-scale” fraud scheme targeting the state’s autism services program. The FBI raided two providers in December 2024; state officials reported 85 open investigations into autism providers as of last summer. Prosecutors have alleged that some centers paid cash kickbacks to parents to enroll their children, then billed Medicaid for services that were never provided or were provided for only a fraction of the hours claimed.

The pattern suggests something systemic: a category of healthcare spending that has grown faster than the infrastructure meant to govern it. Trilliant Health’s analysis put the matter bluntly, noting that the current payment structure “reimburses based on service volume rather than outcomes,” creating “misaligned incentives” where “providers benefit financially from maximizing billable hours regardless of whether treatment produces meaningful improvements.”

The Squeeze

The audits and fraud investigations arrive as states face mounting pressure to contain costs—pressure that has begun to translate into cuts that families say threaten their children’s care. Nebraska slashed reimbursement rates by nearly 50 percent for some providers, prompting Above and Beyond Therapy, one of the state’s largest ABA providers, to announce it would exit the Medicaid market. The company reversed course a week later, citing what it called a “tremendous outpouring of calls, emails” from families. North Carolina attempted a 10 percent rate cut before the governor halted the reductions amid lawsuits from families of children with autism. Indiana is considering caps on service hours that providers warn could shortchange children during the critical early years when intervention is most effective.

The tension is real and unresolved. States are grappling with programs whose costs have ballooned beyond projections, while families who have seen the therapy transform their children’s lives fear that budget constraints will cut them off from services they depend on. The fraud cases, meanwhile, complicate the narrative: every dollar lost to a fraudulent provider is a dollar that could have served a child who genuinely needed it.

Mariel Fernandez, vice president of government affairs at the Council of Autism Service Providers, acknowledged the difficulty of the moment. “For such a costly and intensive service,” she told Stateline, “the states need to explore how to best reimburse this benefit so that it’s sustainable and promotes quality.”

What Comes Next?

Maine has agreed to implement corrective measures, including conducting its own review of the payments in question and reimbursing the federal government. Whether those measures will be sufficient remains to be seen. The OIG’s work plan lists eight state audits in the series, with several still in progress. Other Medicaid programs may soon find federal investigators sifting through their own paper trails, looking for the signatures that should have been there but weren’t.

The children who depend on these services are, in a sense, caught in the middle: between a system that has expanded to meet their needs and the oversight failures that now threaten to constrain it, between providers who deliver life-changing care and those who have exploited a program designed to help the most vulnerable. The paper trail, it turns out, matters—not just for the auditors who follow it, but for the families waiting to see where it leads.