Staggering 47,000% Surge in Medicaid Autism Spending

May 11, 2026

A stethoscope next to a puzzle piece labeled 'Medicaid'

North Carolina’s Medicaid spending on autism therapy exploded from $1.4 million to over $660 million in just five years—a staggering 47,000% increase that state auditors warn signals potential fraud and waste draining taxpayer dollars at an unprecedented rate.

Story Snapshot

NC Medicaid autism therapy spending surged 47,000% since 2019, reaching $660 million annually with projections hitting $1.1 billion by 2027
State Auditor Dave Boliek launched emergency audit after discovering small group of providers, many backed by private equity, dominate billing with over 80 receiving $1 million-plus each
New law signed April 2026 bans out-of-state providers, restricts telehealth, and mandates monthly reverification for intensive therapy plans to curb suspected abuse
Growth far outpaces autism diagnosis increases, with federal investigators probing similar Medicaid billing spikes nationwide for improper payments and fraud

Taxpayer Money Vanishing Into Therapy Billing Black Hole

State Auditor Dave Boliek sounded the alarm in March 2026 when his office uncovered what may be one of the most dramatic examples of government spending run amok in recent memory. Applied Behavioral Analysis therapy for autism, covered by North Carolina Medicaid since 2019, ballooned from a modest $121.7 million in 2022 to over $505 million by 2025. Just three years earlier, the state spent barely $1.4 million on these services. Boliek told lawmakers the “tremendous spike” demanded immediate audit action, as projections show costs potentially exceeding $1.1 billion by 2027. That level of growth—425% in five years—cannot be explained by rising autism diagnoses alone, raising serious questions about who benefits from this taxpayer-funded explosion.

Private Equity Firms and New Providers Dominate Surging Bills

Investigative reporting revealed that a concentrated group of providers captured the lion’s share of these Medicaid dollars, with over 80 entities billing more than $1 million each in 2025. The top biller, ABS Kids—a Utah-based company—alone collected $64.91 million from North Carolina Medicaid that year. Many of these high-billing providers launched operations only after 2020, yet they rapidly out-earned established practices, a pattern researchers at Private Equity Stakeholder Project identified as typical of private equity exploitation of Medicaid programs. Ryan Leitner from the organization noted that audits consistently uncover problems when private capital floods healthcare billing systems designed for patient care, not profit maximization. The state’s own data showed beneficiaries grew from 3,844 children in 2022 to 13,447 by 2025, but average per-patient costs also skyrocketed to approximately $37,600 annually.

Lawmakers Crack Down With Emergency Regulations

Facing a fiscal crisis that threatened to consume North Carolina’s Medicaid budget, legislators acted swiftly. Governor signed House Bill 696 into law on April 30, 2026, imposing strict new controls on autism therapy providers. The law bans out-of-state providers unless they operate within 40 miles of the border, sharply limits telehealth delivery, requires technician certification, and mandates monthly reverification for any treatment plan exceeding 16 hours per week. A second phase launching in December 2026 will prohibit providers from diagnosing patients and referring them to their own services—a practice critics say creates perverse financial incentives. These measures directly target the regulatory gaps that allowed rapid, unchecked growth, though families who secured court injunctions in November 2025 to block proposed 10% rate cuts continue to worry about therapy access for their children.

National Pattern Emerges as Federal Investigators Circle

North Carolina’s predicament mirrors troubling trends across the country, where federal Health and Human Services Office of Inspector General investigators are probing Medicaid ABA therapy billing for improper payments. States like Minnesota have grappled with similar fraud allegations, and the Centers for Medicare and Medicaid Services identifies autism therapy as one of the fastest-growing Medicaid expenses nationwide. The federal government’s Early and Periodic Screening, Diagnostic, and Treatment rules require states to cover necessary pediatric services, including intensive behavioral therapy, but the mandate assumes proper oversight. Deputy Secretary Melanie Bush of NC’s Department of Health and Human Services acknowledged to lawmakers that spending growth concentrated among a small number of providers, justifying the audit and new regulations to balance legitimate family needs against stewardship of public funds. The Attorney General’s office has also pushed for clearer policies, noting vague guidelines hindered fraud prosecutions in the past.

Balancing Care for Children Against Fiscal Responsibility

The controversy exposes a painful tension familiar to Americans frustrated with government dysfunction: a vital service for vulnerable children has become a potential vehicle for waste and abuse, leaving officials scrambling to fix a system that should have had guardrails from the start. Families and advocates rightly emphasize that ABA therapy transforms lives for children with autism, providing skills and independence that would otherwise remain out of reach. Yet taxpayers footing the bill—facing their own economic struggles from inflation and mismanaged federal spending—deserve assurance their dollars fund genuine care, not inflated invoices from opportunistic operators. North Carolina’s aggressive regulatory response and ongoing audit signal recognition that unchecked spending, no matter how well-intentioned the program, ultimately harms both families who need services and citizens who pay for them. Whether these reforms curb fraud without restricting access will determine if the state offers a model for responsible Medicaid management or simply reshuffles the deck while costs continue climbing.