Why Is Autism Exploding? Welfare Fraud Is One Reason

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Why Is Autism Exploding? Welfare Fraud Is One Reason

Minnesota’s example shows that lucrative behavioral therapy is a magnet for scam artists.

By Allysia Finley, WSJ

Dec. 7, 2025 2:57 pm ET

Diagnosis rates of autism among children have more than tripled over the past 15 years. One reason, which Minnesota’s welfare scandal lays bare with shocking details, is Medicaid fraud and abuse.

Medicaid pays healthcare providers big bucks to diagnose and treat children with autism—sometimes tens of thousands of dollars a month for a single child. Yet states rarely verify that kids who are diagnosed actually meet the medical criteria for the disorder or that they get appropriate treatment from qualified specialists.

The result: Children covered by Medicaid or the government-run Children’s Health Insurance Program are 2.5 times as likely as those with private coverage to be diagnosed with autism. Many lower-income kids are labeled autistic merely because they have behavioral or developmental problems.

In 2014 the Centers for Medicare and Medicaid Services began requiring state Medicaid programs to cover autism therapy such as applied behavior analysis or ABA, a technique that uses positive reinforcement to improve social and communication skills. ObamaCare plans are also required to cover such therapy as an “essential benefit.”

Previously, the responsibility for providing such treatment fell mainly on public schools. Many lacked the expertise and were happy to shift the costs to federal taxpayers, which cover between 50% and 75% of Medicaid bills for most beneficiaries.

Autism behavioral services “comprise one of the fastest growing healthcare industries in the United States,” the Massachusetts Office of the Inspector General noted last year in an audit of the state’s Medicaid program. “There is an increased need for vigilance in program integrity to keep pace with the growing number of ABA providers.”

In Minnesota, the number of autism providers soared 700%, and payments to them increased 3,000% between 2018 and 2023. According to a federal indictment, Asha Farhan Hassan set up the ABA therapy provider Smart Therapy, which employed young relatives with no formal education beyond a high school education as “behavioral technicians.”

Ms. Hassan and her business partners allegedly recruited parents by paying them monthly kickbacks of up to $1,500 a child. She worked with a licensed therapist “to get the recruited child qualified for autism services. There was no child that Smart Therapy was not able to get qualified for autism services,” according to the indictment.

She allegedly billed Medicaid for therapy that wasn’t provided and paid the kickbacks to parents out of the proceeds. “Often, parents threatened to leave Smart Therapy and take their children to other autism centers if they did not get paid higher kickbacks,” the indictment alleges. “Several larger families left Smart Therapy after being offered larger kickbacks by other autism centers.” Ms. Hassan’s lawyer has said that she will plead guilty.

Federal audits of Medicaid spending on autism therapies in Indiana and Wisconsin have also turned up widespread abuses. Nearly all Medicaid payments were improper or potentially improper—meaning the providers didn’t adhere to federal requirements.

In Indiana, therapy was “provided by staff who did not have the appropriate credentials” and “to children who did not receive the required diagnostic evaluations or treatment referrals.” Kids spent as long as eight hours a day at treatment centers, missing school. Providers frequently inflated bills, charging Medicaid as much as $256 an hour. Medicaid payments ranged from $2,643 to $28,240 for a single month of therapy for one child.

The Wisconsin audit found providers routinely billed for more-intensive treatment than they provided, including time when kids were napping or “blowing bubbles.” Massachusetts’ audit identified more than 600 instances in which autism providers billed Medicaid for more than 24 hours of service for a patient on a given date. Between 2017 and 2023, Indiana’s Medicaid spending on ABA autism therapy increased nearly 30-fold. Nebraska’s has surged some 20-fold since 2020.

Some autistic kids might have been helped by the therapy, though we have no way of knowing because states don’t track their progress. On the other hand, some children might have been incorrectly diagnosed and missed out on valuable learning in classrooms.

All of this underlines broader problems with America’s social welfare-industrial complex. Liberals measure success by how much money is spent rather than outcomes. They accept waste and fraud in welfare because the spending keeps people on the government dole and payroll. Employment in social assistance—and services for the disabled in particular—has notably grown faster than nearly every industry since the pandemic began.

Government largess is making disability and indolence a way of life for too many Americans, including veterans. Spending on veteran disability payments—which is supposed to be limited to disabilities that resulted from military service—has tripled in the past decade. Among the most common disabilities claimed by older veterans are diabetes, hypertension and “loss of erectile power,” all common among older men.

For politicians, trying to reform the veteran disability system and America’s other broken entitlement programs can seem like picking up a grenade. Easier to keep the money flowing, even if the spending eventually blows up on taxpayers.