Services in question

Editor's note: The following text is a transcript of a podcast story. To listen to the story, click on the arrow beneath the headline above.

MYRNA BROWN, HOST: Up next, investigating Medicaid fraud.

Last week, an Indiana autism center told employees it would close in May, after the state blocked it from participating in Medicaid.

The Wall Street Journal in March found that Piece by Piece Autism Centers over-charged Medicaid for autism therapy services.

NICK EICHER, HOST: In the year 2023, the Center billed the government about $340,000 per child. That’s ten times the average rate.

All of this coming as the federal government is taking a more systematic approach to exposing improper payments and pushing states to do better oversight.

WORLD’s Harrison Watters reports.

HARRISON WATTERS: Sarah Addison is a behavioral clinician in Indiana working with people with special needs including autism.

She says she typically helps individuals work on their social skills.

ADDISON: A lot of times, people who are on the spectrum struggle with making eye contact. They have a hard time understanding timing, what to say, when to say it, staying on topic.

Clinicians use ABA, or applied behavioral analysis , to coach clients: reinforcing positive behaviors and avoiding those that interfere. Therapy typically involves multiple sessions over long periods of time.

ADDISON: The first year you're just spent building trust and building a relationship, and very often you don't really see the results till maybe, like, year two or three.

All those interactions count as billable activities for reimbursement by Medicaid, which provides health coverage for low-income and disabled Americans. The program is jointly funded by state and federal dollars, and allows states flexibility in how to distribute the money. 

Medicaid requires documentation in order to pay providers for their services.

ADDISON: The note should be reflecting what you worked on that is linked to the behavior support plan. So you can't just say, “Oh, we went out into the community and we had coffee.”

But a growing number of ABA providers have been doing things just like that, according to data from the Health and Human Services Office of Inspector General, or OIG. 

Kimberly Kennedy is Assistant Regional Inspector General.

KENNEDY: ABA services has steadily increased since federal coverage guidelines were issued in 2014, with nationwide spending on these services increasing by almost 300% between 2019 and 2024 alone.

Following that Medicaid expansion in 2014, the federal government’s allocation has grown, incentivizing states to increase enrollment for additional federal dollars. That brought a surge in home- and community-based spending for Medicaid. It helped many people receive care at home, but also opened the door to improper payments.

Chip Kahn is the former President of the Federation of American Hospitals and a visiting senior fellow at the American Enterprise Institute. He says the smaller scale and niche services make the program vulnerable to fraud.

KAHN: People can start businesses and either find names or use some method to actually, you know, frequently submit claims when they didn't provide any services.

Abuse and waste are harder to pin down, because they take advantage of gray areas in the law to maximize payouts.

Starting in 2024, the OIG audited Indiana’s fee for service autism program—looking at a sample of 100 payments made in 2019 and 2020. 

Auditors have also scrutinized Maine, Wisconsin, and Colorado. Kennedy says the results are troubling.

KENNEDY: Each of them found that nearly all of the sample enrollee months were either improper or potentially improper.

Many providers failed to meet the requirements for documenting their services. Or they claimed more hours than they actually worked with clients. Some even lacked the right credentials to bill Medicaid in the first place.

KENNEDY: And the improper payments that we were able to determine for those reports, they ranged anywhere from 18 and a half million in projected overpayments in Wisconsin, to approximately 77 million in Colorado.

That’s double Colorado’s personnel budget for 2025.

The OIG recommends states refund the federal government for its contributions that covered improper payments. So far, none have complied, though Indiana is reviewing its Medicaid payments. It’s now up to CMS—the Centers for Medicare and Medicaid—to enforce the recommendations.

In Minnesota, reports of fraudulent autism and daycare centers led CMS to halt more than $200 million in Medicaid reimbursements back in January. Minnesota responded with a plan to address fraud, waste, and abuse, and CMS gave the greenlight in March. But it’s waiting to see Minnesota’s next steps before it makes deferred payments. 

In the meantime, the state has passed those costs onto healthcare providers.

During a Congressional hearing in January, autism care provider Jennifer Larson explained the challenge of healthcare disruptions for children who need treatment.

LARSON: As Medicaid payments are delayed due to prepayment review by an insurance company that is in the business of denying claims, providers are reducing hours, cutting staff, and starting to close. Loss of services can erase years of progress in weeks, and abrupt disruption of services can cause lifelong consequences in these children.

While millions of dollars are at stake, Assistant Regional Inspector General Kennedy says the audits reveal a more fundamental problem.

KENNEDY: The lack of details in the supporting documentation make it unclear if the children are actually receiving high quality therapy services or daycare services.

For clinicians like Sarah Addison in Indiana, the priority continues to be giving individuals with autism consistent coaching and doing due diligence to document how it’s going.

Reporting for WORLD, I’m Harrison Watters.

WORLD Radio transcripts are created on a rush deadline. This text may not be in its final form and may be updated or revised in the future. Accuracy and availability may vary. The authoritative record of WORLD Radio programming is the audio record.