Emerging Target - Federal Enforcement Comes to the Autism Therapy Industry

There's a common pattern for new areas that become the focus of healthcare fraud and related enforcement. A new treatment, device, or procedure becomes available or is newly utilized. The reimbursement process for the new procedure is lucrative, often because it has not been used in the past. The nature of the procedure typically makes it easy to replicate with low barriers to entry. And there's a compelling need – real or manufactured – in the marketplace.

That pattern would fit past healthcare fraud focuses, including home health services, compounded medications, hospice care, telehealth, and many others. But the next major area for increased fraud enforcement may be autism-therapy services.

Background

Autism therapy commonly is referred to as Applied Behavior Analysis (ABA) therapy – a treatment for children with autism spectrum disorder. Based on principles of behavioral reinforcement, ABA is aimed at developing communication, social, and adaptive living skills. It has become the dominant therapeutic modality in autism treatment, and it has grown rapidly in recent years.

For much of its history, ABA was classified as an educational service rather than a medical necessity, placing it largely outside insurance coverage. That changed through state insurance mandates in the 2000s and even more decisively after the Affordable Care Act.

In 2014, the Centers for Medicare and Medicaid Services (CMS) issued a bulletin clarifying that ABA qualified as a medically necessary, requiring all state Medicaid programs to cover it for eligible children under 21.¹ Today, all 50 states have autism insurance mandates for private coverage, and all state Medicaid programs cover ABA.

At the same time, ASD diagnoses have increased dramatically. The Center for Disease Control's April 17, 2025² report found that 1 in 31 8‑year children were identified with an ASD diagnosis. Some experts have estimated that ASD diagnoses have increased approximately 300% in the last 20 years.³

Given those factors it is not surprising that payments from government health‑benefit programs have risen dramatically too. For example, direct Medicaid payments to ABA providers grew from $660 million in 2019 to $2.2 billion in 2023 – making ABA the fastest‑growing service in the entire Medicaid program during that period.⁴ Spending has similarly grown exponentially in the private insurance market.

With that growth has come increased fraud and enforcement scrutiny by state and federal authorities. The enforcement landscape continues to shift, as regulatory, civil, and increasingly criminal enforcement has become more prevalent in the autism‑therapy field.

The enforcement landscape

HHS‑OIG audits

From 2019 to 2023, the U.S. Department of Health and Human Services Office of Inspector General (HHS‑OIG) conducted a four‑state audit of Medicaid ABA payments.

The audit results showed significant improper payments:

• The Indiana audit (released December 2024) found $56 million in improper payments;
• The Wisconsin audit (released July 2025) found $18.5 million in improper payments;
• The Colorado audit (released February 2026) found $77.8 million in improper payments;
• The Maine audit (released January 2026) found $45.6 million in improper payments.⁵

Other state‑level audits are underway.

The violations highlighted vary but include common themes: missing or inadequate session documentation; billing for therapy while patients were napping or watching videos; billing individual therapy rates for group sessions; claims submitted under supervisors' credentials when supervisors did not perform the service; and treatment plans prescribing maximum therapy intensity – 30 to 40 hours per week – for nearly every patient regardless of individual clinical need.

False Claims Act civil settlements

Along with regulatory action, ABA and related therapies have resulted in growing False Claims Act (FCA) enforcement.

Notable cases include:

• In June 2026, the Massachusetts Attorney General's Office settled a matter under the Massachusetts False Claims Act with ABA provider Flexible Fundamentals and its two owners for over $778,000. The matter involved allegations that Flexible Fundamentals billed for services by persons without required supervision and for more hours of treatment than actually provided.
• In 2023, Applied Behavior Center for Autism settled FCA allegations for $2 million in the Southern District of Indiana. The settlement resolved allegations related to upcoded, concurrent, and duplicate billing to TRICARE and Indiana Medicaid programs.
• In 2023, the Massachusetts Attorney's General Office reached settlements with two ABA providers – Ubuntu Autism Consultants and Autism Resources and Therapy Center – over claims that the providers submitted false claims for services provided by unqualified persons, not properly documented, or not provided. The total settlement amount for both exceeded $2.5 million.
• *U.S. ex rel. Zeigler v. South Carolina Early Autism Project, Inc.*⁶ In 2018, South Carolina's largest ABA provider paid $8.8 million to resolve allegations of false claims to TRICARE and South Carolina Medicaid for services misrepresented or not provided. The case arose from a whistleblower suit under the FCA's qui tam provisions by a former employee. In addition to the financial penalties, the defendant company entered a corporate integrity agreement with HHS‑OIG.
• In 2019, East Coast Stepping Stones, an ABA provider in Jacksonville, FL, paid $360,000 to resolve allegations that it submitted false claims to TRICARE. The allegations included that the company failed to keep proper documentation and fabricated certain medical records.

Criminal prosecutions

While there had been civil enforcement dating back to the late 2010s, criminal prosecutions were infrequent. But more recently, criminal enforcement has become common, especially in several high‑profile cases.

The most notable investigation arose in Minnesota. Minnesota's Early Intensive Developmental and Behavioral Intervention (EIDBI) program – a Medicaid‑funded autism benefit – saw provider numbers expand 700% and payments to providers increase approximately 3,000% between 2018 and 2023.

Several federal charges followed.

• In September 2025, Asha Farhan Hassan, the CEO of Smart Therapy Center LLC, was charged with one count of wire fraud. Signaling Hassan's cooperation, she waived her right to an indictment and agreed to be charged by criminal information. She entered a guilty plea in December 2025, admitted that Smart Therapy defrauded government programs, including EIDBI by overbilling for treatment, providing treatment through unqualified providers, and offering kickbacks for patients to use Smart Therapy's services.
• Several months later, on May 21, 2026, DOJ charged 15 defendants of stealing more than $90 million from seven Minnesota Medicaid programs. Central to the announcement were Shamso Ahmed Hassan and Hanaan Mursal Yusuf, charged with submitting $46.6 million in fraudulent claims through Smart Therapy and another company, Star Autism Center.

The Minnesota cases are the most significant to date, but federal and state prosecutors have brought criminal charges against ABA providers in other jurisdictions as well.

• In January 2025, federal prosecutors in the District of Connecticut charged Suhail Aponte and Jose Apellaniz, the principals of Minds Cornerstone Behavior Therapy Services, with conspiracy to commit healthcare fraud and healthcare fraud. The indictment alleged that between November 2021 and January 2025, the defendants submitted approximately $1.87 million in fraudulent ABA claims to Connecticut Medicaid, including billing for services not properly supervised, services not performed, services rendered to patients who were in inpatient hospital care at the time, and services never rendered at all.
• In 2023, Nina Bourret, the owner of Agapi Behavior Consultants in South Carolina, was sentenced to a year and a day in federal prison following her guilty plea to making false statements to Medicaid in connection with ABA services. Bourret admitted to submitting electronic claims that falsely certified services had been rendered, or had been rendered in greater quantity than actually provided.
• In June 2025, the Massachusetts Attorney General's Office indicted Patrice Lamour and her two Randolph, Massachusetts companies – Lamour by Design and Lamour Community Health Institute – alleging that staff were directed to bill Medicaid for ABA services that were never provided to clients, supported by fabricated documentation. The indictment alleged over $1 million in false claims.

New programs, new focus

While the current administration has focused more on traditional violent and drug crimes, and comparatively less on white collar crimes, several initiatives have refocused on fraud. Though general in nature, these initiatives are primed to generate more autism‑therapy‑related enforcement.

For example, in April 2026, DOJ announced the creation of National Fraud Enforcement Division (NFED). Acting Attorney General Todd Blanche's memorandum described its core mission as “zealously investigating and prosecuting those who steal or fraudulently misuse taxpayer dollars,” with Medicaid fraud as a central target.

The NFED consolidated several DOJ units, including the healthcare fraud unit, under common leadership, created designated prosecutors in each district to work under NFED, centralized fraud‑case tracking, and expanded resources.⁷

In May 2026, DOJ announced another new program – one designed to “fast track” civil investigations involving federal benefits programs that are state‑administered such as Medicaid.

Under the program, DOJ would have a shortened period to review qui tam lawsuits filed by whistleblowers. At the end of that 60 to 120‑day period, prosecutors must move forward, allow the whistleblower to move forward, or move to dismiss the action. New matters will also be simultaneously referred to the NFED for evaluation of potential criminal charges. The focus on state‑administered programs makes increased autism therapy investigations a near certainty.⁸

Other initiatives and tools are also likely to affect autism‑therapy‑related matters, including DOJ and HHS‑OIG's ongoing healthcare takedowns – the most recent one announced in June 2026⁹ – and healthcare fraud strike forces.

Many incentives exist for whistleblowers, including the well known FCA qui tam provisions, among others. DOJ earlier this year also announced another anti‑fraud initiative, the Fraud Oversight through Careful Use of Statistics (FOCUS) initiative, which encourages data‑miners to bring forward results of sophisticated data analytics in uncovering fraud.¹⁰

Analysis and predictions

Several trends seem reasonably predictable from the current enforcement posture.

First, given the prevalence of autism‑related therapies, the rate of growth in such claims will continue to rise.

Second, the theories are likely to shift as enforcement continues. As with many past areas of focus, the early cases are typically more blatant fraud. A new specialty area emerges, the reimbursement is lucrative, and the oversight is low. That combination attracts bad actors.

But after the first wave of prosecution, it is likely that investigations will focus on less obvious fraud. For ABA centers, that likely means more scrutiny on billing patterns, time spent and billed, and the precise licensing requirements required to be eligible for reimbursement.

Third, an increased role for private parties. Ultimately, no matter how many initiatives are announced, the government has limited resources. As the benefits‑fraud initiative signals more broadly, DOJ will use whistleblowers and their attorneys not just for leads on fraud cases but as a force multiplier in litigating those cases.

Enforcement actions, however, are only part of the litigation puzzle. Expect to see more litigation by ABA providers against insurers who suspend payments and counterclaims relating to fraud and other misconduct.

Fourth, increased scrutiny and potential revision of billing guidelines. As with other areas that saw an exponential surge in claims, ABA may be subject to revised billing guidelines by CMS and private insurers. At a minimum, providers should expect greater regulator scrutiny of existing claims.

Ultimately, regardless of the specific avenues and various regulators, legitimate ABA providers should expect a much more rigorous enforcement environment in the years to come.

Republished with permission. This article, "Emerging Target - Federal Enforcement Comes to the Autism Therapy Industry," was published in Westlaw Today on July 13, 2026.