This Is Bigger Than Minnesota

Previous coverage documented how a single Minnesota autism program exploded from $600,000 to over $400 million and ended in a $90 million DOJ fraud bust. That story was a preview, not an outlier.

A new Cato Institute report published April 2, 2026, authored by Adam Omary and Jeffrey A. Singer, lays out the full national picture. The findings are stark.

Across eight states examined, combined Medicaid spending on autism therapy grew from $347 million to over $2.2 billion in recent years, according to Cato. Minnesota alone went from under $700,000 to over $342 million between 2018 and 2024 — a figure consistent with, and slightly more precise than, what earlier reporting found.

Federal Auditors Found Fraud Everywhere They Looked

Federal Inspector General audits of four states — Indiana, Colorado, Maine, and Wisconsin — found improper or potentially improper payments in 100 percent of sampled claims.

Not most claims. Not half. One hundred percent.

Confirmed improper payments across those four states totaled $198 million, or 31 percent of total spending audited, according to Cato. That's roughly one out of every three Medicaid autism therapy dollars going somewhere it shouldn't.

And those are just the states that got audited.

The NYT Finally Covers It — With a Twist

The New York Times ran a major investigation headlined "Short Naps, Long Hours: How Autism Clinics Squeeze Medicaid Dollars Out of Preschoolers." The reporting documents how the industry routinely prescribes up to 40 hours per week of therapy for young children, a volume many clinicians consider clinically unjustified.

But the Times framing emphasizes corporate greed and harm to children. That's real and worth covering.

What gets less emphasis is the government's role in building this machine. The Cato report is direct where the Times is cautious: this is a fee-for-service billing structure that rewards volume over outcomes. Broader diagnosis means more billable hours. More billable hours mean more Medicaid dollars. The incentive to over-diagnose and over-prescribe was baked in from the start.

This isn't just bad actors. It's a bad system.

The Diagnosis Explosion Deserves Scrutiny

The CDC's most recent autism prevalence report, published in 2025, puts the rate at 1 in 31 Americans — up from fewer than 1 in 150 before 2000. That is a 381% increase in diagnosed prevalence, according to Cato.

Cato argues — and this is the part no one wants to say out loud — that much of this growth reflects overdiagnosis of mild cases, not a genuine epidemic of severe neurological impairment. The CDC's surveillance methodology relies on broad surveys of ordinary social difficulties rather than gold-standard clinical assessments.

Autism is real. But lumping a child who struggles with eye contact in with a child who cannot speak, cannot toilet independently, and needs 24/7 care creates a diagnostic category so wide it becomes nearly meaningless for treatment planning — and nearly perfect for billing maximization.

Vermont: Where the Crackdown Hits Real Patients

Vermont offers a complicated case study in the fallout from fraud crackdowns.

Vermont Medicaid changed how it pays ABA providers in late 2025, tightening reimbursement rules specifically to combat the fraud patterns documented nationally. The result: revenue collapsed for many Vermont ABA clinics, according to VTDigger.

At Keene Perspectives in Hartford, Vermont, a six-year-old named Sam — who has profound autism, cannot speak independently, and needs round-the-clock support — was discharged six months early from his clinic because the clinic cannot sustain operations under the new payment structure.

His mother, Jennifer Beane-Edgar, told VTDigger that Sam had gone from being "totally non-speaking, non-communicating" to playing with peers and using a picture-based communication system. That progress stopped in February when the clinic cut him loose.

When regulators finally move, the kids with genuine severe needs — the ones the system was supposedly built for — get caught in the crossfire.

What the Coverage Is Missing

Left-leaning outlets like the Times focus on predatory clinics harming kids. That's true. What they underplay: the federal and state governments designed a reimbursement system that invited this.

Conservative outlets mostly ignored this story until the DOJ bust made it impossible to ignore. What they miss: the children with profound autism who genuinely need intensive therapy are now losing services because bad actors wrecked the credibility of the entire industry.

Both framings are incomplete. The full picture is a government entitlement program with zero outcome accountability, administered through fee-for-service billing that rewards fraud, built on diagnostic criteria so broad they've become a liability.

The Facts

Taxpayers across eight states are out billions of dollars. Federal auditors found improper billing in every single claim they sampled in four states. The children who need help most are now being discharged early because the clinics defrauding the system ruined it for everyone else.