Private equity’s autism therapy boom is straining Medicaid as audits reveal widespread billing issues

New report finds rapid private equity expansion in an industry with issues of improper payments, rising costs, and concerns over care quality

CHICAGO, IL, UNITED STATES, April 16, 2026 /EINPresswire.com/ -- A new report from the Private Equity Stakeholder Project (PESP) finds that private equity firms have rapidly expanded into autism therapy services, scaling a Medicaid-funded model that is driving up costs while audits across multiple states have uncovered widespread billing and compliance issues.

As states face rising demand for autism services, they are also preparing for significant reductions in federal Medicaid funding, putting additional strain on already stretched budgets. New federal policies are expected to reduce state Medicaid funding by hundreds of billions of dollars over the next decade, intensifying pressure on states to manage costs.

The report, Private equity’s autism therapy boom is straining Medicaid, finds that private equity firms have acquired more than 500 autism therapy centers in the past decade, with the majority of deals occurring between 2018 and 2022.

As scrutiny of autism therapy providers has increased in recent months, new audits and reporting have brought billing practices and rising costs into sharper focus.

“Private equity firms are using autism therapy as a way to tap into Medicaid dollars,” said Ryan Leitner, PESP healthcare researcher. “And what we’re seeing in audits across multiple states is that it’s coming with real problems. The same billing issues and oversight failures are showing up again and again, which raises serious concerns about how this care is being delivered.”

Audits across multiple states reveal consistent problems
The report highlights a pattern of improper billing and oversight failures identified in recent state and federal audits:
- In Colorado, auditors found at least $77.8 million in improper Medicaid payments, with issues identified in every sampled enrollee-month.
- In Indiana, a federal audit found at least $56 million in improper payments, alongside widespread documentation and billing irregularities.
- In Wisconsin, auditors identified at least $18.5 million in improper payments and up to $94.3 million in potentially improper payments.
- In Massachusetts, investigators found more than $16.7 million in overpayments tied to inadequate supervision and improper billing.

Across these audits, investigators identified similar issues, including billing for services not supported by documentation, and duplicate or cloned records.

A scalable model tied to rising costs
ABA therapy often involves intensive treatment schedules of 30 or more hours per week, creating significant billing opportunities that can be scaled by increasing the number of clients or hours per client.

Private equity-backed providers have rapidly expanded in this environment, where growth can be driven by increasing billable services. Prior research and reporting have linked this model to concerns about staffing levels, supervision, and pressure to increase therapy hours, raising questions about both costs and quality of care.

Rising demand and looming Medicaid cuts increase pressure
As autism diagnoses increase, Medicaid spending on ABA therapy has risen quickly in many states. In North Carolina, for example, the number of children receiving ABA through Medicaid more than doubled between 2022 and 2024.

At the same time, more than $900 billion in federal Medicaid cuts are expected over the next decade, increasing pressure on states to manage rising costs. The report finds that without stronger oversight, transparency, and regulation, the current system may continue to expose state budgets, families, and workers to financial and care risks.

Policy recommendations
The report calls for:
- Continued and expanded audits of ABA providers
- Greater transparency into ownership, billing, and outcomes
- Stronger state oversight at the facility level
- Requirements that a larger share of payments go toward direct care staffing

Matt Parr
Private Equity Stakeholder Project
+1 773-234-4855
email us here
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