Medicaid autism therapy costs grew to $10 billion from $2 billion
Federal officials on Tuesday urged states to tighten oversight of autism therapy providers, in an initiative the administration said is meant to ensure that treatment is based on medical need rather than financial incentives.
The push comes as Medicaid spending on applied behavior analysis has climbed far faster than the number of children diagnosed with autism. The New York Times reported that Medicaid costs for the therapy reached $10 billion in 2025, up from $2 billion in 2021, and that per-child costs grew from a median $8,903 to $21,203 over the same period.
Data from the Centers for Medicare and Medicaid Services shows costs for applied behavior analysis rose 421% between 2021 and 2025, outpacing the 67% increase in the number of children diagnosed with autism over the same period.
Caprice Knapp, principal deputy director at CMS, described the rise to The New York Times. “We were seeing quite an explosion in costs,” she said. “We want to make sure the profit motivation isn’t overtaking what’s in the best interest of children.”
CMS Administrator Dr. Mehmet Oz said the initiative would help ensure care is delivered by qualified providers in a manner that is clinically appropriate. “Every dollar lost to fraud or waste is a dollar that cannot reach a child who genuinely needs it,” he said.
Health Secretary Robert F. Kennedy Jr. said the recommendations, unveiled Tuesday, are targeted at “fraud schemes that exploit children with autism and misuse funds from American taxpayers.” He said the new guidance gives states “practical tools that may be used to identify bad actors, protect families, and hold providers accountable.”