Medicaid autism therapy spending soars, states scramble to control costs

By HPN Staff

Autism therapy has become one of the fastest-growing areas of Medicaid spending, according to a Wall Street Journal investigation. Medicaid paid providers $2.2 billion in 2023, up from $660 million just four years earlier, according to WSJ. The surge reflects both rising autism diagnoses and a growing number of children enrolled in therapy programs.

Much of the day-to-day therapy is delivered by technicians with a high school diploma and minimal online training. Licensed therapists oversee treatment plans, ensuring services meet professional standards. Across states, Medicaid pays roughly $61 per hour for routine therapy, while technicians typically earn around $20 or less per hour. That model can allow providers to serve more children with limited supervision, a factor lawmakers said can affect quality.

Reimbursement rates vary widely among states. In Indiana, providers reportedly billed Medicaid as much as $800 per hour for routine therapy. North Carolina has seen Medicaid payments rise 347 percent between 2022 and 2025. The combination of higher costs and rapid enrollment growth has caught the attention of state and federal officials.

“Provider quality matters,” said Matt Filer, CEO of Mosaic Pediatric Therapy in Charlotte. “There is a lot of variation in the quality of providers. The patients and North Carolina’s Medicaid program are the losers. You’re spending more money in the short term and you’re losing in the long term because they’re not getting the health outcomes that you’re expecting from these services.”

Why it matters

Medicaid is a state-run program, but it is largely funded by federal taxpayers. The rapid growth in autism therapy spending raises questions about whether higher costs are producing better health care outcomes. Private investment, including from private equity firms, has entered the market, and some critics say the focus on scaling therapy hours and billing can come at the expense of quality.

In North Carolina, the surge in enrollment and reimbursements has strained the state budget while increasing exposure for federal taxpayers. CMS Administrator Mehmet Oz said last week the agency plans to monitor both Republican- and Democratic-led states to prevent fraud, waste and abuse. Federal officials are particularly focused on specialized therapies such as autism treatment, regardless of political leadership.

Lawmakers and advocates are pushing for closer oversight. They are considering stricter supervision requirements, caps on reimbursements and more detailed reviews of therapy delivery. The goal is to ensure children receive meaningful care while keeping spending sustainable.

The bigger picture

The rise in autism therapy spending highlights broader challenges facing Medicaid, the nation’s largest health care safety-net program. States must balance rising costs with providing coverage for low-income children, adults and people with disabilities. State programs vary in how they set reimbursement rates and oversee providers, and rapid growth in one area can create pressure across the system. North Carolina’s experience shows how demand and costs in a specialized program can ripple across Medicaid, underscoring the importance of accountability, sustainable spending and careful oversight nationwide.