What Is ABA Therapy?
The Gold Standard for Autism Treatment
Applied Behavior Analysis (ABA) therapy helps children diagnosed with autism spectrum disorder (ASD) build communication skills, improve social interactions, and replace challenging behaviors with constructive ones. Therapists — often Registered Behavior Technicians (RBTs) — work with children in homes, schools, and clinics for anywhere between 10 and 40 hours per week.
Advocates call ABA the “gold standard” of autism treatment. Moreover, many parents report transformative results. Children who were once non-verbal have learned to speak. Toddlers who struggled with daily routines have started school and made friends. For millions of families, ABA is not optional — it is essential.
When Did Medicaid Start Covering It?
In 2014, the federal Centers for Medicare and Medicaid Services mandated that all state Medicaid programs cover comprehensive autism services for children. Coverage was not universal immediately, but by 2022, every state Medicaid program covered ABA therapy. That milestone unleashed a surge in demand — and spending — that states are still struggling to manage.
How Medicaid Spending on ABA Exploded
A 267% Jump in Therapy Visits
ABA therapy visits increased by 266.9% from 2019 to 2024, with technician-administered protocol treatment accounting for the largest share of visits. The growth was not evenly distributed. In 2022 and 2023, the rate of growth in Medicaid programs rocketed past the growth of commercial claims. In 2023, services for Medicaid patients increased 341% relative to 2019, while the rate of growth for commercial claims was 169%.
Additionally, total Medicaid spending on ABA codes grew 279% from 2018 to 2024, reaching $14.49 billion across all states.
Rising Autism Diagnoses Drive Demand
As the diagnostic criteria for autism spectrum disorders shifted from a rigid definition to a broad spectrum, the rate of diagnosis increased more than four times — from 1 in 150 children in 2000 to 1 in 31 children in 2022. More diagnoses mean more families seeking therapy. Furthermore, about 5% of children ages 3 to 17 on public insurance have autism spectrum disorder, compared with 2% who have private insurance.
The Workforce Expanded Rapidly
The number of unique behavioral analysts and technicians billing for ABA increased by 135% from 2019 to 2024, with 41 states experiencing growth exceeding 50%. However, expansion was uneven. Five states, plus Washington D.C., saw provider growth in excess of 200%.
States Bearing the Biggest Cost Burden
Indiana’s 2,800% Spending Surge
Indiana spent $21 million on ABA therapy in 2017. By 2023, that figure had risen to $611 million — a 2,800% increase. In response, Indiana established a reimbursement rate in January 2024 that brought costs down to an estimated $474 million, though expenses are expected to creep back up to $645 million by 2026.
North Carolina’s 423% Projected Jump
Payments for ABA therapy in North Carolina, which were $122 million in fiscal year 2022, are projected to hit $639 million in fiscal 2026 — a 423% increase. As a result, North Carolina Medicaid cut reimbursement rates for autism services by 10% effective October 1. Families of 21 children immediately sued the state, arguing the cuts discriminated against children with disabilities.
Nebraska’s 1,760% Payment Explosion
Nebraska represents one of the most extreme cases. In 2020, Medicaid paid $4.6 million for ABA therapy in Nebraska. By 2024, that figure reached $85.6 million — a nearly 1,760% increase. Subsequently, Nebraska cut payments by nearly 50% for some ABA providers.
Fraud, Audits, and Improper Payments
Federal Auditors Find Widespread Billing Problems
Rapid expansion brought inadequate oversight. A federal audit of Indiana’s Medicaid program estimated at least $56 million in improper payments in 2019 and 2020, with some providers billing for excessive hours — including during nap time. A similar audit in Wisconsin estimated at least $18.5 million in improper payments in 2021 and 2022.
The Wisconsin state Medicaid program had never conducted a single post-payment review of ABA claims since the program began in 2016. These are not minor accounting errors — they reflect structural gaps in a multi-billion-dollar payment system.
The Fee-for-Service Problem
The current payment structure reimburses based on service volume rather than outcomes, creating misaligned incentives. Providers benefit financially from maximizing billable hours regardless of whether treatment produces meaningful improvements in children’s functioning.
Consequently, in Minnesota, state officials had 85 open investigations into autism providers as of this past summer, after the FBI raided two providers in 2024 as part of a Medicaid fraud investigation.
Families Caught in the Crossfire
Real Lives Disrupted by Budget Cuts
For families who rely on ABA therapy, these budget decisions carry life-altering consequences. In one widely reported case, a young girl named Aubreigh Osborne made remarkable progress after starting ABA — she began preschool, made a best friend, and completed toilet training for the first time. Then, in October, Aubreigh’s weekly therapy hours were abruptly halved from 30 to 15 as a byproduct of her state’s effort to cut Medicaid spending.
Her mother called ABA therapy the source of “moments of normalcy” for their family. Those moments now hang in the balance across the country.
Proposed Hour Caps Add to Family Fears
One of the most concerning developments is a proposed cap on ABA therapy hours, which could limit treatment to 30 hours each week for a maximum of three years. For children who need long-term, intensive intervention, such limits could delay essential developmental milestones.
What Comes Next for ABA and Medicaid
Federal Budget Cuts Deepen the Crisis
At the federal level, proposed budget plans include sweeping Medicaid reductions — most notably, a House-backed proposal aiming to cut the Medicaid budget by $880 billion over the next decade. These federal pressures compound existing state-level shortfalls and could reduce access to ABA services for millions of children.
A Path Toward Sustainable Reform
Industry analysts and advocacy groups increasingly agree that reform must move beyond cost-cutting. Recommendations include mandates to collect and report on care outcomes, comparison of care delivery to established norms, and better parameters for assessing treatment progress.
In short, the goal is a system that protects children who truly need services — while preventing billing abuse that drains resources from those who need them most.
