Private Equity LOOTS $660 Million Autism Program

North Carolina state flag waving in the wind with historical dates

North Carolina’s Medicaid autism therapy spending exploded by 47,000 percent in just five years, triggering a state audit and exposing what may be one of the most brazen examples of taxpayer dollars being siphoned by private equity-backed providers while bureaucrats looked the other way.

Story Snapshot

North Carolina Medicaid autism therapy costs skyrocketed from $1.4 million to over $660 million annually—a 47,000% surge—prompting fraud concerns and a state audit.
A handful of new providers, many backed by private equity, captured the bulk of billing, with one Utah-based firm alone collecting nearly $65 million in 2025.
State lawmakers enacted House Bill 696 in April 2026 to ban out-of-state providers, restrict telehealth, and mandate certification, aiming to curb the projected $1.1 billion cost by 2027.
The explosive growth far outpaces rising autism diagnoses, fueling suspicions of overbilling and waste mirroring fraud probes in other states.

Auditor Flags Unprecedented Billing Explosion

North Carolina State Auditor Dave Boliek announced an immediate audit in March 2026 after uncovering a staggering 47,000 percent increase in Medicaid billings for Applied Behavioral Analysis autism therapy over five years. The program, which began in 2019 with minimal spending, ballooned to more than $660 million annually by 2025, with projections hitting $1.1 billion by 2027. Boliek characterized the surge as a red flag for potential waste, fraud, and abuse, telling lawmakers the spike demanded urgent scrutiny. The state’s Department of Health and Human Services acknowledged the growth was concentrated among a small number of providers, many of whom entered the market recently.

Private Equity Providers Dominate Billings

Analysis of 2025 Medicaid data reveals more than 80 autism therapy providers billed over $1 million each, with private equity-backed firms capturing the largest shares. ABS Kids, a Utah-based company, led all providers with $64.91 million in billings, while Hopebridge took in $14.63 million. Many of the top-billing providers began operations after 2020, yet their revenues quickly eclipsed those of long-established practices. Researchers at the Private Equity Stakeholder Project noted that private equity firms have rapidly expanded into Medicaid-funded autism services nationwide, often prioritizing volume over quality. The concentration of billings among newcomers raised immediate concerns among legislators about potential self-referrals and over-diagnosis schemes.

Legislative Response Imposes Strict New Rules

North Carolina Governor Josh Stein signed House Bill 696 into law on April 30, 2026, imposing sweeping restrictions on autism therapy providers. The legislation bans out-of-state providers unless they operate within 40 miles of the state border, limits telehealth services, mandates technician certification, and requires monthly reverification for treatment plans exceeding 16 hours per week. Phase two provisions, taking effect in December 2026, will prohibit providers from diagnosing patients or referring them to their own services, a practice lawmakers suspect has fueled inflated billings. The bill aims to curb costs while preserving access for the more than 13,000 children currently enrolled in the program, though some advocates worry the restrictions could reduce availability of care.

National Fraud Concerns Amplify State Scrutiny

North Carolina’s audit comes amid a broader federal investigation by the Department of Health and Human Services Office of Inspector General into Medicaid ABA therapy billing across multiple states. Minnesota has been particularly plagued by fraud in this sector, with audits uncovering hundreds of millions in improper payments. The Centers for Medicare and Medicaid Services now identifies ABA as one of the fastest-growing Medicaid expenses nationally, prompting heightened oversight. North Carolina’s Attorney General has pushed for clearer fraud prosecution policies, citing vague guidelines that have hampered efforts to hold bad actors accountable. The state’s aggressive regulatory response positions it as a potential model for other jurisdictions grappling with similar cost explosions.

The rapid growth in autism therapy spending reflects a troubling pattern seen across the country where well-intentioned programs become targets for exploitation by providers more interested in maximizing revenue than serving vulnerable children. While families of autistic children depend on these services, taxpayers have a right to demand accountability when billings surge at rates that defy rational explanation. North Carolina’s reforms represent a necessary corrective, balancing the legitimate needs of families against the duty to protect public resources from those who would abuse the system for profit.