The FBI is investigating possible Medicaid fraud in the treatment of autism in Minnesota, according to sources with knowledge of the investigation and who were granted anonymity because they’re not authorized to speak to the media.

Details of the investigation are unknown, but what’s certain is that growth of spending on the autism program has exploded in recent years. The number of providers — who diagnose and treat people with autism spectrum disorder — has increased 700% in the past five years, climbing from 41 providers in 2018 to 328 last year.

The amount paid to providers during that time has increased 3,000%, from about $6 million to nearly $192 million — according to data provided to the Minnesota Reformer by the Minnesota Department of Human Services, which administers Minnesota’s Medicaid health insurance program for low-income people and people with disabilities.

Department of Human Services Assistant Commissioner Natasha Merz said the growth of the autism program has been “pretty consistent” with other DHS programs, such as housing stabilization services, a new Medical Assistance benefit to help people with disabilities and seniors find and keep housing. (Some autism centers advertise both of those services.)

“I don’t think we are surprised or particularly disturbed by the rate of growth,” Merz said. “We know that having early intervention and access to service is a really, really important part of putting these kiddos on a good trajectory for the rest of their lives.”

She added, “Anytime we’re operating Medicaid programs, we have to ensure we’re good stewards of taxpayer money, and that we have the right level of protections in place against fraud, waste and abuse.”

Asked about a federal investigation, Merz said, “I can’t comment on ongoing investigations.” An FBI spokeswoman did not respond to a request for comment.

The federal investigation — following years of explosive growth — raises the specter of another Minnesota program intended to help the needy instead lining the pockets of some undeserving people, as with the ongoing Feeding Our Future case.

In that case, the U.S. Department of Justice has secured 23 convictions — including five this month after the first jury trial — while dozens more await trial, charged with stealing from a program intended to feed hungry children during the pandemic.

Shortage of providers

Autism benefits are part of the Minnesota Health Care Program, which provides coverage to families with children, adults, people with disabilities and seniors.

The autism program launched in mid-2015. Prior to 2001, health insurance companies and Medicaid did not cover services for people with autism, but advocates helped get insurance coverage mandated in all states by 2019, according to the Center for Economic and Policy Research.

The Affordable Care Act, also known as Obamacare, required health plans to cover autism services, and in 2014, the Centers for Medicare and Medicaid Services required all state Medicaid plans to cover autism services. This led to a flood of insurance and taxpayer dollars into a market with no minimum provider standards and little regulatory oversight, according to CEPR.

Autism affects one out of every 34 Minnesota children aged 8, according to a 2020 review by the Minnesota Autism and Developmental Disabilities Monitoring Network, one of 12 Centers for Disease Control and Prevention sites in the U.S. that studies the prevalence of autism. Minnesota’s rate is slightly higher than the national average.

Waiting lists suggest that despite the growth of the state autism program, children with autism who need treatment aren’t getting it due to a shortage of providers. The autism network says there is only one certified behavior analyst available for every 97 children.

Lawmakers passed legislation this year to license behavior analysts — joining 34 other states — and to increase reimbursement rates 15% for early intensive developmental and behavioral intervention providers. The policies are intended to address high turnover and help providers maintain financial stability.

Potential for reform

State officials are looking at whether some autism centers’ caseloads are too high and whether the state should begin licensing autism facilities, too.

Merz said when providers enroll for reimbursement through Medical Assistance — Minnesota’s name for its federal-state funded Medicaid program — the department verifies that they have the appropriate credentials. Families using the program also have to have a service agreement to bill DHS and Medical Assistance.

“So there are checks and balances and protection,” Merz said.

DHS’s Office of Inspector General has the authority to investigate suspected fraud and stop providers’ ability to bill. Fraud findings can be forwarded to the state attorney general’s Medicaid fraud unit.

The OIG has withheld payments to seven providers since 2018: five due to credible fraud allegations, one because a provider refused to give DHS access to records, and one to protect the public welfare and Minnesota Health Care Programs, according to DHS spokesman Scott Peterson. Medicaid Provider Audits and Investigations referred five Minnesota providers to the Medicaid Fraud Control Unit.

Eric Larsson is president of the Association for Science in Autism Treatment, an assistant psychology professor at the University of Minnesota and executive director of clinical services for Lovaas Institute Midwest, which provides autism services to children in their homes and community. Larsson, who is also president of the Autism Treatment Association of Minnesota, said after years of lobbying, Minnesota finally put an autism program in place in 2013, but it didn’t really get up and running until about 2018.

The state has filed a complaint with the Behavior Analyst Certification Board about providers with high caseloads failing to provide quality services. Lovaas’ average caseload is 3.5 children per board-certified clinician.

“I’m serving 42 kids and we have 20 certified behavioral analysts, but another center could be serving 100,” Larsson said.

A woman who works for an insurance company that administers Medical Assistance — granted anonymity because she’s not authorized by her company to speak to the media — said there’s widespread concern that the autism program is riddled with fraud.

“We all talk about it,” she said.

Unlike the nonexistent meals that were the vehicle for the Feeding Our Future fraud, she said children are actually going to the autism centers, but, “A lot of them we feel are just daycare centers,” she said. “I think that people that own the daycare are saying they’re autistic when they’re not.”

If the allegation is true, providers would be reaping the high reimbursement of autism services without the need to provide the expensive services associated with it.

A child can get up to 40 hours of services a week — such as speech therapy — depending on their individual treatment plan.

Larsson said the program has a “huge amount of regulation” and requires children to get diagnosed with autism, but he acknowledged the definition of autism spectrum disorder is “incredibly vague,” which creates the potential for abuse.

“It may be that some people are taking advantage of that diagnosis in order to get their daycare paid for,” he said. “And that’s also a mess.”

In one case, the insurer paid out benefits to a family with four siblings with autism, the insurance industry source said. In another case, she said, a center submitted claims for services and transportation for a 3-year-old to attend a center seven days per week even though it’s closed on Sundays.

The insurance companies pay for children’s rides to the centers, which can lead to children as young as 18 months old being transported five days a week, to and from the centers, sometimes from one center to another within a day, the insurance worker said.

Larsson said he visits some centers and sees “this huge line of cabs” or “medicab kind of service” dropping children off.

“If you look at it with a jaundiced eye … it is kind of crazy,” he said.

The families are predominantly immigrants who are fairly new to Medical Assistance, the insurance worker said, with autism center employees often calling on behalf of parents due to a lack of English language proficiency.

Larsson said children of immigrants who can’t speak English fluently are getting diagnosed, leaving the parents to deal with a befuddling bureaucracy.

“You talk to parents who don’t have any idea why they’re sending the kid to an autism center,” he said.

Some bad operators could be taking advantage of that language gap, he said.

“It wouldn’t shock me if there are confused families … that aren’t committing fraud, they’re just trying to get services … and they need the daycare,” Larsson said. “Maybe there’s providers just playing it fast with that whole concept.”

He said some parents call his company looking for a provider and say they called numerous others where nobody ever answered the phone.

“So are some of these fake centers?” Larsson said.

Larsson serves on a national certification board that responded to widespread allegations of fraud in Florida in 2018 by setting up a special unit to process the complaints. The state found therapy providers billing for more than 24 hours in a day, billing for 31 consecutive days, and falsifying qualifications.

“It’s easy to imagine something like that’s going on here” — especially without the safeguard of rigorous licensing, Larsson said. “What would stop someone from renting out an apartment … and saying ‘This is my autism treatment center?’ As much bureaucracy as there is that we contend with, there’s nothing that would stop us from doing that.”

Florida operators were required to have 40 hours of training to get started, but people were falsifying training records, Larsson said.

After spending 20 years trying to get a Minnesota autism program in place, Larsson used to think Minnesota had too many bureaucratic hurdles. Now he’s not so sure.

“My eyes have been opening more and more,” he said.

The Minnesota Reformer is an independent, nonprofit news organization dedicated to keeping Minnesotans informed and unearthing stories other outlets can’t or won’t tell.