A New York Times investigation reveals that Applied Behavioral Analysis therapy clinics are overprescribing treatment to young children while straining state Medicaid budgets. Thousands of facilities have opened nationwide, fueled by rising autism diagnoses and federal mandates requiring Medicaid coverage. Private equity firms have poured significant investment into this rapidly expanding sector, creating a multi-billion dollar industry.

Annual Medicaid spending on autism therapy has surged dramatically, with Colorado spending more on pediatric treatment than on emergency room care for all patients. The therapy, which involves up to 40 hours per week of intensive sessions, has become one of the fastest-growing medical care categories for state programs. Many clinics discourage school enrollment to maximize billing opportunities.

Clinics operate with minimal oversight since behavioral therapists don't require specialized medical degrees or state licensure. This regulatory gap has led to abuse cases, including a Texas incident where a therapist was caught hitting a child. Experts warn that lack of inspection standards leaves children vulnerable to harm.

States struggle to curb spending despite budget pressures, as federal rules mandate Medicaid coverage without clear restriction guidelines. North Carolina has attempted reforms that may trigger legal challenges. The investigation exposes an industry prioritizing billing over child welfare, creating urgent need for regulatory intervention.