Nearly all Minnesota autism service providers applied for licenses under new requirement

The vast majority of Minnesota’s autism service providers have applied for provisional licenses under a new law aimed at bringing greater oversight to a Medicaid-funded program that in recent years has seen explosive growth — and credible fraud allegations.

The Department of Human Services received applications from 433 service sites out of 481 that could have applied, the agency said in a response to a Reformer records request. Some of those sites were not expected to apply because they were disenrolled or perform testing or administration functions that do not require licensure, the agency said.

Just eight sites that are active and have billed the Minnesota Department of Human Services in the past six months did not apply for a provisional license by the May 31 deadline, the agency said.

The Department of Human Services must finish processing the applications by the end of the year, while it develops a comprehensive licensing system to submit to the Legislature for review by Jan. 1.

Some Republican lawmakers voiced concerns in February that just six out of the roughly 500 autism service sites had applied for provisional licensing. Rep. Patti Anderson, R-Dellwood, called it “shocking” at a hearing of the House fraud prevention committee.

“Why are you giving them another three months to fraudulently bill the state before they don’t have a license?” Anderson asked. “Why wait until May 31? If these are legitimate companies … they should be able to do their license in like 30 days.”

James Clark, inspector general for the agency, reminded her that the May 31 deadline was set by the Legislature when it created the provisional licensing requirement in 2025. It passed by a wide margin, although Anderson voted against it.

To receive a provisional license, autism service providers were required to provide information on all controlling members of the organization, supervisors and their qualifications and copies of contracts with consultants or contractors. Providers were also required to submit copies of their policies on staff training, claims submissions and mandated reporting on maltreatment of minors and vulnerable adults, along with other topics.

At the February hearing, Clark said the agency had moved aggressively to root out fraud and abuse, conducting 338 site visits between October 2024 and July 2025 that resulted in 54 sites voluntarily closing and 18 being terminated for cause.

Minnesota’s spending doubled across 14 Medicaid programs at ‘high risk’ of fraud in past 5 years

That does not include a round of unannounced site visits the agency carried out as part of a mass provider screening effort, called Minnesota Revalidate 2026, required by the federal government.

The Department of Human Services terminated around 60% of service providers across 13 Medicaid programs through the revalidation process, which required visiting thousands of service locations. A human services spokesperson said the agency had not yet finalized data on how many autism service providers were terminated.

Providers say the revalidation process was rushed and resulted in many legitimate organizations being cut off from funding, pending appeal, for small clerical errors or because the agency had seemingly not finished reviewing their applications by a May 31 federal deadline.

By licensing providers in the autism service program, called Early Intensive Developmental and Behavioral Intervention, the Legislature sought to create clear standards for providers while empowering the Department of Human Services to take stronger action to enforce those standards.

The autism program effectively began in 2018 after the Legislature created it to address a dearth in autism testing and treatment. Unlike many other human services programs, however, the state did not require autism treatment providers to be licensed and subjected them to minimal health and safety requirements.

The low barrier to entry allowed providers to flood into the program and begin billing Medicaid and insurance companies, with spending on autism services increasing five-fold over several years, from $83 million in 2021 to $443 million in 2025. Republican state Sen. Jim Abeler, R-Anoka, who worked on autism services legislation, told the Reformer that some growth “was desirable because the program was expanding the way it was designed to go.”

As part of their investigation of the pandemic-era relief fraud known as Feeding Our Future, federal authorities discovered that many of the convicted fraudsters were also Medicaid providers. As the Reformer reported in 2024, the feds opened investigations into autism providers for suspected fraud, an investigation that sprawled into other Medicaid programs, as well.

The Walz administration has moved aggressively in recent months to crack down on suspected fraud across 13 programs it deemed “high risk” of fraud, while shuttering one program completely.

A heavily redacted state-commissioned report by Optum found that over 90% of early autism treatment claims did not clearly match policies or procedures, although a flagged claim doesn’t necessarily indicate fraud.

The Trump administration has also subjected the state’s Medicaid program to intense scrutiny, threatening to cut off billions in funding and Vice President JD Vance calling for the Department of Justice to open criminal investigations into the state’s top officials.

The Department of Justice announced what it said is the largest autism fraud case ever brought last month, charging two people in Minnesota — Shamso Ahmed Hassan and Hanaan Mursal Yusuf — for a scheme to defraud the program of $46.6 million. The defendants are alleged to have paid parents to enroll their children in the program regardless of if they needed it, and then billed for services they never provided.

Explosive growth in spending on autism programs is not unique to Minnesota. The Wall Street Journal found widespread billing abuse across the country, calling autism therapy “Medicaid’s fastest-growing jackpot.”