After 74 investigation, Minnesota senators seek law regulating autism therapy

Citing a recent 74 Million investigation, two Minnesota state senators announced they will seek laws regulating the influence of private equity investment firms on autism therapy providers. 

“This report is outrageous,” said Minneapolis state Sen. Zaynab Mohamed, of the Democratic-Farmer-Labor Party. “The idea that Wall Street investors are exploiting these programs for profit is infuriating.”

Over the last decade, private equity investors — who are subject to very limited oversight — have bought hundreds of mom-and-pop autism therapy centers in Minnesota and elsewhere and consolidated them into lucrative networks. This played a major role in nationwide Medicaid reimbursements for a treatment called applied behavior analysis mushrooming from $400 million in 2019 to nearly $2 billion in 2024, The 74 investigation found. 

According to a 74 analysis of U.S. Centers for Medicare and Medicaid records, private equity firms own almost half of the 50 companies with the highest claims — accounting for $3.1 billion of the almost $7 billion billed for during the investigation’s six-year window.  

The 74’s reporting also called those expenditures into question, building on past reporting that examined the weak evidence base behind applied behavior analysis — behavioral conditioning given to autistic children as young as 2 for up to 40 hours a week. Recent research has found heightened rates of PTSD and psychiatric hospitalizations among people who experienced the intervention, which is designed to “extinguish” autistic traits through rewards and punishments. 

Related: Private equity is cashing in on autism therapy. Children are paying the price.

But ABA, as the treatment is commonly known, has come to dominate autism services nationwide. As private equity entered the picture, large for-profit providers frequently have moved out of states with lower Medicaid reimbursement rates and into ones with better benefits.    

Like a handful of other states that have attempted to make services accessible to as many families with disabled children as possible, Minnesota has been an attractive market for the industry’s big players.  

Now, Mohamed and state Sen. Scott Dibble (DFL-Minneapolis) say they want transparent reporting of who owns autism services centers and the power to weed out those whose profit-driven business models have compromised children’s care. Especially as the One Big Beautiful Bill Act slashes Medicaid spending, states must find ways to sustain children’s benefits, they say.    

Scandals involving fraud and waste in Medicaid reimbursement for autism therapy have ripped through the country over the last year. Minnesota in particular has drawn the ire of the Trump administration, which justified last winter’s violent Immigration and Customs Enforcement incursion into the Twin Cities as necessary to root out Medicaid abuse perpetrated by immigrants. 

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In February, the Department of Government Efficiency released a 275 million-record Medicaid dataset in a supposed effort to root out waste, fraud and abuse. But in analyzing the data, The 74 found a different systemic problem: unchecked profiteering and lax state and federal oversight of ABA, and rapid acquisition of its providers by private equity.

These firms typically acquire privately held companies that have access to steady streams of revenue, extracting as much cash as possible in the short term and leaving debt when investors move on. The impact of this cycle on applied behavior analysis mirrors what has happened in other healthcare industries, says Dibble, who last year authored a bill mandating disclosure of nursing home and assisted living facilities bought by for-profit companies. The bill ultimately did not make it into law. 

A recent investigation by state healthcare monitors found that 79% of complaints about abuse and neglect in long-term care facilities investigated by the Minnesota Department of Health involved for-profit companies. When patient care suffers as a result, the lack of clarity regarding a company’s ownership makes it very difficult to hold anyone accountable, Dibble and other critics contend.  

Atop concerns about quality of care, critics of the investment strategy note that when a private equity firm has paid its investors the cash generated and moves on, the remaining debt often leaves the healthcare providers bankrupt or unable to provide services. When autism therapy centers close, families are frequently left scrambling to provide for their children. 

“It’s not enough to have a P.O. box in New Jersey,” Dibblee says. “I think we’re entitled to know — this particular entity, what else do they own, and how well have they provided services?

“Before someone can come in and purchase a liquor license, they need to prove that they’re an outstanding citizen who hasn’t participated in any shady practices and they can be entrusted with the public trust that a publicly issued license entails.”

In addition, the state ought to require providers to spend a certain amount of the reimbursements they seek on patient care, Dibble says. 

“This kind of aggressive super-sized profit motive is totally inappropriate in these settings because it incentivizes behaviors that don’t support the public’s interest and good use of public dollars.”

The post After 74 investigation, Minnesota senators seek law regulating autism therapy appeared first on MinnPost.

Originally reported by MinnPost by By Beth Hawkins, The 74. Read the full story at the source.