Medicaid Fraud Signal Analysis

A data-driven investigation of $1.09 trillion in Medicaid provider spending
Analysis performed by Claude Code under the guidance of Josh — February 14, 2026

Key Terms and Concepts

What Is Medicaid?

Medicaid is the U.S. government health insurance program for low-income Americans, jointly funded by the federal government and individual states. Each state runs its own version of the program. In 2024, Medicaid covered approximately 90 million Americans, including many children with disabilities.

How Healthcare Billing Works

When a healthcare provider sees a patient, they bill using standardized codes:

• HCPCS Codes (pronounced "hick-picks"): Every medical service has a code. For example, 99213 is a standard office visit, 97153 is 15 minutes of ABA therapy, and T1019 is 15 minutes of personal care.
• NPI (National Provider Identifier): A unique 10-digit number for every healthcare provider in the U.S., like a Social Security number for doctors and healthcare companies.
• Billing Provider vs. Servicing Provider: The "billing provider" submits the bill; the "servicing provider" delivered the care. For a solo doctor, these are the same. For a large company, the company bills and individual therapists deliver services.
• Beneficiary: A person enrolled in Medicaid. The dataset suppresses counts below 12 for privacy.

What Is ABA Therapy?

Applied Behavior Analysis (ABA) is the primary treatment for autism spectrum disorder. ABA therapists work with patients (often children) on behavioral skills, communication, and daily living. Sessions typically run 2–6 hours per day, multiple days per week, billed in 15-minute increments. A 4-hour session generates 16 billing units.

ABA is delivered by BCBAs (Board Certified Behavior Analysts, master's-level) who design treatment plans and RBTs (Registered Behavior Technicians, entry-level) who deliver therapy under supervision.

What Does Fraud Look Like in Billing Data?

• Physical impossibilities: A single person billing more hours per day than exist
• Extreme concentration: Millions of dollars from a handful of patients
• Credential mismatches: A nurse billing for specialized therapy outside their scope
• Banned providers: A federally excluded provider still collecting Medicaid payments
• Unnatural financial patterns: Payment amounts that don't follow expected mathematical distributions

Executive Summary

This analysis examined 227 million rows of Medicaid billing data representing $1.09 trillion in payments from January 2018 through December 2024. We cross-referenced this with the NPPES provider registry, NUCC taxonomy codes, and the OIG List of Excluded Individuals/Entities. Our findings have been validated against publicly available enforcement actions, news reports, and federal audit results.

The ABA Therapy Crisis: A National Fraud Epidemic

ABA therapy has become one of the fastest-growing categories in Medicaid spending — and one of the most fraud-prone. In 2014, CMS effectively mandated that all state Medicaid programs cover comprehensive autism services. By 2022, every state covered ABA. Spending exploded:

The growth trajectory tells a remarkable story: from $2.2 billion in 2018 to $4.6 billion in 2024. But the national average masks extraordinary variation between states:

State ABA Growth Rates (2018–2024)

Note on growth rates: Some growth reflects legitimate policy changes — Pennsylvania enacted its Autism Insurance Act (Act 62) and expanded Medicaid waiver coverage. North Carolina added ABA benefits. However, U.S. autism diagnosis rates grew approximately 50% over this period. Growth of 1,000–24,000% vastly exceeds any plausible increase in the patient population, and the OIG audit findings confirm that a significant portion of this growth includes improper payments.

Physical Impossibilities: Providers Who Defy the Laws of Physics

The Test

Many Medicaid services are billed in 15-minute units. If an individual provider (not an organization) bills 100 units in a month, they're claiming to have worked 25 hours that month. We calculated the implied hours per day for every individual provider who billed time-based services as both the billing and servicing provider. Anyone exceeding 24 hours/day has crossed a physical impossibility threshold — no matter how the data is interpreted, one person cannot work more hours than exist in a day.

The dashed line at 24 hours marks the absolute physical limit. Every provider to its right is billing for more hours than exist in a day.

The Most Extreme Cases

ABA Impossible Hours: A Wisconsin Problem

When we tested specifically for ABA therapy (code 97153), we found 24 providers with impossible or extreme hours. Of these, 12 are in Wisconsin — half of all flagged ABA providers nationwide. This concentration, combined with the OIG's finding of $18.5M in improper payments with a 100% error rate, points to a systemic state-level problem in Wisconsin's ABA billing oversight.

State-Level Deep Dives

Wisconsin OIG Audit: 100% Error Rate

Wisconsin's ABA program presents the clearest evidence of systemic failure. The state's spending grew from $20.8M (2018) to $47.1M (2024), with 12 of 24 impossible-hours ABA providers nationwide located in Wisconsin. The HHS OIG audited the state and found:

• $18.5 million in improper fee-for-service Medicaid ABA payments
• 100% of sampled enrollee-months had at least one improper claim line
• OIG recommended Wisconsin refund $12.3 million to the federal government

Eric Lund alone accounts for more than the total OIG-identified improper amount, suggesting the $18.5M figure significantly understates the problem.

Indiana OIG Audit: $56M Improper

Indiana pays the highest per-patient amount for ABA therapy (code 97153) of any state: $7,132 per patient per month, more than double the next highest state and nearly 3x the national median. The HHS OIG audited Indiana and estimated at least $56 million in improper payments in 2019–2020 (with an additional $76.7M "potentially improper"), noting 97 of 100 sampled enrollee-months had deficiencies including services by uncredentialed staff and billing during nap time.

Our analysis found additional red flags in Indiana:

• Piece by Piece Autism Center (2 related entities): Combined $71.3M, billing 97153 at 3.3–3.8x the state median, with 98% of revenue flowing through a single servicing provider
• Indiana Autism Services: $17.4M at 3.2x state median pricing
• Extreme billing uniformity: Five Indiana residential care providers show less than 4.2% monthly variation over years — unusually flat even for fixed per-diem facilities

Minnesota FBI Raids & $9B+ Estimated Fraud

Minnesota has become the national epicenter of Medicaid fraud concern. The Feeding Our Future scandal ($250 million in food program fraud) was the tip of an iceberg. The U.S. Attorney for Minnesota has estimated that fraud likely exceeds $9 billion across 14 high-risk Medicaid services.

Autism/ABA-specific fraud in Minnesota:

• State ABA payments exploded from approximately $1M (2017) to $220M+ (2024)
• At least a dozen Feeding Our Future defendants were also associated with autism centers
• 90% of autism intervention claims over a four-year period deviated from acceptable standards
• Smart Therapy Center submitted $31.8M in claims (2021–2025) using unqualified 18–19-year-olds as "behavioral technicians" and paid $300–$1,500/month kickbacks to parents per child. Its owner, Asha Farhan Hassan, pled guilty to wire fraud — she was also a Feeding Our Future defendant who stole $465K from the food program
• FBI raided two providers; 85+ open investigations as of mid-2025
• In February 2026, Minnesota DHS announced recruitment of 150+ temporary employees for comprehensive checks of all 5,800 providers in high-risk programs

Flagged providers in our analysis:

• Autism Opportunities Foundation: Largest MN autism provider at $96.8M total. Billing trajectory shows a sharp decline in late 2022, consistent with an enforcement action. Registered 501(c)(3) nonprofit.
• Northway Academy (12 NPIs, $46.7M): † Reassessed Web research revealed this is owned by Sevita Health, a major national disability services corporation. The multi-NPI expansion across 10 Minnesota cities reflects standard corporate growth, not fraud evasion. Sevita is actively breaking ground on new Northway Academy locations. While this entity should still be monitored, the multi-NPI pattern is likely legitimate.
• Riyo International Corporation: $7.4M serving only 28 patients ($264K/patient). Company name suggests no healthcare background.

Arizona $2–3B Behavioral Health Fraud

Arizona experienced a massive behavioral health fraud crisis. Although centered on substance abuse treatment rather than ABA specifically, the dynamics are relevant. Arizona's Medicaid agency (AHCCCS) has suspended 300+ providers, and enforcement actions include:

• Happy House Behavioral Health: 20 individuals indicted, $60M in fraudulent payments
• Rita Anagho: Charged in an alleged $69M scheme involving substance abuse clinic
• L&L Investments: Ordered to pay $34M+ for fraudulent sober living home claims

In our data, Arizona shows ABA spending peaking at $217M in 2022 then dropping to $89M by 2024 — consistent with enforcement actions. We identified a cluster of triple-flagged entities:

• A Better You Wellness Center: $115M total, billing H2014 at 5.9x state median, 19 felony counts filed, new entrant (Dec 2021) with immediate high volume
• Compassion Way Treatment: $36M total, H2014 at 3.5x median
• New Life Wellness Center & New Life Wellness Flagstaff: Combined $80.6M — owner pled guilty to fraudulent schemes; both now on the OIG exclusion list

Texas Governor-Ordered Investigation

In January 2026, Governor Abbott directed the Texas HHS Office of Inspector General to launch investigations into potential Medicaid fraud, specifically ordering a targeted utilization review of autism services with a report due June 2026. The Texas OIG opened 2,118 preliminary provider investigations in FY2023 alone, with 866 referred to the Attorney General.

Our analysis flagged several Texas H2014 (skills training) providers billing at 3.2–5.7x the state median:

Note: Safe Place Counseling is CARF-certified (an independent healthcare accreditation), suggesting it is an operational provider. The pricing outlier may reflect legitimate managed care contract rates, but the 4.6x premium warrants review in the context of the Governor's investigation. A DOJ-confirmed case found a Texas H2014 provider billing 21x the peer average from a residential home — not an approved service location.

North Carolina & Pennsylvania Explosive Growth

Both states show extraordinary ABA spending growth with legitimate policy explanations that partially — but not fully — account for the trajectory.

North Carolina: ABA payments grew from $122M (FY2022) to a projected $639M (FY2026). The state is actively cutting rates (3–8% reductions), though a judge temporarily froze the cuts. We found multiple single-person ABA companies billing $25M–$105M each in NC, which warrants scrutiny.

Pennsylvania: From $1.8M to $436M (2018–2024). Pennsylvania enacted Act 62 (autism insurance mandate) and expanded Medicaid waivers, which explains the coverage expansion. But the rate of growth (over 24,000%) vastly exceeds what coverage mandates alone would predict.

Pricing Outliers

Providers Billing Far Above Their Peers

Within each state, Medicaid fee schedules are standardized. Providers receiving 3x+ the state median per claim may be upcoding, exploiting billing errors, or operating under special rate arrangements.

Credential Mismatches: Wrong Provider Type Billing Wrong Services

Every healthcare provider registers with a specialty in the national registry. When we find providers billing codes completely outside their specialty, it suggests practicing outside their scope, NPI misuse, or fraudulent billing.

ABA Therapy Billed by Non-ABA Providers

A "Contractor" is not any type of healthcare professional. An LPN (Licensed Practical Nurse) assists with basic patient care — ABA therapy is well outside nursing scope. Some states do allow non-BCBAs to bill ABA under supervision, which could explain counselors and occupational therapists appearing here. But contractors and LPNs have no legitimate pathway to billing ABA codes.

Acupuncturists Billing Non-Acupuncture Codes

35 providers registered as acupuncturists in the national registry were billing non-acupuncture medical codes (primarily in New York and California), totaling $35.5 million. This may reflect outdated NPPES registrations rather than active fraud, but the combination of wrong-specialty billing and high dollar volumes warrants verification.

Single-Person ABA Companies Billing Tens of Millions

Gateway Pediatric Therapy billed $108 million in ABA therapy over 6 years, all attributed to one person. At $200/hour, this implies ~250 hours per day — a physical impossibility.

Excluded Providers Still Billing Medicaid

The OIG maintains a list of individuals and companies permanently banned from billing federal healthcare programs. Billing after exclusion is categorically illegal under 42 U.S.C. §1320a-7. We cross-referenced 82,714 excluded entities (8,473 with NPIs) against the claims data.

50 NPI matches were found, billing $243 million combined. 5 were confirmed billing after their exclusion date:

Ohio accounts for 6 of the top 15 excluded-provider matches, suggesting a state-level oversight gap.

Upcoding Detection

Office visits come in five complexity levels, from 99211 (~$25, minimal) to 99215 (~$150, high complexity). Nationally, only 2.2% of established-patient visits are 99215. A provider billing 90%+ as 99215 is almost certainly "upcoding" — billing for a higher level of service than provided.

Scottsdale Physicians Group bills 93.9% of all visits as the highest-complexity code. For a general internal medicine practice, fewer than 5% of visits typically justify 99215. Billing every patient as maximally complex is a statistical near-impossibility in legitimate practice.

Statistical Forensics: Benford's Law

What Is Benford's Law?

Benford's Law is a mathematical principle: in naturally occurring financial datasets, the leading digit is "1" about 30.1% of the time, "2" about 17.6%, and so on. Forensic accountants use deviations from this pattern to detect fabricated data, because humans making up numbers tend to distribute digits more evenly than nature does.

Overall Dataset: Follows Benford's Law Almost Perfectly

The full $1.09 trillion dataset matches Benford's expected distribution closely, confirming the data is largely genuine. The leading digit "1" appears 31.5% of the time (expected: 30.1%).

ABA Claims by State: Significant Deviations

The chart shows the frequency of leading digit "1" in ABA claim payment amounts by state. The expected frequency (per Benford's Law) is 30.1%. States with significantly lower frequencies may have non-natural payment distributions.

Network and Geographic Anomalies

Multi-State Individual Billing

An individual provider can only be in one place at a time. We found 11 individuals billing through servicing providers in 3–8 different states simultaneously:

Some of these may reflect legitimate telehealth practices, but billing across 8 states as an individual is unusual and consistent with billing mill patterns.

High Revenue from Very Few Patients

Providers earning over $1 million from 20 or fewer patients may be exploiting a small number of beneficiaries or fabricating claims:

While 24/7 residential care for severe disabilities can legitimately cost $100K–$300K+ per year, $1M+ per patient over the dataset period should be verified.

What's NOT Fraud: Reassessed Findings

Several initial findings turned out to have legitimate explanations upon further investigation. Removing these reduces false positives and focuses attention on genuine concerns.

Priority Investigation List

Tier 1: Physical Impossibilities and Legal Violations

Tier 2: State-Level Systemic Investigations

Tier 3: Individual Provider Investigation

Methodology and Limitations

Data Sources

Analyses Performed

32 analyses spanning data quality, physical impossibilities, pricing outliers, credential mismatches, temporal anomalies, network analysis, statistical forensics (Benford's Law), billing uniformity, geographic impossibilities, and ABA-specific deep dives across multiple states.

External Validation

Findings were cross-referenced against:

• HHS OIG audit reports (Wisconsin, Indiana, Maine ABA audits)
• DOJ and state AG enforcement actions and press releases
• News reports from NPR, KFF Health News, Minnesota Reformer, and others
• NPPES and NPI registry lookups for flagged providers
• State Medicaid agency publications (AHCCCS, TX HHS, NC DHHS)

Known Limitations

1. Claims vs. units ambiguity: The T-MSIS TOTAL_CLAIMS field represents claim-level counts (header-level entities, which may contain multiple service lines and units), but state reporting varies. CMS excluded Wisconsin from its 2018 T-MSIS assessment due to insufficient data submissions. Our hour calculations are directional, not exact — but extreme magnitudes (100x+ human capacity) cannot be explained by reporting differences.
2. No individual patient records: We see aggregated monthly data, not individual claims or clinical notes. Cannot detect cross-provider fraud for the same patient.
3. Beneficiary suppression at 12: Cannot analyze providers serving fewer than 12 patients per month.
4. State as proxy: Provider state comes from NPPES registration, which may not match the state that paid the claim.
5. Managed care data quality: OIG has documented completeness issues in T-MSIS managed care data.
6. Benford's Law limitations: High false positive rate in healthcare due to fee schedules and unit-based billing. Results presented with appropriate caveats.

Technical Approach

All analyses were performed using DuckDB for query execution on the 2.8GB Parquet file. Joins between claims data and the NPPES registry used TRY_CAST for non-numeric NPI values. External validation was conducted through web research of flagged providers and industry context.

Sources and References

Federal Audit Reports

1. HHS Office of Inspector General. “Indiana Made at Least $56 Million in Improper Fee-for-Service Medicaid Payments for Applied Behavior Analysis.” December 2024.
2. HHS Office of Inspector General. “Wisconsin Made at Least $18.5 Million in Improper Fee-for-Service Medicaid Payments for Applied Behavior Analysis.” July 2025.
3. HHS Office of Inspector General. “Maine Made at Least $45.6 Million in Improper Medicaid Payments for Autism Services.” January 2026.

DOJ and State Attorney General Enforcement Actions

4. U.S. Department of Justice. “Federal Jury Finds Feeding Our Future Mastermind Guilty of $250 Million Fraud.” District of Minnesota.
5. U.S. Department of Justice. “AHCCCS Treatment Fraud.” District of Arizona.
6. U.S. Department of Justice. “U.S. Attorney’s Office Recovers $2 Million from Autism Therapy Provider.” Southern District of Indiana.
7. Arizona Attorney General. “Attorney General Mayes Secures Over $34 Million in Fines and Restitution from Company Convicted of Defrauding AHCCCS.” May 2025.
8. Massachusetts Attorney General. “AG Campbell Announces More Than $2.5 Million in Fraud Settlements with Two Autism Services Providers.” October 2023.
9. Minnesota Attorney General. “Attorney General Ellison Partners with Federal Law Enforcement in Medicaid Fraud Charges Against Asha Hassan.” September 2025.

State Government Actions

10. Office of the Governor of Texas. “Governor Abbott Directs Investigations Into Potential Medicaid Fraud in Texas.” January 2026.
11. Indiana Capital Chronicle. “Governor’s Group Recommends ABA Usage Cap, Rate Changes as Medicaid Costs Rise.” November 2025.
12. Indiana Family and Social Services Administration. “Indiana’s Applied Behavior Analysis Therapy Work Group.”

Investigative Journalism

13. Minnesota Reformer. “U.S. Attorney: Fraud Likely Exceeds $9 Billion in Minnesota-Run Medicaid Services.” December 2025.
14. Minnesota Reformer. “Minnesota Human Services Is Recruiting 168 State Employees to Combat Fraud Through Site Checks.” February 2026.
15. Star Tribune. “Widespread Billing Issues Found in Minnesota Autism Program.”
16. KFF Health News. “It’s the ‘Gold Standard’ in Autism Care. Why Are States Reining It In?”
17. ABC15 Arizona. “DOJ: Scottsdale Physicians Group May Have Upcoded and Improperly Admitted Patients.”
18. FOX 9 Minneapolis. “Woman Pleads Guilty to Autism Services, Feeding Our Future Frauds.”
19. FOX 10 Phoenix. “Phoenix Motel Used as Unlicensed Health Care Center Tied to Clinic Convicted of AHCCCS Fraud.”
20. AZPM. “3 Are Indicted on Fraud-Related Charges in a Medicaid Billing Probe in Arizona.”
21. CBS Detroit. “Fraud Charges Filed in Investigation of Autism Services.” (Centria Healthcare)
22. KJZZ. “22 More People Indicted in Massive Arizona Medicaid Fraud Scheme Involving Sober Living Homes.”

Data Sources

23. Centers for Medicare & Medicaid Services. T-MSIS Medicaid Provider Spending Data. 227 million rows, 2018–2024.
24. CMS National Plan and Provider Enumeration System (NPPES). NPI Registry Download.
25. HHS Office of Inspector General. List of Excluded Individuals/Entities (LEIE).