The Trump administration is releasing new guidelines that would bolster Medicaid's oversight of autism therapy, focusing on a rapidly growing business that is drawing scrutiny from federal investigators.

The recommendations, from the Centers for Medicare and Medicaid Services, are aimed at state Medicaid agencies, but they will likely draw close attention from private insurers and employers as well. They focus on applied behavior analysis, or ABA, a type of therapy that is supposed to help people with autism manage behavior and develop daily living and social skills.

A Wall Street Journal investigation found that autism therapy was one of the fastest-growing services in Medicaid, the state-run program for low-income and disabled people, and highlighted lucrative billing practices. Indiana Medicaid officials barred an autism therapy company after the Journal detailed its billing practices. Last month, lawmakers on the U.S. House of Representatives Committee on Education and Workforce sent a letter to another company the Journal investigated, seeking documents about its billing practices.

The congressional letter, citing the Journal's reporting, said the committee is "investigating whether certain reimbursement arrangements within the autism therapy industry have contributed to excessive health care costs."

Among the new recommendations, in a report the agency described as a "toolkit" for states, are limits on therapists' use of telehealth, safeguards to detect fraudulent or abusive billing, and state licensure for therapy providers.

"We're giving states these practical tools so that every child receiving ABA services gets individualized, evidence-based care delivered by qualified providers and free from fraud and financial exploitation," said Dan Brillman, the deputy CMS administrator who oversees Medicaid.

The new report says Medicaid spending on autism therapy rose more than fivefold between 2021 and 2025, when it totaled $10.1 billion for Medicaid and the related Children's Health Insurance Program. The outlays grew far faster than the number of patients receiving the treatment.

The CMS suggestions could crimp the practices of ABA providers that bill a high number of hours of therapy for nearly every patient.

CMS recommends that the number of hours should vary, depending on patients' needs, and says research shows that "intervention intensity and frequency are not correlated with improvement in outcomes." Though some providers schedule young children for 40 hours a week of therapy, CMS says that this is "not a best practice" and that children need time for normal activities like napping and eating.

States should implement controls including required authorization before ABA services begin and reauthorization near the end of the approved period, to ensure services are medically necessary and appropriate, the guidelines say.

The report recommends a floor for how much supervision therapists should give lower-level technicians and says they should do at least part of the oversight in person.

"If it's all being done telehealth and it's not being done by someone who even is in your state, how effective is that?" said Caprice Knapp, principal deputy in CMS's Medicaid center and primary author of the report. She said it is important for technicians to have "adequate supervision when they are one-on-one with the kids."

The inspector general for the Department of Health and Human Services has found problems in ABA billing in several states.

Kate McEvoy, executive director of the National Association of Medicaid Directors, said that with rapid growth in ABA spending, state officials welcome CMS guidance. "Medicaid programs have identified a clear need to assess the standards under which these services are being provided to safeguard against overuse or outright fraud."

The report notes private-equity firms' growing footprint in the autism-therapy business. CMS suggests that states should monitor ownership changes and that companies should "avoid structures where financial pressures override clinical judgment."

The report also raises concerns about the potential conflicts of interest when the clinician diagnosing autism, or creating a therapy care plan, has ties to the company that provides therapy. Doctors shouldn't be compensated based on their referrals, for instance, CMS says.