Minnesota fraud fallout: Payment delays threaten autism centers

Autism fraud in MN: Children face challenges

As Minnesota implements measures to prevent fraud in social service programs, children who are on the autism spectrum could face additional challenges. FOX 9’s Corin Hoggard has the latest.

MINNETONKA, Minn. (FOX 9) - Kids on the autism spectrum are facing challenges as Minnesota implements measures to prevent fraud in social service programs.

State's new preapproval process

What we know:

The state is now conducting preapproval reviews on Medicaid claims in 14 high-risk areas, including autism centers. This means businesses like Holland Autism Centers have had their claims held, with no payments expected for up to 90 days.

Jennifer Larson, founder of Holland Autism Centers, expressed concern over the financial strain this delay is causing. "They can hold funds according to the federal government up to 90 days. Well, 90 days is a whole quarter. And every two weeks I have a $250,000 payroll. So how am I supposed to make that happen?" said Larson.

Larson says Gov. Walz is throwing the baby out with the bath water, punishing legitimate autism centers to make sure fraudsters don’t get any more money.

Impact on families and centers

Dig deeper:

She says most autism centers can’t stay open without the state funding coming sooner than 90 days.

So as many as 50,000 children will lose the help they need.

What they're saying:

Parents like Jason Fleisner are worried about losing all the progress they made and the hope that gave them.

"You take away facilities like this, and it extinguishes that hope, because then we're back to not knowing what are we going to do, what is tomorrow going to look like," said Fleisner.

Holland Autism Centers, which relies on Medicaid programs for about 80% of its funding, has had to borrow money to pay its 120 employees due to the delay in payments.

Growing fraud, intervention

How it happened:

Funding for autism centers grew from about $2.2 million in 2018 to $228 million in 2024 while the number of providers jumped from 41 to 439.

The state has investigations going for 85 of them and federal prosecutors got a conviction against Asha Farhan Hassan earlier this month for her role in a $14 million autism fraud scheme.

The federal government sets three levels of screening for providers who bill Medicaid: limited, moderate and high risk.

Autism services are currently designated as moderate risk, but Minnesota designated it as high risk as of June 2025, giving the Department of Human Services new oversight including unannounced site visits and required screening before Medicaid enrollment.

Preapproval review started this week.

What we don't know:

It remains unclear if the state will consider designating longstanding centers with good audit records as "trusted providers" to ensure they continue receiving payments.