EIDBI Autism Fraud: DOJ Charges Smart Therapy and Star Autism Owners in $46.6M Indictment
The largest Medicaid autism fraud case ever charged by DOJ. A federal grand jury in the District of Minnesota has indicted Shamso Ahmed Hassan and Hanaan Mursal Yusuf in a $46.6 million scheme to defraud the Minnesota Early Intensive Developmental and Behavioral Intervention (EIDBI) Program. The indictment follows the September 2025 charges against Asha Farhan Hassan, the listed sole owner of Smart Therapy Center on Minnesota Department of Human Services records. The new indictment names the individuals who, according to the government, were the actual beneficial owners of Smart Therapy and a second autism services provider, Star Autism Center.
The EIDBI Autism Fraud Takedown
On May 20, 2026, a federal grand jury returned a ten-count indictment against Shamso Ahmed Hassan and Hanaan Mursal Yusuf. The case is captioned United States v. Hassan, et al., No. 26-cr-00099 (D. Minn.). The Department of Justice announced the indictment as part of the broader Minnesota Health Care Fraud Takedown on May 21, 2026.
The charges include conspiracy to commit healthcare fraud, seven substantive healthcare fraud counts, and two money laundering counts. The government alleges $46.6 million in fraudulent billing through Smart Therapy Center and Star Autism Center, of which approximately $21.1 million was paid.
The Hassan-Yusuf indictment follows the September 2025 federal Information against Asha Farhan Hassan. See the firm's prior coverage in DOJ Priority and Building a Defense. Acting U.S. Attorney Joseph Thompson said the Asha Hassan case was the first in an ongoing investigation. The new indictment is the next charged case.
HHS-OIG audits in Indiana, Wisconsin, Maine, and Colorado have identified hundreds of millions of dollars in improper ABA Medicaid payments. Three more state audits are in progress. Federal criminal prosecutions involving ABA fraud have been brought in Connecticut and South Carolina.
On May 20, 2026, federal prosecutors filed the largest Medicaid autism fraud indictment in the Department of Justice's history. The case targets two Minneapolis-area autism services providers: Smart Therapy Center LLC and Star Autism Center LLC. The defendants, Shamso Ahmed Hassan and Hanaan Mursal Yusuf, both Brooklyn Park residents, face charges that include conspiracy to commit healthcare fraud, substantive healthcare fraud counts, and money laundering. On the same day, the Department of Justice announced the formal expansion of the Midwest Health Care Fraud Strike Force into the District of Minnesota.
This case is the second public charge to emerge from the federal EIDBI investigation. The first was the September 24, 2025 federal Information charging Asha Farhan Hassan, the registered sole owner of Smart Therapy. Acting U.S. Attorney Joseph Thompson described the Asha Hassan case as the first of an "ongoing investigation" into autism services fraud. The Hassan-Yusuf indictment names additional beneficial owners that, according to the government, were not disclosed to DHS.
How the EIDBI Program Operated
The Early Intensive Developmental and Behavioral Intervention Program is a federally funded Minnesota healthcare program administered by the Minnesota Department of Human Services. According to the DHS program description, the purpose of the EIDBI Program is "to provide medically necessary, early and intensive intervention for people with ASD and related conditions."
Minnesota was one of the first states in the country to offer Medicaid coverage for these services. According to the Minnesota Office of the Legislative Auditor, the number of authorized EIDBI provider agencies grew from nearly 150 in 2020 to over 500 in 2024. The number of children and youth receiving EIDBI services grew from approximately 1,400 in 2020 to over 5,600 in 2024. Total annual program cost grew from $38.1 million in 2020 to $324.9 million in 2024. DOJ reports that EIDBI claims grew from over $600,000 in 2018 to more than $400 million by 2025.
Eligibility and Plan Requirements
To qualify for the EIDBI benefit, a recipient must be under 21 years of age, must have been diagnosed with autism spectrum disorder or a related condition, must have completed a Comprehensive Multi-Disciplinary Evaluation (CMDE) establishing medical need for EIDBI services, and must be enrolled in a qualifying healthcare program such as Medicaid. The CMDE is used to develop the recipient's Individual Treatment Plan (ITP), a personalized written plan of care that outlines goals and the specific interventions the recipient will receive based on individually assessed needs.
The CMDE establishes both diagnosis and medical necessity. A pattern of universal autism diagnoses, especially among recipients recruited from outside ordinary clinical referral channels, raises the question whether the CMDE process has been compromised. The Hassan-Yusuf indictment alleges that services were billed for recipients "who appeared to be diagnosed with autism regardless of medical necessity."
Provider Qualifications and the Role of the QSP
EIDBI services must be delivered under the supervision of a Qualified Supervising Professional, or QSP, employed by the EIDBI provider agency. The QSP supervises and manages all aspects of EIDBI services, treatment, and documentation. The QSP assumes full professional responsibility for the services provided by each supervisee, including the supervisee's actions and decisions.
Below the QSP are Level I and Level II providers. Both oversee the implementation of the ITP and work directly with EIDBI client-patients. Both monitor progress, goals, objectives, and treatment outcomes. Both are responsible for documenting all services provided in case notes. Level I providers must meet more stringent education and experience qualifications than Level II providers, and Level I services are billed at a higher rate. Applied Behavior Analysis (ABA therapy), the one-on-one behavioral therapy most often associated with autism intervention, is one of the treatment modalities covered.
Billing and Documentation Requirements
EIDBI providers operate under the Minnesota Health Care Programs Provider Manual, which sets forth specific recordkeeping and billing rules. As a condition for payment, the provider must document each occurrence of a health service in the recipient's health service record. The record must include the recipient's personal information and legal representative, the date the entry was made, the dates the service was provided, contact information for the QSP, start and stop times if the service is billed by time, the signature and title of the person who delivered the service, the completed and current CMDE and ITP, the plan for clinical supervision, and the family's preferences for EIDBI services. Records must be retained for at least five years.
The MHCP Provider Manual also requires that claims be billed only for services actually provided and only after those services have been rendered. Future-dated claims are not permitted. Each claim must include the recipient's individual identifying number, a procedure code identifying the service, the provider's Unique Minnesota Provider Identifier and National Provider Identifier (NPI), and the identity of the medical professional who prescribed or ordered the service.
Ownership and Disclosure Requirements
The MHCP requires providers to disclose, at enrollment and upon any change in ownership, the identity of any person or business with an ownership or controlling interest in the provider, the identity of any board member, officer, business and finance controller (CEO, CFO, COO, CTO), and any managing employee. DHS defines an "owner" as any person or business holding a direct or indirect controlling interest of 5 percent or more. A "managing employee" is a person other than an executive officer who exercises operational or managerial control or who directly or indirectly conducts or manages the day-to-day operations.
The disclosure rules exist for a reason. They allow DHS to screen owners and controllers against federal exclusion lists, criminal histories, and prior program violations. They identify the individuals responsible for billing practices. They allow the agency to enforce program integrity rules against the people who actually control the provider, not just the people whose names appear on the paperwork. The Hassan-Yusuf indictment alleges that the ownership disclosures filed for Smart Therapy and Star Autism concealed the true ownership and control structures of both centers.
The Defendants and the Two Autism Centers
Shamso Ahmed Hassan and Hanaan Mursal Yusuf are both Minnesota residents. Hassan was a beneficial owner of Smart Therapy Center LLC and Star Autism Center LLC. Yusuf was an employee of Smart Therapy and, according to the indictment, the lead biller responsible for submitting claims to Medicaid. Both enrolled with DHS as EIDBI providers and billed for their own purported services through Smart Therapy.
Smart Therapy was formed in November 2019. Star Autism was formed in August 2020. Both providers operated until December 2024. The indictment names two unnamed co-conspirators who held formal title to the centers on DHS disclosure forms and a third individual, identified as "Individual #1," described as Shamso Hassan's husband and a beneficial owner of both centers. The ownership particulars are addressed in the false-disclosure allegation discussed below.
The Scheme to Defraud the EIDBI Program
The conspiracy count covers the period from November 2019 through December 2024. The substantive healthcare fraud counts cover the period from May 2020 through December 2024. The indictment identifies a layered scheme that combined false ownership disclosures, kickback payments to parents, billing for services not provided, billing for services rendered by people who did not work at the centers, and the systematic inflation of family and caregiver training claims. The government's allegations break down into seven distinct categories.
Billing for Services That Were Medically Unnecessary or Not Provided
The indictment alleges that Smart Therapy and Star Autism submitted claims for EIDBI services that were medically unnecessary and that were purportedly rendered to recipients who, according to the indictment, "appeared to be diagnosed with autism regardless of medical necessity." The government will argue that the CMDE process was manipulated to qualify recruited children for the program regardless of clinical indication.
The indictment also alleges claims for services that were not provided at all. From May 2020 through December 2024, Smart Therapy and Star Autism allegedly submitted approximately $46.6 million in claims to Medicaid for EIDBI services that were medically unnecessary, not actually provided, not eligible for reimbursement, or procured through illegal kickbacks. Medicaid paid approximately $21.1 million on those claims.
Billing for Services Allegedly Rendered by Providers Who Did Not Work There
The indictment alleges that Smart Therapy and Star Autism submitted claims for EIDBI services purportedly rendered by medical providers who did not work at either business at the time of service. In some instances, providers had worked at the centers briefly, then left. The centers continued to bill under their names. In other instances, the indictment alleges, individuals attended a single training at Smart Therapy or Star Autism and never became employed there. The centers nonetheless enrolled those individuals with DHS as providers and billed for EIDBI services in their names. The individuals, according to the indictment, had no knowledge that their identities were being used.
Inflated Family and Caregiver Training Claims
The most specific factual allegation involves family and caregiver training. The indictment alleges that between April 2023 and October 2024, Smart Therapy submitted claims to DHS for over 3,000 hours of EIDBI family and caregiver training purportedly provided to a single Medicaid recipient's family. The indictment alleges that the recipient's family never received any training from Smart Therapy. The volume of claims for a single recipient supports the government's argument that the billing was untethered from any underlying service.
False Ownership and Disclosure Documents
A central charging theory rests on the DHS disclosure forms. The indictment alleges that the defendants and their co-conspirators falsely documented Co-Conspirator #1 and Co-Conspirator #2 as the sole owners of Smart Therapy and Star Autism on the enrollment, certification, and disclosure forms submitted to DHS and to managed care organizations such as PrimeWest Health. In fact, on the government's account, Shamso Hassan and Individual #1, along with other co-conspirators, maintained ownership and managing control over both centers. The false representations, according to the indictment, served two purposes: they concealed the involvement of the actual decision-makers, and they furthered the fraudulent operation of the centers by allowing them to bill Medicaid without DHS scrutiny of the true ownership structure.
The ownership disclosure rules are not bureaucratic formalities. They allow DHS, CMS, and managed care organizations to screen owners holding 5 percent or more against the HHS-OIG List of Excluded Individuals/Entities, against state Medicaid exclusion lists, and against records of prior program violations. An undisclosed beneficial owner who would otherwise be excluded from federal healthcare programs can indirectly receive federal program funds through an entity whose disclosed owners pass screening. The Asha Farhan Hassan Information specifically alleged that one of the undisclosed owners had previously been excluded by DHS for three years in connection with prior conduct running an adult daycare. False ownership disclosures are not just administrative violations. They are the means by which an excluded individual continues to access federal program payments.
Kickbacks to Parents Disguised Through Family and Employees
The indictment alleges that Shamso Hassan, Hanaan Yusuf, and their co-conspirators paid illegal cash kickbacks of approximately $300 to $1,500 per child, per month, to parents in exchange for enrollment of their Medicaid-eligible children to receive EIDBI services at Smart Therapy or Star Autism. The amount of the payments was, the government alleges, contingent on the level of services DHS authorized for a given child. The higher the authorization, the higher the kickback.
To disguise the kickbacks, the indictment alleges that the defendants wrote checks payable to family members and employees and directed them to cash the checks and deliver the cash to parents monthly. The defendants referred to the kickback payments using the code word "computer." The September 2025 Asha Farhan Hassan Information described the same kickback structure at Smart Therapy, including the same $300 to $1,500 per month per child range.
Diversion of Proceeds to Personal Use
The indictment alleges that the defendants and their co-conspirators diverted hundreds of thousands of dollars in fraud proceeds for personal and family use. The diversion was accomplished, in part, through high-dollar checks drawn on the Smart Therapy and Star Autism bank accounts and made payable to individuals with no legitimate basis for receiving the funds. Proceeds were used for real property purchases and overseas transfers, including to Kenya. The September 2025 Asha Farhan Hassan Information described the same pattern, including real estate purchases in Kenya funded by EIDBI fraud proceeds.
Billing for the Defendants' Own Purported Services
Smart Therapy submitted hundreds of thousands of dollars in claims for EIDBI services purportedly delivered by each defendant. The personal-services billing, combined with the indictment's broader allegations that services were not actually rendered, supports the seven substantive counts charged against each defendant individually.
The Charges
The indictment charges ten counts.
The Substantive Counts and Money Laundering Charges
The seven substantive healthcare fraud counts charge specific Medicaid claims tied to ABA-related treatment and family or caregiver training services purportedly delivered by each defendant. The two money laundering counts charge specific monetary transactions in criminally derived property over $10,000: one wire transfer to a real estate company, and one check to a money transmitting company. Section 1957 applies to transactions of this size in fraud proceeds and is commonly charged alongside healthcare fraud where proceeds flow into investments or international transfers.
How This Case Connects to the Earlier EIDBI Charges
The Hassan-Yusuf indictment is the second federal case to emerge from the EIDBI investigation. The first was the September 24, 2025 federal Information charging Asha Farhan Hassan with wire fraud for a $14 million scheme to defraud the EIDBI Program through Smart Therapy. As discussed in the firm's prior coverage of the first EIDBI fraud Information, Asha Hassan listed herself as the sole owner of Smart Therapy on DHS documents, allegedly recruited children with autism through the Somali community, paid monthly kickbacks to parents, and sent fraud proceeds to Kenya to purchase real estate.
The Asha Hassan Information stated that "other individuals also had ownership stakes in Smart Therapy but were not listed on DHS documents," including an individual who had previously been excluded by DHS for three years in connection with prior conduct running an adult daycare. The Hassan-Yusuf indictment names additional beneficial owners of Smart Therapy and Star Autism that, on the government's account, the DHS disclosure forms concealed. The two cases describe the same setup: a registered sole owner on the agency forms, and a group of undisclosed beneficial owners who actually controlled the centers and shared the fraud proceeds.
Acting U.S. Attorney Joseph Thompson described the September 2025 charges as "the first in the ongoing investigation into fraud in the EIDBI Autism Program" and said the case was "not an isolated scheme." Thompson described "a web that has stolen billions of dollars in taxpayer money" connecting Feeding Our Future, Housing Stabilization Services, and the EIDBI Program. The firm predicted in October 2025 that additional EIDBI cases would follow within six months. The May 2026 indictment confirms that prediction.
The Federal Enforcement Environment
The Department announced the Hassan-Yusuf indictment as part of the Minnesota Health Care Fraud Takedown, which charged 15 defendants in connection with $90 million in alleged Medicaid losses across four programs. The Department called this the largest Medicaid autism fraud case ever charged. HHS Secretary Robert F. Kennedy, Jr. called the takedown "the largest autism fraud bust in American history."
On the same day, the Department announced funding for 15 new Trial Attorney positions in the Health Care Fraud Section. It also formally expanded the Midwest Strike Force to include the District of Minnesota. The Midwest Strike Force previously operated from Detroit and Chicago. The expansion is permanent. Future EIDBI, Housing Stabilization Services, Integrated Community Supports, and Individualized Home Supports cases in Minnesota will be staffed by Strike Force prosecutors with experience prosecuting large-scale Medicaid schemes.
The DOJ Fraud Section's Health Care Fraud Data Fusion Center contributed to the takedown. The Fusion Center combines Medicaid claims data, HHS-OIG investigative leads, FBI intelligence, and CMS administrative actions with algorithmic outlier detection to identify billing patterns that deviate from peer norms.
State Audit Findings Behind the Federal Charges
According to the March 17, 2026 OLA Special Review, the number of authorized EIDBI provider agencies grew from nearly 150 in 2020 to over 500 in 2024. Over 14,500 individuals were enrolled as EIDBI providers in 2024. The number of children and youth receiving EIDBI services grew from nearly 1,400 in 2020 to over 5,600 in 2024. Total annual program cost grew from $38.1 million in 2020 to $324.9 million in 2024. DOJ reports that EIDBI claims grew from over $600,000 in 2018 to more than $400 million by 2025.
The OLA also reviewed 25 EIDBI complaints that the DHS Office of Inspector General closed without further investigation between 2017 and 2024. Three of those complaints alleged kickback payments to families of recipients. The DHS OIG closed all three without referring them to law enforcement, citing a belief that the agency lacked authority to act on kickback allegations alone. The OLA concluded that DHS had legal authority to investigate the kickback allegations. A decades-old administrative rule definition error may have limited the agency's ability to suspend payments during kickback investigations. The OLA recommended that DHS amend its administrative rule defining "fraud" to clearly include kickbacks.
Why ABA and Autism Services Are a National Enforcement Priority
The Minnesota cases are not isolated. Federal enforcement against autism services billing fraud is happening in multiple states. Four factors explain why.
Mandated Medicaid Coverage and Rapid Spending Growth
In 2014, the Centers for Medicare & Medicaid Services issued guidance directing state Medicaid programs to cover comprehensive autism services for children under the Early and Periodic Screening, Diagnostic, and Treatment (EPSDT) benefit. By 2022, every state Medicaid program covered Applied Behavior Analysis. The federal mandate created uniform coverage. It did not create uniform billing or oversight rules. The result has been rapid state-by-state spending growth in a space where audit infrastructure has not kept up with claim volume.
Indiana ABA Medicaid spending grew from $14.4 million in 2017 to $611 million in 2023. North Carolina spending grew from $122 million in fiscal year 2022 to a projected $639 million in fiscal year 2026, a 423 percent increase. Nebraska reported a 1,700 percent increase in recent years. Colorado spending grew from $60.1 million in 2019 to $163.5 million in 2023. Part of the growth reflects rising demand. CDC data shows autism prevalence rose from 1 in 68 children in 2017 to 1 in 31 by 2022. The growth has also outpaced state audit capacity.
The HHS-OIG Seven-State ABA Audit Initiative
In January 2022, HHS-OIG announced a series of state-by-state audits of Medicaid ABA payments covering seven states. The audits examine compliance with federal and state requirements, documentation supporting CPT codes 97155 (ABA protocol modification) and 97156 (family adaptive behavior treatment guidance), and the qualifications of staff delivering services. Four state audits have been completed. The findings have been consistent and substantial.
- Indiana: HHS-OIG found at least $56 million in improper fee-for-service Medicaid payments for ABA provided to children diagnosed with autism.
- Wisconsin: HHS-OIG found at least $185 million in improper Medicaid ABA payments.
- Maine: HHS-OIG found improper payments and ordered the state to return federal Medicaid funding.
- Colorado: HHS-OIG found in March 2026 that Colorado made $77.8 million in improper ABA payments and ordered the state to refund $42.6 million of the federal share. The OIG audit identified billing for staff without credentials, billing for time children spent napping, eating, watching movies, and using tablets, and one provider that billed for 151 hours of therapy in a single month.
Three additional state audits are in progress. State-level audit findings feed federal criminal investigations through HHS-OIG investigative referrals.
Private Equity Consolidation and Industry Structure
Private equity has acquired more than 500 ABA therapy centers across the United States in the past decade, with nearly 80 percent of those transactions occurring between 2018 and 2022. The consolidation has accelerated growth and has placed large volumes of Medicaid billing under common ownership. Federal investigators have flagged the financial incentives that come with private equity ownership (return targets, exit timelines, billing optimization pressures) as risk factors.
Federal Criminal Prosecutions Outside Minnesota
Federal prosecutors have already begun bringing autism services fraud cases in districts outside Minnesota. In the District of Connecticut, the U.S. Attorney's Office prosecuted Suhail Aponte, the principal of Minds Cornerstone Behavior Therapy Services, for a Medicaid fraud scheme involving ABA services. Aponte pleaded guilty to conspiracy to commit healthcare fraud after submitting approximately $1.87 million in fraudulent claims between November 2021 and January 2025. The Connecticut case involved billing for services purportedly supervised by a Board Certified Behavior Analyst when the supervised technician services were not billed, billing for services rendered to patients who were actually in inpatient hospital care, and billing for services that parents and former employees confirmed never occurred.
In the District of South Carolina, Nina Bourret, the owner of Agapi Behavior Consultants, was sentenced to federal prison for making fraudulent statements to Medicaid in connection with ABA services. Bourret pleaded guilty to electronic claims that falsely certified services had been rendered or had been rendered in excess of what was actually provided.
The Connecticut and South Carolina cases are smaller than the Hassan-Yusuf indictment in scale. They confirm that federal prosecutors are bringing ABA fraud cases in multiple districts. Future prosecutions will likely follow the same pattern: HHS-OIG audit findings or whistleblower tips, parallel state Medicaid Fraud Control Unit activity, federal grand jury investigation, and indictment under sections 1347 and 1349.
Why Federal Autism Services Enforcement Will Continue
The conditions that produced this round of cases have not changed. ABA reimbursement rates remain high. Claim volume continues to grow. State audit capacity remains thin. Private equity ownership of ABA centers continues. State Medicaid oversight remains uneven.
The federal infrastructure for prosecuting these cases is now built. The Health Care Fraud Data Fusion Center provides claims analytics. The expanded Strike Force network provides prosecutorial capacity. The HHS-OIG seven-state audit initiative continues to produce state-level findings that feed criminal referrals.
Federal policy is aligned with continued enforcement. HHS Secretary Kennedy has made autism a department priority. The administration has emphasized Medicaid program integrity. DOJ has established a new National Fraud Enforcement Division.
States that have already drawn federal attention (Minnesota, Indiana, Wisconsin, Maine, Colorado, Connecticut, South Carolina) will continue to see additional cases. States with rapid ABA Medicaid growth and limited oversight (North Carolina, Nebraska, Texas, Arizona, among others) are likely future enforcement targets.
Key Defense Issues in EIDBI Prosecutions
EIDBI cases turn on the same elements that govern any healthcare fraud prosecution. Four issues will drive the defense in cases like this one. The firm's attorneys built and tried the same theories at DOJ's Fraud Section across 17 federal healthcare fraud jury trials involving over $2.8 billion in alleged false claims to federal healthcare programs. That trial record informs how the firm approaches the defense of EIDBI and ABA fraud cases at every stage.
The first is intent. Section 1347 requires proof of a knowing and willful scheme to defraud. EIDBI program requirements are detailed (CMDE, ITP, QSP supervision, Level I and Level II qualifications, recordkeeping standards, managed care billing rules). That complexity creates room for good-faith compliance arguments, particularly for individuals whose role was limited to a single function within a larger organization.
The second is medical necessity. The government's theory that recipients were diagnosed with autism "regardless of medical necessity" requires proof that the CMDE process was actually compromised in identifiable cases. Clinical evidence, contemporaneous treatment records, ITP documentation, and outcome data can support medical necessity defenses on a recipient-by-recipient basis.
The third is the ownership disclosure theory. The Hassan-Yusuf indictment's allegations are dated, specific, and tied to identifiable DHS forms and Operating Agreements. Generalized denials will not be enough. The defense will need to address each disclosure document, each Operating Agreement, and each financial flow the indictment ties to an alleged beneficial owner.
The fourth is the kickback allegation. Cash payments to parents are difficult to defend on the merits, but the government still must prove that the payments were intended to induce referrals or recommendations of Medicaid-reimbursable services. The line between an impermissible inducement and a permissible recipient cost-sharing or hardship arrangement is fact-intensive. The structure of the alleged scheme (cash to parents through family members and employees, code word "computer") will figure heavily at trial. The firm's autism treatment fraud defense practice and broader healthcare fraud defense practice handle federal investigations involving the EIDBI Program, ABA therapy, and other Medicaid waiver programs nationwide.
The Hassan-Yusuf indictment is the second federal case in the EIDBI investigation, which began with the Asha Farhan Hassan Information in September 2025. CBS Minnesota has reported that five Minnesota autism centers were subject to federal search warrants in late 2025. HHS-OIG audits in Indiana, Wisconsin, Maine, and Colorado have identified hundreds of millions of dollars in improper ABA Medicaid payments. Federal criminal prosecutions have been brought in Connecticut and South Carolina. Three more HHS-OIG state audits are in progress. Federal officials have said EIDBI enforcement will continue throughout 2026.
Frequently Asked Questions: EIDBI Fraud and Federal Autism Services Enforcement
What is the Minnesota EIDBI Program?
The Early Intensive Developmental and Behavioral Intervention Program is a Minnesota Medicaid benefit that funds medically necessary, early and intensive intervention services for people under the age of 21 with autism spectrum disorder and related conditions. Minnesota was one of the first states to cover EIDBI services through Medicaid.
To qualify, a recipient must be under 21, have an ASD or related diagnosis, complete a Comprehensive Multi-Disciplinary Evaluation (CMDE) that establishes medical need, and have an Individual Treatment Plan (ITP). Services must be delivered under the supervision of a Qualified Supervising Professional (QSP) employed by the provider agency. EIDBI claims grew from approximately $600,000 in 2018 to over $400 million by 2025.
What is the difference between a Level I and Level II EIDBI provider?
Level I and Level II providers both oversee the implementation of a recipient's Individual Treatment Plan and document services in case notes. Level I providers must meet more stringent education and experience qualifications than Level II providers and bill Medicaid at a higher rate. Both levels operate under the clinical responsibility of a Qualified Supervising Professional, who assumes full professional responsibility for the services rendered by each supervisee.
How does the Anti-Kickback Statute apply to Medicaid autism providers paying parents to enroll children?
The Anti-Kickback Statute, 42 U.S.C. section 1320a-7b(b), makes it a federal crime to knowingly and willfully offer, pay, solicit, or receive any remuneration in cash or in kind to induce the referral or recommendation of items or services payable in whole or in part by a federal healthcare program. Cash payments to parents who enroll their Medicaid-eligible children with a specific autism services provider fall squarely within the statute's prohibition.
A claim submitted to Medicaid for services tied to a kickback-induced enrollment also creates exposure under 18 U.S.C. section 1347 because the provider certified at billing that no kickbacks induced the service. The Hassan-Yusuf indictment alleges payments of approximately $300 to $1,500 per child per month, structured through checks payable to family and employees who cashed them and delivered the cash to parents, and referred to with the code word "computer." For a detailed analysis of the AKS willfulness standard, the one-purpose test, and the statutory safe harbors that apply to provider compensation arrangements, see the firm's Anti-Kickback Statute analysis.
Why does hidden ownership of a Medicaid provider matter under federal law?
Medicaid providers must disclose any person or business holding a direct or indirect controlling interest of 5 percent or more in the provider entity, along with all officers and managing employees. In Minnesota, this requirement is set forth in the Minnesota Health Care Programs Provider Manual and applies at enrollment and on any change in ownership.
False or incomplete ownership disclosures are material to the agency's enrollment decision. They allow individuals who would otherwise be excluded from federal healthcare programs to receive program payments indirectly, and they conceal the actual decision-makers behind billing practices. The Hassan-Yusuf indictment alleges that the listed sole owners of Smart Therapy and Star Autism on DHS Disclosure of Ownership and Control Interest forms were not the actual owners or controllers of the businesses.
What does the indictment allege about services that were not actually provided?
The indictment alleges several patterns. It alleges claims for EIDBI services that were medically unnecessary and rendered to recipients who appeared to be diagnosed with autism regardless of medical necessity. It alleges claims billed under the names of providers who did not work at Smart Therapy or Star Autism at the relevant time, including individuals who attended only a single training and never became employed by the centers.
It alleges significantly inflated family and caregiver training claims, including over 3,000 hours of EIDBI family and caregiver training purportedly provided to a single Medicaid recipient's family between April 2023 and October 2024 when, according to the indictment, the recipient's family never received any training from Smart Therapy.
How is United States v. Hassan and Yusuf connected to the earlier Asha Farhan Hassan case?
On September 24, 2025, the U.S. Attorney's Office for the District of Minnesota filed an Information charging Asha Farhan Hassan with wire fraud for a $14 million scheme to defraud the EIDBI Program through Smart Therapy LLC. The Information alleged that Asha Hassan listed herself as the sole owner of Smart Therapy on DHS documents while other individuals also had ownership stakes that were concealed.
The Hassan-Yusuf indictment, returned on May 20, 2026, names additional individuals connected to Smart Therapy and Star Autism. The indictment alleges that the listed sole owner on the DHS Disclosure of Ownership and Control Interest form was, in fact, only one of several beneficial owners. The Hassan-Yusuf indictment is part of the larger Minnesota Health Care Fraud Takedown that DOJ announced on May 21, 2026, charging 15 defendants across four Medicaid-funded programs.
What is the Comprehensive Multi-Disciplinary Evaluation (CMDE) and why does it matter in EIDBI fraud cases?
The CMDE is a clinical evaluation that establishes a recipient's medical need for EIDBI services. The evaluation supports the recipient's diagnosis of autism spectrum disorder or a related condition and informs the development of an Individual Treatment Plan. The CMDE is a gatekeeping document. It is the source of the recipient's eligibility for the EIDBI benefit.
Federal prosecutors examine CMDE practices closely in autism fraud cases because patterns of universal autism diagnoses, especially among recipients recruited from outside clinical referral channels, suggest that the evaluation function may have been compromised. The Hassan-Yusuf indictment alleges that services were billed for recipients who appeared to be diagnosed with autism regardless of medical necessity.
Will federal enforcement against ABA and autism services billing fraud spread to other states?
Yes. Federal enforcement against autism services billing fraud is happening in multiple states. HHS-OIG has completed audits of Medicaid ABA payments in Indiana, Wisconsin, Maine, and Colorado, identifying hundreds of millions of dollars in improper payments in each state. Three additional state audits remain in progress. Federal criminal prosecutions involving ABA billing fraud have been brought in the District of Connecticut and the District of South Carolina.
Several factors will likely sustain this enforcement. CMS mandated Medicaid coverage of ABA in every state by 2022. Private equity has acquired more than 500 ABA centers in the past decade. Demand has increased as autism prevalence has risen. Medicaid reimbursement rates for ABA exceed rates for many other behavioral health services. Claim volume has grown faster than state audit capacity. States with rapid ABA spending growth and limited oversight, including North Carolina, Nebraska, Texas, and Arizona, are likely future enforcement targets.
Where does Armstrong & Bradylyons PLLC defend federal autism services fraud cases?
Armstrong & Bradylyons PLLC defends healthcare providers, executives, and individuals in federal healthcare fraud and autism treatment fraud investigations and prosecutions nationwide. As former federal prosecutors at DOJ's Fraud Section, the firm's attorneys tried 17 federal jury trials in healthcare fraud cases involving over $2.8 billion in alleged false and fraudulent claims to federal healthcare programs.
Scott Armstrong served as an Assistant Chief at DOJ's Fraud Section and tried nine healthcare fraud cases as lead or co-lead trial counsel. He also directed DOJ's Appalachian Regional Prescription Opioid (ARPO) Strike Force, which charged over 120 defendants. Drew Bradylyons served as Chief of EDVA's Financial Crimes and Public Corruption Unit and, before that, supervised the Healthcare Fraud Unit's Miami Strike Force at DOJ's Fraud Section. Andrea Savdie served for four years as a trial attorney at the Miami Strike Force, charging and trying the most complex healthcare fraud cases in the country. The firm represents clients in every federal district where DOJ brings healthcare fraud cases, including the District of Minnesota and other districts now served by the expanded Midwest Strike Force.
Facing a Federal EIDBI or Autism Services Fraud Investigation?
Armstrong & Bradylyons PLLC defends providers, executives, and individuals in federal Medicaid autism services investigations nationwide. The firm's attorneys tried 17 federal jury trials in healthcare fraud cases at DOJ's Fraud Section involving over $2.8 billion in alleged false claims. As former DOJ prosecutors, Scott Armstrong and Drew Bradylyons built and tried the same theories driving the Minnesota EIDBI prosecutions.
