North Carolina Opens Medicaid Probe Into Compleat Kidz

RALEIGH, NORTH CAROLINA – North Carolina’s Medicaid program has opened an investigation into Compleat Kidz, one of the state’s largest autism therapy chains, after The New York Times shared findings that the company woke napping preschoolers after seven minutes so it could keep billing, prescribed therapy beyond what some children needed, and drew a dozen police reports of child abuse across its clinics.

The investigation could end in suspended payments or the company’s removal from the program, NC Medicaid told the Times. More than 80% of Compleat Kidz patients are covered by Medicaid, and the Gastonia-based chain has collected about $130 million from the program since 2019.

What the Times Found

The investigation, “Short Naps, Long Hours,” ran May 23 and was reported by Sarah Kliff and Margot Sanger-Katz, who interviewed 14 former Compleat Kidz employees. At a clinic in Concord, the reporters watched a 6-year-old girl fall asleep after hours of one-on-one therapy and get woken after seven minutes. Compleat Kidz said the nap limit prevents fraud, because clinics can bill insurers and Medicaid only while a child is awake and receiving services.

Former workers described a business that pushed therapy past clinical need. Some clinics recommended 25, 30, or even 40 hours a week, current and former employees told the Times. Several said staff encouraged families to keep children home from school so they could log more clinic time. One former executive said therapy hours were sometimes set by a child’s availability, not by what treatment required.

The economics explain the pull. Medicaid pays about $70 an hour for ABA nationally and $83 in North Carolina, the Times reported, for therapy delivered largely by paraprofessionals who earn around $20 an hour.

A Dozen Abuse Reports

The Times also documented safety problems. It found 12 police reports of child abuse at Compleat Kidz facilities since 2023. The Times also reported that at least two led to criminal charges against employees, and another is the subject of a lawsuit a parent filed against the company.

The State’s Response

North Carolina Medicaid opened its investigation after the Times shared its reporting. Melanie Bush, who leads NC Medicaid as deputy secretary, told the paper the program was prepared to take “swift and appropriate action,” including suspending the company’s payments or removing it from Medicaid.

Compleat Kidz is a major biller. It collected $51.1 million in Medicaid reimbursement for ABA in 2025, according to an NC Health News analysis of state data, and Bush has said the broader spending growth appears “concentrated among a small number of providers.” The company has fought the state on money before: in written testimony last November, CEO Adi Khindaria warned that a 10% Medicaid rate cut would double a six-month wait at the chain’s Rocky Mount clinic and force about 100 layoffs. A judge paused the cuts.

Two levers are now pointed at the same company: a Medicaid investigation that could suspend its payments, and new budget rules that cap the very hours the Times described.

New Limits in the 2026 Budget

The Times report landed as North Carolina was already rewriting the rules for ABA. Under the state’s 2026 Medicaid budget agreement, any ABA plan above 16 hours a week must be approved by a Medicaid prepaid health plan or the Department of Health and Human Services, and re-approved every month. Licensed Qualified Autism Service Providers, or LQASPs, must build an individual service plan for each Medicaid beneficiary, with a parent or guardian involved.

The budget also tightens telehealth. Paraprofessionals can no longer deliver ABA remotely, and licensed providers must perform patient assessments in person. A licensed provider may still direct paraprofessionals by video, but remote supervision cannot exceed 50% of that provider’s services for any one beneficiary. At least 10% of a paraprofessional’s work must include observation and direction by an LQASP.

The penalties rise with each violation. DHHS can recoup payments for a first or second instance of noncompliance. On a third instance of material and systematic noncompliance, it can bar a provider from billing Medicaid for one to two years.

Scrutiny Beyond One Chain

Compleat Kidz is one company in a market the state has struggled to contain. North Carolina’s Medicaid spending on ABA topped $505 million in 2025, up from $1.9 million five years earlier, and DHHS projects it will pass $1 billion by 2027. The largest single biller was not Compleat Kidz but Utah-based ABS Kids, which collected $64.9 million across 11 facilities in the state.

NC Medicaid has not said when its investigation will conclude, or whether it will move to suspend the company’s payments. Under the budget agreement, every Compleat Kidz therapy plan above 16 hours a week now has to clear the state again each month.

AT A GLANCE

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