The nation’s costliest autism therapy provider will shut down by mid-May, the company’s human resources chief said in an email to employees one week after the state of Indiana said it would bar the firm from billing Medicaid.
The autism-therapy provider, Piece by Piece Autism Centers, received $340,000 in Medicaid payments per patient in 2023, the highest level in the country, The Wall Street Journal reported last month in an article examining how some providers had outpaced regulators in their fast-growing businesses.
Once Piece by Piece—which state officials have said abused the taxpayer-funded program for low-income people—closes, its centers will be operated by a rival autism-therapy provider, Applied Behavior Center for Autism, emails show. Applied Behavior Center settled federal civil fraud allegations over billing issues just three years ago without admitting wrongdoing, the Justice Department announced at the time.
Piece by Piece extracted its high payments in part by boosting list prices to levels that allowed it to collect as much as $640 an hour from the state for services often performed by high-school graduates, the Journal found. From 2019 to 2023, Indiana directly paid Piece by Piece $58 million for autism-therapy services, the billing records show.
Autism therapy, known as applied behavior analysis, is one of the fastest-growing areas of Medicaid. State Medicaid programs’ direct payments for the therapy grew to $2.2 billion in 2023, from $660 million just four years earlier, according to the Journal’s analysis of Medicaid billing records.
Last week, state officials informed Piece by Piece they were cutting it off from Medicaid in 60 days. In an interview with the Journal, an official said the state terminated Piece by Piece because of its alleged abuse of Indiana taxpayers. Former employees said most of the company’s patients were covered by Medicaid, throwing its future into doubt.
At first, owner Meghann Mitchell, who purchased a $2.5 million Sanibel Island vacation home, a $600,000 riverfront Indiana getaway and other properties as Piece by Piece’s billings soared, was defiant. She wrote to employees that “Piece by Piece has done nothing wrong and intended to fight this decision,” an email viewed by the Journal shows.
On Tuesday, her human-resources chief told workers in a brief note reviewed by the Journal that, after “examining all potential outcomes,” the company had decided to transfer operations of its seven autism-therapy centers to another provider and shut down by May 15.
Mitchell didn’t respond to requests for comment Wednesday. She previously told the Journal that her company had performed well in audits, that she followed Indiana’s regulations and that the state provided little oversight.
In a letter to Piece by Piece staff, Kyle Quinn, the owner of Applied Behavior Center for Autism, said his company will take over operations of the company’s centers, employ its staff and oversee therapy for its patients.
“While we are not purchasing the Piece by Piece company, we are stepping in to support both patients and staff through this transition,” he wrote in the letter viewed by the Journal.
In an email to the Journal, Quinn said his company wasn’t acquiring Piece by Piece or any of its assets, such as its patient list. “The owners of Piece by Piece will not have any role with ABC,” he wrote.
Mitchell also owns, through a limited liability company, real estate used by the centers—meaning she could remain a landlord for her former business. Quinn said any arrangements related to real estate and other matters were separate.
Applied Behavior Center for Autism, launched in the 1990s by Quinn’s mother, runs 14 centers across Indiana. Billing records show the state’s Medicaid program paid the company about $91,000 per patient for 123 children in 2023, making it the 17th-highest-paid autism therapy provider nationwide by that measure.
Quinn told the Journal that “utilization and reimbursement levels can vary significantly based on patient acuity, service intensity and clinical needs nationwide by that measure,” and that his company followed Medicaid guidelines.
In 2023, Applied Behavior Center agreed to pay $2 million to settle allegations by the Justice Department that it had fraudulently billed Indiana’s Medicaid program as well as Tricare, the federal health-insurance program for military members and their families.
The company at times allegedly billed both programs for the same services and charged Medicaid for one-on-one services that were in reality group therapy sessions, among other things, according to the Justice Department’s announcement of the settlement, which noted Applied Behavior denied wrongdoing.
Company founder Sherry Michael, who is Quinn’s mother, purchased a $12.8 million waterfront home in Palm Beach County, Fla., in late 2024, and previously owned another house in the area, according to property records.
Quinn said the Applied Behavior Center has since strengthened its compliance, oversight and billing processes and had cooperated with authorities in connection with the 2023 civil settlement. He said the company self-reported improper conduct by an individual employee during that period.
Michael said of the 2023 settlement, “We identified an issue, reported it and were fully cleared.” She said her personal financial matters were private and not related to Applied Behavior Center’s operations.
Indiana is undertaking a wider overhaul of how it covers autism therapy. For years, Indiana had paid autism-therapy providers 40% of whatever list prices they charged, leading to ultrahigh payments for some providers. The state set a flat rate in 2024.
In a recent meeting, Indiana’s top Medicaid official warned autism-therapy providers to self-report any abuse under the old system or risk facing federal scrutiny, officials and autism therapy providers said.
Indiana also plans to seek federal approval for a moratorium on new autism-therapy providers this month, said Marcus Barlow, deputy chief of staff for the Indiana Family and Social Services Administration, which oversees Medicaid in the state.
Write to Christopher Weaver at Christopher.Weaver@wsj.com