Corrective Action Plan for California, to overcome Waste, Fraud, Abuse and Neglect
The Autism Service Industry and the Billions of problems
Corrective Action Plan
Based on: The Aftermath of SB 805 - Analysis of California ABA Regulatory and Childcare Licensure Gap Executive Whitepaper for Lawmakers in California, And cc’d US HHS OIG CMS, Re: HHS‑OIG SRS‑A‑25‑029 Work Plan Entry
February 18, 2026
The corrective action plan should prioritize strengthening Medi-Cal clinical authorization standards and clarifying oversight of unlicensed providers within the Welfare & Institutions Code framework. This includes directing DHCS to adopt and publicly post uniform, evidence-based clinical guidance for determining medical necessity; ensuring that services delivered by unlicensed personnel are subject to clearly defined licensed supervision and documentation requirements; and enhancing transparency to families regarding provider qualifications and available treatment options. These refinements are intended to reinforce program integrity, protect consumers, and align Medi-Cal reimbursement practices with federal compliance standards while minimizing unnecessary stakeholder escalation.
Leaving the Welfare & Institutions Code unamended preserves ambiguity in Medi-Cal clinical authorization standards and oversight of unlicensed providers. That ambiguity allows unpublished or inconsistent clinical guidance to shape medical necessity determinations, limits transparency for families regarding provider qualifications and treatment options, and weakens defensibility under federal Medicaid program integrity requirements. Over time, this creates exposure in three areas: (1) uneven authorization practices, (2) consumer confusion regarding what constitutes medically necessary care, and (3) vulnerability to federal scrutiny if oversight mechanisms are not clearly codified.
Proposed Statutory Language
SECTION . Section [WIC §] is added to read:
(a) For services delivered by unlicensed personnel under the Medi-Cal program, the supervising licensed professional shall conduct and document periodic clinical re-certification of medical necessity at intervals established by the department.
(b) Such re-certification shall include an assessment of measurable progress toward individualized treatment goals and an evaluation of whether the intensity and duration of services remain clinically appropriate.
(c) Continued reimbursement shall require documented re-certification consistent with the department’s publicly posted clinical authorization standards.
Federal Floor, Not Ceiling — and Clinical Integrity Safeguard
Concept Draft Language
SECTION . Section [WIC §] is added to read:
(a) Behavioral health services reimbursed under the Medi-Cal program shall meet or exceed federal Medicaid requirements governing rehabilitative services and early and periodic screening, diagnostic, and treatment (EPSDT) services. Nothing in this section shall be construed to limit the state’s authority to provide services beyond the federal minimum scope of coverage.
(b) Services reimbursed as therapeutic or rehabilitative health benefits shall constitute medically necessary clinical interventions addressing identified functional impairments and shall be delivered in a manner consistent with their recognized clinical standards.
(c) The department shall not authorize reimbursement for services represented as specialized therapeutic interventions unless such services are delivered by, or under the active supervision of, appropriately qualified allied health professionals consistent with the nature and complexity of the intervention.
(d) For purposes of this section, services shall not be deemed compliant if their clinical integrity is diluted through substitution of personnel lacking the requisite training or qualifications necessary to deliver the therapeutic modality as represented.
Federal Service Definition Alignment
Proposed Statutory Language
SECTION . Section [WIC §] is added to read:
(a) Behavioral health services reimbursed under the Medi-Cal program pursuant to this chapter shall be delivered in accordance with federal Medicaid definitions applicable to rehabilitative services and early and periodic screening, diagnostic, and treatment (EPSDT) services, as set forth in Title 42 of the United States Code and the Code of Federal Regulations.
(b) Covered services shall constitute medically necessary, individualized therapeutic interventions designed to address identified functional impairments and shall be supported by measurable treatment goals.
(c) Covered services shall not include custodial care, general supervision, educational services otherwise required under federal or state education law, or services provided primarily for convenience, respite, or maintenance absent therapeutic objective.
(d) Licensed supervising professionals shall ensure that services delivered by unlicensed personnel remain consistent with this section and with the department’s publicly posted clinical authorization standards.
Mandatory CMS Conformity
Statutory Language (Concept Draft)
SECTION . Section [WIC §] is added to read:
(a) Behavioral health services reimbursed under the Medi-Cal program pursuant to this chapter shall conform to federal Medicaid requirements governing rehabilitative services and early and periodic screening, diagnostic, and treatment (EPSDT) services, including but not limited to Title 42 United States Code Section 1396d and Title 42 Code of Federal Regulations Sections 440.130(d) and 441.56.
(b) The department shall adopt, through regulation, clinical authorization standards consistent with federal Medicaid definitions of rehabilitative and medically necessary services.
(c) No service shall be reimbursed unless the service constitutes a medically necessary therapeutic intervention addressing an identified functional impairment and is supported by individualized treatment goals and measurable progress criteria.
(d) Services shall not include custodial care, educational instruction otherwise required under state or federal education law, general supervision, or activities lacking a therapeutic objective consistent with federal Medicaid requirements.
(e) The department shall ensure that services delivered by unlicensed personnel are provided under supervision and in a manner consistent with the requirements of this section.
Justification
This bridge accomplishes several things:
Prevents separation between authorization and delivery oversight
Ensures supervision is clinically meaningful, not nominal
Ties reimbursement to adherence to publicly posted criteria
Reduces risk of high-intensity service continuation without clinical re-evaluation
Strengthens defensibility under federal program integrity rules
Strategically, this provision avoids direct scope conflict. It does not prohibit unlicensed providers. It simply conditions reimbursement on:
Transparent criteria
Licensed clinical oversight
Documentation of alignment
That makes it hard to oppose publicly while still tightening oversight.
Below is a complete Senate Health Committee concept brief structured exactly as requested:
The Problem
The Urgency
The Remedy
It integrates:
QASP clarification
Adaptive Behavior Services billing reform
Custodial prohibition
Independent review
Supervision standards
Federal scrutiny and clawback exposure
This is formatted for committee analysis and member briefing.
SENATE HEALTH COMMITTEE CONCEPT BRIEF
Adaptive Behavior Services Clinical Integrity & Governance Clarification Act
I. THE PROBLEM
California currently reimburses Adaptive Behavior Services (CPT 97151–97158) under Medi-Cal without a statutory governance framework equivalent to other licensed allied health professions.
Three structural problems have emerged:
1️⃣ Reimbursement Has Been Mistaken for Professional Recognition
The term “Qualified Autism Service Provider (QASP)” exists in statute as a reimbursement classification.
However, in practice it functions as:
A proxy for professional legitimacy
A quasi-licensure designation
A basis for marketing “therapy” services
Yet:
QASP is not a license under the Business & Professions Code.
Behavior analysis is not governed by a California state licensing board with statutory supervision standards comparable to psychology, occupational therapy, or speech-language pathology.
Certification by a private national organization is not California licensure.
Medical necessity is a reimbursement determination.
It does not create an allied health profession.
Without clarification, statutory inclusion risks being interpreted as legislative endorsement of professional status that does not exist under California licensure law.
2️⃣ Federal Scrutiny and Clawback Risk
Across multiple states, adaptive behavior CPT codes have been subject to:
Federal Office of Inspector General audits
CMS program integrity findings
Improper payment determinations
Repayment negotiations and clawbacks
Common findings nationally include:
Billing without adequate documentation of medical necessity
Insufficient supervision of technician-delivered services
Lack of measurable clinical outcomes
Custodial or duplicative services billed as treatment
California reimburses these same CPT codes broadly under EPSDT.
Without statutory guardrails, California remains exposed to:
Federal disallowance of claims
Repayment of federal matching funds
Corrective action plans
Heightened federal oversight
3️⃣ Custodial Care Risk & Technician-Driven Models
Adaptive behavior services are frequently delivered by non-licensed technicians in:
Homes
Clinics
Schools
Without codified supervision standards and outcome requirements:
Services may resemble general supervision or childcare;
Renewal may occur without independent review;
Remote supervision may substitute for in-person oversight;
Treatment may continue despite lack of measurable improvement.
Federal Medicaid does not reimburse custodial care.
Statute does not currently draw a bright line between clinical treatment and custodial supervision under adaptive behavior CPT codes.
II. THE URGENCY
This legislation is driven by three urgent concerns:
A. Federal Compliance Risk
OIG findings in other states demonstrate that adaptive behavior billing is a current federal scrutiny area.
Waiting until California is subject to an audit places the General Fund at risk of retroactive repayment.
Preventive compliance is fiscally responsible governance.
B. Governance Gap
California has not established:
A state allied health licensing board for behavior analysis;
Statutory supervision ratios;
Defined disciplinary authority equivalent to other allied health professions.
Until such governance exists, reimbursement classification must not be conflated with professional licensure status.
C. Program Integrity & Outcome Accountability
High-intensity (20–40 hour/week) treatment models:
Generate substantial Medi-Cal expenditure;
May continue without independent outcome verification;
Risk expanding volume without documented improvement.
Independent review and measurable standards are common in other medical disciplines.
Adaptive behavior services should meet similar accountability.
III. THE REMEDY
This Act introduces targeted statutory corrections.
1️⃣ Clarify QASP Is Not Allied Health Recognition
Amend the Business & Professions Code to state:
QASP is a reimbursement and program eligibility classification only;
It does not constitute allied health licensure;
It does not confer scope-of-practice authority;
Certification by private national organizations does not substitute for state licensure;
QASP does not authorize use of the title “therapist” absent licensure under California law.
This preserves reimbursement structure while correcting professional-status inflation.
2️⃣ Clarify Medical Billing Does Not Create Childcare Exemption
Amend all relevant statutes (HSC § 1374.73, WIC, and Title 22) to clarify that Medicaid funding/medical necessity does not exempt any behavioral program from licensure unless it meets the standards established for allied health professionals and clinics.
Proposed Amendment to Health & Safety Code § 1596.750 & Title 22:
“No exemption from child care, community care, or day program facility licensing in California may be granted solely on the basis of a referral, prescription, or payment for ‘medically necessary‘ services, unless the program is both licensed as a clinic or health facility by the Department of Public Health and staffed with master’s-level, state-licensed clinical professionals. Any program providing group services to unrelated minors that does not meet these requirements shall be treated as a community care or child care facility for licensure, inspection, and enforcement purposes.”
Medical billing does not convert a program into a licensed health facility;
Programs serving unrelated minors may not claim childcare exemption solely based on medical necessity billing status.
This closes facility classification ambiguity.
3️⃣ Prohibit Custodial Billing Under Adaptive Behavior CPT Codes
Amend the Welfare & Institutions Code to require:
Baseline measurement and defined functional goals;
Quantifiable progress tracking;
Prohibition on billing for general supervision, childcare, classroom aide support, respite, or parental relief;
Presumption of non-medical necessity if no measurable improvement over two review periods.
This aligns California law with federal Medicaid standards.
4️⃣ Require Independent Clinical Review
For services:
Exceeding 90 days, or
Exceeding 20 hours per week, or
Failing to demonstrate measurable improvement,
Continuation must be reviewed by:
The referring pediatrician;
A licensed psychologist; or
A developmental specialist not employed by the billing entity.
This prevents revenue-driven auto-renewal.
5️⃣ Establish In-Person Supervision Standards
For technician-delivered services:
In-person observation required monthly if >10 hrs/week;
Twice monthly if >20 hrs/week;
Remote data review alone insufficient for renewal;
Documentation subject to audit.
This addresses governance gaps until allied health standards are codified.
IV. WHAT THIS BILL DOES NOT DO
It does not:
Eliminate adaptive behavior services;
Restrict licensed professionals acting within scope;
Remove Medi-Cal coverage where measurable improvement exists;
Prohibit behavior analysis as a discipline.
It ensures:
Measurable clinical accountability;
Clear separation between reimbursement and licensure;
Reduced federal clawback exposure;
Program integrity safeguards consistent with other medical services.
V. CONCLUSION
California reimburses adaptive behavior CPT codes at medical rates.
When:
Licensure governance is undefined,
Supervision standards are not codified,
Custodial care is not clearly excluded,
Independent review is not required,
federal scrutiny follows.
This legislation corrects structural vulnerabilities before corrective action is imposed externally.
It is a compliance bill.
It is a governance bill.
It is a fiscal responsibility bill.
If you would like, I can now prepare:
• A one-page “leave-behind” version for members, or
• A redline-style insertion showing exactly where in existing code these provisions would sit.
Below is a single unified bill draft integrating:
QASP clarification
Title protection limitation
Adaptive Behavior Services billing reform
Custodial prohibition
Independent clinical review
Supervision standards
Federal compliance framing
This is written in clean Legislative Counsel–ready structure.
BILL TEXT DRAFT
Adaptive Behavior Services Governance Clarification & Program Integrity Act
SECTION 1. Legislative Findings and Declarations
The Legislature finds and declares:
(a) Adaptive Behavior Services reimbursed under CPT codes 97151–97158 have been subject nationally to federal Office of Inspector General audits and Centers for Medicare & Medicaid Services program integrity scrutiny.
(b) Federal Medicaid law requires that services be medically necessary, efficient, economical, and consistent with quality of care pursuant to 42 U.S.C. § 1396a(a)(30)(A).
(c) Federal financial participation is not available for custodial care or services lacking measurable clinical benefit.
(d) California has not established a state licensing board under the Business and Professions Code governing behavior analysis as an allied health profession.
(e) No state currently maintains an allied health licensure structure for behavior analysis equivalent to professions regulated under the Business and Professions Code.
(f) Certification issued by a private national organization does not constitute licensure under California law.
(g) Medical necessity is a reimbursement determination and does not establish professional licensure status or health facility classification.
It is the intent of the Legislature to clarify professional status, prevent improper payments, and reduce federal clawback exposure.
SECTION 2. Amendment to Business & Professions Code — QASP Clarification
Add subdivision to § [QASP Section]:
(a) Inclusion within the definition of “Qualified Autism Service Provider” is a reimbursement and program eligibility classification only.
(b) The designation “Qualified Autism Service Provider” shall not be construed to constitute recognition as an allied health profession under this code.
(c) Inclusion within this definition does not confer licensure status, scope-of-practice authority, or professional title protection beyond that expressly authorized by statute.
(d) Certification issued by a private national organization shall not substitute for licensure by a California state board established under this code.
(e) Until such time as behavior analysis is governed by a California licensing board established under this code, title protection shall extend only to the specific name of a private certification and shall not imply state-recognized professional licensure.
(f) Nothing in this section shall expand or modify the scope of practice of any licensed profession under this code.
SECTION 3. Title Representation Limitation
Add to Business & Professions Code:
(a) The designation “Qualified Autism Service Provider” shall not authorize use of the title “therapist” unless the individual holds licensure under a California state board whose statutory scope expressly includes therapeutic treatment of health conditions.
(b) Use of reimbursement terminology, including “behavioral health treatment” or “adaptive behavior services,” shall not imply allied health licensure.
(c) Nothing in this section shall prohibit a duly licensed professional from using titles authorized within the scope of that license.
SECTION 4. Health & Safety Code — Facility Classification Clarification
Add:
(a) Authorization or reimbursement of Adaptive Behavior Services under Medi-Cal or private insurance shall not constitute classification as a licensed health facility.
(b) A program serving unrelated minors in a congregate setting shall not claim exemption from childcare or community care licensing requirements solely on the basis of medical billing status.
SECTION 5. Welfare & Institutions Code — Custodial Care Prohibition
Add:
(a) Adaptive Behavior Services reimbursed under CPT codes 97151–97158 shall be billable only when implementing documented therapeutic interventions directed toward measurable clinical goals.
(b) The following shall not be reimbursable under Adaptive Behavior Services codes:
(1) General supervision;
(2) Childcare or babysitting;
(3) Classroom aide services otherwise provided under an Individualized Education Program;
(4) Respite or parental relief;
(5) Custodial monitoring absent active treatment.
(c) Each treatment episode shall include baseline measurement and quantifiable progress metrics.
(d) Absence of measurable improvement over two consecutive review periods shall create a presumption that continued reimbursement does not meet medical necessity requirements.
SECTION 6. Independent Clinical Review Requirement
Add:
(a) Continuation of Adaptive Behavior Services beyond 90 days or in excess of 20 hours per week shall require independent clinical review.
(b) The reviewer shall be:
(1) The referring pediatrician;
(2) A licensed psychologist; or
(3) A developmental specialist licensed under California law.
(c) The reviewer shall not be employed by or have a financial relationship with the billing entity.
(d) If measurable outcomes have not been achieved, the reviewer shall determine whether continuation of Adaptive Behavior Services remains clinically appropriate.
(e) Absent documented improvement or clinical justification for protocol modification, continued authorization shall not be reimbursable.
SECTION 7. Supervision Standards for Technician-Delivered Services
Add:
(a) “Non-licensed technician” means an individual delivering Adaptive Behavior Services who is not licensed under a California state board established in the Business and Professions Code.
(b) Treatment plan renewal shall not be based solely on remote documentation review by a supervising clinician who is not regularly onsite observing services.
(c) For services delivered by a non-licensed technician exceeding 10 hours per week, supervising licensed professionals shall conduct in-person observation at least once per month.
(d) For services exceeding 20 hours per week, supervising licensed professionals shall conduct in-person observation no less than twice per month.
(e) Documentation of supervision shall be maintained and subject to audit by the Department of Health Care Services.
Structural Summary
This unified bill:
• Clarifies QASP is not allied health recognition
• Limits title implication absent licensure
• Separates reimbursement from professional status
• Closes childcare exemption loopholes
• Prohibits custodial billing
• Requires measurable outcomes
• Mandates independent review
• Codifies supervision standards
• Addresses federal audit and clawback exposure
Read
The Aftermath of SB 805 - Analysis of California ABA Regulatory and Childcare Licensure Gap
Executive Whitepaper for Lawmakers in California
And cc’d US HHS OIG CMS