Colorado taxpayers face a staggering $77.8 million bill for improper Medicaid payments on autism therapy, exposing government waste that burdens families amid a state budget crisis.
Story Highlights
- Federal audit uncovers at least $77.8 million in improper payments for Applied Behavior Analysis (ABA) therapy in 2022-2023, with 100% error rate in sampled claims.
- State must repay $42.6 million federal share, straining Colorado’s $1 billion Medicaid shortfall and risking cuts to vulnerable families.
- Payments went to uncredentialed providers and undiagnosed patients across 47 ABA centers, highlighting systemic compliance failures.
- ABA spending exploded 172% from $60.1 million in 2019 to $163.5 million in 2023, driven by higher rates and hours, not patient growth.
- Worst case in OIG’s series of audits, signaling national crackdown on Medicaid billing abuses.
Audit Reveals Massive Improper Payments
U.S. Department of Health and Human Services Office of Inspector General (OIG) audited Colorado’s fee-for-service Medicaid claims for ABA therapy from 2022 to 2023. Auditors reviewed $289.5 million across over 1 million claims. A sample of 100 enrollee-months from 96 children and 47 centers showed 100% improper or potentially improper payments. Issues included uncredentialed technicians delivering services and missing autism diagnoses. This marks the highest improper amount in OIG’s ABA audit series.
Explosive Growth in ABA Spending
Colorado Medicaid ABA payments surged from $60.1 million in 2019 to $163.5 million in 2023, a 172% increase. Broader pediatric behavioral therapy spending grew 650% since 2018 to $287 million. Growth stemmed from higher reimbursement rates and extended therapy hours, despite slower patient increases. Federal and state agencies flagged questionable nationwide billing patterns. Prior state reviews confirmed these drivers, prompting July 2025 post-payment audits and system upgrades.
Stakeholders Respond to Federal Demands
OIG issued five recommendations in February 2026 report A-09-24-05001, including $42.6 million federal refund. Colorado Department of Health Care Policy & Financing (HCPF) administers the program and partially concurs. HCPF disputes the full refund amount as an estimate, agrees to three recommendations, and partially to one. Providers like Soar Autism Center and Action Behavior Centers billed $1,200 to $15,000 monthly per patient. Centers for Medicare & Medicaid Services status remains open as of August 2026 update.
Budget Crisis Amplifies Impacts
Colorado faces a $1 billion Medicaid shortfall, leading to proposed benefit cuts for low-income and disabled residents. The $77.8 million improper plus $207.4 million potential improper totals $285.2 million, with federal share over $112.5 million potentially owed. Short-term, refunds and audits disrupt ABA services for autism children. Long-term, mandated statewide reviews and oversight may curb waste but limit therapy access. This hits families hardest, echoing conservative calls to end government overspending and inefficiency.
National Precedent and Fixes Underway
OIG’s fourth ABA audit underscores nationwide issues, following 100% error rates in Indiana, Wisconsin, and Maine. HCPF initiated provider education, prior authorization reviews, and billing system fixes. No evidence of intentional fraud emerged; problems centered on documentation gaps. Enhanced federal oversight could standardize rules across states. Conservative principles demand accountability to protect taxpayer dollars for those truly in need, preventing erosion of limited government and fiscal responsibility.
Sources:
Colorado wrongly spent $78M on autism therapy, Office of the Inspector General says
Federal audit finds $77.8M in improper Medicaid payments for Colorado autism therapy
Colorado wrongly spent $78M on autism therapy, Office of the Inspector General says
HHS Medicaid audit finds autism therapy overpayment Colorado
Colorado Medicaid ABA audit finds $77.8M in improper payments
OIG report finds $77.8M of improperly documented claim payments for ABA
