Colorado may have improperly paid more than $75 million to autism service providers and could be on the hook to return more than half that sum to the federal government, a new report found.
The Office of the Inspector General estimated the state’s Medicaid program overpaid $77.8 million for applied behavior analysis services in 2022 and 2023. ABA involves breaking tasks down into steps, so children with severe autism or developmental disabilities can learn how to perform personal care or communicate with others.
The report recommended Colorado refund about $42.6 million to the federal government. The state and the federal government split the cost of caring for children covered by Medicaid roughly in half.
The inspectors took a sample of 96 enrollees with care worth about $611,000 and determined about 31% was definitely improper, mostly due to lack of documentation, and 69% was “potentially” improper. They determined $862 worth of billing was clearly correct.
Extrapolating those numbers across the entire population receiving ABA services yielded estimates of $77.8 million in improper payments and $207.4 million that could be improper.
Colorado’s Medicaid spending on ABA services more than doubled from $60.1 million in 2019 to $163.5 million in 2023, according to the report. Other states also had large increases that raised concerns about improper billing, according to the report.
The inspectors determined Colorado hadn’t regularly reviewed payments or educated providers about how they should bill.
The Colorado Department of Health Care Policy and Financing said it is working with the federal government, ABA providers and other stakeholders to prevent fraud and bend the curve in increasing costs for autism therapy. In the past year, it launched a process for reviewing payments before or after they go to providers, with the possibility of recouping improper ones.
“Colorado and the nation are battling unacceptable cost increases due to outrageous behaviors and practices by a subset of disruptive and revenue-maximizing ABA providers,” the department said in a statement.
The department said it disputed the inspectors’ method for calculating what the state should pay back and planned to appeal, however.
Rebecca Urbano Powell, president of the Colorado Association for Behavior Analysis, said the OIG report shows failure by the state government to clarify how providers should document their services, not fraud by providers. The association raised concerns about the state’s processes, but it never acted on them, she said.
“This report should be a wake-up call to fix broken systems, not an excuse to take care away from children who depend on these therapies every day,” she said in a news release. “Providers have asked for years for better oversight and clearer standards, and instead, families are now facing the risk of more cuts and more red tape. Children with autism deserve stability, access, and care, not punishment for the state’s failures.”
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