Colorado FLUSHES $77.8 Million — Families Crushed

Colorado’s Medicaid program flushed at least $77.8 million in taxpayer dollars on improper autism therapy payments, demanding a $42.6 million refund from the federal government amid a $1 billion state budget crisis.

Story Highlights

Federal OIG audit uncovers $77.8 million in improper payments for ABA therapy to uncredentialed providers and undiagnosed children in 2022-2023.
100% error rate in audited sample of 100 claims from 96 kids and 47 centers, highest in OIG’s ABA audit series.
State faces $42.6 million federal refund while grappling with $1 billion shortfall and cuts to benefits for low-income families.
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.
Colorado partially disputes refund, claims fixes underway, but oversight failures expose government waste hurting vulnerable families.

Audit Reveals Massive Improper Payments

The U.S. Department of Health and Human Services Office of Inspector General audited Colorado’s fee-for-service Medicaid payments for Applied Behavior Analysis from 2022 to 2023. Auditors reviewed $289.5 million across over 1 million claims. A sample of 100 enrollee-months from 96 children at 47 centers showed every single one included improper or potentially improper payments. Issues included uncredentialed technicians and missing autism diagnoses. This marks the highest improper amount in OIG’s ABA audits.

Spending Surge Amid Billing Failures

Colorado Medicaid ABA payments jumped 172% from $60.1 million in 2019 to $163.5 million in 2023. Broader pediatric behavioral therapy spending rose 650% since 2018 to $287 million. Growth stemmed from higher reimbursement rates and more therapy hours per patient, not increased enrollment. Federal and state agencies flagged questionable nationwide billing patterns beforehand. The audit projects $77.8 million improper plus $207.4 million potentially improper, totaling $285.2 million at risk.

State Response and Federal Demands

Colorado’s Department of Health Care Policy and Financing administers Medicaid, covering low-income children, pregnant women, seniors, and disabled residents. The OIG issued five recommendations, including a $42.6 million refund of the federal share. HCPF partially concurs, calling the figure an estimate, and disputes the full refund. Since July 2025, the state started post-payment audits, billing system upgrades to flag issues, and provider education. Recommendation status remains open as of August 2026.

Providers like Soar Autism Center and Action Behavior Centers received payments of $1,200 to $15,000 monthly per patient. Auditors found payments did not comply with federal and state rules on documentation, billing, and credentialing. HCPF plans prior authorization reviews and statewide postpayment checks to prevent recurrence.

Impacts on Families and Taxpayers

The scandal hits during Colorado’s $1 billion Medicaid shortfall, forcing benefit cuts for low-income and disabled families. Short-term, the refund strains budgets, while provider audits risk service disruptions for autism children. Long-term, stricter oversight could curb waste but limit ABA access, a key therapy for social and communication skills. This signals a national crackdown on ABA billing, the fastest-growing Medicaid service at $2.2 billion in 2023.

Conservative Concerns Over Government Waste

Taxpayers foot the bill for bureaucratic failures that prioritize compliance lapses over helping vulnerable kids. Limited government demands accountability, not excuses. As Trump administration officials scrutinize Medicaid overspending, Colorado’s case underscores fiscal mismanagement echoing past leftist policies of unchecked growth and poor oversight. Families deserve efficient programs without draining resources needed for real priorities like border security and energy independence.