Colorado may owe feds $42M for improper autism therapy payments

According to a recent report, Colorado may have mistakenly paid over $75 million to autism service providers and could potentially owe more than half of that amount back to the federal government.

The Office of the Inspector General estimated that the state’s Medicaid program overpaid $77.8 million for applied behavior analysis services in 2022 and 2023. Applied behavior analysis (ABA) involves breaking tasks down into steps to help children with severe autism or developmental disabilities learn personal care and communication skills.

The report recommended that Colorado refund about $42.6 million to the federal government, as the state and federal government share the cost of caring for children covered by Medicaid. Inspectors found that about 31% of the sampled care worth $611,000 was definitely improper due to lack of documentation, while 69% was potentially improper. They also identified $862 worth of correct billing.

Extrapolating these findings to the entire population receiving ABA services revealed estimated improper payments of $77.8 million and potentially improper payments of $207.4 million. Colorado’s Medicaid spending on ABA services more than doubled from $60.1 million in 2019 to $163.5 million in 2023, raising concerns about improper billing in other states as well.

The inspectors noted that Colorado had not been regularly reviewing payments or educating providers on proper billing practices. The Colorado Department of Health Care Policy and Financing is collaborating with the federal government, ABA providers, and other stakeholders to prevent fraud and address rising costs for autism therapy. They have implemented a process for reviewing payments before or after they are sent to providers to potentially recoup improper payments.

The department disputed the inspectors’ method for calculating the state’s repayment and plans to appeal. Rebecca Urbano Powell, president of the Colorado Association for Behavior Analysis, stated that the report highlights the state government’s failure to clarify documentation requirements for providers, rather than provider fraud. She emphasized the need to fix broken systems and provide better oversight and clearer standards for ABA services.