Colorado’s Medicaid payments for a therapeutic program for individuals with autism increased 172% in four years, prompting a federal audit by the Office of the Inspector General.

Auditors found Colorado made $77.8 million in improper Medicaid payments for Applied Behavior Analysis (ABA) to children.

ABA is a therapeutic approach that centers on managing symptoms by improving social and communication skills.

“Colorado’s payments for ABA did not fully comply with federal and state requirements,” auditors said. “All 100 sampled enrollee-months included payments for one or more claim lines that were improper or potentially improper.”

The OIG report also recommended the state repay about $42 million of the payments, which represent the federal government’s share.

Medicaid, which is jointly funded by the state and federal government, provides health coverage to low-income residents, including children, pregnant women, seniors and people with disabilities.

The audit was prompted by questionable billing patterns and payments.

State payments for the program nearly tripled in four years, rising from $60.1 million in 2019 to $163.5 million in 2023, according to the audit.

The Colorado Department of Health Policy and Financing (CDHPF) administers the state’s Medicaid program.

“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,” said Marc Williams, a CDHPF spokesperson.

In July, the state launched an effort to audit providers after they’ve been paid and review claims before paying them, Williams said. The state is also in the process of updating its Medicaid billing system to automatically flag or block claims that lack required information or appear improperly billed.  

Williams also noted that the $77.8 million in improper Medicaid payments the OIG audit identified is an estimate.

The Applied Behavior Analysis is a subset of Pediatric Behavioral Therapy, which has grown far faster than the number of patients receiving services.

A state-commissioned review found spending on pediatric behavioral therapy in Colorado’s Medicaid program has grown dramatically — rising 650% since 2018 to about $287 million — while the number of patients increased far more slowly. The report attributed much of the growth to higher reimbursement rates and a sharp increase in the number of therapy hours patients receive each week.

The scrutiny follows other recent concerns about oversight in Colorado’s Medicaid program.

Last month, state officials said they detected $25 million in abnormal billing in the non-emergency medical transportation program over just four months, prompting a new state law, the suspension of 64 providers and federal fraud indictments against two transportation operators accused of billing millions for rides that never occurred or for patients who were dead.

The cases underscore broader concerns about oversight in a program that now spends roughly $16 billion annually, as federal auditors examine a separate surge in spending on autism therapy services.