Colorado WASTED $78M – 100% Audit Failure!

Colorado’s Medicaid program wasted at least $77.8 million on improper autism therapy payments, forcing a $42.6 million refund to the federal government amid a $1 billion state budget crisis.

Story Highlights

Federal OIG audit uncovers $77.8 million in improper payments for Applied Behavior Analysis (ABA) therapy to children, with 100% error rate in sampled claims.
State faces $42.6 million federal refund demand, straining resources during $1 billion Medicaid shortfall and benefit cuts for vulnerable families.
Payments surged 172% from $60.1 million in 2019 to $163.5 million in 2023, driven by higher rates and hours, not patient growth.
Issues stem from uncredentialed providers and missing autism diagnoses, signaling nationwide Medicaid compliance failures.

Audit Reveals Massive Improper Payments

The U.S. Department of Health and Human Services Office of Inspector General (OIG) audited Colorado’s fee-for-service Medicaid payments for Applied Behavior Analysis (ABA) therapy during 2022-2023. Auditors examined $289.5 million across over 1 million claims. A sample of 100 enrollee-months from 96 recipients and 47 centers showed 100% improper or potentially improper payments. Problems included payments to uncredentialed behavioral technicians and for patients without autism diagnoses. Total improper payments reached at least $77.8 million, with $207.4 million potentially improper.

Spending Explosion Amid Budget Shortfall

Colorado Medicaid ABA payments tripled from $60.1 million in 2019 to $163.5 million in 2023, a 172% increase. This growth occurred despite slower patient numbers, fueled by higher reimbursement rates and more therapy hours per patient. The audit coincides with Colorado’s $1 billion Medicaid shortfall, prompting cuts to benefits for low-income families, pregnant women, seniors, and the disabled. Pediatric behavioral therapy spending overall rose 650% since 2018 to $287 million. Federal auditors noted questionable billing patterns nationwide.

Stakeholders Respond to Federal Demands

OIG issued five recommendations, including a $42.6 million refund of the federal share, provider guidance, statewide postpayment reviews, prior authorization checks, and assessment of $112.5 million in potential improper federal funds. Colorado Department of Health Care Policy & Financing (HCPF) administers the program and partially concurs. HCPF disputes the full refund, calling $77.8 million an estimate, and launched July 2025 postpayment audits and billing system updates to flag improper claims. Providers like Soar Autism Center and Action Behavior Centers face reviews; monthly payments ranged $1,200-$15,000 per patient.

Impacts on Families and Fiscal Reform

Short-term effects include budget strain from the refund and disrupted services from audits and claim blocks. Long-term, enhanced oversight could curb waste but risk ABA access gaps for autism children in low-income families. This marks the fourth OIG ABA audit with 100% sample errors, the highest improper amount yet at $285.2 million total improper/potential. HCPF plans provider education and prior authorization reviews. Centers for Medicare & Medicaid Services status remains open, with updates due August 2026. Conservative taxpayers demand accountability to protect limited resources for truly needy Americans.

Conservative Call for Medicaid Accountability

Federal oversight exposes how state mismanagement erodes fiscal responsibility, diverting funds from legitimate needs to uncredentialed providers and undiagnosed cases. Amid endless government overspending, this scandal reinforces the need for limited government and strict compliance. Trump’s administration prioritizes ending waste, ensuring Medicaid serves vulnerable children without bloating bureaucracy. Patriots watching blue-state failures like Colorado’s see why America First policies cut fraud, lower taxes, and safeguard family values against wasteful entitlements.