OIG Flags Colorado Medicaid ABA Billing

A federal audit has flagged widespread improper and potentially improper billing for applied behavior analysis (ABA) under Colorado’s fee-for-service Medicaid program. The U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG) reviewed whether Colorado’s fee-for-service Medicaid payments for ABA services in 2022–2023 complied with federal and state requirements and concluded they did not fully comply. In its report highlights, HHS-OIG noted that every one of the 100 sampled enrollee-months contained at least one claim line that was improper or potentially improper.

Financial Findings in Audit Highlights

HHS-OIG’s highlights include two key estimates tied to the audited fee-for-service ABA payments:

• $77.8 million in improper payments, with a cited federal share of $42.6 million

• $207.4 million in potentially improper payments, with a cited federal share of $112.5 million

The report distinguishes between “improper” and “potentially improper” payments in its findings and frames the results as issues of compliance with payment requirements.

Common Error Types and “Potentially Improper” Patterns

The highlights also categorize the most common types of errors identified in the sample. These include documentation requirements not being met, as well as credentialing and diagnosis issues. In addition, the report identifies several patterns it classifies as potentially improper. These include situations where services were not fully described, possible unallowable activities, non-therapy time, and group activities.

Recommendations and Oversight Signals

HHS-OIG’s recommendations include refunding the federal share, issuing additional billing and documentation guidance, and performing periodic statewide postpayment reviews. The report describes these postpayment reviews as a way to educate providers and reinforce requirements. For Medicaid and state providers, the audit functions as a blueprint for what oversight bodies will expect next. The report points to sampling approaches that test medical necessity and documentation at the service-unit level, followed by explicit recoupment recommendations and provider education mandates.

The implications extend beyond ABA. Even for IDD providers that do not deliver ABA, the audit is presented as a broader warning for HCBS-like services. The report frames documentation quality as a payment integrity control rather than an administrative afterthought.