Colorado ABA Therapy Medicaid Audit: What the $77.8 Million OIG Finding Means for Families

A new federal audit has found that Colorado made at least $77.8 million in improper Medicaid payments for Applied Behavior Analysis (ABA) therapy provided to children — and that an additional $112.5 million in payments may also be improper and require further investigation.

The report, released by the U.S. Department of Health and Human Services Office of Inspector General (OIG) in 2026, is one of the largest ABA-specific Medicaid audits in recent memory. If you are a Colorado family receiving ABA therapy through Medicaid, or a provider who bills Colorado Medicaid for ABA services, here is what you need to understand — and what steps to take now.

What Did the Federal Audit Find?

The HHS Office of Inspector General examined Colorado's fee-for-service Medicaid payments for ABA therapy covering 2022 and 2023. The findings were remarkable in their scope:

• All 100 sampled enrollee-months included payments for one or more claim lines that were improper or potentially improper
• $77.8 million in confirmed improper payments identified in the audited sample period
• $112.5 million in additional payments flagged as potentially improper and requiring further review
• The OIG recommended Colorado refund $42.6 million to the federal government (the federal share of the confirmed improper payments)

The audit covered Colorado's fee-for-service Medicaid ABA payments — that is, payments made directly by the state Medicaid program to providers, rather than through managed care plans. The OIG identified three main categories of problems: inadequate documentation, improper billing practices, and credentialing deficiencies among ABA providers.

How Rapidly Did Colorado's ABA Spending Grow?

The audit provides important context about the pace of growth that drew federal scrutiny in the first place. Colorado's fee-for-service Medicaid payments for ABA services grew from $60.1 million in 2019 to $163.5 million in 2023 — an increase of more than 170 percent in just four years.

Rapid, high-dollar growth in a Medicaid program category is one of the most consistent triggers for OIG audit activity. It is worth noting that much of this growth reflects genuine increases in autism diagnosis rates, expanded Medicaid eligibility, and greater family awareness of ABA therapy. But the audit makes clear that Colorado's documentation and billing infrastructure did not keep pace with the program's expansion.

What Were the Specific Problems Found?

1. Inadequate Documentation

Providers were unable to produce sufficient documentation to demonstrate that the services billed actually occurred as claimed, met medical necessity criteria, or were delivered by qualified staff. In ABA therapy, proper documentation includes session notes, treatment plans signed and reviewed by a BCBA, parent training records, and ongoing progress data. When this documentation is missing or incomplete, the Medicaid payment has no valid basis.

2. Improper Billing Practices

Some claims were billed incorrectly — including billing for units of service that did not match actual session duration, or using incorrect procedure codes for the services delivered. These errors, whether administrative or intentional, result in overpayments that must be recouped by the Medicaid program.

3. Credentialing Deficiencies

Some providers billed for ABA services under staff credentials that did not meet the qualifications required for the billing codes used. ABA therapy billed to Medicaid typically requires that sessions be supervised by a Board Certified Behavior Analyst (BCBA) and delivered by a Registered Behavior Technician (RBT) or equivalently qualified staff. Where these credential requirements were not met, the claims were considered improper.

What Is Colorado Doing in Response?

Colorado partially or fully agreed with most of the OIG's recommendations and has committed to implementing corrective actions by August 2026. These include:

• Refunding $42.6 million to the federal government representing the federal share of confirmed improper payments
• Conducting additional reviews of the $112.5 million in potentially improper payments to determine what else must be recovered
• Providing clearer guidance to ABA facilities on documentation and billing requirements
• Conducting ongoing statewide reviews of ABA payments going forward
• Reviewing prior authorization procedures to improve oversight before payments are made

What Does This Mean for Colorado Families?

If your child receives ABA therapy through Colorado Medicaid (Health First Colorado), the most important thing to understand is that this audit is about provider billing and documentation practices — not about families doing anything wrong. Families will not be held responsible for billing errors made by their providers.

However, this audit may have indirect effects that Colorado families should be aware of:

Increased Provider Scrutiny Going Forward

Colorado Medicaid will be conducting more intensive reviews of ABA provider billing as a result of this audit. Providers who are found to have documentation problems may face payment holds or recoupment demands. In some cases, providers who cannot demonstrate compliance may lose their Medicaid billing authorization — which could disrupt your child's therapy if your current provider is affected.

What you can do: Ask your provider what documentation and compliance practices they follow. Quality providers will welcome this question and be able to answer it clearly.

Potential for More Prior Authorization Requirements

States that come under federal scrutiny for ABA Medicaid spending often respond by adding more layers of prior authorization and utilization management. This may mean more paperwork and potential delays in getting or renewing authorization for ABA hours going forward.

RBT Credential Verification

One of the issues flagged in the audit relates to staff credentials. Colorado has been enforcing RBT certification requirements for ABA providers. If you are a Medicaid-enrolled family, it is reasonable to ask your provider to confirm that all staff working directly with your child hold current, valid RBT credentials issued by the Behavior Analyst Certification Board (BACB).

What Does This Mean for Colorado ABA Providers?

If you are an ABA provider in Colorado who bills Medicaid, the OIG's findings should be treated as a compliance priority — whether or not your agency was directly included in the audit sample.

Priority compliance actions for Colorado ABA providers:

• Conduct an internal documentation audit: Review a sample of recent sessions to ensure every billed session has complete documentation — session notes, session duration, staff credentials, BCBA supervision signatures, and updated treatment plans
• Verify all staff credentials: Confirm that all RBTs are currently certified through the BACB and that BCBA supervision ratios and documentation meet Colorado Medicaid requirements
• Review billing code accuracy: Ensure the procedure codes being billed match the actual services delivered and that units align precisely with documented session times
• Update treatment plans on schedule: Confirm all clients have current, BCBA-signed treatment plans on file, updated at the frequency required by Colorado Medicaid policy
• Consider a third-party compliance review: A Medicaid compliance consultant can help you identify and correct gaps before a state or federal audit does

The Bigger Picture: Federal ABA Oversight Is Increasing Nationally

Colorado is not an isolated case. Medicaid programs across the country are conducting more intensive reviews of ABA therapy claims as ABA spending has grown significantly in almost every state. Similar audits and oversight actions have occurred in Indiana, New York, North Carolina, and several other states in recent years.

This increased scrutiny is not a sign that ABA therapy is ineffective or that families should avoid it. ABA remains one of the most rigorously evidence-based treatments available for autism spectrum disorder, and Medicaid's coverage of it is essential for millions of American families. But as with any high-growth, high-spend Medicaid program area, federal and state governments are working to ensure that the money is being spent correctly — on real services, documented properly, delivered by qualified staff.

For families, the takeaway is straightforward: work with providers who have strong compliance practices and who can clearly explain how they document and supervise services. For the ABA field, this is a moment to demonstrate that the therapy's proven effectiveness deserves continued, sustainable Medicaid coverage.

Find Qualified ABA Therapy Providers in Colorado

If you are a Colorado family looking for ABA therapy — whether through Health First Colorado (Medicaid) or private insurance — ABA Navigator's directory includes verified providers throughout the state, from Denver and Colorado Springs to Fort Collins, Boulder, Pueblo, and surrounding communities.

Search ABA therapy providers in Colorado and find qualified providers who accept your insurance and are accepting new clients. Every provider in our directory is verified as a legitimate, US-based ABA therapy practice.

If you have questions about navigating Colorado Medicaid coverage for ABA therapy or need help understanding your options, start with our Colorado provider directory and reach out to providers who can walk you through the enrollment process.