Colorado made at least $77.8 million in improper payments for Medicaid services for children with autism and must refund the federal government $42.6 million, federal officials said Monday.
Auditors at the federal Office of the Inspector General found the state Medicaid program has been improperly covering care by uncredentialed behavioral technicians for children with autism, among other billing discrepancies.
The audit released Monday comes as the state is already dealing with a $1 billion budget shortfall and cuts to Medicaid benefits that have affected multiple programs for people with low incomes and disabilities.
The therapy, called applied behavioral analysis, uses playtime and step-by-step repetition to improve communication, attention span and life skills. The number of autism centers that provide the therapy has increased in Colorado in recent years as the number of people diagnosed with autism has grown.
Colorado has more than 6,600 certified technicians and an estimated 1,500-2,000 who are not certified but are providing therapy. Certification requires a 40-hour course, a written test and on-the-job supervision.
The OIG has been investigating applied behavior analysis therapy in multiple states, identifying what it calls “questionable billing patterns.” Colorado’s Medicaid payments for this type of therapy jumped to $163.5 million in 2023 from $60.1 million in 2019, federal officials said.
The federal agency said Colorado must refund $42.6 million in federal money, as well as conduct periodic statewide reviews of payments for autism centers offering applied behavior analysis therapy, including places such as Soar Autism Center and Action Behavior Centers.
The audit looked at whether the state’s Medicaid payments for the therapy in 2022 and 2023 complied with federal and state law.
The audit reviewed $289.5 million in payments for more than 1 million claims for the therapy in those two years, with auditors digging deeper into the claims of 96 Medicaid recipients for 100 months of payments. The sample included 47 applied behavioral analysis therapy centers, with payments ranging from $1,200 to $15,000 per month. They found problems with the entire sample, including multiple payments to providers without credentials and payments for patients without an official diagnosis of autism.
State Medicaid officials at the Colorado Department of Health Care Policy and Financing, in a written response to the OIG, disagreed that Colorado should have to return $42 million to the federal government. Federal auditors did not provide the “detailed claim-level documentation” needed to substantiate that repayment amount, the department argued.
State officials did agree, however, to provide additional guidance about filing claims to autism therapy centers.
Medicaid officials knew the OIG report was coming.
In December, they went to the state’s governor-appointed Medical Services Board to ask for an emergency rule change to address “urgent compliance issues” and to ensure children’s safety, as well as the future of federal funds. After contentious discussion with parents and autism therapy providers who packed the meeting, Medicaid officials pulled back the request.
The state does not have a robust regulation in place regarding the credentialing of behavioral health technicians, who are not required under the law to have background checks, qualifications or supervision. State officials said they were not aware until they read an early draft of the OIG report how many uncredentialed technicians are providing pediatric behavioral therapy at autism centers in the state.
But therapy providers said they are the ones who for years have been warning the state Department of Health Care Policy and Financing, called HCPF, that they needed a more thorough certification process.
Providers are not opposed to a certification process but said they need a grace period for employees to get credentialed. About 25% of the autism therapy workforce is in training, providers said, so centers hire uncredentialed therapists and help them earn their certification while under supervision. There is no federal prohibition on a grace period for workers, they argued, questioning why state officials were trying to prohibit one.
“All of this feedback has been ignored and now HCPF is using their failure to follow recommendations as a reason to continue to cut critical services for kids,” said Erin McCann Ciani, co-founder of Elevate Strategic Consulting, which is representing autism centers. “They knew this report was coming and were hoping to use it to justify their continued and disparate cuts to these life-changing therapies for families, rather than taking accountability for their own policies.”
Autism therapy providers said they had asked the OIG themselves and learned that a grace period was allowed as part of the state’s certification process.
In response to the audit, state Medicaid officials said this week they are reviewing the final version of the audit and continuing to work on regulatory and legislative policies that were already under way.
“Colorado takes oversight of our Medicaid programs very seriously and we are always working to find and root out fraud when it occurs, including referring to law enforcement when appropriate,” department spokesperson Marc Williams said via email.
The department is working with federal partners, state lawmakers and behavioral health centers on how to “properly serve children with autism while better managing outlier cost trend increases and tackle overpayments,” he said.
“Colorado and the nation are battling unacceptable cost increases due to outrageous behaviors and practices by a subset of disruptive and revenue maximizing (applied behavioral analysis) providers,” he said.
Several other states, including Indiana, Wisconsin and Maine, have been ordered by the OIG to return federal Medicaid funding for autism therapy for similar billing problems.