A federal audit reveals billions in questionable Medicaid payments for autism therapy in Colorado, highlighting unchecked industry growth, private equity influence, and concerns over the quality of care for children with autism.
A federal audit of Colorado’s Medicaid programme has exposed deep problems in autism therapy billing, adding weight to a wider case that the industry has grown fast enough to outpace oversight. According to the U.S. Department of Health and Human Services’ Office of Inspector General, the state made at least $77.8 million in improper fee-for-service payments for applied behaviour analysis, or ABA, in claims for children. The audit found that all 100 sampled enrollee-months contained at least one claim line that was improper or potentially improper.
The findings sit within a much broader picture of rapid growth, private investment and weak accountability. The reporting behind the MinnPost piece says Medicaid spending on ABA for children rose from about $400 million a year in 2019 to nearly $2 billion by 2024, with total claims approaching $7 billion over six years. That expansion has drawn in private equity firms, which have bought up ABA providers across the country and helped turn a therapy once promoted as intensive early intervention into a large, lucrative business.
Critics argue that the model itself encourages excess. ABA is meant to be highly individualised, yet advocates and former staff describe a system in which children are often kept in therapy for long hours, sometimes up to 40 a week, for years at a time. Researchers and autistic adults have also raised concerns about trauma, with studies cited in the reporting linking ABA to higher rates of post-traumatic stress symptoms and later mental health hospitalisation. Opponents say the therapy’s focus on suppressing autistic behaviours can crowd out more humane supports and, in some cases, even delay school attendance.
Federal audits in other states point to similar patterns. In Indiana, the inspector general found at least $56 million in improper Medicaid payments for ABA in 2019 and 2020, with another $76.7 million potentially improper. Reporting cited in the MinnPost story says auditors have also flagged problems in Wisconsin, Maine and Colorado, including missing notes, unallowable billing for meals and naps, and records that were copied and pasted across different children. In Colorado, auditors found improper or potentially improper claims in every sampled case.
The money trail has become increasingly tied to private equity ownership. Researchers cited in the story found 574 ABA sites acquired by private equity firms between 2015 and 2024. Of the 50 largest ABA providers by Medicaid billing in the dataset used by The 74, 23 were owned or had been owned by private equity, and those companies accounted for $2 billion in claims from 2019 to 2024. Centria Healthcare, once backed by Martis Capital and later sold to Thomas H. Lee Partners, became the country’s largest Medicaid biller in that period, with more than $440 million in receipts.
For families and schools, the consequences can be lasting. The reporting describes children who remained in ABA centres through school age, missing classroom instruction they are legally entitled to receive. Colorado lawmakers have since moved to impose licensing and clinic standards, but many disability advocates say the answer is not simply tighter control of ABA; they want stronger support for alternatives and more independent oversight of a field they believe has been shaped by profit before patient need.
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