Colorado Was Told to Refund $42.6M. The Bigger Number Is the $112.5M Behind It.

The largest single finding in the Office of Inspector General's ABA audit series landed on February 25, 2026, and it is not the $42.6 million Colorado was told to refund. It is the $112.5 million sitting behind it.

The numbers

Report A-09-24-02004 covers Colorado fee-for-service Medicaid ABA payments for 2022–2023. It finds:

• At least $77.8 million in improper payments — $42.6 million federal share, which OIG recommends Colorado refund.
• An estimated further $207.4 million in potentially improper payments — $112.5 million federal share, which OIG recommends Colorado review “for recovery.”

For scale: the potentially improper figure alone is larger than the entire improper finding in Indiana, Wisconsin and Maine put together.

And the sampling result is the one every report in this series has produced: “All 100 sampled enrollee-months included payments for 1 or more claim lines that were improper or potentially improper.”

What made payments improper

OIG's findings track the rest of the series — inadequate documentation, supervision that could not be verified, gaps in provider credentialing, and treatment plan requirements that were not met. The Colorado report additionally directs attention at the prior-authorization contractor, recommending the state review its procedures for confirming that diagnostic evaluation requirements were satisfied before authorizing services.

That is worth sitting with. It means a provider could hold a valid prior authorization and still be inside a finding, because the defect OIG identifies is upstream in how the authorization was granted.

Five recommendations

1. Refund $42.6 million to the federal government.
2. Provide enhanced guidance to ABA facilities on documentation, billing and credentialing.
3. Conduct periodic statewide post-payment reviews, including medical record audits.
4. Review the prior-authorization contractor's procedures for diagnostic evaluation compliance.
5. Review the estimated $112.5 million in potentially improper payments for recovery.

Colorado did not simply accept it

The state disagreed with one recommendation, agreed with three, and partially agreed with one, and set out corrective action taken and planned. Which recommendation it rejected matters to anyone modelling their exposure, and the response is in the report rather than the summary — read it there before assuming the $112.5M review proceeds as written.

The limits

An OIG recommendation is not a determination of debt. CMS decides what is recovered, the state decides how, and a disputed recommendation can move. “Potentially improper” is OIG's category for claims it could not verify in either direction — it is not a finding that those payments were wrong, and $207.4M is an estimate projected from a 100-enrollee-month sample rather than a count. Colorado's own response is part of the record and it is not a concession.

What you must know or do

• Colorado providers: recommendation 3 is a statewide post-payment review with medical record audits, and recommendation 5 points it at a specific $112.5M. Retrieve your 2022–2023 records now and confirm they are complete and producible, before a request arrives with a deadline attached.
• If your Colorado authorizations came through the PA contractor: recommendation 4 questions whether diagnostic evaluation requirements were verified at authorization. Holding the authorization is not the same as being outside the finding. Check that your own file independently documents the diagnostic evaluation and referral.
• Read Colorado's response, not the press summary. One recommendation was rejected outright and another only partly accepted. The state's position shapes what actually gets recovered and from whom.
• Everyone else: this is the fourth audit in the series and the numbers have gone up, not down — $56M, $18.5M, $45.6M, $77.8M. Four more states are being audited now and have not been named.