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The direct answer: your clock started January 28, 2026
If you operate a SUD or mental health program contracted with Anthem, Wellpoint, or any Elevance Medicaid plan in Florida, Tennessee, Georgia, or Indiana, treat Elevance Health’s Q4 2025 earnings call as an operational warning. On that call, CEO Gail Boudreaux told investors the company is using analytics to flag outlier utilization and billing in high-cost substance use disorder settings, then acting on those flags with provider education, claims review changes, and payment accuracy enforcement.
Boudreaux’s exact framing on the January 28, 2026 call: “In Medicaid, we’re strengthening our analytics to identify outlier utilization and billing patterns in high-cost substance use disorder treatment settings, while maintaining access to clinically appropriate care.“ She added that these insights are enabling targeted actions, including provider education, claims review enhancements, and payment accuracy and compliance initiatives.
Two things to notice. First, the trigger is Medicaid margin pressure. Analyst coverage of the call noted that Boudreaux highlighted actions to reposition the book of business, such as exiting lower-margin geographies and tightening pricing, aimed at stabilizing margins. Second, Elevance leadership named behavioral health as a category Carelon will run harder in 2026. The cost-recovery target has a name on it. It is you.
The Carelon payment integrity machine is already running
This is not a future-state announcement. On the April 2026 Q1 call, Elevance publicly confirmed the analytics engine is live. Per Healthcare Finance News: predictive analytics supported by AI is identifying members at risk for health concerns, including substance use disorder, and AI is embedded in clinical operational workflows and is scaled across the organization.
Operators should expect the same pattern other payers have run for years:
- Pre-payment claim edits on codes Carelon flags as outliers
- Retrospective focused audits with broad date ranges
- Medical-necessity documentation requests tied to ASAM Criteria, 4th Edition placement
- SIU referrals and recoupment demands
- Provider re-education letters that double as audit predicates
The analytics are the trigger. The SIU audit is the response. Appeal windows on pre-payment edits are short, so the compliance program you have on the day the letter lands is the compliance program you get to defend with.
Federal data tells you exactly where Carelon's models will hunt
If you want to know what Carelon will flag, look at what federal auditors already flag. CMS reported that the FY2024 Medicaid improper payment rate was 5.09%, or $31.10 billion, and 79.11% of those improper payments were the result of insufficient documentation. The FY2025 rate rose further: 6.12%, or $37.39 billion, with 77.17% of those improper payments the result of insufficient documentation, which is generally not indicative of fraud or abuse. That is the single largest target on a payer’s heat map: services that probably happened but cannot be defended on paper.
The pattern repeats at the state level. In Ohio in December 2025, Auditor of State Keith Faber released findings on a Toledo-area SUD and mental health provider. Per the Auditor of State press release, state auditors identified more than $1.75 million in improper Medicaid payments over a three-year period to a Lucas County behavioral health agency, and with added interest, the Auditor of State’s Office is recommending repayment of about $1.87 million from Empowered for Excellence Behavioral Health of Ohio as part of a recently completed compliance examination. Reporting from WTOL added that one of the largest overpayment categories involved Therapeutic Behavioral Services (TBS) per diem claims, where the state sampled 60 services and found issues in 42 of them, and that sample was used to project a broader overpayment estimate of $1.73 million in this category alone. One provider. One state. Nearly two million dollars on the table.
HHS-OIG has hit the same vein from the federal side. Per the February 2026 OIG audit of Colorado, all 100 sampled enrollee-months included payments for 1 or more claim lines that were improper or potentially improper, and the OIG recommended Colorado refund $42,649,438 (Federal share) to the Federal Government for FFS Medicaid ABA payments that did not comply with Federal and State requirements. Same root cause every time: documentation that did not support the claim.
What to fix before the pre-payment edits land
Operators AHS works with in Florida, Tennessee, Georgia, and Indiana get the same readiness conversation. The exposure points are predictable. Fix them in this order.
- Medical necessity tied to ASAM Criteria, 4th Edition. Every admission to residential withdrawal management, clinically managed residential, partial hospitalization (an outpatient level of care), and intensive outpatient must trace cleanly to the six dimensions. Carelon reviewers will not give credit for clinical judgment that was not written down.
- Length-of-stay defensibility. Census pressure tempts programs to extend stays. Outlier LOS against peer benchmarks is the fastest way to draw an SIU audit. If your average residential LOS is materially above your state’s Medicaid managed care norm, your utilization management notes need to justify each extension.
- Billing-code intensity. Frequency of H0015, H0010, H0035, group-versus-individual ratios, drug testing units. HHS-OIG found that its audit covered $3 billion in Medicare Part B payments for definitive drug testing services with dates of service from January 2016 through December 2020, made to 1,062 “at-risk providers,” which routinely billed procedure code G0483 (for 75 percent or more of their definitive drug testing services), and 4,227 “other providers”. For the 5-year audit period, Medicare paid $704.2 million for definitive drug testing services that were at risk for noncompliance with Medicare requirements. Definitive drug testing is a known landing zone.
- Internal chart audit cadence. Quarterly, statistically valid sampling. Not vibes. Not AI-only. Human auditors who can read a treatment plan against the bill and tell you whether it holds.
- Compliance committee minutes. When Carelon’s letter arrives, the first thing requested will be your compliance program documentation. If your committee has not met in six months, your leadership team starts from behind.
Other payers will copy this playbook
Elevance is not the only payer doing this. It is the one being explicit about it. UnitedHealth’s Optum, Centene, Molina, and the regional Blues plans all run comparable programs. HHS-OIG has already telegraphed the multi-state sweep on ABA. Per the OIG’s own Colorado report, prior published audits covered Indiana ($56 million improper), Wisconsin ($18.5 million improper), and Maine ($45.6 million improper) in fee-for-service Medicaid payments for services provided to children diagnosed with autism. In the Colorado file specifically, the office estimated $77.8 million in improper payments, including a $42.6 million federal share, and $207.4 million in potentially improper payments.
Colorado’s own Department of Health Care Policy and Financing spokesperson Marc Williams told Colorado Politics: “Colorado and the nation are battling unacceptable cost increases due to outrageous behaviors and practices by a subset of disruptive and revenue maximizing ABA providers.” State Medicaid agencies will lean on plans to close those gaps. Plans will lean on you.
The operators who handle this well will not be the ones with the loudest compliance language on their website. They will be the ones whose clinicians, utilization management staff, and billers produce documentation, LOC assignments, and claims that line up so cleanly an analytics outlier flag resolves on first medical-record review. Be boring on the dashboard.
Frequently asked questions
What did Elevance Health actually announce about behavioral health billing analytics?
On the January 28, 2026 Q4 2025 earnings call, CEO Gail Boudreaux told investors Elevance is strengthening analytics to identify outlier utilization and billing patterns in high-cost SUD treatment settings, with follow-through via provider education, claims review enhancements, and payment accuracy and compliance initiatives. On the Q1 2026 call, Healthcare Finance News reported that predictive analytics supported by AI is embedded in clinical operational workflows and scaled across the organization, and is identifying members at risk for concerns including substance use disorder.
How big is the Medicaid documentation problem CMS and payers are looking at?
CMS reported an FY2024 Medicaid improper payment rate of 5.09%, or $31.10 billion, with 79.11% of those improper payments resulting from insufficient documentation. The FY2025 rate rose to 6.12%, or $37.39 billion, with 77.17% still driven by insufficient documentation. That is the lever payers pull first because it requires no fraud finding, just a records gap.
Which behavioral health services are most likely to be flagged first?
Expect early focus on residential SUD treatment, partial hospitalization (which is outpatient under ASAM Criteria, 4th Edition), intensive outpatient, definitive drug testing, and ABA. HHS-OIG identified $704.2 million in at-risk Medicare Part B payments to 1,062 providers who routinely billed G0483 for 75% or more of their definitive drug testing services from January 2016 through December 2020. On the Medicaid ABA side, OIG’s Colorado audit alone flagged $77.8 million improper plus $207.4 million potentially improper, and prior published audits covered Indiana ($56M), Wisconsin ($18.5M), and Maine ($45.6M). Carelon’s models will mirror those federal targets.
What should a multi-state behavioral health operator do in the next 90 days?
Run a focused internal audit on medical-necessity documentation tied to ASAM Criteria, 4th Edition; length-of-stay defensibility against payer benchmarks; billing-code intensity for H-codes and drug testing units; and utilization management notes. Convene the compliance committee, document the meeting, and pre-build an audit response playbook so the first Carelon letter does not catch leadership flat-footed. The goal is to be unremarkable on the payer’s outlier dashboard.
References
- Elevance Health Q4 2025 Earnings Call Transcript, The Motley Fool, January 28, 2026
- Despite Q1 profit decline, Elevance Health raises financial outlook, Healthcare Finance News, April 2026
- Fiscal Year 2025 Improper Payments Fact Sheet, CMS
- Fiscal Year 2024 Improper Payments Fact Sheet, CMS
- Auditor Faber press release on Empowered for Excellence Behavioral Health of Ohio, Ohio Auditor of State, December 2025
- Toledo behavioral health provider owes state $1.87M for improper Medicaid claims, WTOL
- Colorado Made at Least $77.8 Million in Improper FFS Medicaid Payments for ABA (A-09-24-02004), HHS-OIG, February 25, 2026
- HHS-OIG Colorado ABA Audit Report (PDF), A-09-24-02004
- Federal audit finds $77.8M in improper Medicaid payments for Colorado autism therapy, Colorado Politics, March 2026
- Medicare Could Have Saved up to $216 Million Over 5 Years on Definitive Drug Testing, HHS-OIG
- Colorado Medicaid ABA audit finds $77.8M in improper payments, Becker’s Behavioral Health