The company promotes itself as the industry leader<\/a> in building sophisticated and efficient systems for states that, among other things, screen who is eligible for Medicaid. However, a KFF Health News investigation of eligibility systems found widespread problems.<\/p>\n The systems have generated incorrect notices to Medicaid beneficiaries, sent their paperwork to the wrong addresses, and been frozen for hours at a time, according to findings in state audits, allegations and declarations in court documents, and interviews. It can take months to fix problems, according to court documents from a lawsuit in federal court in Tennessee, company documents, and state agencies. Meanwhile, America\u2019s poorest residents pay the price.<\/p>\n Deloitte dominates this important slice of government business: Twenty-five states have awarded it eligibility systems contracts \u2014 with 53 million Medicaid enrollees in those states as of April 1, 2023, when the unwinding of pandemic protections began, according to the Centers for Medicare & Medicaid Services. Deloitte\u2019s contracts are worth at least $5 billion, according to a KFF Health News review of government contracts, in which Deloitte commits to design, develop, implement, or operate state systems.<\/p>\n State officials work hand in glove with Deloitte behind closed doors to translate policy choices into computer code that forms the backbone of eligibility systems. When things go wrong, it can be difficult to know who\u2019s at fault, according to attorneys, consumer advocates, and union workers. Sometimes it takes a lawsuit to pull back the curtain.<\/p>\n Medicaid beneficiaries bear the brunt of system errors, said Steve Catanese, president of Service Employees International Union Local 668 in Pennsylvania. The union chapter represents roughly 19,000 employees \u2014 including government caseworkers who troubleshoot problems for recipients of safety-net benefits such as health coverage and cash assistance for food.<\/p>\n \u201cAre you hungry? Wait. You sick? Wait,\u201d he said. \u201cDelays can kill people.\u201d<\/p>\n KFF Health News interviewed Medicaid recipients, attorneys, and former caseworkers and government employees, and read thousands of pages from contracts, ongoing lawsuits, company materials, and state audits and documents that show problems with Deloitte-operated systems around the country \u2014 including in Arkansas, Colorado, Florida, Georgia, Kentucky, Pennsylvania, Rhode Island, Tennessee, and Texas.<\/p>\n In an interview, Kenneth Smith, a Deloitte executive who leads its national human services division, said Medicaid eligibility technology is state-owned and agencies \u201cdirect their operation\u201d and \u201cmake decisions about the policies and processes that they implement.\u201d<\/p>\n \u201cThey\u2019re not Deloitte systems,\u201d he said, noting Deloitte is one player among many who together administer Medicaid benefits.<\/p>\n Alleging \u201congoing and nationwide\u201d errors and \u201cunfair and deceptive trade practices,\u201d the National Health Law Program, a nonprofit that advocates for people with low incomes, urged the Federal Trade Commission to investigate Deloitte in a complaint filed in January.<\/p>\n \u201cSystems built by Deloitte have generated numerous errors, resulting in inaccurate Medicaid eligibility determinations and loss of Medicaid coverage for eligible individuals in many states,\u201d it argued. \u201cThe repetition of the same errors in Deloitte eligibility systems across Texas and other states and over time demonstrates that Deloitte has failed.\u201d<\/p>\n FTC spokesperson Juliana Gruenwald Henderson confirmed receipt of the complaint but did not comment further.<\/p>\n Smith called the allegations \u201cwithout merit.\u201d<\/p>\n The system problems are especially concerning as states wade through millions of Medicaid eligibility checks to disenroll people who no longer qualify \u2014 a removal process that was paused for three years to protect people from losing insurance during the covid-19 public health emergency. In that time, nationwide Medicaid enrollment grew by more than 22 million, to roughly 87 million people. At least 22.8 <\/a>[RP1]<\/a>\u00a0million have been removed as of June 4 , according to a KFF analysis of government data<\/a>.<\/p>\n Advocates worry many lost coverage despite being eligible. A KFF survey of adults disenrolled from Medicaid during the first year of the unwinding found that nearly 1 in 4 adults who were removed<\/a> are now uninsured. Nearly half who were removed were able to reenroll, the survey showed, suggesting they should not have been dropped in the first place.<\/p>\n \u201cIf there is a technology challenge or reason why someone can\u2019t access health care that they\u2019re eligible for, and we\u2019re able to do something,\u201d Smith said, \u201cwe work tirelessly to do so.\u201d<\/p>\n Deloitte\u2019s contracts with states regularly cost hundreds of millions of dollars, and the federal government pays the bulk of the cost.<\/p>\n \u201cStates become very dependent on the consultant for operating complex systems of all kinds\u201d to do government business, said Michael Shaub, an accounting professor at Texas A&M University.<\/p>\n Georgia\u2019s contract with Deloitte to build and maintain its system for health and social service programs, inked in 2014, as of January 2023 was worth $528 million. This January, state officials wrote in an assessment<\/a> obtained by KFF Health News that its eligibility system \u201clacks flexibility and adaptability, limiting Georgia\u2019s ability to serve its customers efficiently, improve the customer and worker experience across all programs, ensure data security, reduce benefit errors and fraud, and advance the state\u2019s goal of streamlining eligibility.\u201d<\/p>\n Deloitte and the Georgia Department of Community Health declined to comment.<\/p>\n Deloitte is looking ahead with its \u201cpath to Medicaid in 2040,\u201d<\/a> anticipating sweeping changes that will expand its own business opportunity.<\/p>\n \u201cState Medicaid leaders and policymakers are hungry to know what the future of health care holds,\u201d the company said. \u201cDeloitte brings the innovative tools, subject matter expertise, and time-tested experience to help states.\u201d<\/p>\n When Medicaid eligibility systems fail, beneficiaries suffer the consequences.<\/p>\n DiJuana Davis had chronic anemia that required iron infusions.\u00a0In 2019, the 39-year-old Nashville resident scheduled separate surgeries to\u00a0prevent pregnancy and to remove the lining of her uterus, which could alleviate blood loss and ease her anemia.<\/p>\n Then Davis, a mom of five, received a shock: Her family\u2019s Medicaid coverage had vanished. The hospital canceled the procedures, according to testimony in federal court in November.<\/p>\n Davis had kept her insurance for years without trouble. This time, Tennessee had just launched a new Deloitte-built eligibility system. It autofilled an incorrect address, where Davis had never lived, to send paperwork, an error that left her uninsured for nearly two months, according to an ongoing class-action lawsuit Davis and other beneficiaries filed against the state.<\/p>\n The lawsuit, which does not name Deloitte as a defendant, seeks to order Tennessee to restore coverage for those who wrongly lost it. Kimberly Hagan, Tennessee Medicaid\u2019s director of member services, said in a court filing defending the state\u2019s actions that many issues \u201creflect some unforeseen flaws or gaps\u201d with the eligibility system and \u201csome design errors.\u201d<\/p>\n Hagan\u2019s legal declaration<\/a> in 2020 gave a view of what went wrong: Davis lost coverage because of missteps by both Tennessee and Deloitte during what\u2019s known as the \u201cconversion process,\u201d when eligibility data was migrated to a new system.<\/p>\n Tennessee\u2019s Medicaid agency, known as \u201cTennCare, along with its vendor, Deloitte, designed rules to govern the logic of conversion,\u201d Hagan said in the legal declaration. She also cited a \u201cmanual, keying error by a worker\u201d made in 2017.<\/p>\n Davis\u2019 family was \u201cincorrectly merged with another family during conversion,\u201d Hagan said.<\/p>\n Davis regained coverage, but before she could rebook the surgeries, she testified, she became pregnant and a serious complication emerged. In June 2020, Davis rushed to the hospital. A physician told her she had preeclampsia, a leading cause of maternal death. Labor was induced and her son was born prematurely.<\/p>\n \u201cPreeclampsia can kill the mom. It can kill the baby. It can kill both of you,\u201d she testified. \u201cThat\u2019s like a death sentence.\u201d<\/p>\n Deloitte\u2019s Tennessee contract is worth $823 million. Deloitte declined to comment on Davis\u2019 case or the litigation.<\/p>\n Speaking broadly, Smith said, \u201cdata conversion is incredibly challenging and difficult.\u201d<\/p>\n Hagan called the problems one-time issues: \u201cNone of the Plaintiffs\u2019 cases reflect ongoing systemic problems that have not already been addressed or are scheduled to be addressed.\u201d<\/p>\n William DeShazer for KFF Health News<\/p>\n<\/div>\n States leverage Deloitte\u2019s technology as part of a larger push toward automation, legal aid attorneys and former caseworkers said.<\/p>\n \u201cWe all know that big computer projects are fraught,\u201d said Gordon Bonnyman, co-founder of the nonprofit Tennessee Justice Center. \u201cBut a state that was concerned about inflicting collateral damage when they moved to a different automated system would have a lot of safeguards.\u201d<\/p>\n TennCare spokesperson Amy Lawrence called its eligibility system \u201ca transformative tool, streamlining processes and enhancing accessibility.\u201d<\/p>\n When enrollees seek help at county offices, \u201cyou don\u2019t get to sit down across from a real human being,\u201d Bonnyman said. \u201cThey point you to the kiosk and say, \u2018Good luck with that.\u2019\u201d<\/p>\n As part of the Affordable Care Act rollout about a decade ago, states invested in technological upgrades to determine who qualifies for public programs. It was a financial boon to Deloitte and such companies as Accenture<\/a> and Optum<\/a>, which landed government contracts to build those complex systems.<\/p>\n Problems soon emerged. In Kentucky, a Deloitte-built system that launched in February 2016 erroneously sent at least 25,000 automated letters telling people they would lose benefits, according to local news reports<\/a>. State officials manually worked through a backlog of 50,000 cases caused by conflicting information from newly merged systems, the reports say.<\/p>\n \u201cWe know that the rollout of Benefind has caused frustration and concern for families and for field staff,\u201d senior Deloitte executive Deborah Sills said during a <\/a>March 2016 news conference<\/a> alongside Gov. Matt Bevin and other senior officials after Kentucky was bombarded with complaints. Within two months, roughly 600 system defects were identified, found a report<\/a> by the Kentucky state auditor.<\/p>\n In Rhode Island, a botched rollout in September 2016 delayed tens of thousands of Social Security payments, The Providence Journal<\/a> reported. Advocacy groups filed two class-action lawsuits, one related to Medicaid<\/a> and the other to food stamp benefits<\/a>. Both were settled, with Rhode Island officials denying wrongdoing. Neither named Deloitte as a defendant.<\/p>\n In a 2018 statement for a Statehouse hearing<\/a>, Sills of Deloitte said, \u201cWe are very sorry for the impact that our system issues have had on your constituents, on state workers, and on service providers.\u201d The state\u2019s top human services official resigned<\/a>.<\/p>\n A 2017 audit by a top Rhode Island official<\/a> prepared for Gov. Gina Raimondo found that Deloitte \u201cdelivered an IT system that is not functioning effectively\u201d and had \u201csignificant defects.\u201d \u201cWidespread issues,\u201d it said, \u201ccaused a significant deterioration in the quality of service provided by the State.\u201d<\/p>\n \u201cDeloitte held itself out as the leading vendor with significant experience in developing integrated eligibility systems for other states,\u201d the audit read. \u201cIt appears that Deloitte did not sufficiently leverage this experience and expertise.\u201d Deloitte declined to comment further about Rhode Island and Kentucky.<\/p>\n Deloitte invokes the phrase \u201cno-touch\u201d<\/a> to describe its technology \u2014 approving benefits \u201cwithout any tasks performed by the State workers,\u201d it wrote in documents<\/a> vying for an Arkansas contract.<\/p>\n In practice, enrollee advocates and former government caseworkers say, the systems frequently have errors and require manual workarounds.<\/p>\n As it considered hiring Deloitte, Arkansas officials asked the company about problems, particularly in Rhode Island.<\/p>\nTrouble in Tennessee<\/strong><\/h2>\n
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A backlog of 50,000 cases<\/strong><\/h2>\n