Deloitte's Medicaid eligibility systems kept misfiring across states

A KFF Health News investigation, republished by Fortune on 24 June 2024, examined the Medicaid eligibility systems Deloitte builds or runs for 25 states covering 53 million enrollees, under contracts worth at least $5 billion. It found incorrect notices, paperwork sent to the wrong addresses and systems frozen for hours, in findings from state audits, court documents and interviews in nine states including Arkansas, Colorado, Georgia, Kentucky, Rhode Island, Tennessee and Texas. Fixes could take months.

In Tennessee, a Deloitte-built system launched in 2019. Plaintiff DiJuana Davis lost family coverage for nearly two months after the system autofilled an address where she had never lived. A state official said in a court filing that she and Deloitte had both erred in the 'conversion process', including merging her family with another. Earlier, Kentucky's 2016 system sent at least 25,000 erroneous letters about lost benefits and left a backlog of 50,000 cases, and roughly 600 defects were found within two months.

In Rhode Island, a September 2016 rollout delayed tens of thousands of benefit payments; a 2017 state audit said Deloitte 'delivered an IT system that is not functioning effectively', and the state's top human services official resigned. A Colorado audit in September 2020 found 67% of sampled notices contained errors. Deloitte says the systems belong to the states, which direct how they run, and called a January 2024 complaint to the FTC from the National Health Law Program 'without merit'.

Data conversion from legacy systems was error-prone: Tennessee's own filing cited design errors and a merge of two families during conversion.

Deloitte promoted 'no-touch' automation, but caseworkers and advocates said the systems needed manual workarounds and left enrollees stuck.

Rhode Island's audit said Deloitte did not sufficiently use its experience from other states, so the same failure patterns recurred.

Responsibility was blurred: states own the systems and write the policy rules, so errors surfaced in lawsuits against states rather than the vendor.

When the same vendor repeats the same migration and notice errors in state after state, the problem is the delivery method, not each state's bad luck. Vendor experience claims need verifying.

The National Health Law Program asked the FTC in January 2024 to investigate Deloitte; the FTC confirmed receipt but did not comment. The Tennessee class action, which does not name Deloitte, sought restored coverage for people wrongly dropped. Rhode Island settled two class actions without admitting wrongdoing, and Deloitte's Deborah Sills apologised at a 2018 hearing. Georgia's own 2024 assessment said its Deloitte system lacked flexibility, and the investigation noted these errors persisted as states reviewed millions of Medicaid enrollees after pandemic protections ended.