Senators press Deloitte, different contractors on errors in Medicaid eligibility programs

Senators have launched an inquiry into corporations paid billions in taxpayer {dollars} to construct eligibility programs for Medicaid, expressing concern that error-riddled know-how and looming work necessities “will trigger Individuals to lose Medicaid protection to this bureaucratic maze.”

The letters, dated Oct. 10, had been despatched to 4 corporations and comply with a KFF Well being Information investigation that uncovered widespread points in states utilizing Deloitte-run programs to evaluate Medicaid eligibility for hundreds of thousands of individuals. Failures have resulted within the faulty lack of well being protection and different very important safety-net advantages for low-income folks. Malfunctions in these programs can price hundreds of thousands and take years to repair.

As most states put together to institute work necessities mandated by the tax and home spending regulation President Trump signed in July, senators wrote it’s every firm’s duty to construct functioning programs, “reasonably than to prioritize their backside line.”

Democratic Sens. Ron Wyden of Oregon, Elizabeth Warren of Massachusetts, and Raphael Warnock of Georgia, in addition to Sen. Bernie Sanders (I-Vt.), despatched the letters to a number of corporations the Facilities for Medicare & Medicaid Providers recognized as eligibility system contractors: Deloitte, GDIT, Gainwell Applied sciences, and Conduent.

“They’re primarily well being care middlemen which are within the enterprise of purple tape, and so they revenue when Individuals do not get well being care,” Wyden, the highest Democrat on the Senate Finance Committee, which oversees Medicaid, mentioned in an interview.

“They have a historical past of poor efficiency in terms of figuring out eligibility or in serving to Individuals enroll in Medicaid,” Wyden mentioned. “With out stronger oversight and actual accountability, these contractors are simply going to get a jumbo windfall for creating programs that really hurt Individuals attempting to get well being care.”

Spokespeople for the 4 corporations didn’t present feedback for this text.

As of June, 70.5 million folks had been enrolled in Medicaid, in keeping with CMS.

A handful of states function their very own Medicaid eligibility and enrollment programs, however most depend on contractors to construct and run them. KFF Well being Information discovered that Deloitte, a world consultancy that generated $70.5 billion in income in fiscal yr 2025, dominates this slice of presidency enterprise. Twenty-five states have awarded Deloitte contracts for eligibility programs. The agreements, by which the corporate commits to design, develop, implement, or function state-owned programs, are value at the very least $6 billion, dwarfing any of its opponents.

Kinda Serafi, a accomplice at Manatt Well being, is advising states on methods to reconfigure their programs to include work necessities.

States are in a “main dash” to make adjustments by 2027, she mentioned, and so they’re being “inundated” with pitches from distributors seeking to safe contracts. It underscores the enterprise alternative these system adjustments signify for contractors.

“I believe we’ve got to actually be vigilant to guarantee that these distributors are implementing the necessities per the regulation,” Serafi mentioned.

Firms signal contracts with state governments, however the federal authorities pays the majority of the fee. The federal authorities covers 90% of states’ prices to develop and implement state Medicaid eligibility programs and 75% of ongoing upkeep and operations bills, in keeping with federal rules.

The Senate letters cite issues with Deloitte-run eligibility programs that KFF Well being Information recognized. Amongst different points, the Florida eligibility system erroneously lower advantages for brand spanking new mothers, and an issue in Kentucky prevented protection purposes from getting via on-line, which price $522,455 and took 10 months to resolve.

“Sadly, these are just some examples of third-party programs’ failure to serve their very perform: to reliably and precisely decide a person’s eligibility for Medicaid protection and providers,” the senators wrote.

The senators requested the businesses to reply by Oct. 31 to their questions, similar to whether or not corporations’ contracts with states embrace monetary incentives tying cost to the elimination of Medicaid enrollees and whether or not the businesses are penalized for protection terminations made in error. The senators additionally demanded an accounting of the corporate’s lobbying expenditures for the previous 5 years and protocols for making system adjustments.

By 2027, the Congressional Funds Workplace projected, based mostly on an early model of the invoice, 18.5 million Medicaid beneficiaries should work or full different qualifying actions for 80 hours a month to maintain their advantages, except they qualify for an exemption. The CBO estimates that 5.3 million enrollees will lose protection by 2034.

The brand new work necessities are simply certainly one of a number of federally mandated Medicaid adjustments which are forcing states to adapt their eligibility programs.

Medicaid work necessities have been plagued with issues within the few states the place they have been examined. Medicaid enrollees have been pissed off in attempting to navigate byzantine guidelines and glitchy know-how. Work necessities have additionally come at nice price.

Georgia has not adopted the ACA Medicaid enlargement, which has granted advantages to hundreds of thousands of adults incomes as much as 138% of the federal poverty degree. As an alternative, the state affords advantages to some folks incomes as much as the poverty line who can show they’re working or collaborating in comparable actions for 80 hours a month. Practically 110,000 Georgians had utilized to the state’s Georgia Pathways to Protection program via Might, however solely 9,157 folks had been enrolled as of mid-August. Below typical ACA enlargement guidelines, 336,000 adults could be eligible for protection, in keeping with KFF.

The Georgia program has price $109 million, with $34 million spent on well being advantages and greater than $20 million allotted to advertising contracts, in keeping with a KFF Well being Information evaluation of state experiences. Deloitte constructed Georgia’s eligibility system and is the first advisor for the Pathways program.

Earlier than Medicaid work necessities grew to become federal regulation, Arizona additionally submitted a request to federal regulators to launch its personal model that might apply to roughly 190,000 folks.

The state’s software supplied perception into the kinds of system adjustments states might quickly have to make to handle the brand new federal work requirement.

Arizona Medicaid officers mentioned they’d collect info on enrollees’ work hours, coaching, and schooling. The state’s eligibility system, which is operated by Accenture, would additionally have to verify whether or not somebody is exempt.

States are within the early levels of figuring out adjustments they should make to implement work necessities.

Tessa Outhyse, a spokesperson for the California Division of Well being Care Providers, mentioned the state expects upgrades to be processed “via the prevailing contractual change order course of.” State contracts with eligibility corporations typically put aside hundreds of thousands to cowl the price of adjustments, however programs might require upgrades past the agreed-upon work.

In Missouri, upgrades are anticipated to price roughly $33 million, in keeping with a state funds doc.

The state has a contract with personal firm RedMane to deal with a few of its Medicaid eligibility processing. Missouri plans to rent a further contractor to make sure it correctly institutes Medicaid work necessities, in keeping with Baylee Watts, a spokesperson for Missouri’s Division of Social Providers.

Medicaid eligibility contractors “have lots of leverage and experience to affect contracts, to win contracts,” Wyden mentioned. “They’ll do much more, to the worth of what we’re giving them.”

KFF Well being Information senior correspondent Renuka Rayasam and correspondent Sam Whitehead contributed to this report.

KFF Well being Information is a nationwide newsroom that produces in-depth journalism about well being points and is likely one of the core working applications at KFF — the impartial supply for well being coverage analysis, polling, and journalism.