Senators press Deloitte and other contractors over errors in Medicaid eligibility systems

Senators launched an investigation into companies that paid billions in taxpayer money to build Medicaid eligibility systems, expressing concern that bug-ridden technology and looming work requirements “will cause Americans to lose Medicaid coverage in this bureaucratic maze.”

The letters, dated October 10, were sent to four companies and traced A Investigated by KFF Health News Which revealed widespread problems in states that use systems run by Deloitte to evaluate the eligibility of millions of people for Medicaid. These failures have led to the wrongful loss of health coverage and other vital safety net benefits for low-income people. Malfunctions in these systems It can cost millions It takes years to fix.

As most states prepare to put in place work requirements imposed by the local tax and spending law signed by President Donald Trump in July, The senators wrote It is every company’s responsibility to build effective systems, “rather than prioritizing their bottom line.”

Democratic Senators Ron Wyden of Oregon, Elizabeth Warren of Massachusetts, and Raphael Warnock of Georgia, as well as Senator Bernie Sanders (in Vermont), sent letters to several companies identified by the Centers for Medicare and Medicaid Services as contractors for the eligibility system: Deloitte, GDIT, and Gainwell. Technologies, and Conduent.

“They are essentially health care brokers who are red tape, and they benefit when Americans don’t have access to health care,” Wyden, the top Democrat on the Senate Finance Committee, which oversees Medicaid, said in an interview.

“They have a history of poor performance when it comes to determining eligibility or helping Americans enroll in Medicaid,” Wyden said. “Without stronger oversight and real accountability, these contractors stand to gain enormous profits to create systems that actually harm Americans trying to access health care.”

Spokespeople for the four companies did not provide comments for this article.

As of June, 70.5 million people They were enrolled in Medicaid, according to CMS.

A few states operate their own Medicaid eligibility and enrollment systems, but most rely on contractors to build and operate these systems. Deloitte, a global consulting firm, was born, KFF Health News found $70.5 billion revenue In FY2025, this segment is dominated by government business. Twenty-five states awarded contracts to Deloitte for eligibility systems. The agreements, in which the company commits to design, develop, implement or operate state-owned systems, are worth at least $6 billion, dwarfing any of its competitors.

Kinda Serafi, partner at Manat Health, advises states on how to reshape their systems to integrate business requirements.

She said states are in a “big race” to make changes by 2027, and are being “inundated” with offers from vendors looking to secure contracts. He underscores the business opportunity these system changes represent for contractors.

“I think we have to be vigilant to make sure that these vendors implement the requirements that are compliant with the law,” Al-Sayrafi said.

Companies sign contracts with state governments, but the federal government pays the bulk of the cost. The federal government covers 90% of states’ costs for developing and implementing state Medicaid eligibility systems and 75% of maintenance and ongoing operations expenses, according to federal regulations.

Senate letters point to problems with eligibility systems run by Deloitte and identified by KFF Health News. Among other issues, Florida’s eligibility system Incorrectly cutting benefits For new mothers, an issue in Kentucky prevented coverage applications from going online, which cost $522,455 and took 10 months to resolve.

“Unfortunately, these are just a few examples of third-party systems failing to do their job: reliably and accurately determining an individual’s eligibility for Medicaid coverage and services,” the senators wrote.

The senators asked the companies to respond by Oct. 31 to their questions, such as whether the companies’ contracts with states include financial incentives that tie payment to removing Medicaid enrollees and whether companies would be penalized for wrongly terminating coverage. The senators also demanded an accounting of the company’s lobbying expenses over the past five years and protocols for making changes to the system.

By 2027, the Congressional Budget Office, based on an early version of the bill, projects 18.5 million Medicaid beneficiaries They will have to work or complete other qualifying activities for 80 hours per month to retain their benefits, unless they qualify for an exemption. the Central Bank of Oman estimates 5.3 million enrollees will lose coverage by 2034.

The new work requirements are just one of many federally mandated changes to Medicaid that are forcing states to adapt their eligibility systems.

Medicaid work requirements have been plagued by problems in the few states where they have been tested. Medicaid enrollees have become frustrated as they try to navigate byzantine rules and complex technology. The business demands have also come at a significant cost.

Georgia did not adopt the ACA Medicaid expansion, which gave benefits to millions of adults earning up to 138% of the federal poverty level. Instead, the state provides benefits to some people whose income reaches the poverty line and who can prove that they work or engage in similar activities for 80 hours a month. Nearly 110,000 Georgians had applied for the state’s Georgia Pathways to Coverage program through May, but only 9,157 people had registered as of mid-August. Under the model ACA expansion rules, 336,000 adults will be eligible For coverage, according to KFF.

Georgia’s program cost $109 million, with $34 million spent on health benefits and more than $20 million allocated to marketing contracts, according to a KFF Health News analysis of state reports. Deloitte built Georgia’s eligibility system and is the lead advisor to the Pathways program.

Before Medicaid work requirements became federal law, so was Arizona I submitted an application To federal regulators to launch their own version that could apply to approximately 190,000 people.

The state request provided insight into the types of system changes states may need to make soon to manage the new federal work requirements.

Arizona Medicaid officials said they will collect information about enrollees’ work hours, training and education. The state’s eligibility system, which is run by Accenture, will also need to verify whether someone is exempt.

States are in the early stages of determining what changes they need to make to implement business requirements.

Tessa Othis, a spokeswoman for the California Department of Health Care Services, said the state expects to process the upgrades “through the existing contractual change order process.” Government contracts with eligible companies often allocate millions to cover the cost of changes, but systems may require updates beyond agreed-upon work.

In Missouri, developments are expected to cost nearly $33 million, according to the A.D State budget document.

The state has a contract with the private company RedMane to handle some of the Medicaid eligibility procedures. Missouri plans to hire an additional contractor to ensure it sets Medicaid work requirements correctly, according to Billy Watts, spokesman for the Missouri Department of Social Services.

Medicaid eligibility contractors “have a lot of influence and experience to influence contracts and win contracts,” Wyden said. “They can do a lot, with the value of what we give them.”

KFF Health News Chief Correspondent Renuka Rayasam and Reporter Sam Whitehead contributed to this report.