Deloitte Errors Threaten Millions’ Medicaid in America
TL/DR –
Deloitte’s systems, which determine Medicaid eligibility for states, have been found to have widespread problems, including sending incorrect notices and paperwork to wrong addresses. The company has contracts with 25 states, covering 53 million Medicaid enrollees, and these contracts are worth at least $5 billion. These systemic issues have significant impacts on beneficiaries, causing delays and incorrect benefit cancellations, problem that often take months to resolve and put America’s poorest residents at risk.
Deloitte’s Underperforming Medicaid Systems
Deloitte, a global consultancy with annual revenue of $65 billion, earns billions from state and federal governments for its promise to modernize Medicaid technology. Despite claiming industry leadership, a KFF Health News investigation reveals widespread system failures.
Issues include incorrect notices sent to Medicaid beneficiaries, wrongly addressed paperwork, and system freezes, leading to delayed problem resolution. Meanwhile, the most disadvantaged Americans suffer the consequences.
Deloitte’s influence on government operations is significant, with 25 states awarding the company contracts worth at least $5 billion to manage Medicaid eligibility systems. However, when errors occur, accountability is difficult to determine, often requiring legal intervention to clarify matters.
Medicaid beneficiaries bear the brunt of these system errors, says Steve Catanese, president of the Service Employees International Union Local 668 in Pennsylvania. “Delays can kill people,” he warns.
A KFF Health News investigation identified issues with Deloitte-operated systems across multiple states, including Arkansas, Colorado, Florida, Georgia, Kentucky, Pennsylvania, Rhode Island, Tennessee, and Texas.
However, Kenneth Smith, a Deloitte executive, deflects blame, stating that Medicaid eligibility technology is state-owned and agencies “direct their operation”.
The National Health Law Program urged the Federal Trade Commission to investigate Deloitte in a complaint filed in January, alleging “ongoing and nationwide” errors and “unfair and deceptive trade practices”.
With states gearing up for a mass disenrollment process after a pandemic-prompted pause, concerns about system errors are heightened. The erroneous removal of eligible individuals can leave them uninsured, as a KFF survey reveals that nearly 1 in 4 adults removed from Medicaid are now without insurance.
Problems across Multiple States
Mistakes in the Deloitte-built systems can have severe consequences. DiJuana Davis, a Nashville resident, lost her Medicaid coverage due to an incorrect address autofilled by Tennessee’s new Deloitte-built eligibility system. Unable to rebook her surgeries due to the loss of insurance, she became pregnant and suffered a serious complication.
System issues are not isolated to Tennessee. In Kentucky, a Deloitte-built system erroneously sent at least 25,000 automated letters notifying individuals of benefit losses. Rhode Island experienced delayed Social Security payments due to a botched system rollout by Deloitte in September 2016.
In Arkansas, Deloitte won a $345 million contract to develop its system, which according to a former program eligibility specialist, had many bugs leading to delays in fixing errors and loss of benefits for eligible individuals.
Escalating System Issues
Colorado, already experiencing widespread problems with its Deloitte-operated system, faced further challenges in late 2020 as pandemic-era Medicaid protections were winding down. A 2023 state audit found that 90% of sampled enrollee notices had errors and were missing required elements and information.
Pennsylvania also experienced issues with Deloitte’s system, resulting in errors affecting thousands of children last June and October. As Deloitte’s role in Medicaid eligibility expands, the system continues to fall short of its promise of efficiency, instead running into persistent errors that require manual workarounds.
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