Senators have launched an inquiry into corporations paid billions in taxpayer {dollars} to construct eligibility programs for Medicaid, expressing concern that error-riddled expertise 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 observe a KFF Well being Information investigation that uncovered widespread points in states utilizing Deloitte-run programs to evaluate Medicaid eligibility for thousands and thousands of individuals. Failures have resulted within the inaccurate lack of well being protection and different important safety-net advantages for low-income folks. Malfunctions in these programs can value thousands and thousands and take years to repair.
As most states put together to institute work necessities mandated by the tax and home spending legislation President Donald Trump signed in July, senators wrote it’s every firm’s accountability to construct functioning programs, “moderately than to prioritize their backside line.”
Democratic senators 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 can be within the enterprise of crimson tape, they usually revenue when Individuals don’t get well being care,” Wyden, the highest Democrat on the Senate Finance Committee, which oversees Medicaid, mentioned in an interview.
“They’ve obtained 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 response to 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 worldwide 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, through which the corporate commits to design, develop, implement, or function state-owned programs, are value not less than $6 billion, dwarfing any of its opponents.
Kinda Serafi, a accomplice at Manatt Well being, is advising states on the way to reconfigure their programs to include work necessities.
States are in a “main dash” to make adjustments by 2027, she mentioned, they usually’re being “inundated” with pitches from distributors seeking to safe contracts. It underscores the enterprise alternative these system adjustments symbolize for contractors.
“I believe we’ve got to actually be vigilant to guarantee that these distributors are implementing the necessities in step with the legislation,” 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 response to 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 new mothers, and an issue in Kentucky prevented protection purposes from getting via on-line, which value $522,455 and took 10 months to resolve.
“Sadly, these are only a few examples of third-party programs’ failure to serve their very perform: to reliably and precisely decide a person’s eligibility for Medicaid protection and companies,” the senators wrote.
The senators requested the businesses to reply by Oct. 31 to their questions, resembling whether or not corporations’ contracts with states embody monetary incentives tying fee to the removing 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 Price range Workplace projected, primarily based on an early model of the invoice, 18.5 million Medicaid beneficiaries must work or full different qualifying actions for 80 hours a month to maintain their advantages, until 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 one in every of a number of federally mandated Medicaid adjustments which can be forcing states to adapt their eligibility programs.
Medicaid work necessities have been plagued with issues within the few states the place they’ve been examined. Medicaid enrollees have been annoyed in attempting to navigate byzantine guidelines and glitchy expertise. Work necessities have additionally come at nice value.
Georgia has not adopted the ACA Medicaid growth, which has granted advantages to thousands and thousands of adults incomes as much as 138% of the federal poverty stage. As a substitute, the state presents advantages to some folks incomes as much as the poverty line who can show they’re working or taking part in related 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. Underneath typical ACA growth guidelines, 336,000 adults can be eligible for protection, in response to KFF.
The Georgia program has value $109 million, with $34 million spent on well being advantages and greater than $20 million allotted to advertising and marketing contracts, in response to a KFF Well being Information evaluation of state stories. Deloitte constructed Georgia’s eligibility system and is the first marketing consultant for the Pathways program.
Earlier than Medicaid work necessities grew to become federal legislation, Arizona additionally submitted a request to federal regulators to launch its personal model that may apply to roughly 190,000 folks.
The state’s utility supplied perception into the varieties of system adjustments states could quickly have to make to handle the brand new federal work requirement.
Arizona Medicaid officers mentioned they might collect data 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 phases 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 present contractual change order course of.” State contracts with eligibility corporations usually put aside thousands and thousands to cowl the price of adjustments, however programs could require upgrades past the agreed-upon work.
In Missouri, upgrades are anticipated to value roughly $33 million, in response to a state price range doc.
The state has a contract with personal firm RedMane to deal with a few of its Medicaid eligibility processing. Missouri plans to rent an extra contractor to make sure it correctly institutes Medicaid work necessities, in response to Baylee Watts, a spokesperson for Missouri’s Division of Social Providers.
Medicaid eligibility contractors “have a variety of leverage and experience to affect contracts, to win contracts,” Wyden mentioned. “They will 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.
