Feb 1, 2024 - Health

Software errors forced many to lose Medicaid, complaint to FTC alleges

Illustration of a distorted computer with binary code flowing out of the screen with abstract shapes around it.

Illustration: Gabriella Turrisi/Axios

Hundreds of thousands of Texans recently have lost Medicaid coverage due to faulty eligibility software from Deloitte, consumer advocacy groups alleged in a complaint to the Federal Trade Commission on Wednesday.

Why it matters: While the filing is focused on Medicaid redeterminations in Texas, where about 1.8 million people have been removed from the rolls since April, the advocates claim the issues are part of recurring problems with eligibility systems Deloitte has provided to state Medicaid programs.

Driving the news: The complaint requesting the FTC to investigate Deloitte for "deceptive and unfair" trade practices says the company's software doesn't reliably conduct automatic redeterminations of whether a Texas Medicaid enrollee is still eligible for coverage.

  • States are supposed to check existing data to see if someone remains eligible for Medicaid before asking them to submit renewal forms.
  • Most people who have lost Medicaid coverage during the post-pandemic unwinding process have been disenrolled because of procedural issues, not because they were determined ineligible for coverage.
  • Texas' Medicaid disenrollment rate (61%) is the highest in the country, per KFF.
  • The complaint was filed by the National Health Law Program, online privacy group EPIC and technology justice group Upturn.

The other side: "The innovative technology systems we help states develop and maintain provide health and human services benefits to millions of families every day," said Deloitte spokesperson Karen Walsh in a statement. "We are proud of the work that we do and believe this complaint is without merit."

  • The Texas Department of Health and Human Services said through a spokesperson it's aware of the complaint and will work with the Centers for Medicare and Medicaid Services "to implement immediate strategies to ensure that the redetermination process operates as smoothly as possible."
  • "Through our quality assurance process, when HHSC identifies any issues, we work systematically to resolve them and reinstate recipients' coverage if necessary," said the spokesperson, Jennifer Ruffcorn.

Zoom out: The complaint says Deloitte was aware that its software had bugs, pointing to reports of issues in other states that predate the pandemic.

  • For instance, the complaint says 2019 litigation revealed that an error in the eligibility system Deloitte built for Tennessee was improperly forcing newborns off Medicaid coverage — a problem the groups say is now happening in Texas.
  • The groups also say Deloitte's practices violate the Biden administration's new guidelines for responsible automated decision-making, part of the federal government's efforts to regulate artificial intelligence.
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