Senators have launched an inquiry into corporations paid billions in taxpayer {dollars} to construct eligibility techniques for Medicaid, expressing concern that error-riddled expertise and looming work necessities “will trigger People to lose Medicaid protection to this bureaucratic maze.”
The letters, dated Oct. 10, have been despatched to 4 corporations and observe a KFF Well being Information investigation that uncovered widespread points in states utilizing Deloitte-run techniques to evaluate Medicaid eligibility for tens of millions of individuals. Failures have resulted within the misguided lack of well being protection and different important safety-net advantages for low-income individuals. Malfunctions in these techniques can price tens of millions 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 duty to construct functioning techniques, “quite 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 basically well being care middlemen which are within the enterprise of pink tape, they usually revenue when People 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 with regards to figuring out eligibility or in serving to People enroll in Medicaid,” Wyden mentioned. “With out stronger oversight and actual accountability, these contractors are simply going to get a jumbo windfall for creating techniques that really hurt People making an attempt to get well being care.”
Spokespeople for the 4 corporations didn’t present feedback for this text.
As of June, 70.5 million individuals have been enrolled in Medicaid, in keeping with CMS.
A handful of states function their very own Medicaid eligibility and enrollment techniques, 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 12 months 2025, dominates this slice of presidency enterprise. Twenty-five states have awarded Deloitte contracts for eligibility techniques. The agreements, by which the corporate commits to design, develop, implement, or function state-owned techniques, are value a minimum of $6 billion, dwarfing any of its opponents.
Kinda Serafi, a companion at Manatt Well being, is advising states on the way to reconfigure their techniques 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 characterize for contractors.
“I feel we’ve to essentially be vigilant to make it possible for 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 price. The federal authorities covers 90% of states’ prices to develop and implement state Medicaid eligibility techniques and 75% of ongoing upkeep and operations bills, in keeping with federal rules.
The Senate letters cite issues with Deloitte-run eligibility techniques that KFF Well being Information recognized. Amongst different points, the Florida eligibility system erroneously minimize advantages for brand spanking new mothers, and an issue in Kentucky prevented protection purposes from getting by means of on-line, which price $522,455 and took 10 months to resolve.
“Sadly, these are only a few examples of third-party techniques’ 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, similar to whether or not corporations’ contracts with states embody 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 Finances Workplace projected, primarily based 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, 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 considered one of a number of federally mandated Medicaid adjustments which are forcing states to adapt their eligibility techniques.
Medicaid work necessities have been plagued with issues within the few states the place they’ve been examined. Medicaid enrollees have been annoyed in making an attempt to navigate byzantine guidelines and glitchy expertise. Work necessities have additionally come at nice price.
Georgia has not adopted the ACA Medicaid enlargement, which has granted advantages to tens of millions of adults incomes as much as 138% of the federal poverty degree. As an alternative, the state affords advantages to some individuals incomes as much as the poverty line who can show they’re working or collaborating in comparable actions for 80 hours a month. Almost 110,000 Georgians had utilized to the state’s Georgia Pathways to Protection program by means of Might, however solely 9,157 individuals have been enrolled as of mid-August. Beneath typical ACA enlargement guidelines, 336,000 adults can 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 and marketing contracts, in keeping with a KFF Well being Information evaluation of state experiences. Deloitte constructed Georgia’s eligibility system and is the first guide 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 individuals.
The state’s software offered perception into the sorts of system adjustments states might quickly must make to handle the brand new federal work requirement.
Arizona Medicaid officers mentioned they’d collect data on enrollees’ work hours, coaching, and schooling. The state’s eligibility system, which is operated by Accenture, would additionally must 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 “by means of the prevailing contractual change order course of.” State contracts with eligibility corporations typically put aside tens of millions to cowl the price of adjustments, however techniques might require upgrades past the agreed-upon work.
In Missouri, upgrades are anticipated to price roughly $33 million, in keeping with 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 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 quite a lot 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.