Federal complaint faults Texas Medicaid software glitches for removal errors

Sign up for The Brief, The Texas Tribune’s daily newsletter that keeps readers up to speed on the most essential Texas news.

---

A group of privacy, technology and health care advocates on Wednesday filed a complaint with the Federal Trade Commission urging an investigation into Deloitte Consulting LLP, claiming that hundreds of thousands of Texans were wrongfully denied Medicaid coverage due to errors in the consulting firm’s eligibility software.

Deloitte provides software that determines an applicant’s Medicaid eligibility in 20 states, including Texas. The National Health Law Program, one of three groups behind the complaint, claims problems with Deloitte’s software have persisted for a decade. Two other groups – the Electronic Privacy Information Center and Upturn, a group that advocates the equitable use of technology, also signed onto the complaint.

Karen L. Walsh, a Deloitte spokesperson, said the complaint was baseless. “Deloitte collaborates with hundreds of government agencies throughout the country and is deeply committed to positively impacting the people they serve,” she said. “The innovative technology systems we help states develop and maintain provide health and human services benefits to millions of families every day. In all states, we work at the direction of our clients to implement state-specific policies, rules and processes. We are proud of the work that we do and believe this complaint is without merit.”

Usually, Texans enrolled in Medicaid — the joint federal-and-state funded insurance program for low-income individuals — are evaluated every year to determine whether they still qualify for insurance. After that rule was suspended during the coronavirus pandemic, extended coverage allowed more than 3 million Texans to continue receiving Medicaid. The program mostly serves low-income children, pregnant and postpartum mothers, and disabled and senior adults.

But last April, Texas and other states began unwinding the pause in evaluations and the process has been anything but smooth. Over the last nine months, nearly 1.8 million Texans who qualify for the health insurance coverage, lost it. According to the state, around 65% of these erroneous removals occurred because of procedural reasons which could mean an application failed to provide complete information or sent their information to the agency on time.

In the first eight months of 2023, at least 90,000 Texans were wrongfully removed from Medicaid coverage because of unidentified system glitches, but the state was able to restore their care, a spokesperson for the Texas Health and Human Services Commission told The Texas Tribune last September. At least 24,000 Texas children also lost coverage that month due to software errors. At the time, the HHSC spokesperson did not name the the contractor providing the software or if there were multiple contractors.

“We are aware of the FTC complaint and will continue to work with CMS [federal Centers for Medicare and Medicaid Services] to implement immediate strategies to ensure that the redetermination process operates as smoothly as possible,” said Jennifer Ruffcorn, an HHSC spokesperson.

The complaint before the FTC blames Deloitte for the errors that resulted in lost coverage for those who qualify.

“We are hearing from whistleblowers and advocates on the ground in Texas that there are computer glitches and system issues going on with the Medicaid eligibility system that Deloitte has provided to the state,” Sarah Grusin, a senior attorney at the National Health Law Program, a group that advocates for better health access for low-income individuals, said. “And we are asking the FTC to investigate because a lot of what they're describing sounds really similar to documented problems that have occurred in other states with other Deloitte Medicaid systems.”

Grusin said an August 2023 letter from whistleblowers within Texas’ Health and Human Services Commission (HHSC), the state agency that oversees Medicaid eligibility reevaluations, spurred the complaint.

In the letter to the agency’s Commissioner Cecile Erwin Young, employees working with Deloitte’s system identified over 20 active problems with the system. Each issue “has either caused or is slated to cause disruptions in coverage,” the letter said.

The complaint accuses Deloitte of failing to fix problems with their eligibility software in multiple states over the last decade. Grusin said her organization has identified similar problems in Rhode Island, Illinois and New Mexico that they believe started as early as 2013, in some cases. The National Health Law Program was also involved in a 2019 lawsuit concerning infants in Tennessee who lost access to health care because Deloitte’s software did not link them to their mother.

“We are concerned that there is not sufficient monitoring, oversight testing and harm mitigation strategies in place to make sure that harms that have been identified in one place aren’t happening again,” Grusin said.

Wednesday’s complaint calls on the FTC to pause the state’s use of Deloitte’s Texas Integrated Eligibility Redesign System (TIERS) software for determining eligibility. It also asks for details about how the system is programmed, to be made public.

The complaint requests that the FTC create a strategy for protecting people in Texas from losing health care coverage because of Deloitte’s system.

Texas has the highest rate of Medicaid disenrollments and uninsured residents in the country. Rules to qualify for coverage in Texas are among the nation’s strictest, and the state was already struggling with pre-pandemic delays in confirming recipients’ eligibility for the program.

Meanwhile, there are few options for Texans without health insurance coverage besides federally qualified health centers, which are required to provide care to anyone in need. And the state’s struggle to handle the influx of Medicaid renewals has relegated other important programs to the backseat — Texans seeking food benefits are facing lengthy wait times on applications.

Grusin said her organization has not received a response from Deloitte since filing the complaint Wednesday morning.

“Deloitte is a private company that is taking a lot of taxpayer money to build these systems,” Grusin said. “When things go wrong, the people who are hurt are low-income people who need health care, and the impact of losing that health care can be incredibly harmful.”

---

Disclosure: Deloitte and Integrate have been financial supporters of The Texas Tribune, a nonprofit, nonpartisan news organization that is funded in part by donations from members, foundations and corporate sponsors. Financial supporters play no role in the Tribune's journalism. Find a complete list of them here.

We can’t wait to welcome you to downtown Austin Sept. 5-7 for the 2024 Texas Tribune Festival! Join us at Texas’ breakout politics and policy event as we dig into the 2024 elections, state and national politics, the state of democracy, and so much more. When tickets go on sale this spring, Tribune members will save big. Donate to join or renew today.