The computer systems managed by Deloitte, which millions of Americans use for Medicaid and other government benefits, are susceptible to errors that can take years and hundreds of millions of dollars to rectify. As states wait for Deloitte to address these issues, beneficiaries face the risk of losing access to essential services like health care and food. “People will go without care,” warned Edwards, highlighting that the persistent issues cause repeated harm until a resolution or workaround is found.

Kenneth Smith, a Deloitte executive overseeing its national human services division, has defended the company by stating that Medicaid eligibility technology is state-owned, with agencies responsible for directing operations and making policy decisions. Smith has dismissed the legal nonprofit’s claims as “without merit.”

The costs to remedy errors in Deloitte-run eligibility systems often exceed the original contract amounts, which can delay the resolution of problems. Deloitte’s contracts for eligibility systems span twenty-five states, giving the company a dominant position in the government benefits sector. These contracts, totaling at least $6 billion, far surpass those of its competitors, according to a KFF Health News investigation.

Issues and delays in these systems can affect more than just Medicaid, which covers about 75 million low-income individuals, as some state systems also determine eligibility for other safety-net programs. The benefits a person receives hinge on the accuracy of these computer systems.

Elizabeth Edwards, a senior attorney at the National Health Law Program, noted that there is no automatic mechanism to prevent system errors. Her organization filed a complaint in January urging the Federal Trade Commission to investigate Deloitte for “ongoing and nationwide” errors and “unfair and deceptive trade practices.”

States allocate millions of dollars for system updates, but the required fixes often exceed the original scope of work. Each year, the number of hours or updates allowed is limited, forcing states to prioritize certain fixes. Deloitte addresses issues on a state-by-state basis rather than applying solutions across multiple states, according to Smith. This means that a change request in one state often does not apply to another.

Smith stated, “Because of the custom nature of these systems, it’s never quite that simplistic as, ‘Hey, a particular issue that’s arisen in state A is directly applicable to state B.’” He added that Deloitte has always managed to address client needs, though it often involves significant time and expense.

The work is lucrative for Deloitte, which reported global revenues of $65 billion in fiscal year 2023. For instance, Deloitte’s estimates show that 35 change requests for Georgia’s eligibility system in 2023 would require over 104,000 hours of work—equivalent to 50 years of work if done continuously.

Ellen Brown, spokesperson for the Georgia Department of Human Services, noted that system changes were made to align with evolving policies and improve functionality. The federal government covers 90% of the development and implementation costs and 75% of maintenance expenses for state Medicaid systems.

Matt Salo, CEO of Salo Health Strategies, highlighted ongoing issues with contractor-state dynamics, noting that companies like Deloitte have significant expertise and often outpace state capacities. This can lead to cost overruns and delays, with states frequently needing to deal with change orders.

In Florida, a federal lawsuit filed by advocacy groups in August alleged that the state’s eligibility system was improperly cutting off Medicaid coverage. Testimony revealed discrepancies between state and Deloitte’s views on system defects. Deloitte’s managing director, Harikumar Kallumkal, acknowledged a glitch but stated it was not a defect and claimed Deloitte fixed it without charging extra.

In Michigan, the eligibility system sometimes fails to recognize Medicaid benefits for adults with disabilities, leading to concerns from advocates. Despite state officials claiming no issues, the system’s frequent problems have led to significant disruptions.

Tennessee’s contract with Deloitte, valued at $823 million, shows substantial increases in costs due to change orders. The state contends that these increases are due to modernization and compliance with new federal requirements. A federal judge ruled that Tennessee’s Medicaid system, TEDS, is flawed and violated federal law.

In Colorado, former staff member Jamie Perkins expressed frustration over delayed fixes for confusing Medicaid letters. The state’s contract now includes protocols for addressing contractor issues, and improvements have been made. Deloitte emphasized that change requests and system issues are distinct, and fixes can vary in implementation time.

In Kentucky, a glitch in the state’s system led to coverage lapses, and a change request to resolve the issue took months to address. Deloitte’s contract in Texas involved numerous workarounds, some of which had been in place for years. Despite these challenges, Deloitte argues that system fixes can vary in time required and often are not the sole constraint.

In Florida, the state requested an estimate from Deloitte to alter notices sent to Medicaid beneficiaries, revealing a need for significantly more hours than allocated, leading to potential contract amendments. Deloitte acknowledged that additional hours translate into increased revenue but also provided a revised estimate for a narrower scope of work.