Advocates file FTC complaint against Deloitte over Medicaid eligibility software errors

At least 90,000 Texans were wrongfully removed from Medicaid coverage last year.

By Sarah AschFebruary 2, 2024 12:36 pm, ,

At least 90,000 Texans were wrongfully removed from Medicaid coverage because of unidentified system glitches last year, though the state was able to restore their care when the problem was identified. 

This week, a group of privacy, technology and health care advocates filed a complaint with the Federal Trade Commission asking for an investigation into Deloitte Consulting. Deloitte Consulting provides software that determines an applicant’s Medicaid eligibility in some 20 states, including Texas. 

According to the complaint, errors in the consulting firm’s Medicaid eligibility software caused the removal errors in the Texas Medicaid program. 

Sarah Grusin is a senior attorney at the National Health Law Program, one of the organizations behind this legal complaint. She said much of the complaint was based in part on whistleblower letters that came to light last year.

“The computer system that decides whether someone is or is not eligible for Medicaid isn’t working as it should be, and people who are eligible or losing coverage – for instance, newborns who are entitled to coverage for a full year – were getting kicked off,” Grusin said. “And what we noticed is that the problems being described sound very similar to problems that have been documented in the past in other states that also use Deloitte systems. And so we’re asking the Federal Trade Commission to investigate, because we are concerned that Deloitte didn’t take meaningful steps to make sure that those problems didn’t happen again.”

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Grusin said the whistleblower letters identified over 20 active system issues, each of which were causing or were expected to cause terminations in coverage. 

“Deloitte hasn’t made information public about the status of those issues, and neither has the state,” she said. “Frankly, we don’t know whether those errors are ongoing or exactly which ones are continuing. But, we continue to hear about problems from advocates on the ground. And so from our perspective, it doesn’t seem like they’ve been solved.”

Deloitte has called this complaint to the FTC baseless, according to reporting from the Texas Tribune.

Grusin said that the real-life impact of being kicked off of Medicaid cannot be overstated. 

“It can (come up) in a lot of places. One is at the doctor’s office, and a lot of people at that point decide, ‘I actually can’t afford this care.’ And so they go away and they don’t get treatment,” Grusin said. “And that can have a variety of negative consequences, right? If it’s preventative care, you might miss a diagnosis. If you need ongoing care, like for physical therapy or ongoing care for something like diabetes, where you need equipment or medicine every day, missing that even for a day or week can be really harmful.

We’re concerned that even though the state says that they’ve restored some people’s coverage, those gaps are really harmful to people, and we just think they shouldn’t happen in the first place.”

The main concern, Grusin said, is that Deloitte doesn’t have sufficient monitoring, oversight and testing to make sure that the systems are working properly.

“One of the things that we keep seeing is that errors are being identified only after thousands and thousands of people have lost coverage, but we think that responsible, automated decision making should have sufficient processes in place to identify those harms before they happen, or at the very least, much faster,” she said.

“But one of the problems is that there’s not a lot of transparency about these systems. So Deloitte doesn’t publicize information about how its systems operate even when there have been mistakes. And so it makes it very difficult to determine whether there was an error in their particular case.”

Now that the complaint has been filed, the situation is in the hands of the FTC.

“They have authority to investigate this issue and could potentially work with Deloitte to identify steps to address the problems and prevent further harms,” Grusin said. “And then they do also have the authority to file a lawsuit against Deloitte if need be. But we are basically waiting to see what the FTC wants to do next.”

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