Tennessee’s Medicaid agency, known as “TennCare, along with its vendor, Deloitte, designed rules to govern the logic of conversion,” Hagan said in the legal declaration. She also cited a “manual, keying error by a worker” made in 2017.

Davis’ family was “incorrectly merged with another family during conversion,” Hagan said.

Davis regained coverage, but before she could rebook the surgeries, she testified, she became pregnant and a serious complication emerged. In June 2020, Davis rushed to the hospital. A physician told her she had preeclampsia, a leading cause of maternal death. Labor was induced and her son was born prematurely.

“Preeclampsia can kill the mom. It can kill the baby. It can kill both of you,” she testified. “That’s like a death sentence.”

Deloitte’s Tennessee contract is worth $823 million. Deloitte declined to comment on Davis’ case or the litigation.

Speaking broadly, Smith said, “data conversion is incredibly challenging and difficult.”

Hagan called the problems one-time issues: “None of the Plaintiffs’ cases reflect ongoing systemic problems that have not already been addressed or are scheduled to be addressed.”

States leverage Deloitte’s technology as part of a larger push toward automation, legal aid attorneys and former caseworkers said.

“We all know that big computer projects are fraught,” said Gordon Bonnyman, co-founder of the nonprofit Tennessee Justice Center. “But a state that was concerned about inflicting collateral damage when they moved to a different automated system would have a lot of safeguards.”

TennCare spokesperson Amy Lawrence called its eligibility system “a transformative tool, streamlining processes and enhancing accessibility.”

When enrollees seek help at county offices, “you don’t get to sit down across from a real human being,” Bonnyman said. “They point you to the kiosk and say, ‘Good luck with that.’”

A Backlog of 50,000 Cases

As part of the Affordable Care Act rollout about a decade ago, states invested in technological upgrades to determine who qualifies for public programs. It was a financial boon to Deloitte and such companies as Accenture and Optum, which landed government contracts to build those complex systems.

Problems soon emerged. In Kentucky, a Deloitte-built system that launched in February 2016 erroneously sent at least 25,000 automated letters telling people they would lose benefits, according to local news reports. State officials manually worked through a backlog of 50,000 cases caused by conflicting information from newly merged systems, the reports say.

“We know that the rollout of Benefind has caused frustration and concern for families and for field staff,” senior Deloitte executive Deborah Sills said during a March 2016 news conference alongside Gov. Matt Bevin and other senior officials after Kentucky was bombarded with complaints. Within two months, roughly 600 system defects were identified, found a report by the Kentucky state auditor.

In Rhode Island, a botched rollout in September 2016 delayed tens of thousands of Social Security payments, The Providence Journal reported. Advocacy groups filed two class-action lawsuits, one related to Medicaid and the other to food stamp benefits. Both were settled, with Rhode Island officials denying wrongdoing. Neither named Deloitte as a defendant.

In a 2018 statement for a Statehouse hearing, Sills of Deloitte said, “We are very sorry for the impact that our system issues have had on your constituents, on state workers, and on service providers.” The state’s top human services official resigned.

A 2017 audit by a top Rhode Island official prepared for Gov. Gina Raimondo found that Deloitte “delivered an IT system that is not functioning effectively” and had “significant defects.” “Widespread issues,” it said, “caused a significant deterioration in the quality of service provided by the State.”

“Deloitte held itself out as the leading vendor with significant experience in developing integrated eligibility systems for other states,” the audit read. “It appears that Deloitte did not sufficiently leverage this experience and expertise.” Deloitte declined to comment further about Rhode Island and Kentucky.

Deloitte invokes the phrase “no-touch” to describe its technology — approving benefits “without any tasks performed by the State workers,” it wrote in documents vying for an Arkansas contract.

In practice, enrollee advocates and former government caseworkers say, the systems frequently have errors and require manual workarounds.

As it considered hiring Deloitte, Arkansas officials asked the company about problems, particularly in Rhode Island.

In response, the company said in 2017, “We do not believe Deloitte Consulting LLP has had to implement a corrective action plan” for any eligibility system project in the previous five years.

Arkansas awarded Deloitte a $345 million contract effective in 2019 to develop its system.

“It had a lot of bugs,” said Bianca Garcia, a program eligibility specialist for the Arkansas Department of Human Services from August 2022 to October 2023.

Garcia said it could take weeks to fix errors in a family’s details and Medicaid enrollees wouldn’t receive the state’s requests for information because of glitches. They would lose benefits because workers couldn’t confirm eligibility, she added.

The enrollees “were doing their part, but the system just failed,” Garcia said.

Arkansas Department of Human Services spokesperson Gavin Lesnick said: “With any large-scale system implementation, there occasionally are issues that need to be addressed. We have worked alongside our vendor to minimize these issues and to correct any problems.”

Deloitte declined to comment.

‘Heated’ Negotiations

In late 2020, Colorado officials were bracing for the inevitable unwinding of pandemic-era Medicaid protections.

Colorado was three years into what is now a $354.4 million contract with Deloitte to operate its eligibility system. A state-commissioned audit that September had uncovered widespread problems, and Kim Bimestefer, the state’s top Medicaid official, was in “heated” negotiations with the company.

The audit found 67% of the system notices it sampled contained errors. Notices are federally required to safeguard against eligible people being disenrolled, said MaryBeth Musumeci, an associate teaching professor in public health at George Washington University.

“This is, for many people, what’s keeping them from being uninsured,” Musumeci said.

The Colorado audit found many enrollee notices contained inaccurate response deadlines. One dated Dec. 19, 2019, requested a beneficiary return information by Sept. 27, 2011 — more than eight years earlier.

“We’re in intense negotiations with our vendor because we can’t turn around to the General Assembly and say, ‘Can I get money to fix this?’” Bimestefer told lawmakers during the 2020 legislative audit hearing. “I have to hold the vendor accountable for the tens of millions we’ve been paying them over the years, and we still have a system like this.”

She said officials had increased oversight of Deloitte. Also, dozens of initiatives were created to “improve eligibility accuracy and correspondence,” and the state renegotiated Deloitte’s contract, said Marc Williams, a state Medicaid agency spokesperson. A contract amendment shows Deloitte credited Colorado with $5 million to offset payments for additional work.

But Deloitte’s performance appeared to get worse. A 2023 state audit found problems in 90% of sampled enrollee notices. Some were violations of state Medicaid rules.

The audit blamed “flaws in system design” for populating notices with incorrect dates.

In September, Danae Davison received a confusing notice at her Arvada home stating that her daughter did not qualify for coverage.

Lydia, 11, who uses a wheelchair and is learning to communicate via a computer, has a seizure disorder that qualifies her for a Medicaid benefit for those with disabilities. The denial threatened access to nursing care, which enables her to live at home instead of in a facility. Nothing had changed with Lydia’s condition, Davison said.

“She so clearly has the need,” Davison said. “This is a system problem.”

Davison appealed. In October, a judge ruled that Lydia qualified for coverage.

The notice generated by the Deloitte-operated system was deemed “legally insufficient” because it omitted the date Lydia’s coverage would end. Her case highlights a known eligibility system problem: Beneficiary notices contain “non-compliant or inconsistent dates” and are “missing required elements and information,” according to the 2023 audit.

Deloitte declined to comment on Colorado. Speaking broadly, Smith said, “Incorrect information can come in a lot of forms.”

Last spring in Pennsylvania, Deloitte’s eligibility role expanded to include the Children’s Health Insurance Program and 126,000 enrollees.

Pennsylvania’s Department of Human Services said an error occurred when converting to the state’s eligibility system, maintained by Deloitte through a $541 million contract. DHS triaged the errors, but, for “a small window of time,” some children who still had coverage “were not able to use it.”

These issues affected 9,269 children last June and 2,422 in October, DHS said. A temporary solution was implemented in December and a permanent fix came through in April.

Catanese, the union representative, said it was another in a long history of problems. Among the most prevalent, he said: The system freezes for hours. When asked about that, Smith said “it's hyperbole.”

Instead of the efficiency that Deloitte touted, Catanese said, “the system constantly runs into errors that you have to duct tape and patchwork around.”

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KFF Health News senior correspondent Renuka Rayasam and correspondents Daniel Chang, Bram Sable-Smith, and Katheryn Houghton contributed to this report.

©2024 KFF Health News. Distributed by Tribune Content Agency, LLC.