Florida’s Deloitte-run computer system cut off new moms entitled to Medicaid, suit says

In mid-May, Mandi Rokx had a 3-month-old baby and a letter from a Florida agency warning that they both would be cut from Medicaid, the health insurance program for people with low incomes or disabilities.

Under a Florida law passed in 2021, Rokx was supposed to receive 12 months of continuous coverage after giving birth. But the letter from Florida’s Department of Children and Families said their coverage would end May 31.

The explanation: “You failed to complete or follow through with your Medicaid renewal.”

Rokx said she didn’t understand why the state was cutting coverage. She had provided everything it asked for, she said.

She worried about what losing Medicaid would mean for her daughter, Vernita. Initially after the coverage ended, Rokx said, she paid out-of-pocket for the infant’s checkups. She then turned to a free health fair put on once a month by a local nonprofit near her home in Melrose, near Gainesville.

“I just hope she doesn’t get sick,” she said.

Deloitte issues

An unknown number of mothers in Florida have abruptly lost Medicaid coverage after giving birth, despite being eligible, according to an ongoing federal lawsuit filed against the state in August 2023. The issue is linked to the state’s computer eligibility system, run by Deloitte Consulting, according to trial testimony from state and Deloitte employees. It is yet one more example of problems states and beneficiaries have encountered with Medicaid management systems operated by Deloitte, a giant consulting firm.

As of July, Florida had awarded the global firm contracts valued at more than $100 million to modernize, operate, and maintain the state’s integrated eligibility system for Medicaid and other benefits.

Deloitte did not respond to requests for comment about its work in Florida.

In total, 25 states have awarded Deloitte eligibility system contracts, making the company the dominant player in this crucial slice of government business. These agreements, in which Deloitte commits to design, develop, or operate state-owned systems, are worth at least $6 billion, according to a KFF Health News analysis of state contracts.

The KFF investigation found that errors in Deloitte-run eligibility systems can cost millions and take years to fix while denying benefits like health insurance to eligible people.

In response to the investigation, Deloitte spokesperson Karen Walsh said the firm’s clients — state governments — “understand large system implementations are challenging due to the complexity of the programs they support and that all IT systems require ongoing maintenance, periodic enhancements and upgrades to software and hardware, and database management.”

Senate Democrat John Fetterman of Pennsylvania, which is one of Deloitte’s state clients, sees it much differently. “Let’s call this what it is: a racket,” he said. “This isn’t an occasional glitch. It’s a pattern of systemic failure. And the worst part? We’re paying them billions to do it.”

In July, Kimber Taylor of Jacksonville and Lily Mezquita of Orlando testified in a federal courtroom in Florida that state officials removed them from Medicaid even though their pregnancies made them eligible. The class-action lawsuit alleges that Florida did not adequately explain to people with Medicaid the reason for cutting their health insurance, or explain to them that they could appeal the decision before losing coverage.

Florida has denied the allegations in court filings. But the trial revealed problems with the computer system the state uses to determine Medicaid eligibility and inform people that they are no longer eligible. Deloitte did not respond to questions about the trial, in which a judge’s decision is pending.

‘Mothers of this state deserve better’

Although Deloitte is not a named defendant in the lawsuit, an employee was called to testify about the firm’s role in operating Florida’s eligibility system. Harikumar Kallumkal, a Deloitte managing director who is responsible for Florida’s system, said that a “defect” may have led to coverage losses for new mothers.

William Roberts, a state worker who reviews Medicaid eligibility decisions, also testified that the agency learned about a “glitch” that cut postpartum coverage for eligible new mothers in April 2023 — the same month Florida launched a Medicaid eligibility review process known as “unwinding,” which all states undertook after pandemic-era coverage protections ended in March of that year. Kallumkal testified that Deloitte fixed the problem by April or May 2024.

And yet Rokx’s coverage was cut May 31.

During the unwinding, Florida disenrolled nearly 2 million people, including kids, from Medicaid, according to the Centers for Medicare & Medicaid Services.

Patient advocates say flaws in Florida’s Deloitte-operated computer system prevented some of the state’s most vulnerable residents from getting care they were entitled to receive.

“Florida’s Medicaid officials knew from the start of the unwinding period that their system was not handling pregnancy and postpartum Medicaid correctly, and proceeded full steam ahead anyway,” said Lynn Hearn, an attorney with the Florida Health Justice Project, a nonprofit legal aid and advocacy group that together with the National Health Law Program represents the class-action plaintiffs. “To this day, we don’t know that the problems have been fully corrected. The mothers of this state deserve better from their government.”

Medicaid is the largest insurance payer for childbirths in Florida, covering nearly 98,000, or 44%, of all deliveries in 2022, according to the state health department. But it’s unclear how many mothers have been cut from the Medicaid coverage they were entitled to receive.

Florida’s Department of Children and Families on Sept. 9 cashed a check from KFF Health News to cover the processing fee for records it requested about eligible mothers who were disenrolled. As of Nov. 22, the state had not released the records.

The state did provide an estimate during the trial, but that number was not made available by the state to KFF Health News. In a court filing, the plaintiffs cited the state’s estimate as showing that 19,802 women were removed from pregnancy coverage as of March 2024, one year after Florida began unwinding. It’s unclear how many of these women lost coverage incorrectly. The figure is probably a conservative estimate — it excludes anyone who was removed from coverage because of paperwork issues.

Mallory McManus, deputy chief of staff for the Department of Children and Families, told KFF Health News that after identifying the problem, agency workers “manually corrected cases until necessary system updates were in place.” She added that the department also reviewed the system to “ensure there were no gaps in coverage.”

McManus said that Floridians who were disenrolled from Medicaid “were properly noticed and provided with information on requesting an appeal.”

Rokx, Taylor, and Mezquita ultimately regained their Medicaid coverage after seeking help from the Florida Health Justice Project. Attorneys there have said they are often able to get coverage restored for eligible people by reaching out directly to the state agency’s general counsel — an avenue not known to most Floridians.

While the class-action lawsuit awaits a judgment, the problems revealed at trial echo those encountered in other states with Deloitte-run Medicaid eligibility systems, such as Arkansas, Colorado, Florida, Georgia, Kentucky, Michigan, Pennsylvania, Rhode Island, Tennessee, and Texas.

In Texas, according to a July report by the U.S. Government Accountability Office, “about 100,000 eligible individuals had been disenrolled due to eligibility system errors,” including denial of postpartum coverage for some eligible women.

Congressional lawmakers paying attention

The error-plagued systems and widespread denials of Medicaid for eligible people have caught the attention of lawmakers on congressional committees that oversee social programs. They blame state leaders who they say aren’t holding vendors like Deloitte accountable.

“As the errors compound, contractors are rewarded with more billing hours and higher payouts,” said Rep. Lloyd Doggett (D-Texas). “This is an alarming and unacceptable waste of taxpayer dollars.”

Sen. Ron Wyden (D-Ore.), chairman of the Senate Finance Committee, which oversees Medicaid, said that too many people “can’t even get in through the front door due to outdated and inaccurate eligibility systems.”

And Rep. Kathy Castor (D-Fla.) said that “there’s such a pattern of trying to discourage and inappropriately cutting families off of Medicaid in Florida.”

“It appears to be intentional,” she said, “and I think it clearly is.”

KFF Health News is a national newsroom that produces in-depth journalism about health issues and is one of the core operating programs at KFF—an independent source of health policy research, polling, and journalism.

©2024 Miami Herald. Visit miamiherald.com. Distributed by Tribune Content Agency, LLC.