Deloitte-Run Medicaid Systems Denied Care to Disabled Patients, New Laws Could Worsen Crisis

A joint investigation by NPR and KFF Health News has revealed that Deloitte-managed Medicaid eligibility systems in Michigan and other states have systematically denied or limited coverage to disabled patients due to computer system errors. The findings come at a precarious moment, as new federal legislation requiring sweeping Medicaid changes threatens to compound the crisis.

The Human Cost of System Failures

Marie Noon, 48, of Brighton, Michigan, was diagnosed with adult-onset Still’s disease, a rare inflammatory arthritis that left her crawling to the bathroom in pain. “I honestly thought I was going to die,” she told NPR. Despite being eligible for Medicaid through Michigan’s “Freedom to Work” program for disabled adults who work, Noon was denied coverage in August 2025 due to a computer system error. The system failed to recognize her disability status and used incorrect income calculations.

For months, Noon paid hundreds of dollars out of pocket for medications she takes twice daily. “I can’t afford my medical care. I have to have insurance,” she said. It took months of appeals before the state reversed the decision in January 2026. “I literally cried,” Noon said. “It was a really big deal.”

Her experience is not an isolated incident. According to the investigation, similar problems have occurred across multiple states where Deloitte operates Medicaid eligibility systems.

Deloitte’s Dominance and the Accountability Question

Deloitte has operated Michigan’s Medicaid eligibility system (“Bridges”) under contracts worth approximately $768 million since 2006. Nationwide, at least 25 states have awarded the company contracts to build or run computer systems that control access to safety net benefits including Medicaid. The company’s contracts are often worth hundreds of millions to over a billion dollars — its Tennessee contract alone is valued at $1.12 billion over a decade.

Yet when errors occur, Deloitte consistently deflects responsibility. Spokesperson Karen Walsh stated the company found “no system anomalies causing routine denials of Medicaid for people with disabilities,” adding that “all of the eligibility systems we support are owned by the states and built to their unique specifications.” Deloitte executive Kenneth Smith previously said the systems are “not Deloitte systems” but state-owned and state-directed.

However, as the investigation notes, Deloitte’s contracts explicitly make the company responsible for development, implementation, maintenance, operations, and enhancements. A 2010 audit by Michigan’s Office of the Auditor General found that state agencies “did not provide effective project administration” and failed to ensure independent operation because Deloitte “did not transfer knowledge and skills” to state officials — creating a dependency that has lasted decades.

A Pattern Across States

The investigation documented recurring errors across multiple states. In Tennessee, a class-action lawsuit filed in 2020 alleged the state’s Deloitte-built system “does not reliably test for eligibility” for several categories of people with disabilities. A federal judge sided with the Medicaid beneficiaries in 2024, ruling that Tennessee violated federal law and the U.S. Constitution.

In Texas, Lilly Livingston, 22, who has Down syndrome, was abruptly cut off from Medicaid in 2023 and wrongly enrolled in Healthy Texas Women — a limited program covering only breast and cervical cancer screenings and family planning. An attorney with Disability Rights Texas intervened via an “URGENT” email, noting that Livingston had undergone two major surgeries and her “recovery is contingent on Medicaid.”

In Michigan, mental health advocates flagged in 2024 that people with disabilities were being automatically enrolled in “Plan First,” a limited Medicaid program covering sexual health and family planning, instead of comprehensive health care. Michigan’s own records showed a 10% decline in Medicaid enrollment for people with disabilities over roughly four years.

The One Big Beautiful Bill Act: A Compounding Crisis

The investigation’s findings carry heightened urgency as states prepare to implement the One Big Beautiful Bill Act (OBBBA), signed into law by President Donald Trump in July 2025. The law mandates work requirements for able-bodied adults under 65 (minimum 80 hours per month) and requires states to update their Medicaid computer systems to verify employment status.

Companies including Deloitte, Accenture, and Optum are being paid millions in taxpayer funds to update state eligibility systems to comply with OBBBA. The law is projected to strip Medicaid from roughly 7.5 million people and SNAP from 2.4 million people by 2034.

Experts warn the new requirements will further strain already-flawed systems. “When these administrative systems get overloaded, everyone gets impacted,” said Pamela Herd, a University of Michigan professor who researches bureaucratic obstacles to accessing benefits. “The systems are going to be really, really strained.”

Anastassia Kolosova, a supervising attorney with Disability Rights Michigan who represented Noon, expressed similar concerns: “I’m really worried about more people falling through the cracks. The system is going to be even more overburdened than it is right now.”

What’s Next

The investigation raises fundamental questions about the privatization of public benefits infrastructure. While U.S. Senators launched an investigation into Deloitte and other contractors in October 2025, the company itself has not been named as a defendant in major lawsuits, and its legal liability remains largely untested in court.

As states rush to comply with OBBBA’s requirements on a tight schedule, the same systems with a documented history of errors are being asked to handle even more complex determinations — including employment verification and exemption classifications. For the millions of Americans with disabilities who rely on Medicaid for life-sustaining care, the stakes could not be higher.

“There’s something wrong with the system if they’re relying on individual caseworkers to catch this,” Kolosova said. “The system needs to work.”