Longevity
Senators push for stricter rules on Medicaid computer systems as new work requirements loom
By Life and Health Today Staff, . Life and Health Today.
Three Democratic senators have released a set of recommendations demanding that the Centers for Medicare and Medicaid Services, the federal agency that oversees Medicaid, impose tougher standards on the private companies that build and run the computer systems determining who qualifies for the program. The report, covered by KFF Health News, follows a year-long inquiry the senators launched into four major contractors: Deloitte, General Dynamics Information Technology, Gainwell Technologies, and Conduent.
Medicaid is the federal-state health coverage program for people with low incomes or disabilities. As of June, 66 million people were enrolled, according to the Centers for Medicare and Medicaid Services. Most states do not run their own eligibility systems; they hire contractors to build and operate them. The federal government covers 90 percent of state costs to develop and implement those systems, and 75 percent of ongoing maintenance and operations expenses, according to federal regulations.
What the senators found, and what the contractors said
The senators, Ron Wyden of Oregon, Elizabeth Warren of Massachusetts, and Raphael Warnock of Georgia, all members of the Senate Finance Committee, wrote that system malfunctions have cost millions of taxpayer dollars and taken years to fix, and that the consequences fall on people who lose health coverage they are entitled to. "Administrative errors in this line of work are not like errors in other fields," they wrote in their report. "There are life-and-death consequences for sick Americans who seek care only to find that their Medicaid coverage has been terminated."
The contractors pushed back on several points. Deloitte told the senators that state workers approve or deny eligibility, "not a private contractor or an automated system acting alone." Conduent said it gets paid less when enrollment drops, denying any financial incentive to remove people from the program. Gainwell said, "We take seriously the issues raised." General Dynamics Information Technology said it would answer additional questions from lawmakers. All four said it is common for states to require that they meet certain performance metrics, but none provided specific details about the documents or processes they use to help states make eligibility decisions.
Why the timing matters
The pressure on these systems is about to increase sharply. President Donald Trump's One Big Beautiful Bill Act has introduced the first federally mandated work requirements in Medicaid's history. Starting next year, adult enrollees in more than 40 states must demonstrate they are working or engaged in a qualifying activity for at least 80 hours a month to keep their benefits, unless they qualify for an exemption. States must adapt their eligibility systems to handle that verification on a compressed timeline.
The senators described existing state systems as having been "built up, patched, and frankensteined for decades," and argued that layering new requirements on top of them will cause large numbers of eligible people to lose coverage improperly.
What the senators are asking for
Their recommendations target the Centers for Medicare and Medicaid Services directly. They want the agency to establish mandatory performance standards that states must include in contracts with companies as a condition of receiving federal funds. They also want the agency to make those contracts and any amendments publicly available, currently the documents can be obtained from state governments, but access varies significantly, and to publish companies' performance data and change orders. Change orders are modifications to a system's agreed scope; states set aside millions of dollars for them, but systems can require fixes that go beyond what was originally contracted.
In August, the Centers for Medicare and Medicaid Services said it intends to develop standards for Medicaid systems, with the stated goal of improving enrollees' access to care and holding companies accountable for systems that are "continuously improving" and have a "stronger capacity to implement critical policy changes."
The senators' recommendations face a difficult path. Republicans control both the executive branch agencies the recommendations target and Congress, meaning any legislation would need to advance in a chamber where the majority has backed the policies adding new demands to these systems. That balance could shift if Democrats win a Senate majority in November's midterm elections.
For the 66 million people currently enrolled in Medicaid, the practical question is whether the systems processing their eligibility will function accurately under the new rules. That question will not be answered by a Senate report; it will be answered by what happens when the work requirements take effect.
Life & Health Today provides information for educational purposes only, not medical advice, diagnosis, or treatment. Always consult a qualified healthcare professional.