Deloitte-run Medicaid system denied disabled patients in Michigan, probe finds

IT errors misdirected eligible adults into limited coverage plans

IT errors and coverage gaps for disabled Medicaid patients

Marie Noon takes eight medications a day to manage adult-onset Still’s disease, a rare inflammatory arthritis that can cause rashes, debilitating pain, and fevers. The disease forced her to leave her job as a bank manager and left her unable to work for eight years, with hospital stays that stretched for weeks.

“I honestly thought I was going to die,” Noon said.

When Noon lost private insurance and applied for Medicaid, the state denied her coverage. The denial notice cited incorrect income information and stated she was not disabled, according to documents reviewed by KFF Health News and interviews with Noon and her attorney.

Anastassia Kolosova, a supervising attorney with Disability Rights Michigan who helped Noon, said the state’s computer system did not identify Noon as disabled even though the state “already had all the information they needed” to show she was. By failing to recognize her disability, the system used the wrong income formula and said Noon earned too much to qualify for Medicaid, Kolosova said.

Without coverage, Noon said she paid hundreds of dollars out-of-pocket for prescriptions, scrounging for discount coupons. She takes some of the drugs twice a day. Without them, “I’m toast,” she said. It was stressful “not knowing if my medicine’s going to be $50 or $500 this month, because it changes constantly.”

Her doctor agreed to fewer visits to avoid medical bills. “It was kind of a nightmare,” Noon said.

Deloitte has operated Michigan’s Medicaid eligibility system, known as Bridges, under contracts worth roughly $768 million since 2006, according to contracts reviewed by KFF Health News. Nationwide, at least 25 states have awarded Deloitte contracts to build or run computer systems that control access to safety net benefits such as Medicaid.

In an emailed statement, Deloitte spokesperson Karen Walsh said it found “no system anomalies causing routine denials of Medicaid for people with disabilities.” She said “there are many reasons why someone may no longer be eligible for a benefit they once received or believe they deserve” and that eligibility systems are “owned by the states and built to their unique specifications.”

Lynn Sutfin, a spokesperson for the Michigan Department of Health and Human Services, said the state “is not aware of any widespread or systemic issues” within Bridges “related to disability‑based eligibility pathways.”

The problems extend beyond Michigan. In Texas, Lilly Livingston, a 22-year-old woman with Down syndrome, was abruptly cut off from Medicaid benefits in 2023, according to her mother, Marie. Livingston had undergone numerous surgeries to reconstruct her severely misaligned jaw and relied on services including speech and occupational therapy. When she lost benefits, she was wrongly enrolled in Healthy Texas Women, a limited program covering breast and cervical cancer screenings and family planning services.

“Trying to fix that was a nightmare,” Marie Livingston said.

Terry Anstee, an attorney with Disability Rights Texas, sent a September 2023 email with the subject line “URGENT” to a state Medicaid staffer, saying some unknown “error” had stripped Livingston of her benefits and that “her recovery is contingent on Medicaid.”

Jennifer Ruffcorn, a spokesperson for Texas Health and Human Services, confirmed that Livingston was erroneously enrolled in Healthy Texas Women but said she did not experience a lapse in Medicaid coverage in 2023. Anstee disputed that, saying Livingston experienced lapses in coverage.

In Tennessee, Medicaid beneficiaries who brought a class-action lawsuit in 2020 said 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 beneficiaries in 2024, ruling that Tennessee violated federal law and the U.S. Constitution. The lawsuit did not name Deloitte as a defendant.

In Michigan, a 2010 report from the state’s Office of the Auditor General said government agencies “did not provide effective project administration” and failed to ensure that the state could “independently maintain and operate Bridges” because “the contractor did not transfer knowledge and skills” to state officials, according to the audit. The report said Deloitte’s original contract — valued at roughly $70 million — ballooned by $50 million over the initial cost, a 71% increase. Sutfin said the state is now fully capable of operating and maintaining Bridges independently.

Advocates also raised alarms about a separate error in Michigan: people with disabilities being automatically enrolled in Plan First, a limited program covering sexual health and family planning services, instead of in comprehensive health care. In September 2024, Malcolm Kletke, a lobbyist for the Community Mental Health Association of Michigan, wrote to a Michigan health official that enrollees had “long received Medicaid due to their disability” and losing comprehensive coverage meant losing access to “services essential to their recovery and quality of life.”

After inquiries from KFF Health News, the Michigan health department acknowledged in April that it had made changes to “address concerns raised by advocates.” The computer system now prevents approval of Plan First benefits until all other coverage options are evaluated. Sutfin said the changes were implemented but “not to correct system errors.”

Kolosova said Disability Rights Michigan has seen a growing number of calls from people about Freedom to Work benefit denials — “maybe two or three a month.” She said she has been unable to get a meeting with Michigan officials to understand the underlying problem that deprived Noon of health coverage. “There’s something wrong with the system if they’re relying on individual caseworkers to catch this,” Kolosova said. “The system needs to work.”

Nationwide, roughly 15.5 million people on Medicaid have a disability, according to KFF. The computer system problems foreshadow trouble as states prepare to roll out the most significant changes to their Medicaid programs in years under the One Big Beautiful Bill Act, which has states rushing to update their Medicaid computer systems to verify details such as employment. Companies including Deloitte, Accenture, and Optum are being paid millions in taxpayer funds to make the changes, which are projected to strip Medicaid from roughly 7.5 million people and SNAP from 2.4 million people by 2034.

Pamela Herd, a University of Michigan professor who researches bureaucratic obstacles to accessing government benefits, said, “When these administrative systems get overloaded, everyone gets impacted.” She added, “The systems are going to be really, really strained.”

Kolosova said she is “really worried about more people falling through the cracks” because the state’s benefits system “is going to be even more overburdened than it is right now.”