A group of influential Democratic senators is demanding that the federal agency overseeing Medicaid institute significantly tougher performance standards for the private government contractors that run the complex computer systems relied upon by millions of Americans to secure their health coverage.
The push comes as three prominent Democratic lawmakers issued a comprehensive series of recommendations following a year-long congressional inquiry into major tech and administrative companies. The targeted firms—including Deloitte, General Dynamics Information Technology, Gainwell Technologies, and Conduent—are paid billions of taxpayer dollars to build, maintain, and operate eligibility and enrollment systems for the nation’s primary safety-net health coverage program. For the poorest Americans, these vital benefits often mean the difference between accessing essential medical care and going entirely without treatment.
While a handful of states choose to directly operate their own Medicaid eligibility systems, the vast majority rely on outside private contractors to handle the heavy technological lifting. Previous investigative reporting by KFF Health News revealed that Deloitte holds a dominant share of this lucrative government business. However, systems operated by Deloitte and other major contractors have frequently been plagued by critical software errors, persistent glitches, and administrative malfunctions. These system failures have routinely resulted in eligible low-income individuals being improperly stripped of their health coverage. Furthermore, such technological breakdowns have cost millions of taxpayer dollars and, in many cases, have taken years for state and corporate entities to properly identify and fix.
"Administrative errors in this line of work are not like errors in other fields," the senators emphasized in their newly released report. "There are life-and-death consequences for sick Americans who seek care only to find that their Medicaid coverage has been terminated."
The urgency surrounding the functionality of these systems has intensified due to sweeping policy changes. Legislation signed by President Donald Trump has mandated major Medicaid overhauls, forcing states to frantically adapt their computer systems on an aggressively compressed timeline. The policy changes introduced under the One Big Beautiful Bill Act add substantial layers of bureaucratic red tape and operational restrictions that make it considerably more difficult for vulnerable individuals to maintain their health enrollment.
Among these sweeping changes are the first federally mandated work requirements in the history of the Medicaid program. Beginning next year, in order to maintain their vital health benefits, millions of adult Medicaid enrollees spread across more than 40 states will be forced to formally prove that they are actively working or participating in a similar qualifying activity for at least 80 hours a month, unless they qualify for a specific exemption.
Senators Ron Wyden of Oregon, Elizabeth Warren of Massachusetts, and Raphael Warnock of Georgia warned that these restrictive new hurdles—when layered directly on top of legacy computer systems with long histories of malfunctions—will inevitably result in massive numbers of eligible Americans improperly losing their health coverage.
Describing the underlying technological infrastructure, the senators noted that state eligibility systems "have been built up, patched, and frankensteined for decades."
The lawmakers sit on the powerful Senate Finance Committee, which holds broad jurisdiction over critical federal health programs such as Medicare and Medicaid. Their newly proposed recommendations are primarily aimed at the Centers for Medicare & Medicaid Services, the federal agency tasked with administering the programs. However, implementing these ideas faces significant political hurdles under the current balance of power. Executive branch agencies are controlled by Republicans, and any potential legislative vehicle would need to advance successfully through a Republican-controlled Congress.
That political dynamic could potentially shift if Democrats manage to secure a majority of seats in the upcoming midterm elections. In the meantime, the three lawmakers have formally called on CMS to establish mandatory contractual standards that states must enforce with corporate vendors in order to continue receiving vital federal matching funds.
The financial arrangement underpinning these systems heavily relies on federal investment. While these private companies sign formal contracts directly with state governments, the federal government approves the arrangements and shoulders the vast majority of the financial burden. According to current federal regulations, the federal government covers 90% of the state costs required to develop and implement state Medicaid eligibility systems, alongside 75% of ongoing maintenance and operational expenses.
To increase transparency and accountability, the lawmakers also urged CMS to make state contracts and contract amendments publicly accessible. While those complex legal documents can theoretically be obtained directly from state governments under public records laws, accessibility and responsiveness vary dramatically from one state to another.
Additionally, the senators recommended that CMS publicly disclose comprehensive company performance data and official change orders. Change orders are frequently utilized by states to adjust and modify computer systems, with governments setting aside millions of dollars to fund them. Yet, systems frequently require extensive fixes that extend far beyond the scope of the original agreed-upon work.
"The millions of Medicaid enrollees who will be required to prove their eligibility every six months, to document every hour of work on a glitchy portal, to find a doctor willing to certify that their cancer or their chronic condition is bad enough to qualify for an exemption—deserve contractors who are accountable for what happens when the system fails them," the senators wrote.
The congressional scrutiny dates back to October, when the three Democratic senators, joined by independent Senator Bernie Sanders of Vermont, dispatched formal inquiry letters to several major corporations identified by CMS as primary eligibility system contractors. At the time, the lawmakers asserted that it is the fundamental responsibility of each company to build fully functioning eligibility systems, "rather than to prioritize their bottom line."
According to the latest data released by CMS in June, approximately 66 million people remain enrolled in Medicaid nationwide.
In response to the congressional inquiries, the lawmakers asked the companies to provide detailed information regarding their specific contracts, lobbying expenditures, and internal protocols for addressing system errors. While the corporate entities provided some contextual details, they frequently sidestepped or failed to answer specific questions posed by the committee.
The companies defended their operations by emphasizing that state governments retain final authority over whether an individual receives health benefits. State human services workers review files and formally approve or deny eligibility, Deloitte noted in its formal response letter, arguing that decisions are made by humans "not a private contractor or an automated system acting alone."
Despite persistent questioning, the corporate contractors did not provide the senators with specific details regarding the proprietary documents or internal processes they utilize to assist states in making eligibility determinations. Furthermore, the companies denied harboring any financial incentives to systematically remove people from the Medicaid rolls. Conduent specifically maintained in its response that its corporate compensation decreases if overall program enrollment drops.
The companies also declined to clarify whether state governments are ultimately on the hook for paying the financial costs required to fix errors originating from the contractors’ own software. However, Deloitte, Gainwell, GDIT, and Conduent all noted that it is standard industry practice for states to require them to meet specific operational performance metrics.
Representatives for Gainwell told lawmakers that the company takes the raised issues seriously. Meanwhile, General Dynamics Information Technology stated that it would answer additional questions from lawmakers and maintained in statements to the press that it "has a strong track record" of supporting public Medicaid programs. Highlighting its operations in New York, GDIT explained that it plays a "limited role" in determining individual eligibility because it strictly adheres to policy rules provided directly by the state. GDIT operates New York’s online Affordable Care Act marketplace, where residents can enroll in various healthcare plans, including Medicaid.
Deloitte similarly defended its corporate record, stating in its response to lawmakers: "We are proud of our work serving individuals and families across the U.S."
The Centers for Medicare & Medicaid Services did not respond to a formal request for comment regarding the senators’ report and recommendations.
Federal oversight of these technological platforms does exist in limited forms. As part of the standard federal process for certifying state computer systems, CMS officials routinely check specific performance metrics. These evaluations examine whether states are accurately calculating individual incomes, whether applicants receive timely eligibility decisions, and whether eligibility categories are assigned correctly. Despite these monitoring efforts, it remains exceedingly rare for the federal government to withhold or withdraw federal funding from states that fall short of performance standards.
However, federal momentum toward stricter oversight may be shifting. In August, CMS formally announced its intention to develop unified federal standards specifically tailored for Medicaid computer systems. The ultimate objective, according to the agency, is to improve enrollees’ overall access to medical care and enhance their experiences navigating these complex digital systems. CMS has stated that the forthcoming standards will hold private contractors strictly accountable for delivering technology that undergoes continuous improvement and possesses a stronger capacity to implement critical policy changes smoothly.
