Automated Medicaid system contributed to thousands losing health care coverage

In an opinion published Monday by a U.S. District Court in Tennessee, a judge found the automated computer system used to determine eligibility for TennCare, the state’s Medicaid program, was partially to blame for thousands in the state wrongfully losing their health care coverage.

The ruling, which comes in response to a class action complaint filed in 2020 against TennCare Director Stephen Smith, said TennCare’s automated and computerized Eligibility Determination System, or TEDS, failed to properly evaluate the eligibility of thousands of applicants and enrollees due to system and data issues. As a result, the program violated the Medicaid Act, the Fourteenth Amendment and the Americans with Disabilities Act, according to the 116-page opinion of U.S. District Judge Waverly Crenshaw.

TEDS is an automated eligibility system Tennessee implemented in 2019 for administering TennCare, which currently covers 1.7 million residents, including adults with disabilities, low-income individuals, pregnant women, children and caretakers of young children and older adults.

The automated system replaced two other systems TennCare previously used to determine coverage eligibility. TEDS allowed the state the new ability to capture and analyze eligibility-related data from various sources, including external state and federal agencies. It could also quickly make automated determinations about eligibility without human intervention, processing new applications and renewals sometimes overnight, the opinion said.

However, TEDS was plagued with “ingrained systemic errors,” including it sometimes considering incomplete or faulty data in its eligibility determinations, the opinion said.

For several months, TEDS did not consistently load relevant eligibility data, such as receipt of Social Security benefits, disability status or marital status. This caused the system to fail widely in considering disability-related categories of coverage in its eligibility determinations.

As part of the transition to TEDS, those already enrolled in TennCare were sorted in the system into “households,” but some enrollees were put into the wrong households or dropped from their correct households. As a result, renewal notices were sent to incorrect addresses, and in one case, this caused a single mother and her five children to wrongfully lose their coverage, the opinion said.

While the opinion stated that the TEDS system, including the online portal, worked for some, others — such as those with disabilities — faced “additional, unequal burdens” to maintain their coverage. Enrollees or their caretakers faced layers of technical issues when attempting to update or correct employment, address or income information using the TennCare online portal, called TennCare Connect, the opinion said. These issues included difficulties logging in, system bugs and incorrect technical assistance.

Beyond the technical issues, the opinion found TennCare had also violated the ADA by failing to maintain an “accessible and effective system” or to offer adequate accommodations for those with disabilities who require assistance — including in-person assistance — to successfully complete redetermination or renewal processes. Federal law and state policy require TennCare enrollees to undergo the renewal process every 12 months to reevaluate program eligibility.

The court also said that TennCare intentionally withheld information from those who wished to appeal their eligibility decisions by omitting information from the legally required notices TennCare mails to enrollees or applicants about the decisions. This omitted information included details about the appeals process and the “good cause” clause, which provides enrollees and applicants the right to a hearing about their eligibility if certain criteria are met. This intentional omission violated the Due Process Clause of the Fourteenth Amendment, the judge ruled.

The opinion said that although system administrators knew of these issues, they did nothing about them.

“Then, TennCare sat on its hands for months before it fixed system-wide errors that caused data issues that resulted in wrongful terminations of disabled individuals …” Crenshaw’s opinion read. “At bottom, TEDS’s systemic errors blocked those with disabilities from accessing benefits to which they were legally entitled. Although TennCare knew that TEDS was rife with flaws and that those flaws led to erroneous eligibility terminations for disabled individuals, TennCare’s response was slow to address them.”