Posted October 1, 2026 via POLITICO, By Katelyn Cordero
WORKING OUT THE KINKS: New York’s Department of Health began transitioning more than 147,000 Medicaid and Medicare Savings Program enrollees to an upgraded case management system about a year ago.
Since then, state officials say only a third of them have been able to automatically renew their coverage without assistance.
The shift is part of a $1.1 billion contract aimed at creating an automated system for Medicaid enrollees to receive real-time determinations on their eligibility for the two programs. While the new system is intended to create a seamless enrollment process, for many consumers it’s been riddled with challenges.
The initiative is part of a broader effort to move the Medicaid program away from local social services departments that still rely on paper applications and an outdated system in desperate need of overhaul. The state wants to transition the program to one centralized system run through its public health insurance marketplace, New York State of Health, according to officials.
Lindsay Heckler, managing attorney for policy at the nonprofit Center for Elder Law & Justice, said her firm has seen a surge in inappropriate denials.
“I’m not saying the new system shouldn’t be in place,” Heckler said. “But the concern is that the training and processes that are in place are preventing people from becoming eligible. My concern is that in the coming year they are moving more people into a system that doesn’t have the kinks worked out for the people that are in the system right now.”
The state began rolling out the new Medicaid Eligibility and Client Management system in September 2025. A second wave of more complex cases is expected to migrate to the new system between November 2027 and February 2028. And while state officials say the system — which was created by Deloitte Consulting through a $1.1 billion contract — was thoroughly tested by both the Health Department and the company, they concede that problems remain and are being addressed as they’re flagged.
Advocates describe the situation in starker terms. They say errors have put health care coverage in jeopardy for people who are 65 years and older, blind or disabled. They also told POLITICO they’ve discovered inaccurate information being transferred, a flawed automated asset verification tool and state workers’ inability to manually override inappropriate denials.
Deloitte did not respond to a request for comment.
New York entered into a $177 million contract with Deloitte in August 2023. But that projected outlay has grown to $1.18 billion after the state quietly filed four amendments to the initial deal, which ended on March 31, 2025. The latest amendment included an $866 million extension along with a work plan modification, according to details of the contract listed in the Open Book New York database.
The Health Department said the contract extension will complete the migration of Medicaid enrollees to the new system, which includes more complex cases in the next wave, such as long-term care and nursing home patients. The contract also includes additional funding for Deloitte to conduct testing and ensure compliance with new federal requirements.
“This multi-year transition to a centrally administered model will replace the outdated, expensive, error-prone and inefficient paper-based system with a streamlined, user-friendly platform that better supports the health coverage needs of New Yorkers while reducing the potential for waste, fraud, and abuse,” Health Department spokesperson Cadence Acquaviva said in a statement. “At every step of the way, this transition and contract were subject to extensive federal review and approval by the Centers for Medicare and Medicaid Services.”
Read the original story here: New York grapples with kinks in $1B Medicaid system - POLITICO
