Judge rules $400M algorithmic system illegally denied Medicaid benefits

https://gizmodo.com/judge-rules-400-million-algorithmic-system-illegally-denied-thousands-of-peoples-medicaid-benefits-2000492529

by rntn • 2 years ago

450 119 2 years ago

gizmodo.com

blackeyeblitzar• 2 years ago

The TennCare Connect system—built by Deloitte and other contractors for more than $400 million—is supposed to analyze income and health information to automatically determine eligibility for benefits program applicants. But in practice, the system often doesn’t load the appropriate data, assigns beneficiaries to the wrong households, and makes incorrect eligibility determinations, according to the decision from Middle District of Tennessee Judge Waverly Crenshaw Jr.

Not at all surprised to see the name of a big consulting firm like Deloitte in something like this. How much money and productivity is lost to these leeches across our entire economy?

Leaving aside this particular case: how can potential recipients of benefits even know how or why they were denied to bring such lawsuits in the first place? Especially if they are forced into arbitration? For example I feel like private health insurance companies, particularly Aetna, deny many claims falsely as a typical approach to avoid having to pay out as much. And patients are then subjected to a long drawn out process with hours of wait times, hours of calls, and constant vigilance. This method of avoiding payouts by creating expenses for patients should be illegal. But how can anyone see what’s happening and be in a position to challenge it without even a basic level of transparency?

OutOfHere16• 2 years ago

IMHO, the state should be the one to approve/deny claims (except if they're duplicate claims within a time-period specific to the code). Leaving it to the insurance company to process the claim is akin to letting robbers play cops.

throwaway9029843• 2 years ago

how can potential recipients of benefits even know how or why they were denied to bring such lawsuits in the first place? Especially if they are forced into arbitration?

You get a letter in the mail, with a review of the decision they made. There is a section where they have to explain why they denied you. It is a direct, "We don't think you meet this criteria" statement.

Awful letters, imo.

miohtama2• 2 years ago

The TennCare Connect system—built by Deloitte and other contractors for more than $400 million

There you have the reason. The government software should be open source because

- People need to be able to make public officers accountable (Article XV – The society has the right of requesting an account from any public agent of its administration. https://en.m.wikipedia.org/wiki/Declaration_of_the_Rights_of...)

- You should be able to fire incompetent contractors, and replace them with someone else, for which open source code base makes it much more practical and the contractor cannot use any trade secrets clauses to make this impossible

Deloitte was a major beneficiary of the nationwide modernization effort, winning contracts to build automated eligibility systems in more than 20 states, including Tennessee and Texas.

So much tax payers money wasted.

OutOfHere16• 2 years ago

I would go further and say that not only the software but also the execution of the software should also be open, akin on a non-financial blockchain database, with the rules, execution, and decision recorded permanently (under an anonymous ID, of course). Anyone should be able to easily replay the execution. This would allow for citizen monitoring of government actions. If not for this, at least a weekly export of all anonymized processed claims, plus the corresponding logic rules, should be made available on the web, similarly facilitating a local replay.

The problem with a scheduled export is that a corrupt state government will gladly change your records for you (in their favor) when you go to court. This is more difficult to do with a blockchain.

striking5• 2 years ago

I would really prefer my health information not be exposed in any way, "anonymized" or otherwise, thanks.

KittenInABox2• 2 years ago

Nnnnnnah, I don't want claims to be public. There's no real way to anonymize claims. e.g. someone getting specialized immune therapy in west virginia is pretty damn identifiable. Or someone being paid out in a claim of 300k+ for some highly specific antiviral.

Terr_• 2 years ago

blockchain [...] replay

That's burning down your house to kill a spider. Even in a closed system infinite replay-ability is a big headache, and adding "blockchain" adds a hundred new problems. There's already legal system which is a direct dependency, and it is more efficient and manageable. (Yes, that's right, the US legal system actually looks sane by comparison.)

Instead, make a legal requirement that patients (and sometimes other stakeholders) can demand the data/logic behind the company decisions.

If you still want very tamper-proof write-only records, that can be done way more easily/quickly/cheaply with an old-school distributed database with fixed trusted nodes, run by multiple institutions that are not likely to conspire together.

giantg23• 2 years ago

It shouldn't be auditable by anyone. There should be an audit trail though, and it should be available to the subject of that process on request.

abduhl• 2 years ago

> People need to be able to make public officers accountable (Article XV – The society has the right of requesting an account from any public agent of its administration. https://en.m.wikipedia.org/wiki/Declaration_of_the_Rights_of...)

I agree with this sentiment, but what is the relationship between the linked French Declaration and American law? Why not try to build the argument based on FOIA: https://en.wikipedia.org/wiki/Freedom_of_Information_Act_(Un...

forrestthewoods• 2 years ago

Four hundred million dollars is unfathomable.

Has Deloitte ever built any software that is good? I certainly have a super strongly negative bias against their work. But hey maybe someone here has worked with them and was impressed…

akira2501• 2 years ago

The contract is likely structured into "Scope of Work" and "Ongoing Maintenance and Support" to help justify this cost.

tomrod5• 2 years ago

Has Deloitte ever built any software that is good?

Not in my experience.

ungreased0675• 2 years ago

Their skill is in winning huge government contracts, which is not easy.

I’d be comfortable betting my house that they’ve never produced even mediocre software. Why would they if the government is willing to pay for garbage-tier work?

amonon• 2 years ago

The United Stated Digital Service is pushing for more government software to be open source[1]. I have no idea how effective it is, but it made me happy to see

[1] https://playbook.usds.gov/ ctrl+f "Default to open"

CuriousCosmic• 2 years ago

Not just the USDS (as the USDS is a small part of a larger effort), the GSA as a whole is pushing for this. They maintain a lot of open source software for the federal and state governments and they try to do open by default and FOSS COTS where they can.

Just the main GSA github org has over 1000 repos in it.

https://github.com/GSA/

https://open.gsa.gov/

tomrod5• 2 years ago

It's extremely effective. Not just USDS either, but also 18F (now GSA TTS). Also, much of the UK government.

The people win when the sun can shine.

geraldwhen• 2 years ago

There is no competent government contractor. The only companies which survive RFP operate in a way to maximize cost and minimize value.

tomrod5• 2 years ago

There is a subset pushing the change that. Typically people connected in some way to USDS or GSA TTS who then go into private business. It shows up in surprising places.

Flozzin• 2 years ago

Maybe it should be open source. It is using our tax dollars after all. But I think this failure isn't a failure of the software. But a failure of using software. And of have complex laws/criteria of who can be helped. We should craft laws and programs that are uncomplex. 400 million dollars on admin software to ultimately deny people care they want. That just shouldn't be a thing. We should have spent that money on helping people, and using it to 'eat' the cost of accepting too many people.

Our justice system acknowledges that it's flawed and it's flawed with the idea of letting guilty people go, in order to make sure we aren't charging innocent people.(granted we are failing at that). But we should be crafting care with the intention of accidentally helping people who may have no qualified so that all qualified people would get care.

lenerdenator2• 2 years ago

I'll do you one better:

We should just have a publicly-funded health insurance plan that applies to every American at a basic level. Then you don't have to have a massive bureaucracy to figure out who's eligible, who's not, how long they are eligible, etc.

We've successfully spent more money trying to deny people public benefits than we probably would have just providing a basic level of public benefits to everyone.

jasonlotito• 2 years ago

When an enrollee is entitled to state-administered Medicaid, it should not require luck, perseverance, and zealous lawyering for him or her to receive that healthcare coverage

That's such a powerful statement. If they are entitled, they are entitled. Simple as that. And anything that systematically prevents that is absolutely wrong.

What's more important is the approval process. Deloitte might have build this, but the State approved it's use. People signed off on this.

Further, this isn't an easy fix. Loosing coverage like this is not something you can just fix. This has affected people's entire life going forward, and not in a good way.

Yes, mistakes happen, but this isn't a simple one-of mistake. This is something rotten, and while Deloitte wrote it, they wrote it for a client who asked for it and put it out there. And that's who is ultimately responsible.

mlinhares• 2 years ago

I doubt Deloitte did this without direct guidance and approval from state governments.

The unemployment system here in FL was also built to spec to be incredibly hard to use and that was the goal of the administration. I have no love lost for consultancies, but if no government agents are penalized for this and they take the fall alone it will happen again with some other consultancy.

jkaptur• 2 years ago

I recommend the book "Automating Inequality" by Virginia Eubanks for a deeper dive here.

sitkack3• 2 years ago

https://virginia-eubanks.com/automating-inequality/

In Automating Inequality, Virginia Eubanks systematically investigates the impacts of data mining, policy algorithms, and predictive risk models on poor and working-class people in America. The book is full of heart-wrenching and eye-opening stories, from a woman in Indiana whose benefits are literally cut off as she lays dying to a family in Pennsylvania in daily fear of losing their daughter because they fit a certain statistical profile. Deeply researched and passionately written, Automating Inequality could not be more timely.

https://www.youtube.com/watch?v=Avxm7JYjk8M

engineer_222• 2 years ago

More likely, they lacked incentive to get it right

kevin_thibedeau• 2 years ago

These states salivate at every opportunity to cut themselves off at the knees with tax cuts. They tend to receive a disproportionate amount of federal funding but that isn't enough to maintain high quality services and you get these sort of death panels meant to restrict spending so that the top earners can pretend they're going to trickle down their wealth. Tennessee is a tax haven state. They are the worst offenders at this.

khafra• 2 years ago

To some extent, the reason business consultancies get paid so much is to be the fall guys when what the client wanted to do all along turns out badly.

However, they're still businesses. If the fall is big enough, or it starts happening reliably enough, they will stop volunteering for certain types of falls.

We need to make "business practices that kill vulnerable people who they're supposed to be helping" a category of fall that is reliably unprofitable.

maerF0x04• 2 years ago

by Deloitte and other contractors for more than $400 million—is supposed to analyze income and health information to automatically determine eligibility for benefits program applicants.

Ultimately this needs to be weighed against 1. How accurately, corruption free, and expediently would $400M of humans performed compared to the software, and 2. How much better software could have been delivered by Code for America had they been given the $400M in resources.

My gut suspicions are 1. Much worse, and 2. Much better

justin66• 2 years ago

$400M of humans

Weird.

tomrod5• 2 years ago

Government procurement contracts in a few ways. Only in small ones or DOD do you see FFP. Larger ones are structured like "work programs" due to laws.

maerF0x04• 2 years ago

yeah, probably "Government Employees" would have come across clearer.

autoexec3• 2 years ago

It should only be weighed against the harms it's caused right now and any company responsible for those harms should face meaningful consequences as a result. It doesn't matter if humans would have done worse in the same situation (something you can't easily prove anyway) the same way we don't weigh the actions of a murderer based on how much more horrifically some other murderer might have killed the victims. We just punish the murderer we have for what they've actually done.

Maybe generally software is a good idea, but this software was a total nightmare and it clearly has no place making these decisions.

maerF0x04• 2 years ago

The point is that humans doing the work was the baseline control. If we invested $400M and got something for our money, then it's a good iteration.

gopher_space• 2 years ago

I mean what would it have cost to just greenlight every applicant?

maerF0x04• 2 years ago

That is also a fantastic comparison point. The same ideal is part of the idea behind UBI replacing the social welfare bureaucracy.

I found this documentary "Freedom to choose" to be really interesting: https://www.youtube.com/watch?v=dngqR9gcDDw&list=PLt27lKoC5L...

gnu8• 2 years ago

How many of the software engineers, project managers, and sparkle-shoe consultants from Deloitte are on Medicaid?

josefritzishere• 2 years ago

It's hard to ignore the fact that the prior governor of Florida was convicted of medicare fraud. There is something to that.

lotsofpulp• 2 years ago

*prior Governor, promoted to current US Senator. You would think stealing from billions of dollars from taxpayers, and this is billions in the 1990s, would disqualify you from attaining one of the highest government positions.

lenerdenator2• 2 years ago

The last eight or so years has proven that the vast majority of the American system of governance is based on the idea that people have basic amounts of shame and are willing to not do something if they can't do it in good faith, and that such things would be enough to deter malignant parties from being involved in government without the need for explicit laws.

Now you have a bunch of sociopaths realizing that, oh, wait, there isn't any reason, legally or technically speaking, that I cannot be involved in government.

throwaway9029843• 2 years ago

It took four years for me to be accepted into TennCare with one denial. That seems average, from what I can tell. This system definitely contributed to some suicides.

With many of those decisions as incorrect as they were, with people as poor as they are here... This is a tragedy that has had people hiding the cause of their suicides for an insurance payout to their families.

I am guessing that the healthcare costs for those denied are generally larger now than they would have been had they been accepted; that the hospital system is still paying the price tag, not the destitute. - A layered tragedy in that the finances are worse for everyone but Deloitte.

hsbauauvhabzb5• 2 years ago

I don’t live in your country and so I’m not familiar, is a denial some potentially ‘fraudulent’ transaction, or something else?

benbayard• 2 years ago

Not everyone qualifies for government assistance. The software Deloitte built was supposed to automatically determine if someone was eligible. It is now being alleged that the software did not function correctly and was denying people because of bugs and issues with the software, not because the person was ineligible.

throwaway9029843• 2 years ago

You have to apply for the social benefits here, like you would apply for a job. It is when the state government says no, you don't get to benefit from social welfare programs. In this case, TennCare, a health insurance system for the poor and disabled.

This government denies those applications at around a 50% rate, iirc. With that decision taking around 4 months to a year Then an appeal is launched, with that decision generally taking 2+ years. A judge rules on that appeal eventually.

A panel is convened with a couple of lawyers, the judge, a vocational expert (job fitness person), a health care professional, and yourself. Who you are and what you are capable of is summed up and deliberated upon. If you are deemed indigent, you are given an insurance policy with TennCare.

justinclift2• 2 years ago

Wonder if there's an up-and-coming AI based version of the system in development already? ;)

neilv2• 2 years ago

Imagine you get together a team of really good developers, who really want to help government work better for people, pay them semi-competitively [*], and just task them with building and deploying the software aspects of this system.

Maybe the software is fully delivered within a year, at a cost of $10M? (Excluding non-software costs of this project.)

Then those team members can move on to the next project(s).

[*] I'm thinking: don't pay as much as FAANG, but maybe 50% FAANG-TC, as straight salary. Meaning FAANG mercenary types motivated only by money filter out themselves for you, but it's still doable for top-tier people who want to do beneficial work, with enough income and job stability that they shouldn't be distracted from work by those stresses. You'd really need to keep the hiring bar up, though, carefully hand-picking small teams, and not compromising if your formula is successful. (And be able to say no to agencies want to scale to too many projects in parallel, or to some politician wants to make it a jobs program, or stuff it with patronage/nepo hires.)

sitkack3• 2 years ago

I have run consulting before and was thinking of getting back into with a similar arrangement. Having been involved tangentially in government procurement for small software projects, you get first had visibility into how the normal predatory ISVs operate. Their single site licensing cost is from my experience 20-30% below what it would cost to build it yourself. But then you don't own the software and have to pay for ongoing maintenance. It looks cheaper but ends up costing more for worse software.

This whole sector is ripe for getting flipped because every actor in it operates using the same set of greedy rules.

neilv2• 2 years ago

I wouldn't want to have to be playing bidding games against one of the big consulting firms that sometimes bill massively to create disasters.

I'd rather just have more information systems be recognized as necessarily a government core competency, to in-house. And to pay well enough, to hire the best teams for that (without leaning on their altruism/patriotism so hard that they have to worry about money).

thatguymike2• 2 years ago

This is roughly the Code For America model... there are many other roadblocks other than "ability to build a system" though, for example the pointlessly strict and bloated regulation which is mandatory to follow. Unfortunately it's not quite enough to have good engineers.

renewiltord• 2 years ago

That was the healthcare.gov rescue team. patio11 was on it.

But the government guys usually aren't looking to do that. They're not trying to build the software. They're trying to make their friends who got them elected rich. And then maybe when they're out after some time, their other friends can run the law team that extracts something from the government which they're no longer part of.

POSIWID baby. You think this is accidental. But it's the way it is on purpose.

patio11• 2 years ago

(I was not on the healthcare.gov rescue mission.)

gtvwill• 2 years ago

Private healthcare/medical services should be illegal. Nationalise it. So broken to be in 2024 and people still have to pay for Healthcare. Thank God I don't live in the US. Our healthcare ain't great but it shits on theirs (Aus).

There are zero arguments that private Healthcare should exist.

thatguymike2• 2 years ago

A plug for everyone in this thread to read `Recoding America` by Jennifer Pahlka, founder of Code For America. Extremely good book which goes into detail about why software is such a crapshow in government... there are many more reasons than "bad software engineers", and they're all fascinating.

lacker• 2 years ago

Her Substack is pretty good too:

https://www.eatingpolicy.com/

tomrod5• 2 years ago

This makes a great case for UBI.

Years to get a benefit that should be dispersed in days or even minutes. Shame.

cco• 2 years ago

If it was an algorithmic system, why did denials take months?

CatWChainsaw• 2 years ago

If that's the way the system works then perhaps assume the malice is part of the design? If it takes months to deny, maybe the person will be dead by then and you won't have to pay out anything, plus you keep whatever money they had put in before. It's brilliant.

melenaboija• 2 years ago

In banking it is mandated that a group validates any model that is used and reports the results to the FED. I wonder if something similar should exist for public institutions.

hsbauauvhabzb5• 2 years ago

In australia, we have a recent ‘robodebt’ where Centrelink (welfare) payments were evaluated by a debt recovery system, deeming (MANY) incorrect bills of thousands of tens of thousands.

Suicides happened.

As a result of a royal commission into the legality of the debt recovery scheme, it was deemed illegal, and I think all debts were rescinded. Many people in charge were recommended to be prosecuted by the anti corruption commission within the royal commission, the recommendations were made by (afaik) a Supreme Court judge. The anti corruption commission chose not to prosecute.

yieldcrv• 2 years ago

Out of all forms of accountability, do you think that would have been the best form if they did prosecute?

Unfortunately i could probably bet that no other form of accountability was pursued

justinclift2• 2 years ago

Yes, they absolutely should have been prosecuted.

These people are still around to this day, likely making similarly consequential decisions that affect others with zero accountability.

hsbauauvhabzb5• 2 years ago

They had legal advice that what they were doing was not lawful and they did it anyway.

So at scale fraud and gross negligence, for a start. And jail is a perfectly suitable punishment for knowingly sending fraudulent invoices to the most vulnerable people in our country, driving several to suicide.

Instead, they got cushy jobs.

TZubiri• 2 years ago

That's justice served. Big algorithm deserves Medicaid benefits too

say_it_as_it_is• 2 years ago

Probably another case of technology blamed by politicians who behind closed doors ordered to deny the claims

Judge rules $400M algorithmic system illegally denied Medicaid benefits

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