Florida officials blamed technology failures and staffing problems for the state government wrongfully stripping Medicaid coverage from potentially hundreds of thousands of eligible families since early 2023, testimony in federal court revealed last week.

A class-action trial challenging how Florida terminates Medicaid benefits concluded Friday at the U.S. District Court in Jacksonville. The proceedings shed new light on the inner workings of the state’s benefits-eligibility decisions.

Internal problems plagued Florida’s Department of Children and Families as it rapidly removed people from Medicaid rolls starting in March 2023 as part of a so-called “unwinding” that began after the expiration of a COVID-era federal rule.

The state didn’t contest that it had wrongly removed families’ Medicaid coverage. Instead, it has argued that it didn’t violate those Floridians’ constitutional rights.

Florida contends its termination notices and appeals hearings offered residents enough of a chance to correct any wrongs. Plaintiffs, however, claim the notices lack crucial information and that DCF employees gave inaccurate information, violating their due process rights and making it nearly impossible for many recipients to challenge decisions effectively.

“I just hope that there can be a solution so that families and staff can know what’s going on when we receive these notices,” Orlando mother Lily Mezquita, who wrongfully had her Medicaid taken multiple times after the unwind began, testified from the stand, noting she was able to reobtain coverage after contacting lawyers now representing her in this case.

“I can’t even imagine how many people weren’t able to do that and now are without coverage because they couldn’t find the right resources.”

Tech problems

From the start of the unwind, software failures affected both the automated and human-run systems DCF jointly manages with global consulting giant Deloitte Consulting LLP. The state identified some of those failures early on but took more than a year to fix them.

One “computer error” stripped new mothers of Medicaid coverage. A new state law supported by Gov. Ron DeSantis had guaranteed some postpartum mothers 12 months of insurance. But a glitch, according to 26-year DCF employee Will Roberts’ testimony, caused the state to routinely deny coverage to moms who qualified.

Roberts said the state became aware of this glitch in April 2023. Deloitte managing director Hari Kallumkal said the state didn’t fix it until a year later, sometime in April or May. Deloitte, which has gotten more than $117 million since 2013 to help operate the agency’s so-called ACCESS Florida System, didn’t have a hand in helping resolve that computer error for the state, Kallumkal said.

Kallumkal testified about another defect that limited how much data the eligibility software could read, which led the state to wrongly deny coverage. He said Deloitte fixed that problem last November. Kallumkal said he didn’t know how many people were impacted by that glitch.

Roberts, the DCF employee, testified that multiple other computer errors had been found potentially affecting peoples’ eligibility during the unwind that he couldn’t remember the specific details of.

DCF’s system also intentionally deletes income data used to determine Medicaid eligibility after it deems them ineligible, then automatically checks if they qualify for Medically Needy coverage, a lesser program that requires out-of-pocket payments by patients. That means if a person challenges the determination, that data is no longer available, and as Roberts and other state employees confirmed in testimony, the data comes from third-party sources and can be outdated or inaccurate.

Clogged call centers

DCF’s call centers, run jointly with California-based Lighthouse Software Systems LLC, buckled under the increased demand during the unwind.

The percentage of callers whom DCF’s call centers blocked – where callers needing human assistance were rejected due to busy lines – jumped from 17% in February 2023 to 83% by August of that year, according to state data presented in court. The most recent data presented at trial covered April 2024, with DCF still blocking 54% of callers that month.

Computer failures played a part in call-center disruptions at points during the unwind, according to testimony from Nichole Solomon, DCF’s director of call center services.

“We did have some periods of instability with our” interactive voice-response system, she said from the stand, referencing an initial automated menu the call center presents callers with to either resolve their question on the spot or forward them to the queue for a human service agent. As DCF prepared for the unwind, it began contracting with the third-party entity, Lighthouse, to help with Medicaid unwind calls in March 2023, Solomon testified. She said the contractor was only tasked with handling callers who had simple issues rather than more complex cases that would be forwarded to highly-trained DCF representatives. “Lighthouse’s role has been significantly decreased” in the current day, she testified.

According to state procurement data, DCF had only two active contracts with Lighthouse during the unwind – one that expired in mid-2023 and one that’s set to expire in mid-2028 – but the scope of both these contracts only has Lighthouse supporting DCF’s opioid treatment facilities. It’s not clear how much Lighthouse was paid to help with the call center.

The plaintiffs’ attorneys played many recordings of mothers they’re representing in the case calling the DCF centers to seek answers as to why they were suddenly losing their Medicaid coverage. Call representatives in multiple instances provided incorrect information. Mezquita, the Orlando mother, was told by a representative at one point after she’d been wrongfully cut off from her postpartum coverage that she no longer was eligible because “the COVID mandate is lifted.”

Solomon said the agency is currently hiring about 200 more call representatives, which will raise DCF’s total to about 700.

The plaintiffs’ attorneys asked why the agency waited until after the unwind to expand its staffing.

“I can’t speak to why we waited,” Solomon said, then clarifying that because these positions were recently created, “there was no wait.”

Overly vague notices?

The lawsuit challenges DCF’s termination notices sent to Medicaid recipients deemed ineligible. Plaintiffs argue the standardized set of “reason codes” DCF automatically applies to the notices were too vague or misleading.

One code simply stated, “ELIGIBILITY REQUIREMENTS NOT MET,” without referencing income. Another stated, “YOU ARE STILL ELIGIBLE (…) BUT IN A DIFFERENT MEDICAID COVERAGE GROUP,” which meant they’d been switched to the Medically Needy program, even though multiple state employees testified that this program isn’t the same as full Medicaid coverage.

DCF altered the way these reason codes appear in termination notices in December 2023, months after the lawsuit had been filed in this case, to add direct references to income and the Medically Needy program.

The plaintiffs also challenged the notices’ boilerplate paragraph that was supposed to inform people of their right to challenge their termination. Prior to October 2023, this paragraph told people that they “will be responsible to repay any benefits if the hearing decision is not in your favor,” though such repayment is only legally required if someone commits Medicaid fraud or an intentional program violation.

DCF tweaked that paragraph in October 2023, also after the lawsuit was filed, to say people “may be responsible to repay” their benefits if they lose on appeal. The agency has made multiple other changes to its notices in the time since the lawsuit began, such as adding hyperlinks to clarifying information about the Medicaid program.

A still-murky path to resolution

Joan Alker, executive director of the Center for Children and Families at Georgetown University, told the Tributary her organization “heard many, many stories out of Florida” during the unwind.

“I’ve personally had parents contact me, which is very unusual, who have very sick children, to say that they were desperate,” Alker said. “They were getting all these notices that were impossible to understand. I mean, I had one family send me, like, seven different notices that they got, and I could hardly make heads or tails of it, and I’m a health-policy professor.”

Alker specifically noted the issue of children being stripped of healthcare coverage, citing a study her organization published in May found Florida disenrolled the second-most children in the nation from Medicaid and CHIP coverage during the unwind.

“It’s no surprise to me that there were systemic problems here that resulted in the large-scale loss of health insurance coverage for children who remain eligible,” Alker said. “What’s gonna happen to get these children and these new moms the coverage that they need?”

U.S. District Judge Marcia Morales Howard set a deadline for each side to file a post-trial brief within 30 days after the court releases its trial transcript.

She also again suggested each side consider negotiating a settlement prior to her ruling on the case. “Whatever you all agree to is so much better than what I can come back (with),” she said.

“The fact that I came out and encouraged the parties to consider settlement is not gonna – but I don’t think either of you is gonna be very thrilled” by her ruling, Howard said before exiting to her chambers.

The plaintiffs, representing a class of all Floridians cut from Medicaid since March 31, 2023, based on a claim their income was too high, want reinstatement to the Medicaid program and changes to the termination notices. The plaintiffs haven’t asked the state to pay back the medical expenses the state should’ve covered after wrongly terminating the plaintiffs’ Medicaid. 

The class of plaintiffs totals hundreds of thousands of people statewide.

The state wants Howard to dismiss the lawsuit that prompted the trial, arguing the plaintiffs’ are wrong in their claims that its termination notices violate federal due-process rights and the Medicaid Act.

The state argues that if Medicaid recipients have been confused by language in DCF’s notices, they’ve had ample resources to clarify their confusion online or in person at one of 40 DCF service centers statewide. Even if the state did violate their rights, its lawyers also argued the relief the plaintiffs seek is overly broad and would come with a “staggering price tag.”

Charlie McGee covers poverty and the safety net for The Tributary. He’s also a Report for America corps member with The GroundTruth Project, an independent, nonpartisan, nonprofit news organization dedicated to supporting the next generation of journalists in the U.S. and worldwide. McGee may be reached at charlie.mcgee@floridatrib.org. Follow him on Twitter @bycharliemcgee.