A US District Court judge ruled that TennCare's automated Eligibility Determination System (TEDS) wrongfully terminated Medicaid coverage for thousands of Tennessee residents.

Developed by Deloitte, the USD 400 million system was implemented in 2019 to streamline eligibility determinations but was plagued with systemic errors, including a failure to consistently load relevant eligibility data, allocating incorrect assignment of enrollees to households, sending renewal notices to wrong addresses, and causing difficulties for users, especially those with disabilities, in updating information through the online portal.

The problems with the system resulted in the loss of TennCare participants' Medicaid and disability benefits, leaving many without access to necessary medical care; financial hardship, especially for low-income families and those with disabilities, and emotional and psychological damage.

The ruling came from a class action lawsuit filed in 2020 on behalf of 35 children and adults denied benefits, with the judge finding that TennCare violated the Medicaid Act, the Fourteenth Amendment, and the Americans with Disabilities Act.

TennCare was aware of these issues but was slow to address them, leading to wrongful terminations of coverage, particularly for disabled individuals. 

Similar issues had been reported with Deloitte-developed systems in other states, including Texas, leading to calls for broader investigations into automated eligibility systems.