New York State Department of Health

New York's Department of Health is encountering significant problems as it transitions more than 147,000 Medicaid and Medicare Savings Program enrollees to a new case management system. Officials say only about a third of those enrollees have been able to automatically renew coverage without extra assistance since the rollout began roughly a year ago.

The effort is part of a push to replace outdated, paper-based local processes with a centralized system run through New York State of Health, the state's public insurance marketplace. The system, built by Deloitte Consulting, was initially a $177 million contract signed in 2023 but has since grown to $1.18 billion after four amendments, including an $866 million extension. A second wave of more complex cases, including long-term care and nursing home patients, is expected to migrate between November 2027 and February 2028.

Advocates say the system has produced inappropriate coverage denials affecting elderly, blind, and disabled residents, citing inaccurate data transfers and flawed automated verification tools. State officials acknowledge ongoing issues but say they are being addressed as flagged.