Brief
New York expands Deloitte Medicaid contract to $1.1 billion without bidding
The state added $866 million to a Medicaid IT contract with Deloitte, a move that watchdogs say should have triggered a public bidding process.
By Felo News Desk · Published
The New York Department of Health increased a contract with Deloitte Consulting from $177 million to $1.1 billion, a jump of $866 million, without a competitive bid, according to the New York Post.
In 2023 the state awarded Deloitte a $177 million contract to centralise part of the Medicaid application process into a statewide portal. The agreement was amended several times, reaching $317 million before the August amendment that added $866 million.
Only about $200 million has been spent so far, meaning the state will pay roughly $9 million per month for the first three years, rising to $25 million per month after the amendment, according to comptroller records.
State officials say the change was legal and necessary to replace an outdated system. A spokesperson for the Department of Health, Cadence Aquaviva, said the new platform would save taxpayers hundreds of millions of dollars and reduce waste, fraud and abuse.
Watchdog experts argue that the amendment, more than four times the original price, should have triggered a public rebid. Manhattan Institute Health Policy expert Bill Hammond told the Post that a contract of this size “should be rebid.” Senior policy adviser Rachael Fauss of Reinvent Albany added that the amendment “deserves scrutiny to ensure taxpayers are getting the best deal.”
The federal government will cover 90 % of design and implementation costs and 75 % of operations for the new portal, the DOH spokesperson said.
Deloitte has not responded to a request for comment. The firm has previously built costly IT systems for the state, including the COVID‑era vaccination “Excelsior Pass” program, which cost over $60 million and was under‑used.
Key facts
- Contract increased from $177 million to $1.1 billion (nypost.com)
- $866 million added in August amendment (nypost.com)
- Only $200 million spent so far (nypost.com)
- State will pay $25 million per month after amendment (nypost.com)
- Federal government covers 90 % of design and implementation costs (nypost.com)
Background
The contract was originally awarded in 2023 to centralise Medicaid applications. Deloitte had previously built the Excelsior Pass vaccination portal for New York, which cost over $60 million and was under‑used.
Why it matters
The expansion raises questions about procurement transparency and taxpayer cost for state health services.
What happens next
Lawmakers and watchdogs are calling for a review of the amendment and potential rebidding.
Sources
- [1] nypost.com — originally reported as “How Kathy Hochul’s admin handed firm a $1B Medicaid contract without competitive bidding”
