TennCare Ruling: What the Judge Found About the $400 Million Eligibility System

A federal judge ruled in A.M.C. v. Smith that Tennessee’s TennCare eligibility-redetermination practices violated due-process protections, the Medicaid Act, and the Americans with Disabilities Act. The court found that defects in the state’s eligibility system and related policies could cause officials to overlook information TennCare already had. The ruling was about TennCare in Tennessee—not Michigan Medicaid—and did not find every allegation proven.

What the judge ruled

After a five-day trial, the U.S. District Court for the Middle District of Tennessee issued its ruling on August 26, 2024. The Tennessee Justice Center, which represents the plaintiffs, describes the court as finding violations of the Fourteenth Amendment’s Due Process Clause, the Medicaid Act, and the ADA. The court also rejected plaintiffs’ arguments on other certified issues, so the decision should not be read as accepting every claim in the lawsuit.

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The case was brought by 35 children and adults, according to the Tennessee Justice Center. That is the number of named class-action plaintiffs identified on the case page, not a count of everyone affected by TennCare’s practices. The court opinion sets out the findings and distinguishes issues on which the plaintiffs prevailed from those on which they did not meet their burden.

How TEDS and TennCare’s policies affected eligibility reviews

The opinion discusses the Tennessee Eligibility Determination System, or TEDS, which supports TennCare eligibility operations. It identifies systemic errors and design defects that led TennCare to overlook information already in its possession when assessing whether people remained eligible. The findings concern the interaction of the system with agency procedures; they do not establish that an algorithm alone caused every termination.

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Notices and the chance to respond

The court found due-process problems involving notice of TennCare’s Good Cause Policy and the 90-day reconsideration period. These procedures matter because people need understandable notice of what the agency is doing and what steps or deadlines may let them respond or preserve coverage.

Fair hearings and factual disputes

The opinion also found that TennCare’s Valid Factual Dispute Policy violated the Medicaid Act and due process by foreclosing fair hearings to which enrollees were entitled. In practical terms, a dispute about the facts underlying an eligibility action should not be resolved through a policy that denies an otherwise-entitled enrollee a fair-hearing opportunity.

What the $400 million and 88,604 figures mean

Gizmodo reported in 2024 that TEDS/TennCare Connect was built by Deloitte and other contractors for more than $400 million. That figure is attributed to the news report; it is not a verified total from a primary procurement record reviewed here. The headline’s “thousands” should not be mistaken for a court-certified count of people who were wrongfully denied benefits.

The court opinion says TennCare received 88,604 timely termination and redetermination-related appeals between March 19, 2019, and October 31, 2022. This is a count of appeals over a defined period, not a count of unique people or a finding that every appeal involved an unlawful denial. The opinion’s findings address the agency’s systems and procedures, rather than converting that appeal total into a number of proven wrongful terminations.

What the ruling means if your TennCare coverage was cut off

The ruling identifies serious problems with TennCare’s processes, but it does not by itself determine the status of an individual’s case or guarantee that a specific person will regain coverage. If you have received a termination notice or disagree with an eligibility decision, rely on the instructions and deadlines in your own notice and contact Tennessee-specific assistance promptly. The Tennessee Justice Center’s A.M.C. v. Smith page includes a free-help path; confirm its current scope and eligibility when you contact the organization.

• Keep the notice and any envelopes or messages related to the decision.
• Check the notice for the reason for the action, response steps, and deadlines.
• Gather relevant eligibility documents and records of information you already provided.
• Ask a Tennessee benefits advocate or qualified attorney about options for your own case.

Do not use another state’s Medicaid hearing forms or procedures as a substitute for Tennessee guidance. For example, Michigan’s Medicaid fair-hearings page is for Michigan, not TennCare.

What is known about the case after the ruling

The Tennessee Justice Center’s case page says the court ordered the parties to mediate over relief after finding liability. It described a possible hearing on injunctive and other relief if mediation failed, with appeals also possible. The sources cited here do not establish the final remedy or current appeal posture, so the August 2024 liability ruling should not be treated as a complete account of what happened afterward.

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