Domain Atlas / Public benefits & eligibility
Tennessee TennCare TEDS
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In A.M.C. v. Smith (No. 3:20-cv-00240, M.D. Tenn.), a federal court held after a five-day bench trial that Tennessee's Deloitte-built TEDS automated Medicaid eligibility system, operational statewide since March 19, 2019 for a program covering roughly 1.7 million residents, produced wrongful terminations, wrong-household assignments, and misleading or missing notices that violated the Medicaid Act, the Fourteenth Amendment's Due Process Clause, and the Americans with Disabilities Act; the 116-page opinion, issued August 26, 2024 by Judge Waverly D. Crenshaw Jr., ordered mediation before considering an injunction.[4]
What happened
Tennessee's Eligibility Determination System (TEDS), with its public portal TennCare Connect, is an automated Medicaid eligibility engine built by Deloitte as the systems integrator of a three-contract program — taking over after an earlier build under a different contractor failed — and operational statewide since March 19, 2019 for a program covering roughly 1.7 million residents. It is described in the record as a rules-based automated (or "algorithmic") system, not an AI or machine-learning model: it applies eligibility rules across TennCare's coverage categories, performs automated ex parte renewals, and generates the notices enrollees receive. In A.M.C. v. Smith (No. 3:20-cv-00240, M.D. Tenn.), a class action filed in March 2020 on behalf of 35 named child and adult plaintiffs, and, per secondary legal analysis, covering a class described as over 100,000 people terminated plus over 100,000 qualified individuals with disabilities, U.S. District Judge Waverly D. Crenshaw Jr. held after a five-day bench trial in November 2023 — in a 116-page opinion issued August 26, 2024 — that the system violated the Medicaid Act, the Fourteenth Amendment's Due Process Clause, and the Americans with Disabilities Act. The court found that TEDS often failed to load appropriate data such as Social Security benefit receipt, disability status, and marital status, assigned beneficiaries to the wrong households, made incorrect eligibility determinations, did not always evaluate people terminated from one category for others they might qualify for, and issued "misleading and deficient" termination notices — compounded by an unwritten policy refusing "good cause" exceptions for people who never received written notice. Judge Crenshaw wrote that "TEDS is flawed, and TennCare knows that it is flawed," and that "poor, disabled, and otherwise disadvantaged Tennesseans should not require luck, perseverance, or zealous lawyering to receive healthcare benefits they are entitled to under the law." Rather than immediately enjoining the system, the court ordered the parties into mediation, reported by secondary coverage as running over roughly six months, before deciding a remedy. As of late 2025 and into 2026 the case sits in the remedies phase with an appeal pending at the U.S. Court of Appeals for the Sixth Circuit (No. 25-5660); the system remains in operation. Deloitte was not a named defendant, and TEDS is one node in a national footprint of that vendor's Medicaid systems that reporting has tied to recurrent errors across roughly two dozen states; cost figures for the Tennessee build differ by source and scope, from a reported roughly 400 million dollar system to an 823 million dollar original contract with change-order amendments.
The sociotechnical reading
TEDS is the Atlas's case of a correction loop that existed in law and was severed at the interface. Every other benefits case here fails a different way: MiDAS had no human review at all, so errors were self-sustaining by construction; Indiana's privatized modernization made denial the default action on any documentation friction. TEDS is neither. Medicaid law entitles enrollees to a fair hearing, and TennCare's caseworkers could in principle override the engine. What the court located as unlawful was the component that connects a wrong determination to a person's ability to contest it: the notice. When notices are misleading, deficient, or sent to the wrong household — and when the discretionary "good cause" safety valve is withdrawn for the very people who never received notice — the statutory right to appeal becomes unreachable, and a wrong automated termination becomes final without anyone deciding that it should. The court's own framing is the lesson: relief flowed to those with "luck, perseverance, or zealous lawyering," which is to say due process became a private good, rationed by advocacy, rather than a property of the system. It is a court-adjudicated demonstration that a right to appeal is worth exactly as much as the notice that triggers it — and that a single legacy keying error, propagated through data conversion into wrong-household merges, can compound precisely because the loop that should have caught it was cut. In the Practice Library's terms, the leverage is not the classifier's accuracy but the reconciliation and correction pathway around it; the governance question the case makes unavoidable is who reviews the automated adverse actions that nobody manages to appeal.
The concepts used in this reading are defined in the Field Guide; the governance responses live in the Practice Library. The model organization for this case can be stress-tested in the PAN Lab.