From the Health & Human Services edition of November 1, 2026
New York DOH's seven-year Medicaid eligibility system RFP asks vendors to use AI, but every use needs 90 days' notice and written approval, with non-essential AI off by default
New York State Department of Health (Office of Health Insurance Programs) · State Medicaid and health insurance eligibility and enrollment · New York, United States
- Publisher
- NYS DOH RFP C043776: Converged Eligibility and Enrollment (E&E) System and Appeals Management System (AMS)
- Original publication
- 2026-10-29
- Source retrieved
- 2026-11-02
- Event date
- 2026-11-13
What happened
The RFP, issued Oct. 29, 2026, seeks one contractor for a seven-year term. The contractor would maintain and operate New York's Medicaid Eligibility and Client Management (MECM) system and Appeals Management System. It would also fold NY State of Health functions into MECM, creating one Converged E&E System for Medicaid, Child Health Plus, the Basic Health Program and Qualified Health Plans. Section 5.2.9 encourages the contractor to use AI to improve quality and cut time and cost. The department's vision cites AI-enabled, model-driven solution engineering to lower costs. Section 6.10 controls that AI. The contractor must give 90 days' written notice and get written approval before using any AI. AI not integral to the system is disabled by default. The department may disallow any AI for any reason, and rejected AI must be replaced at no cost. Department data and AI outputs may not be used to train models. The department owns prompts and outputs. AI transcription is off unless requested. The department may ask for an independent audit or a NIST-defined AI impact assessment. Letters of intent are due Nov. 13, 2026; proposals Feb. 19, 2027.
Why it matters
The RFP covers 6.5 million enrollees across the programs (Table 2, July 31, 2026), so it is one of the largest state eligibility procurements in the country. It shows how a state Medicaid agency can encourage vendor AI for engineering productivity while keeping tight approval and data controls. Other states can reuse the clause set in their own eligibility contracts.
Evidence and measured results
Primary procurement document. It sets requirements and states expected outcomes; it reports no measured results from AI use.
Limitations and uncertainty
This is a solicitation, not an award or a deployed system. Requirements may change through Q&A (responses due on or about Jan. 19, 2027) and Attachment E, the requirements matrix, which was not reviewed. Expected AI cost savings are department aspirations. The 6.5 million total is NYSOH enrollment as of July 31, 2026, not the full Medicaid caseload.
Put this evidence to work
Lighthouse Advisory interpretation, grounded in this source. Enriched 2026-11-02; this does not change the original publication date. Each role follows the same checklist so takeaways compare across sources.
Sales
Role takeaway
- Customer problem
- The state wants modern, faster eligibility delivery and lower vendor costs, while keeping strict control over any AI inside a Medicaid system.
- Stakeholders
- NYS DOH Office of Health Insurance Programs leadership
- Procurement and contract management
- NYS ITS and security/privacy officers
- Medicaid eligibility operations
- CMS certification reviewers
- Discovery questions
- Which AI uses would the department approve first: engineering, testing, or operations?
- What evidence satisfies the OHIP AI Security and Privacy Baseline?
- How will the department judge whether AI is 'integral to the system'?
- What does a no-cost replacement mean in pricing?
- Value hypothesis
- Bounded hypothesis: a governed AI usage plan for development and testing can shorten delivery cycles without putting eligibility decisions under AI control.
- Potential engagement
- Proposal support or a partner role preparing the AI notice, approval and impact-assessment package under Section 6.10.
- Unsupported claims
- That AI will reduce costs by any specific amount
- That any AI use is pre-approved
- That the RFP authorizes AI eligibility decisions
- That terms will not change during Q&A
Pre-sales engineering
Role takeaway
- Fit
- Fits AI-assisted engineering (code, test, documentation) and tightly scoped operational aids within state-controlled tenants.
- Architecture and integration
- Switchable AI components in the MECM and Converged E&E stack, CI/CD and low-code tooling under department ownership, and audit logging for each approved use.
- Prerequisites
- Written department approval per use
- 90-day advance notice
- Mapping to NYS-P24-001 and the OHIP AI baseline
- Impact assessment and explainability material on request
- Constraints
- Non-integral AI disabled by default
- No training on department data, prompts or outputs
- AI transcription off unless requested
- Department may disallow any AI at any time
- Security
- Department owns prompts, uploads and outputs; no third-party sharing; reports for third-party audits and an independent audit or NIST AI impact assessment may be requested.
- Proof of value
- Demonstrate AI features can be fully disabled without breaking functions
- Show that prompts, uploads and outputs are never used to train or tune models
- Provide a sample NIST-aligned impact assessment
- Measure cycle-time change on a non-eligibility engineering task against a baseline
Delivery
Role takeaway
- Work
- Run an AI governance track inside the contract: notice, approval, register, monitoring and fallbacks, alongside transition-in and convergence work.
- Dependencies
- Department approval capacity
- Attachment E AI requirements
- CMS Streamlined Modular Certification
- NYS ITS policy updates
- Ownership
- NYS DOH OHIP owns approval and data; the selected contractor owns compliant AI use and evidence.
- Skills and adoption
- Contractor and state staff need shared practices for AI notices, impact assessments and reviewing AI-generated code and documents.
- Governance checkpoints
- 90-day notice before AI use
- Written approval per tool
- Periodic audit or impact assessment on request
- Re-approval when AI features change
- Acceptance criteria
- Proposed: complete AI register matching approvals
- Proposed: verified disabled-by-default configuration in each release
- Proposed: zero use of department data for model training
- Risks
- Approval delays stall delivery schedules
- Vendor platforms add AI features silently
- Savings assumptions built into pricing fail
- AI-generated code introduces defects into eligibility logic
Implementation considerations
Lighthouse Advisory interpretation across the operating dimensions a public-sector buyer must settle before this evidence becomes a design. Each note answers the question under its heading for this specific source.
Architecture and integration
What must connect, and where does the AI sit in the workflow?
The department's vision cites AI-enabled, model-driven engineering using low-code and no-code platforms and CI/CD. Today's eligibility engine runs on the open-source Drools rules engine, and the Appeals Management System runs on Salesforce. Each AI notice must describe the technology, its purpose, its connections to the department, its deployment timing and whether it is open source. Disabled-by-default AI means configuration control over AI features embedded in vendor platforms.
Governance
Who approves, reviews and stays accountable for outcomes?
Gives the department written approval of every AI use, a right to disallow any AI for any reason, and audit, impact-assessment and explainability requests. It references NYS ITS policy NYS-P24-001 and an OHIP AI Security and Privacy Baseline (the baseline itself was not reviewed).
Security and privacy
What data, permissions and controls need testing?
The RFP bars training on confidential data without the information owner's written approval and bars using prompts or outputs to train or tune models. The department owns AI outputs, and the contractor may not share department data with third parties.
Accessibility and workforce
Who is affected, and what skills or accommodations follow?
The 90-day notice and approval duty also covers AI used in interactions with department staff, public users and data subjects. Users must be told about any functionality lost when transcription is disabled. The AI sections do not address effects on state eligibility staff.
Procurement
What should contracts, pricing and exit terms secure?
If the department rejects an AI tool, the contractor must replace it with a non-AI solution or an approved alternative at no cost. If neither is acceptable, the department may terminate the contract at no cost. Bidders must price for that risk and for 90-day approval lead times. Expected savings from AI-assisted engineering are a stated department goal, not a contract guarantee.
Operating model
Which teams own the service once it runs?
The department's stated objective is to increase its ownership of licenses, code, configurations, documentation and data and to reduce reliance on vendors. AI is treated as a vendor productivity tool under state control, not as an autonomous eligibility decision-maker.
Publication history
- 2026-11-01Health & Human Services · Issue 044 resources
Stable resource ID: nys-doh-converged-ee-rfp-ai-contract-terms-20261029