New federal court filings show that Immigration and Customs Enforcement (ICE) shared Medicaid data covering millions of people with data-analytics firm Palantir, after the Centers for Medicare and Medicaid Services (CMS) improperly handed that data to immigration officials in January. The records reportedly included home addresses and ethnicity information, which Palantir fed into its ELITE application, a tool ICE agents use to locate noncitizens who may be subject to deportation.

The disclosure emerged from a lawsuit brought by more than 20 Democratic state attorneys general challenging ICE's access to Medicaid data for immigration enforcement. A federal judge had already warned in an April hearing that the government could lose access to the data entirely if improper sharing continued. Critics argue the transfer violated HIPAA protections and lacked clear legal authorization.

Palantir told reporters the dataset in question had since been "purged pursuant to government instruction" and that "our customers control their own data." The case adds to mounting scrutiny of how federal agencies use commercial data-analytics platforms for immigration enforcement, and is likely to fuel further legal challenges over health-data privacy protections.