Medicaid deal in Missouri draws lawmakers’ scrutiny

Questions surrounding how the state awarded more than $1.1 billion worth of Medicaid contracts have sparked an investigation by the Missouri Senate.

California-based Molina Healthcare discovered in February that it lost its contract to manage health care for Medicaid beneficiaries in Missouri. The company has filed a lawsuit alleging that state officials violated competitive bidding laws and changed the rules to favor another company, Centene Corp., which was a major donor to Gov. Jay Nixon, a Democrat.

Senate President Pro Tem Rob Mayer, a Dexter Republican, has now formally requested that the Senate Government Accountability Committee investigate how the state awards Medicaid contracts.

“Billions of dollars are spent every year on the Medicaid program,” Mayer said. “I think it’s reasonable for the legislature to get a better idea of how those contracts are awarded.”

A spokeswoman for the Office of Administration — the agency that handles purchasing for the state — did not respond to a request for comment.

In its lawsuit, Molina is asking a court to delay an open-enrollment period for Medicaid participants that is slated to begin Thursday.

But Seth Bundy, a spokesman for the Department of Social Services, which administers the Medicaid program, said that “enrollment packets have been mailed out to managed-care participants. We are moving forward with open enrollment.”

More than 430,000 Medicaid patients are enrolled in the state’s managed-care program, which covers children and pregnant women in 54 counties in Missouri. Of the more than $1.1 billion spent on the program, roughly $700 million is federal money.

Five companies currently hold managed-care contracts with Missouri. But last year the state decided only three contracts would be awarded.

Molina, which has held a contract with Missouri for 16 years, was effectively replaced by Centene, a company based in the St. Louis suburb of Clayton, which has not held a Medicaid contract in Missouri since it withdrew from the market in 2006.

Molina alleged that the state is trying to “artificially limit competition” among managed-care plans by capping the number of companies given contracts. The company also questioned how it scored poorly in the access to care category of the bid review process when Centene currently has no network of doctors and hospitals in the state.

In addition to Mayer’s call for an investigation, the Senate Appropriations Committee responded to the controversy last week. The panel altered the Social Services Department’s budget to keep it from capping the number of contracts awarded for managed care.

If the change survives the Senate and a conference committee with the House, a portion of the state’s Medicaid funding to the department could be withheld if a company that meets the managed-care program’s requirements is denied a contract. The new provision noted the goal is to “maximize free and open competition and to ensure the greatest possible choice” for enrollees.

Centene’s attorney in Molina’s lawsuit against the state is Chuck Hatfield, who for 10 years served as Nixon’s chief of staff during his tenure as attorney general.

In an interview last week, Hatfield called the lawsuit “sour grapes,” arguing that Molina didn’t object to capping the number of companies that would provide managed care until it didn’t win a contract.

Centene currently handles Medicaid managed-care contracts in 14 states and is a finalist for a similar contract in Kansas.

A hearing on Molina’s lawsuit was scheduled for Friday in Cole County, but due to scheduling conflicts it was transferred to Boone County and is scheduled to be held sometime this week.