Molina protests $1.1B 'illegal' Medicaid contract

Molina Healthcare is protesting a billion dollar contract to manage Missouri's Medicaid services that it lost to a rival insurer, claiming state officials took steps to artificially limit competition.

Molina's objection to the Medicaid contract, which is worth $1.1 billion and covers almost 880,000 members, alleges that Missouri issued a vague request for proposals, changed its rules to favor other bidders after realizing only Molina met certain requirements and used an unauthorized "evaluation committee" of state employees from various agencies to score the bids, the St. Louis Post-Dispatch reported.

"This is not only plainly illegal, it is bad policy," Molina said. "It arbitrarily limits Medicaid members' choice of managed care plans, (and) it limits free and open competition among all qualified plans."

In its formal complaint filed Monday, Molina alleged that the Missouri Office of Administration made "procedural and substantive errors" during the Medicaid contract bidding process, which caused "unexpected and unjustifiable" results. Molina also claims that by selecting Centene Corp. to run the Medicaid program, the Office of Administration violated the state's competitive bidding law and procedures for Medicaid contracts, reported the St. Louis Business Journal.

In selecting an insurer to run the Medicaid program, the state's evaluation panel considered each bidders' organizational experience, method of performance, quality and access to care. Molina, however, allegedly only received mid-range marks for quality, noted the Post-Dispatch. And despite its 16-year experience working with Missouri, including 16,000 providers and 80,000 patients, Molina complained that "contracts went to providers with little or no experience" in Missouri.

To learn more:
- see the St. Louis Post-Dispatch article on Molina's protest and Centene's contract win
- read the St. Louis Business Journal article