CHARLESTON, W.Va. -- West Virginia officials are preparing to enter into nearly $600 million worth of no-bid contracts with three health care insurance companies.
It's a decision by the state Department of Health and Human Resources that is now under fire. Critics say the arrangement could cost the state millions of dollars and that the plan may be illegal.
"When is the last time the state of West Virginia would allow a $600 million contract and not bid it?" said Delegate Ron Walters, R-Kanawha.
Walters urged House leaders to call for a special investigation or audit.
Delegate Nancy Peoples Guthrie, D-Kanawha, said Attorney General Darrell McGraw should rule on whether the arrangement is legal.
"The fact that they were not bid out should be alarming to all of us," she said.
Right now, the state has agreements with three health insurance companies to provide care to more than 160,000 Medicaid recipients who receive government-sponsored health insurance because they are on welfare.
Those agreements are worth a total of about $290 million a year to the companies - The Health Plan of the Upper Ohio Valley, Unicare and Carelink.
Those so-called managed care companies help provide the welfare recipients with what is, for the most part, standard medical care, including doctor visits.
Beginning next year, the state is planning to send more customers to those companies in the form of 55,000 more Medicaid recipients, a deal worth about $270 million total.
That group of Medicaid recipients is part of the Social Security Income program, which means they have a different and more expensive set of medical needs than the welfare group.
To qualify for SSI, a person must be aged, blind or disabled, a category that includes people with serious mental disorders.
But even though the state is doubling the size of the program, DHHR doesn't see any reason to put the contract out for bid.
"While the secretary of DHHR is authorized to request bids for managed care products, he or she is not required to do so," said department spokesman John Law. "A procedure is set forth in statute if the secretary determines to solicit bids for the managed care products."
The law says the secretary is "authorized to execute a contract to implement" a number of services, including providing "managed care."
But others aren't sure if the law is as lenient as DHHR thinks.
Walter said he thinks the law forces the state to bid out its contracts.
"I honestly think the law says they've got to do it," he said. "Again, (the legislative committee on) special investigations should get involved in it or legislative auditor ought to get involved to force their hand on this."
Walters added, "Isn't the fed looking at us for other issues now and wouldn't this send a flag straight up the pole?"
He was referring to federal prosecutors who recently subpoenaed records from the state Division of Highways and Department of Administration.
DHHR's $600 million in agreements with the three managed care companies would practically be small potatoes compared to other state contracts.