Members of the state Personal Service Contract Review Board refused to adopt its own staff recommendations to approve contracts totaling about $2 billion annually awarded by the Division of Medicaid to three managed care companies.

But the five-member board also refused during Tuesday’s hearing to reject the contracts, meaning Medicaid has the option of allowing the contracts to become valid in 30 days under state law.

Erin Barham, a spokeswoman for the Division of Medicaid, confirmed after the hearing that Medicaid’s intent is to move forward with the contracts after the staff of the Review Board affirmed “the integrity and fairness of the procurement process.”

She added, “We can now move forward, and we are eager to work with the successful bidders to ensure that our beneficiaries can continue to receive services they need.”

There is a likelihood the issue, though, could be headed to court.

The contracts are opposed by two losing bidders, including Mississippi True, which is a coalition of 65 Mississippi hospitals that have formed their own managed care company and contend the Division of Medicaid’s process in awarding the contracts was not fair.

Chuck Reece, chairman of Mississippi True, said the Contract Review Board’s decision “represents an important step in our efforts to advocate for fair state procurement processes… We look forward to a new procurement that is fair and unbiased.”

But Medicaid officials indicated there are no plans to seek new bids. Another possibility is the Legislature taking action related to the Medicaid managed care program.

Numerous legislators oppose the managed care system – designed to save the state money by paying the companies a set amount to manage the health care of about 70 percent of the approximately 710,000 Medicaid recipients. And some legislators want to pass a bill mandating that in-state health care providers, such as hospitals, be awarded a portion of the lucrative managed care business.

When asked could the Legislature take such steps if the contracts not rejected by the Contract Review Bard already were in place, Rep. Becky Currie, R-Brookhaven, said, “We break contracts all the time.”

Currie was one of several legislators attending Tuesday’s meeting of the Personal Service Contract Review Board, which met in its boardroom in its downtown Jackson office of the state Personnel Board. Other legislators at the meeting included Rep. William Tracy Arnold, R-Booneville, who has voiced opposition to the managed care program, and Rep. Jerry Turner, R-Baldwyn, who led the effort crafting legislation to give the Contract Review Board its authority and said legislation is needed to ensure all contracts awarded by agencies go before the board and to ensure that contracts could not proceed if not approved by the board.

Medicaid officials had maintained, based on earlier inquires from the Contract Review Board, that the managed care contracts did not require review from the board. But at the behest of Gov. Phil Bryant, who appoints the Medicaid executive director, the contracts were submitted to the review panel.

Contract Review Board member Bill Moran made a motion that the Medicaid managed care contracts be rejected and a new procurement process undertaken. But Moran’s motion died for lack of a second, meaning the panel opted not to act.

Much of the 90-minute meeting in the packed hearing room was dominated by questions from Moran to Medicaid. He questioned whether the procurement process was fair and whether Medicaid put too much emphasis in areas that had less importance on the ability of the companies to provide adequate services to Medicaid recipients. He also questioned why what some believe as inadequate services rendered by two companies that have existing contracts did not play a role in whether they got the new contracts.

Medicaid officials said there were methods to deal with companies that did not live up to contract obligation without denying them the right to bid on new contracts.

The companies receiving the contracts are two existing companies – Magnolia and UnitedHelthcare – and a third to Molina, a California-based company.

Some legislators at the hearing said they would prefer Mississippi companies receive the contracts. Sen. Hob Bryan, D-Amory, who did not attend the hearing, has faulted the Legislature for not mandating that Mississippi providers be awarded the contracts.