A year and a half ago, the state Attorney General’s Office alleged in a lawsuit that Louisiana’s Medicaid program had paid grossly excessive amounts for prescription drugs for more than two decades, and it put the blame squarely on the state’s Medicaid claims processor.
On Friday, a sharply divided state appeals court panel dismissed the state’s allegation that Molina Healthcare Inc. and Molina Information Systems LLC, which does business as Molina Medicaid Solutions, violated the state’s Medical Assistance Programs Integrity Law and the Louisiana Unfair Trade Practices Act.
“The facts alleged in the State’s petition, even if proven true, would not support a remedy under either MAPIL or LUTPA,” wrote 1st Circuit Court of Appeal Judges Michael McDonald, Mitch Theriot and John Michael Guidry on Friday in reversing state District Judge Clark, who last March refused to throw out those claims.
Circuit Judges Page McClendon and Wayne Ray Chutz dissented and said the court should have declined to exercise its supervisory jurisdiction.
The state’s claims of breach of contract, fraud and negligence remain in the case.
The suit, filed in June 2014, is set for trial in March.
Attorneys for the state and the defendants, which include Molina subcontractor Unisys Corp., could not be reached for comment Friday.
U.S. District Judge James Brady ruled in October that the suit belongs in state court. The defendants wanted the case heard in federal court.
The suit accuses the defendants of using “negligent, false, misleading, unfair, and deceptive acts and practices” in processing Medicaid reimbursements for prescription drugs for Louisiana’s low-income, elderly and disabled residents.
The defendants deny the allegations.
Molina was slated to be replaced as the state’s Medicaid claims processor, but in early 2013, then-Gov. Bobby Jindal’s administration abruptly canceled a multiyear contract with low bidder Client Network Services Inc. after news surfaced of a federal grand jury investigation of the nearly $200 million contract. Nothing came of the probe, but an East Baton Rouge Parish grand jury later indicted former state Department of Health and Hospitals Secretary Bruce Greenstein — an ex-CNSI executive — on perjury charges related to the contract’s award.
In separate lawsuits, CNSI has sued the state and the company’s former senior vice president, Stephen Smith, who cooperated with the state grand jury probe. CNSI claims Smith’s “false statements” led the Jindal administration to pull the contract.