Molina Healthcare of Missouri claimed officials violated bidding laws in awarding the contracts for the state's managed care program in February, but Senior Judge Bernhardt Drumm of St. Louis rejected the company’s lawsuit as the act of a disgruntled bidder.

"Lacking factual merit, the complaints about the evaluation process also lack any legal basis whatsoever," he wrote.

Molina has held a state contract for managed care services since the program started in the mid-1990s and currently covers 80,000 Missouri Medicaid recipients, but the company was not one of the three selected in a competitive bidding process earlier this year.

Molina attorney Paul Wilson of Jefferson City could not immediately be reached for comment Friday afternoon.

In a written statement, Molina officials raised the possibility of an appeal.

“We are disappointed with the court’s ruling, and are evaluating our grounds for appeal,” the statement reads. “Having delivered quality health care to Missouri HealthNet members for the past 16 years, we will continue to serve our members and providers until our contract ends on June 30, 2012.”

The new contracts will take effect July 1.

The managed care program covers about 430,000 Missourians in 54 counties – many of them children and pregnant women.

The state sets a flat, per-person rate to pay the companies, so it traditionally has accepted all bids. Currently, five companies are part of the program. But Dr. Ian McCaslin, director of the state Medicaid division, told the court last month he favored cutting the number of companies because that would help maintain the viability of the program.

Seven companies bid on the program for the coming year, but only three were awarded contracts. In the points-based selection process, Molina came in last in the east and central regions of the state and fifth of six bidders in the western region, records show.

None of the companies that bid on contracts met all of the requirements contained within the Office of Administration’s request for proposals this year.

State law does not allow unsuccessful bidders to challenge state contract awards based on who won or lost, so Molina brought its suit as a taxpayer. Drumm dismissed the claim in his order.

"At no point in this process have plaintiffs even acknowledged the disingenuous nature of their claims of acting as a 'taxpayer' as opposed to a disgruntled losing bidder and of their delays in acting if they truly believed the contracts were improperly awarded."

Wilson had argued that while there may not have been an outright favoritism involved in the process but there was an appearance of favoritism – Molina lost the bid to Centene, a company that has never held such a contract here.

Meanwhile, Centene argued that it was better suited for the contract and had scored higher in the evaluating process.

Centene attorney Chuck Hatfield said the company was pleased with the judge's ruling.

“It’s sound legal reasoning and it affirms what we’ve said from the start,” he said.