Palm Beach, FL 6/8/12 (StreetBeat) – Shares of Centene (NYSE: CNC) and Molina Healthcare (NYSE: MOH) surged Friday after Ohio reversed an earlier Medicaid contract award on their appeal after finding the process was faulty.
Centene's Buckeye Community Health Plan and Molina Healthcare of Ohio both received contracts to do business throughout the state. Molina said the new contract is a significant expansion of its business in Ohio, expanding it into 38 counties where it did not previously operate. The contract begins in January.
Shares of Molina Healthcare Inc. jumped 23 percent, or $4.18, to $21.95 in morning trading. Centene Corp. shares rose $2.83, or 8.6 percent, to $35.67.
The Ohio Department of Job and Family Services made its initial decision on the contracts in April. Centene, Molina, and three other companies that did not receive contracts filed a protest, saying the review of the applications was flawed. After a review, the department changed the way it scored the applications.
As a result, Centene and Molina received contracts and Aetna Better Health and Meridian Health Plan did not.
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