Investigating Medicaid contract given to form government employee's company

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RICHMOND, Va. (AP) -- Virginia's inspector general is investigating a contract worth up to $1.5 million that the state's Medicaid office awarded to a company owned by a former U.S. government employee who helped oversee federal oversight of the state.

The Department of Medical Assistance Services said earlier this week that it asked for the investigation to "ensure full transparency." The agency did not say what prompted the request, though The Associated Press and lawmakers have made inquiries about the contract in recent weeks.

Medicaid is a government funded health care program for the poor whose costs are split between federal and state governments. Virginia has been the subject of multiple deferrals and disallowances in recent years.

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