JEFFERSON CITY, Mo. -- The state agreed Friday to pay $5.8 million to a suburban St. Louis firm to settle claims lingering from an autumn decision that granted Missouri's Medicaid transportation contract to a new firm.

Medical Transportation Management Inc., of Lake St. Louis, stopped providing Medicaid patients with nonemergency rides to doctor's visits in early November, after the state awarded the contract to rival LogistiCare Inc.

Since then, some of MTM's subcontractors complained that they were still owed money, and MTM sought $6.2 million from the state to cover its final month of services, said Carol Rosse, MTM's director of corporate marketing.

Under Friday's agreement between MTM and the state Office of Administration, the state is to immediately pay $4.15 million to MTM, which is to be passed on to its subcontractors to cover all their outstanding balances.

A 'New Year's gift'

"In all honesty, we wish it had happened sooner, because some of these smaller companies were impacted financially," Rosse said. "But we're very thankful it's now resolved. It's a New Year's gift we were hoping we would be able to relay to providers."

The agreement also calls for the state is to pay an additional $1.65 million to MTM -- either directly or as a credit against the $2.4 million MTM owes the state under a separate settlement reached in September to resolve an investigation by Attorney General Jay Nixon that focused on alleged fraud, contract problems and antitrust violations.

Republican Gov. Matt Blunt claimed Friday that MTM had been "bilking the system" and that Friday's agreement was necessary to settle claims left unresolved in previous agreement reached by the Democratic attorney general.

"The pathetic settlement between MTM and the attorney general's office was not commensurate with the damage inflicted by MTM on Missouri taxpayers and low-income Missourians," Blunt said in a written statement. "It also severely tied our hands as we reached this final settlement to close the book on a terrible contract between MTM and the state."

Blunt's administration said the state paid MTM more than $40 million last fiscal year. The new contract with Atlanta-based LogistiCare will cost the state $25.6 million a year.

A Nixon spokesman had no immediate comment.

Blunt's statement also labeled MTM as a "scurrilous company," claiming it had hindered the implementation of Atlanta-based LogistiCare's contract. LogistiCare had trouble lining up subcontractors in time to begin its service, partly because MTM exercised an option to end its state contract early.

Rosse said Blunt's comments were disappointing.

"We take a huge amount of pride in our involvement in this program," she said. "For the governor or anyone to say we were doing anything other than putting the best interests of Medicaid recipients first is very disconcerting to us and is very saddening."