A federal judge has dismissed a lawsuit that tried to block the state's use of a Mainland company to run a new program for low-income seniors and disabled people, the state announced tonight.

The state Department of Human Services announced in a news release that federal District Judge J. Michael Seabright dismissed the lawsuit filed by the Hawai'i Coalition for Health, a group of doctors and healthcare providers.

In June, federal District Judge Susan Oki Mollway dismissed a similar lawsuit filed by AlohaCare.

Both lawsuits had challenged the awarding of contracts providing healthcare to 37,250 low-income seniors, and blind and disabled persons of all ages who currently receive treatment through a fee-for-service program. In February, DHS awarded the three-year contracts for the new QUEST Expanded Access Medicaid program to units of UnitedHealth Group Inc. and WellCare Health Plans Inc., both of which have headquarters on the Mainland.

AlohaCare had been one of three losing bidders for that contract.

"We are gratified with the federal court's order," said Human Services Director Lillian Koller. "When QExA launches on Feb. 1, 2009, about 37,000 elderly Medicaid clients and people with disabilities will receive high-quality, comprehensive and coordinated medical services that will improve their health outcomes."