SIOUX FALLS, S.D. (AP) — South Dakota officials are investigating the legality of an arrangement in which Avera Health is covering out-of-pocket expenses of state employees for some medical services.

Avera has offered to help state workers with their medical bills if they seek the care they need from Avera rather than from two competitors that secured state contracts after competitive bidding.

Avera owns St. Mary's Hospital in Pierre and says the arrangement spares many state employees a drive from the state capital to Sioux Falls for medical care. But competitors Sanford Health and Sioux Falls Specialty Hospital say Avera is subverting the bidding process.

South Dakota Bureau of Human Resources Commissioner Laurie Gill tells the Argus Leader newspaper that the agency is looking into the matter.

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