2004 FEB 23 - (NewsRx.com & NewsRx.net) -- Iowa and Tennessee each recently awarded contracts to the Magellan Health Services subsidiaries in their regions to continue providing behavioral health services.
The state contract to manage mental health and substance abuse treatment for Iowans eligible for Medicaid was awarded January 29, 2004, to Magellan Behavioral Health, a division of a company only recently out of bankruptcy.
Magellan is part of the Maryland-based Magellan Health Services Inc., which is the largest mental-health managed-care company in the U.S., overseeing care for 68 million Americans or 30% of all insured people.
Magellan Health filed for protection from its creditors in March 2003 with almost $1 billion in debt, but emerged from bankruptcy in January 2004.
'The parent company sought protection under Chapter 11 but that didn't affect [the] subsidiary,' said Roger Munns, spokesman for the Iowa Department of Human Services (DHS).
Magellan was selected to manage the Iowa Plan for Behavioral Health, widely praised as a model for the nation in providing effective mental health services, Munns said. Several companies expressed interest but only Magellan and the Virginia-based ValueOptions Inc. submitted formal bids, he added.
Magellan, which has the current contract with Iowa's Human Services and Public Health departments, will continue as the state's provider for another 2 years. The state has the option of extending the contract for three 1-year periods after that.
The state agencies were aided by an independent evaluation panel in selecting Magellan, Munns said.
DHS Director Kevin Concannon said Magellan survived intense scrutiny to emerge on top.
Tennessee has signed a contract with Tennessee Behavioral Health (TBH), another Magellan subsidiary, to provide mental health services to TennCare Partners enrollees in eastern Tennessee. TBH has been a contractor under TennCare since 1996.
The contract is an 'at-risk' arrangement in which the contractor will be paid a fixed per-member, per-month fee and assume any financial risk for costs beyond that amount.
TennCare Partners is TennCare's behavioral health wing.
The two current behavioral health providers in middle and western Tennessee, TBH and Premier, have agreed to extend their current contracts through the end of 2004 in those regions. The new eastern Tennessee contract runs from July 1, 2004, through December 31, 2005.
This article was prepared by Health & Medicine Week editors from staff and other reports. Copyright 2004, Health & Medicine Week via NewsRx.com & NewsRx.net.
