Magellan Health Services has been tapped to administer a new Medicaid program for behavioral health services in Louisiana. The two-year contract begins March 1 of next year and run through February 28, 2014 with a one-year optional extension through February 28, 2015.
The contract was awarded by the state’s Department of Health and Hospitals. It’s expected to generate annual revenues of $150 million for Magellan. About 150,000 are expected to access behavioral services including 50,000 children, according to the New Orleans Times-Picacyune.
There are two caveats to the Magellan announcement. First, the contract must be approved by the Louisiana Department of Administration. Second, the successful bid could be challenged by another bidder. This is what happened to the state’s Medicaid contract for medical services — it was awarded to Louisiana Health care Connections, Amerihealth Mercy of Louisiana, and AmeriGROUP Louisiana. But Aetna Better Health, Aetna’s Medicaid arm, filed a formal protest in August.
A second protest was filed by Coventry health Care of Louisiana.
The Medicaid contract in Louisiana covers about 875,000 lives and is worth, overall, about $2.2 billion.
In addition to Magellan, ValueOptions, Cenpatico of Louisiana, Perform Care Behavioral health Solutions, and AmeriHealth Company submitted bids for the state’s behavioral health Medicaid business.
The contract awards are part of a plan to build a new, more integrated care system in the state, according to the Times-Picayune. State officials are trying to move from a fee-for-service model to coordinated care networks.
Louisiana will begin negotiating a per-patient fee to Magellan, which will be responsible for building a statewide network of therapists to treat the Medicaid population, the paper said.