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Aetna to give
up Magellan contract
(April 2005
Issue)
By Elinor Nelson
After seven years of delegating the management of its behavioral
health clients to Magellan, Aetna has announced that as of Jan.
1, 2006, it will be taking back the business. Aetna's 11 million
behavioral health members will be managed by a new entity, Aetna
Behavioral Health.
According to both Aetna and Magellan representatives, there has
been no problem with Magellan's performance. "They've been very
complimentary," states Erin Somers, Magellan's vice president of
public relations and communications. Although Magellan filed for
Chapter 11 in 2003, it regained profitability and established dedicated
call centers for Aetna's members in California, Pennsylvania and
Utah. Those centers and their employees will next year be managed
by Aetna.
Elena Eisman, Ed.D., executive director of the Massachusetts Psychological
Association, confirms that "in general, we've found that the local
Magellan office has been one of the more responsive. It's not without
problems, but they've tried to work with us." Since Aetna has not
been in the behavioral health business, local psychologists lack
a track record for dealing with Aetna so, adds Eisman, "we will
rely on members to give feedback - we will respond to that."
Magellan is disappointed to lose the Aetna business but not surprised.
"We certainly had hoped to keep Aetna as a customer," Somers says.
"We've had a long and productive association. But we've known they
had their own strategic objectives and that they could lead to this
decision."
She says that for Magellan this is "certainly survivable." The
Aetna contract has been 12 to 13 percent of Magellan's business
and although "the revenue and earnings will change, we're in a strong
cash position that will enable us to address a change of this nature."
Somers declined to discuss the profitability of the Aetna contract,
citing company policy of not disclosing revenue numbers. But "we
are profitable now and have been in the past. We expect that to
continue." In any event, there will be no financial impact for Magellan
until 2006.
Jon Sandberg, director of communications for Aetna's Specialty
Group (which includes Behavioral Health), offers that Aetna plans
to "enhance [its] product and program offerings by integrating behavioral
health with medical and other offerings." Sandberg outlines a medical/psychological
depression management model where Aetna could screen patients with
serious illnesses such as heart disease or diabetes for depression
and treat the medical and psychological conditions together. "We
think the integrated clinical model can improve medical outcomes,"
Sandberg says, and that "everyone benefits."
Aetna, he says, is already working with this model for integrating
pharmacy and dental benefits with medical benefits. As for whether
Aetna anticipates any changes in policy, paperwork or reimbursement
that could affect providers, that's "10 months out," Sandberg says,
and it's premature to plan.
In order to continue as an Aetna provider, psychologists need to
sign a contract addendum. Those who have not been contacted may
call Aetna at 1-800-788-4005.
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