NU Online News Service, March 13, 2003, 10:53 a.m. EST – Vermont insurance regulators say the recent move by Magellan Health Services Inc., Columbus, Md. to file for bankruptcy court protection should have little immediate effect on state residents.
Magellan, a company that manages mental health care for one-quarter of all U.S. residents, filed a reorganization plan Tuesday in the bankruptcy court in New York.
The company has emphasized that it already has approval for the reorganization plan from its major creditors, and that it has enough cash to fund its current operations. But, even if Magellan does end up having problems with operations, the company simply manages programs for health insurers in Vermont and does not actually provide insurance, according to Vermont regulators.
“Consumers are not at risk of losing their mental health and substance abuse benefits,” regulators say in a statement about the Magellan bankruptcy filing.
In Vermont, Magellan’s biggest customers are Blue Cross and Blue Shield of Vermont, Montpelier, Vt., and The Vermont Health Plan, a health maintenance organization affiliated with Vermont Blue.
Magellan manages care for the plans’ patients, reviews requests for utilization of mental health care and runs a mental health care provider network.
Vermont regulators are talking to the affected health plans about what they will do to keep any problems at Magellan from disrupting services, Vermont regulators say.