NU Online News Service, Feb. 6, 2004, 12:51 p.m. EST – Tennessee will let Magellan Health Services Inc. continue to manage mental health benefits for the state’s poor and uninsured residents.[@@]

Magellan is a Columbia, Md., company that administers mental health benefits for about one-quarter of all U.S. residents, including all Tennessee Medicaid recipients and many uninsured Tennessee residents.

Magellan’s contract to administer mental health benefits throughout Tennessee for TennCare, the state agency that manages health benefits for the poor and uninsured, was set to expire March 31. TennCare was trying to award mental health administration contracts on a regional basis and buy services from other vendors.

Magellan now says TennCare has agreed to let Magellan continue to run the state’s entire mental health benefits program until June 30.

TennCare also has awarded a Magellan unit a contract to administer mental health benefits for 500,000 residents of eastern Tennessee from July 1, 2004, to Dec. 31, 2005. TennCare has an option to extend the contract for the eastern region until Dec. 31, 2008.

Meanwhile, TennCare has broken off talks with a vendor that was negotiating for the right to administer mental health benefits in central and western Tennessee.

A Magellan joint venture that already does business in central and western Tennessee has agreed to continue serving 800,000 TennCare program participants in those areas until the end of the year, Magellan says.