A large health insurer is parting ways with a company that has managed mental health care for its members for the past 7 years.[@@]
Aetna Inc., Hartford, says it will be buying control of the mental health management operations back from Magellan Health Services Inc., Farmington, Conn., at a total cost of about $50 million.
Magellan will have to pay $49 million to Aetna to satisfy the terms of a note.
Aetna says it hopes to complete the deal by the end of 2005, when its existing agreement with Magellan expires.
Magellan, a company that emerged from Chapter 11 reorganization proceedings about a year ago, manages care for depression, alcoholism, and other “behavioral health” problems for 60 million people, or more than 20% of the U.S. population.
Aetna provides or administers health coverage for 14 million U.S. residents. Magellan operations dedicated to managing Aetna members’ behavioral health needs include service centers in El Segundo, Calif.; King of Prussia, Pa.; and Sandy Hook, Utah. The centers employ 550 people.
Magellan also manages a network of psychologists, psychiatrists, drug abuse treatment clinics and other mental health providers for Aetna.