Magellan Health Services has charted its course to become one of the largest managed behavioral health care companies in the nation. The company manages mental health plan, employee assistance, and work/life programs through its nationwide third-party provider network of some 79,000 behavioral health professionals. Magellan also provides radiology benefits management, specialty pharmaceutical management, and Medicaid management. Overall, it serves more than 52 million members through contracts with federal and local government agencies, insurance companies, and employers. Its services include administration, billing, claims handling, technology programs, and coordination of care.
As part of its pharmacy benefits management business, Magellan operates two mail-order pharmacies in Florida and New York. Other subsidiaries include National Imaging Associates (NIA), which manages benefits for diagnostic imaging facilities, and ICORE Healthcare, which manages coverage of specialty drugs to treat cancer and other serious diseases. Magellan Medicaid Administration helps public sector clients run their Medicaid programs.
Magellan's managed behavioral health care operations for public sector programs account for half of the company's revenues. These programs generally provide behavioral health benefits to Medicaid recipients through contracts with state and local authorities. Some of the states with which it has contracts are Arizona, Florida, Iowa, Nebraska, and Pennsylvania. Commercial behavioral health managed care accounts for another 20% of revenues.
While Magellan is still interested in expanding its managed behavioral health business, its primary strategy is to seek growth through the diversification of its business lines. Acquisitions since 2006, have allowed the company to enter new service categories including radiology benefits management and specialty pharmaceutical management. By 2011 a third of the company's revenues and 40% of its profits came from its newer businesses with its Radiology Benefits Management business showing rapid growth. That same year Magellan created a new business, Magellan Pharmacy Solutions, to help clients manage what they spend on prescriptions for their members.
One segment that is most likely going to be booming in coming years is Magellan's Medicaid Administration business. According to the Centers for Medicare and Medicaid Services, Medicaid enrollment is projected to increase from about 53 million in 2010 to 78 million people in 2019. Magellan intends to take advantage of that increase by marketing itself to states that need guidance navigating the public mental health system.
To address the complex needs of Medicaid populations, in 2012 the company launched several different approaches. In Arizona, it created a joint venture with Vanguard Health Systems' subsidiary Phoenix Health Plan. The planned joint venture will provide integrated behavioral and physical health care for Maricopa County Medicaid recipients with serious mental illness. In Massachusetts, it teamed up with FallonCommunity Health Plan (FCHP) to form Fallon Total Care to provide integrated health care to individuals with dual eligibility for Medicare and Medicaid benefits.
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