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Medco Behavioral Care of Iowa awarded contract to manage State of Iowa Medicaid Managed Mental Healthcare Program.

DES MOINES, Iowa--(BUSINESS WIRE)--Nov. 21, 1994--Medco Behavioral Care Corp. (MBC) announced Monday that the Iowa Department of Human Services (DHS) awarded its Iowa subsidiary a contract to manage the State's Medicaid Managed Mental Health Care Program (MMHCP).

The MMHCP is designed to provide comprehensive mental health clinical and administrative services to approximately 190,000 Medicaid-eligible individuals throughout the entire State of Iowa. The two-year contract, which commences on March 1, 1995, is valued at approximately $46 million per year.

The award of this contract to MBC of Iowa was made following the disqualification of Value Behavioral Health Inc. (VBH) from the bidding process. VBH had initially been awarded the contract by DHS. However, a Polk County District Judge ruled in October 1994 that VBH had an organizational conflict of interest that resulted in their disqualification from the award. Given the State's and DHS' strong interest in rapidly accruing the quality improvement and cost savings results expected from the implementation of the MMHCP, DHS elected to award the contract to MBC of Iowa, which was the sole remaining bidder receiving a qualifying score for the program from the Evaluation Committee.

In addition to offering an entirely local service operation to serve the MMHCP, MBC of Iowa offered the lowest allowable rate proposal, which guarantees the State a minimum savings of 14 percent as compared to the current rate of expenditure, or in excess of $16 million over the life of the contract. Aside from MBC and VBH, six other managed behavioral healthcare companies vied for the award.

Commenting on the award to MBC of Iowa, Shannon R. Kennedy, Ph.D., president and chief operating officer of MBC, stated, "We are delighted to have this opportunity to work in partnership with DHS to build a program that effectively serves the very complex and compelling needs of Iowa Medicaid beneficiaries and we commend the DHS for the rigor with which they undertook the full evaluation process. Our company's extensive experience with Medicaid programs has enabled us to offer a locally-managed program which will not only enhance access to care for tens of thousands of people, but will also result in significant savings to the State of Iowa. MBC of Iowa, its employees and its affiliated healthcare providers are dedicated to ensuring that the Medicaid beneficiaries are well-served and that the core mission of DHS is achieved."

MBC of Iowa is a subsidiary of Medco Behavioral Care Corp. (MBC). Headquartered in Park Ridge, N.J., MBC provides managed behavioral healthcare services to over 13.5 million people in 50 states. MBC is a subsidiary of Medco Containment Services Inc., which is a subsidiary of Merck & Co. Inc.

CONTACT: Medco Behavioral Care Corp.
 Lisa Suennen, 415/742-0317 (work hours)
 or 415/383-1227 (after hours)
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Publication:Business Wire
Date:Nov 21, 1994
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