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Magellan to form joint venture with Fallon Community Health Plan

March 29, 2012
by News release
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Fallon Community Health Plan (FCHP) and Magellan Health Services have announced the formation of a joint venture to apply to participate in a new demonstration program that will provide integrated health care to individuals aged 21 to 64 years who are dually-eligible for Medicare and Medicaid.

Massachusetts is preparing to be one of the first states in the nation to launch a dual-eligible demonstration program being offered by the Centers for Medicare & Medicaid’s Federal Coordinated Health Care Office. Under the demonstration, MassHealth and CMS will use combined Medicaid and Medicare funding to contract with selected integrated care organizations (ICO) to provide enrollees with comprehensive, integrated services that address their full range of medical and behavioral health needs.

Dual-eligible adults under the age of 65 typically have complex care needs--they may be disabled and often have serious mental illnesses. In pursuing participation in the state’s demonstration program, FCHP will rely on its significant experience in developing and delivering high-quality, comprehensive services to vulnerable individuals. FCHP currently serves frail elders through Summit ElderCare®, its Program of All-inclusive Care for the Elderly, and NaviCare®, its Medicare Advantage Special Needs Plan/Senior Care Options program. Magellan’s strong experience in providing behavioral health services and its commitment to a model of care that integrates those services with comprehensive medical and physical health care management will support the program’s objective of meeting enrollees’ full range of needs.

“Massachusetts continues to take the lead on finding innovative ways to more efficiently and effectively deliver care to all residents, especially those who are most vulnerable. FCHP and Magellan hope to help make this demonstration program a success,” said Patrick Hughes, FCHP President and CEO. “For FCHP, this furthers our mission of ‘making our communities healthy’ and our strong interest in increasing access to high-quality, affordable care. We’re pleased to partner with Magellan, a leading provider of behavioral health services that, like FCHP, is committed to being part of the health care solution.”

“We look forward to using our unique capabilities to serve this most vulnerable of populations in the Commonwealth,” said Elizabeth Malko, M.D., FCHP Executive Vice President and Chief Medical Officer. “In Magellan, we have found an outstanding partner who shares our passion for, and our commitment to, using an integrated approach to improve the health of our members. We jointly believe in collaborative engagement with the provider community to enhance the delivery of care to those we serve.”

To most appropriately respond to this opportunity, FCHP and Magellan have developed an ICO to be called Fallon Total Care. The ICO is a joint venture between two highly respected organizations. It will bring together Magellan’s clinical expertise in behavioral health services and FCHP’s significant capabilities and experience in managing the health care needs of dual-eligibles. The joint venture will be structured with FCHP owning 51 percent and Magellan owning 49 percent.

“With this joint venture, we are moving decisively to capitalize on our knowledge of and expertise in managing the Medicaid population,” said René Lerer, M.D., Magellan’s chairman and chief executive officer. “FCHP is an outstanding and award winning partner that is a respected presence in Massachusetts and nationally. Magellan and FCHP will develop a new paradigm of health management, incorporating physical and behavioral health to treat the whole person. Working together, we will bring an innovative and clinically-driven solution to Massachusetts, where Medicare and Medicaid health care services for the state’s dual eligible population under age 65 represent $3.85 billion in costs. This is another step forward as Magellan executes on our state-specific Medicaid growth strategy.”

“This joint venture with Fallon Community Health Plan is an exciting step forward, establishing us as a player that will be uniquely qualified to compete for the Massachusetts demonstration program, and potentially other CMS demonstration projects in other states,” said Scott Markovich, Magellan’s senior vice president for Medicaid strategy. “Massachusetts represents a significant opportunity for growth in an important new market. Magellan currently manages behavioral health services for more than 30 million people, ten percent of the U.S. population, and we have demonstrated experience in managing individuals with severe mental illness (SMI). That’s critical because more than one-third of the population in this demonstration has SMI. We are confident that with FCHP we can make an immediate difference in the lives of this population.”