Message #36 From:
NewsBot Date: January 3, 2007 06:00:00 AM
MGLN News Magellan Health Services and CIGNA HealthCare Execute Definitive Agreement for Radiology Network Management and Related Services
AVON, Conn.--(BUSINESS WIRE)--Magellan Health Services, Inc. (Nasdaq:MGLN) today announced that it has
entered into a definitive agreement with CIGNA HealthCare with respect
to the provision of radiology network management and other related
services that had been the subject of the non-binding letter of intent
with CIGNA that the Company had announced on October 25, 2006.
Consistent with previous disclosures, the definitive agreement covers
approximately three million CIGNA HealthCare members in 12 states, over
half of which members Magellan will serve on a risk basis. The
definitive agreement is for an initial term of 45 months beginning on
the date of the first implementation, rather than 36 months as stated in
the letter of intent.
As previously disclosed, annual revenue upon full implementation of the
contract is estimated to be over $200 million. Under the contract, which
Magellan and CIGNA expect to begin implementing on April 1, 2007,
Magellan will manage MRI, CT and PET services for CIGNA members in 12
states.
Steven J. Shulman, chairman and chief executive officer of Magellan,
said, “We are very pleased to have executed
our agreement with CIGNA to provide advanced radiology management
services for members in certain states. Implementation activity for the
contract has been proceeding for several weeks and progress has been
excellent. We look forward to the start of a long and successful
collaboration with CIGNA and to demonstrating our commitment to clinical
and service excellence to CIGNA’s members,
customers and providers.”
About Magellan: Headquartered in
Avon, Conn., Magellan Health Services, Inc. (Nasdaq:MGLN) is the country’s
leading diversified specialty health care services organization. In
addition to radiology benefits, the Company manages behavioral health
care and specialty pharmaceuticals. Its customers include health plans,
corporations and government agencies.
Cautionary Statement: Certain of
the statements made in this press release including, without limitation,
statements regarding the definitive agreement with CIGNA, the estimated
revenue associated with the CIGNA agreement, and other matters
constitute forward-looking statements contemplated under the Private
Securities Litigation Reform Act of 1995. These forward-looking
statements are based on management’s current
expectations and are subject to known and unknown uncertainties and
risks which could cause actual results to differ materially from those
contemplated or implied by such forward-looking statements, including
(among others) the risk that the Company does not properly underwrite
the risk portion of the agreement with CIGNA, the risk that the Company
does not effectively implement the agreement with CIGNA, the risk
concerning the possible election of certain of the Company’s
health plan customers to manage the health care services of their
members directly; competition; renegotiation of rates paid to and/or by
the Company by customers and/or to providers; higher utilization of
treatment services by risk members; delays, higher costs or inability to
implement the Company’s initiatives; the
impact of changes in the contracting model for Medicaid contracts
relating to managed health care services; termination or non-renewal of
contracts by customers; the impact of new or amended laws or
regulations; governmental inquiries and/or litigation; the impact of
increased competition on the Company’s ability
to maintain or obtain contracts; the impact of increased competition on
rates paid to or by the Company; and other factors. Any forward-looking
statements made in this document are qualified in their entirety by the
more complete discussion of risks set forth in the section entitled “Risk
Factors” in Magellan’s
Annual Report on Form 10-K for the year ended December 31, 2005, filed
with the Securities and Exchange Commission (“SEC”)
on March 8, 2006, and the Company’s Form 10-Q
for the period ended September 30, 2006, filed with the Securities and
Exchange Commission on October 26, 2006 and posted on the Company’s
Web site.
