Magellan wins postal pact to counsel 420,000 workers

Columbia company now will provide services to 14 million

October 12, 2001|By M. William Salganik | M. William Salganik,SUN STAFF

Magellan Health Services Inc. announced yesterday that it had won its largest employee assistance program (EAP) contract ever, adding about a million members.

The contract will provide short-term psychological counseling for 420,000 United States Postal Service employees, plus their families. With the new business, the Columbia behavioral health services provider will serve about 14 million EAP customers, including 2.9 million federal employees and family members.

Magellan had already been providing short-term counseling services to postal workers in the eastern half of the country under a contract won five years ago by Merit Behavioral Health, a company acquired by Magellan in 1997.

The new contract adds the western half. "This is a vote of confidence in the work we have been doing for the Postal Service," said Erin S. Somers, a Magellan spokeswoman. "The Postal Service has very high standards for quality and service."

The contract will begin Nov. 1 and run for 50 months. It is expected to add about $9 million in annual revenue for Magellan, which had $1.9 billion in revenue last year.

In a competitive bidding process, the Postal Service decided to bring all its employees under the Federal Occupational Health consortium contract, for which Magellan won the counseling business last year.

The consortium "serves as a purchasing agent for the smaller [federal] agencies," allowing them to get better pricing on contracts, said William Barr, senior vice president for Magellan's workplace division.

Barr said the new contract adds about 60 jobs to Magellan's service center in St. Louis, which employs about 1,400. It also means hiring another 60 clinicians - master's or doctoral level people with training in psychological counseling - who will be based in larger postal facilities. The contract is not expected to affect employment at the Columbia headquarters.

Magellan also provides mental health services for HMOs, employers, unions and government programs. Between EAP and general mental health benefits, it has about 70 million members.

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