MAMSI to get $41 million payment from its drug-plan administrator

April 30, 2002|By Andrea K. Walker | Andrea K. Walker,SUN STAFF

Mid Atlantic Medical Services Inc. said yesterday that it has reached a $41 million settlement with the company that administers its prescription drug program.

The Rockville managed care company filed an arbitration complaint against Merck-Medco Managed Care LLC in August, claiming that the company reneged on certain terms in its three-year contract, including a stipulation that puts a cap on how much MAMSI has to pay for prescription drug costs.

Neither company would discuss specifics of the arbitration case because of federal guidelines forbidding disclosure. The two companies will continue to work together, officials said.

"I can clearly tell you that our contract with Merck-Medco remains in force," said Elizabeth Sammis, MAMSI senior vice president for corporate communications.

Merck-Medco officials said it was in the best interest of both companies to settle the case by paying the $41 million.

Merck-Medco administers MAMSI's prescription drug program, paying the claims filed by pharmacists and verifying patient coverage. Merck-Medco also acts as a mail order pharmacy for MAMSI, which covers 1.9 million people in Maryland, five other states and the District of Columbia.

The settlement won't result in lower premiums for MAMSI patients, Sammis said. MAMSI officials have said in the past that if they won the lawsuit they would take a one-time charge and not restate past earnings.

"The settlement has no impact on premiums and doesn't change our financial statements," Sammis said.

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