Magellan Health Says JV Complete Care of Arizona Notified State of Arizona Did Not Select as RBHA in GSA6

Magellan Health Services, Inc.

announced today that Magellan Complete Care of Arizona, a joint venture owned 80% by Magellan and 20% by Vanguard/Phoenix Health Plan, has been notified by the state of Arizona that it has not been selected as the Regional Behavioral Health Authority (RBHA) in GSA6 (Maricopa County). The RBHA contract is for the management of the publicly funded behavioral health system that delivers mental health, substance abuse and crisis services for adults, youth, and children and includes an integrated behavioral and physical health care system for individuals with Serious Mental Illness. Magellan's existing contract to manage behavioral health services began on September 1, 2007, and was previously extended through September 30, 2013; such contract generated net revenues of $758.3 million for the year ended December 31, 2012. Magellan Complete Care of Arizona has the right to protest the State's decision, and is currently evaluating the scoring of its bid as well as other relevant information to determine whether it will file a protest. “We are disappointed in the State's decision especially given our track record of success in transforming the public behavioral health system in Maricopa County,” said Dr. Richard Clarke, CEO of Magellan Health Services of Arizona. “Regardless of this decision, our work has had a positive impact on health care in Maricopa County. We will continue to seek opportunities to continue our work on behalf of the people of Arizona.” The company's full year 2013 guidance assumed that the contract would be awarded to Magellan Complete Care of Arizona. The company is assessing the impact of this award notification on its 2013 guidance.