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MGLN > SEC Filings for MGLN > Form 8-K on 19-Nov-2013All Recent SEC Filings




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Item 8.01. Other Matters

Magellan Health Services, Inc. ("Magellan" or the "Company") has received the decision of the administrative law judge ("ALJ") in the Arizona Office of Administrative Hearings ("OAH") regarding its appeal of the denial of its protest of a contract award to another bidder (the "Appeal"). On November 18, 2013, the ALJ issued her decision and recommended that the Arizona Office of Administration ("ADOA"), the agency responsible for considering appeals of procurement protest denials, rule against Magellan and dismiss Magellan's appeal. The ADOA has thirty days to accept, reject, or modify the recommendation and decision of the ALJ.


The State of Arizona had previously issued a Solicitation for a new Regional Behavioral Health Authority ("RBHA") for GSA6 ("Maricopa County") (the "New Contract") to replace the current contract with Magellan to be effective on October 1, 2013. The New Contract is for the management of the publicly funded behavioral health system currently provided by Magellan under its current contract for Maricopa County, and also includes an integrated behavioral and physical health care system for a small number of individuals with serious mental illness. Magellan Complete Care of Arizona, a joint venture owned 80% by the Company and 20% by Phoenix Health Plan, previously submitted a bid for the New Contract.

On March 25, 2013, the Company was notified that Magellan Complete Care of Arizona was not selected as the RBHA for the New Contract. On April 3, 2013, the Company filed a formal protest regarding the State's decision to award the RBHA in Maricopa County to another vendor. On April 17, 2013, the Arizona Department of Health Services denied the Company's protest. On May 9, 2013, the Company filed the Appeal with the ADOA. The Company also filed with the ADOA a motion to stay the award and implementation of the contract pending a decision on the Appeal. On May 21, 2013, the ADOA granted the Company's motion and issued a stay of the award and implementation of the contract pending resolution of the Appeal by the ADOA (the "Stay").

On June 13, 2013 the ADOA referred the Appeal for a hearing before the ALJ. The ALJ held an evidentiary hearing on the Appeal on September 18-27, 2013.

There is no assurance that the Company will prevail on the Appeal or that the Stay will remain in effect.

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