Aetna to cut out behavioral-health middleman

Aetna, Hartford, Conn., said it will develop its own behavioral-health business, starting with a Dec. 31, 2005, buyout of the assets used by Magellan Health Services in its contract to serve Aetna members. Aetna said the move will allow better integration of behavioral-health and medical benefits. Magellan, Farmington, Conn., said Aetna will pay $50 million to $55 million to exercise its option to buy three behavioral-health centers and Magellan's behavioral-health provider networks for Aetna members. Meanwhile, as part of the bankruptcy reorganization Magellan completed in January of this year, the company will repay Aetna for a $49 million note on Dec. 31, 2005. The assets Aetna will acquire generated $170.4 million in revenue for the nine months ended Sept. 30, 12.6% of Magellan's total revenue for the period. -- by Vince Galloro