'Has just failed to deliver': Maryland replaces Optum, awards $340M behavioral contract to Elevance

Maryland has selected Elevance Health's Carelon to administer mental health and substance use disorder services under its public behavioral health system, which is currently administered by UnitedHealth's Optum. Optum did not submit a bid to be considered for the new contract.

"Optum is grateful for the opportunity to partner with the Maryland Department of Health (MDH) to help Marylanders access the quality mental health and substance use services they need," an Optum spokesperson told Becker's. "We remain committed to providing the highest level of service to the state, and to the providers that deliver these critical services, until our contract ends, and will work closely with MDH to ensure a smooth transition to the new vendor."

Beginning in 2025, Carelon Behavioral Health will be responsible for processing claims and paying behavioral health providers for more than 1.7 million Maryland Medicaid enrollees and uninsured individuals, according to state documents shared with Becker's Feb. 15. Centene's Magellan Healthcare also submitted a bid for consideration.

Optum "has just failed to deliver" on the current contract, Maryland Gov. Wes Moore said, as reported by The Baltimore Banner.

The new contract with Carelon is for an initial $233 million over five years, with one two-year renewal option for $99.8 million. Optum's $198 million, five-year contract began in 2020. 

According to the Banner, there were issues for providers with Optum's claims processing system. In a 2022 audit, the state found it had overpaid behavioral health providers by more than $223 million and underpaid others. The audit also found Optum subcontractors were not vetted properly and the claims system was not tested before launching with providers. 

In 2023, Idaho awarded a four-year, $1.2 billion contract to Magellan Healthcare, beginning March 1, 2024. Optum had previously held the state's behavioral contract for a decade.

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