THE VIRGINIAN-PILOT 
              Copyright (c) 1996, Landmark Communications, Inc.

DATE: Saturday, January 20, 1996             TAG: 9601200270
SECTION: BUSINESS                 PAGE: D1   EDITION: FINAL 
SOURCE: BY MARIE JOYCE, STAFF WRITER 
                                             LENGTH: Short :   44 lines

FHC OPTIONS WINS ANOTHER MEDICAID CONTRACT PARTNERSHIP GETS MENTAL HEALTH CONTRACT IN MASS.

A partnership that includes Norfolk health care company FHC Options has won a contract to manage mental health care for Medicaid clients in Massachusetts. Under the deal, the partnership will handle as much as $600 million in claims over the next three years.

The contract will be handled by Massachusetts Behavioral Health Partnership, a group that Options formed with another health care company, Value Behavioral Health.

The contract, which begins in July, includes mental health care and substance abuse services for about 400,000 Medicaid recipients in the state, as well as acute hospitalization and emergency services for about 30,000.

Medicaid is the government insurance program for the poor, financed by state and federal money.

The contract is capitated, which means the partnership will be paid a set amount per each client in the program; to make the money, the company must provide care for less than that amount. Managed care plans try to keep costs down by emphasizing prevention and early intervention and by keeping patients out of hospitals.

The contract will be managed through the partnership's headquarters in Boston and two regional offices in Massachusetts. The partnership will take care of patients through 37 facilities and the offices of 2,500 doctors and other practitioners throughout the state.

This isn't the first Medicaid contract for FHC Options. The company has already won similar awards to serve Medicaid clients in Colorado, Florida and Nebraska. The company also has contracts with commercial groups and CHAMPUS, the program for military dependents and retirees.

FHC Options, part of FHC Health Systems, was founded in the 1980s by psychiatrist Ronald I. Dozoretz. Value Behavioral is a subsidiary of Connecticut-based Value Health Inc.

KEYWORDS: MENTAL HEALTH CARE MANAGED CARE FHC MEDICAID by CNB