State picks California firm for $1.5M mental health deal. (U.S. Behavioral Health)

A decision by the state to contract with a single provider for all employee mental health benefits will save taxpayers $1.5 million next year and the Ohio Department of Administrative Services its share of administrative hassles.

It will also mean a significant loss of business - coverage of 131,000 state employees and their dependents - for the 11 companies that now provide those mental health and substance abuse services. The consolidation of benefits will have a lesser impact on the state's 16 HMO plans, since mental health benefits generally amount to just 5 percent of their total contract amount.

In awarding its $9.8 million, one-year contract to California-based U.S. Behavioral Health, the Ohio Department of Administrative Services last week ended a period of vigorous bidding and, in some cases, vigorous lobbying by several of the HMOs and behavioral health companies that serve state employees. The decision is subject to approval by the State Controlling Board.

"The competition far surpassed what we expected. The companies were falling all over themselves for this contract," said …