Magellan Health (MGLN) 10-Q 30 Apr 15 2015 Q1 Quarterly report Financial data

Document_and_Entity_Informatio

Document and Entity Information	3 Months Ended
	Mar. 31, 2015
Document and Entity Information
Entity Registrant Name	MAGELLAN HEALTH INC
Entity Central Index Key	19411
Document Type	10-Q
Document Period End Date	31-Mar-15
Amendment Flag	FALSE
Current Fiscal Year End Date	-19
Entity Current Reporting Status	Yes
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding	27,326,375
Document Fiscal Year Focus	2015
Document Fiscal Period Focus	Q1

CONSOLIDATED_BALANCE_SHEETS

CONSOLIDATED BALANCE SHEETS (USD $)	Mar. 31, 2015	Dec. 31, 2014
In Thousands, unless otherwise specified
Current Assets:
Cash and cash equivalents	$231,351	$255,303
Restricted cash	205,586	215,325
Accounts receivable, less allowance for doubtful accounts of $4,047 and $ 3,870 at December 31, 2014 and March 31, 2015, respectively	354,750	353,713
Short-term investments (restricted investments of $132,808 and $148,109 at December 31, 2014 and March 31, 2015, respectively)	261,180	224,361
Deferred income taxes	26,656	27,226
Pharmaceutical inventory	34,605	39,375
Other current assets (restricted deposits of $30,620 and $31,204 at December 31, 2014 and March 31, 2015, respectively)	77,483	52,246
Total Current Assets	1,191,611	1,167,549
Property and equipment, net	176,593	171,916
Restricted long-term investments	41,402	43,293
Other long-term assets	13,468	11,575
Goodwill	574,847	566,106
Other intangible assets, net	131,779	133,718
Total Assets	2,129,700	2,094,157
Current Liabilities:
Accounts payable	53,707	63,929
Accrued liabilities	142,888	154,931
Medical claims payable	277,318	278,482
Other medical liabilities	97,596	72,719
Current maturities of long-term debt and capital lease obligations	15,794	15,779
Total Current Liabilities	587,303	585,840
Long-term debt and capital lease obligations	252,065	255,742
Deferred income taxes	28,618	30,950
Tax contingencies	11,078	12,320
Contingent consideration	61,319	49,839
Deferred credits and other long-term liabilities	19,471	19,951
Total Liabilities	959,854	954,642
Redeemable non-controlling interest	8,548	5,957
STOCKHOLDERS' EQUITY
Preferred stock, par value $.01 per share Authorized-10,000 shares at December 31, 2014 and March 31, 2015-Issued and outstanding-none
Other Stockholders' Equity:
Additional paid-in capital	1,070,336	1,018,266
Retained earnings	1,187,185	1,179,897
Accumulated other comprehensive loss	-74	-143
Ordinary common stock in treasury, at cost, 23,150 shares and 23,660 shares at December 31, 2014 and March 31, 2015, respectively	-1,096,659	-1,064,963
Total Stockholders' Equity	1,161,298	1,133,558
Total Liabilities, Redeemable Non-Controlling Interest and Stockholders' Equity	2,129,700	2,094,157
Ordinary common stock
STOCKHOLDERS' EQUITY
Common stock	510	501
Multi-Vote common stock
STOCKHOLDERS' EQUITY
Common stock

CONSOLIDATED_BALANCE_SHEETS_Pa

CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $)	Mar. 31, 2015	Dec. 31, 2014
In Thousands, except Per Share data, unless otherwise specified
Accounts receivable, allowance for doubtful accounts (in dollars)	$3,870	$4,047
Short-term restricted investments (in dollars)	148,109	132,808
Other current assets, restricted deposits (in dollars)	$31,204	$30,620
Preferred stock, par value (in dollars per share)	$0.01	$0.01
Preferred stock, Authorized shares	10,000	10,000
Preferred stock, Issued shares	0	0
Preferred stock, outstanding shares	0	0
Ordinary common stock in treasury, shares	23,660	23,150
Ordinary common stock
Common stock, par value (in dollars per share)	$0.01	$0.01
Common stock, Authorized shares	100,000	100,000
Common stock, Issued shares	50,986	50,085
Common stock, outstanding shares	27,326	26,935
Multi-Vote common stock
Common stock, par value (in dollars per share)	$0.01	$0.01
Common stock, Authorized shares	40,000	40,000
Common stock, Issued shares	0	0
Common stock, outstanding shares	0	0

CONSOLIDATED_STATEMENTS_OF_INC

CONSOLIDATED STATEMENTS OF INCOME (USD $)	3 Months Ended
In Thousands, except Per Share data, unless otherwise specified	Mar. 31, 2015	Mar. 31, 2014
Net revenue:
Managed care and other	$748,650	$829,591
PBM and dispensing	232,318	136,884
Total net revenue	980,968	966,475
Cost and expenses:
Cost of care	522,328	605,708
Cost of goods sold	218,207	125,298
Direct service costs and other operating expenses	204,450	164,722
Depreciation and amortization	23,496	20,229
Interest expense	1,626	836
Interest income	-466	-311
Total costs and expenses	969,641	916,482
Income before income taxes	11,327	49,993
Provision for income taxes	4,133	25,613
Net income	7,194	24,380
Less: net income (loss) attributable to non-controlling interest	-94	-1,340
Net income attributable to Magellan Health, Inc.	$7,288	$25,720
Net income per common share attributable to Magellan Health, Inc.:
Basic (in dollars per share)	$0.29	$0.94
Diluted (in dollars per share)	$0.28	$0.92

CONSOLIDATED_STATEMENTS_OF_INC1

CONSOLIDATED STATEMENTS OF INCOME (Parenthetical) (USD $)	3 Months Ended
In Thousands, unless otherwise specified	Mar. 31, 2015	Mar. 31, 2014
CONSOLIDATED STATEMENTS OF INCOME
Stock compensation expense	$13,901	$4,472
Changes in fair value of contingent consideration	$14,969

CONSOLIDATED_STATEMENTS_OF_COM

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (USD $)	3 Months Ended
In Thousands, unless otherwise specified	Mar. 31, 2015	Mar. 31, 2014
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
Net income	$7,194	$24,380
Other comprehensive income:
Unrealized gains on available-for-sale securities	69	43
Comprehensive income	7,263	24,423
Less: comprehensive income (loss) attributable to non-controlling interest	-94	-1,340
Comprehensive income attributable to Magellan Health, Inc.	$7,357	$25,763

CONSOLIDATED_STATEMENTS_OF_COM1

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Parenthetical) (USD $)	3 Months Ended
In Thousands, unless otherwise specified	Mar. 31, 2015	Mar. 31, 2014
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
Net of income tax provision	$45	$29

CONSOLIDATED_STATEMENTS_OF_CAS

CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $)	3 Months Ended
In Thousands, unless otherwise specified	Mar. 31, 2015	Mar. 31, 2014
Cash flows from operating activities:
Net income	$7,194	$24,380
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	23,496	20,229
Non-cash interest expense	99	184
Non-cash stock compensation expense	13,901	4,472
Non-cash income tax benefit	-2,263	-3,733
Non-cash amortization on investments	1,539	1,611
Cash flows from changes in assets and liabilities, net of effects from acquisitions of businesses:
Restricted cash	9,739	-27,870
Accounts receivable, net	1,425	34,843
Pharmaceutical inventory	4,770	2,504
Other assets	-27,219	-17,273
Accounts payable and accrued liabilities	-22,398	30,344
Medical claims payable and other medical liabilities	23,663	9,803
Tax contingencies	-787	801
Deferred credits and other long-term liabilities	11,000	2,533
Other	-3	-1
Net cash provided by operating activities	44,156	82,827
Cash flows from investing activities:
Capital expenditures	-21,396	-11,059
Acquisitions and investments in businesses, net of cash acquired	-13,640
Purchase of investments	-128,851	-76,548
Maturity of investments	92,499	74,424
Net cash used in investing activities	-71,388	-13,183
Cash flows from financing activities:
Payments to acquire treasury stock	-32,112	-16,970
Proceeds from exercise of stock options and warrants	36,900	7,180
Payments on long-term debt and capital lease obligations	-3,662	-1,117
Tax benefit from exercise of stock options and vesting of stock awards	2,961	517
Other	-807	-1,141
Net cash (used in) provided by financing activities	3,280	-11,531
Net increase (decrease) in cash and cash equivalents	-23,952	58,113
Cash and cash equivalents at beginning of period	255,303	203,187
Cash and cash equivalents at end of period	$231,351	$261,300

General

General	3 Months Ended
	Mar. 31, 2015
General
General	NOTE A—General
	Basis of Presentation
	The accompanying unaudited consolidated financial statements of Magellan Health, Inc., a Delaware corporation ("Magellan"), include Magellan and its subsidiaries (together with Magellan, the "Company"). The financial statements have been prepared in accordance with accounting principles generally accepted in the United States for interim financial information and with the Securities and Exchange Commission's (the "SEC") instructions to Form 10-Q. Accordingly, the financial statements do not include all of the information and footnotes required by accounting principles generally accepted in the United States for complete financial statements. In the opinion of management, all adjustments, consisting of normal recurring adjustments considered necessary for a fair presentation, have been included. The results of operations for the three months ended March 31, 2015 are not necessarily indicative of the results to be expected for the full year. All significant intercompany accounts and transactions have been eliminated in consolidation.
	The Company has evaluated subsequent events for recognition or disclosure in the consolidated financial statements filed on this Form 10-Q. Other than as described in Note F—"Subsequent Events", the Company did not have any material recognizable events during the period.
	These unaudited consolidated financial statements should be read in conjunction with the Company's audited consolidated financial statements for the year ended December 31, 2014 and the notes thereto, which are included in the Company's Annual Report on Form 10-K filed with the SEC on February 26, 2015.
	Business Overview
	The Company is engaged in the healthcare management business, and is focused on meeting needs in areas of healthcare that are fast growing, highly complex and high cost, with an emphasis on special population management. The Company provides services to health plans and other managed care organizations ("MCOs"), employers, labor unions, various military and governmental agencies, third party administrators, consultants and brokers. The Company's business is divided into the following five segments, based on the services it provides and/or the customers that it serves, as described below.
	Managed Healthcare
	Two of the Company's segments are in the managed healthcare business. This line of business reflects the Company's: (i) management of behavioral healthcare services, and (ii) the integrated management of physical, behavioral and pharmaceutical healthcare for special populations, delivered through Magellan Complete Care ("MCC"). The Company's coordination and management of physical and behavioral healthcare includes services provided through its comprehensive network of medical and behavioral health professionals, clinics, hospitals and ancillary service providers. This network of credentialed and privileged providers is integrated with clinical and quality improvement programs to enhance the healthcare experience for individuals in need of care, while at the same time managing the cost of these services for our customers. The treatment services provided through the Company's provider network include outpatient programs, intermediate care programs, inpatient treatment and crisis intervention services. The Company generally does not directly provide or own any provider of treatment services, although it does employ licensed behavioral health counselors to deliver non-medical counseling under certain government contracts.
	The Company's integrated management of physical and behavioral healthcare includes full service health plans which provide for the holistic management of special populations. These special populations include individuals with serious mental illness, dual eligibles, those eligible for long term care and other populations with unique and often complex healthcare needs.
	The Company provides its management services primarily through: (i) risk-based products, where the Company assumes all or a substantial portion of the responsibility for the cost of providing treatment services in exchange for a fixed per member per month fee, (ii) administrative services only ("ASO") products, where the Company provides services such as utilization review, claims administration and/or provider network management, but does not assume responsibility for the cost of the treatment services, and (iii) employee assistance programs ("EAPs") where the Company provides short-term outpatient behavioral counseling services.
	The managed healthcare business includes the following two segments, which are differentiated based on the services provided and/or the customers served:
	Commercial.    The Managed Healthcare Commercial segment ("Commercial") generally reflects managed behavioral healthcare services and EAP services provided under contracts with health plans and other MCOs for some or all of their commercial, Medicaid and Medicare members, as well as with employers, including corporations, governmental agencies, military and labor unions. Commercial's contracts encompass risk-based, ASO and EAP arrangements. As of March 31, 2015, Commercial's covered lives were 2.7 million, 15.1 million and 13.4 million for risk-based, ASO and EAP products, respectively. For the three months ended March 31, 2015, Commercial's revenue was $69.7 million, $31.3 million and $51.5 million for risk-based, ASO and EAP products, respectively.
	Public Sector.    The Managed Healthcare Public Sector segment ("Public Sector") generally reflects: (i) the management of behavioral healthcare services provided to recipients under Medicaid and other state sponsored programs under contracts with state and local governmental agencies, and (ii) the integrated management of physical, behavioral and pharmaceutical care for special populations covered under Medicaid and other government sponsored programs. Public Sector contracts encompass either risk-based or ASO arrangements. As of March 31, 2015, Public Sector's covered lives were 1.4 million and 1.8 million for risk-based and ASO products, respectively. For the three months ended March 31, 2015, Public Sector's revenue was $407.8 million and $15.2 million for risk-based and ASO products, respectively.
	Specialty Solutions
	The Specialty Solutions segment ("Specialty Solutions") generally reflects the management of the delivery of diagnostic imaging (radiology benefits management or "RBM") and a variety of other specialty areas such as radiation oncology, obstetrical ultrasound, cardiology and musculoskeletal management to ensure that such services are clinically appropriate and cost effective. The Company's Specialty Solutions services are currently provided under contracts with health plans and other MCOs for some or all of their commercial, Medicaid and Medicare members. The Company also contracts with state and local governmental agencies for the provision of such services to Medicaid recipients. The Company offers its Specialty Solutions services through risk-based contracts, where the Company assumes all or a substantial portion of the responsibility for the cost of providing services, and through ASO contracts, where the Company provides services such as utilization review and claims administration, but does not assume responsibility for the cost of the services. As of March 31, 2015, covered lives for Specialty Solutions were 7.2 million and 15.0 million for risk-based and ASO products, respectively. For the three months ended March 31, 2015, revenue for Specialty Solutions was $110.2 million and $14.1 million for risk-based and ASO products, respectively.
	Pharmacy Management
	The Pharmacy Management segment ("Pharmacy Management") comprises products and solutions that provide clinical and financial management of drugs paid under medical and pharmacy benefit programs. Pharmacy Management's services include: (i) traditional pharmacy benefit management ("PBM") services; (ii) pharmacy benefit administration ("PBA") for state Medicaid and other government sponsored programs; (iii) specialty pharmaceutical dispensing operations, contracting and formulary optimization programs; (iv) medical pharmacy management programs; and (v) programs for the integrated management of specialty drugs across both the medical and pharmacy benefit that treat complex conditions, regardless of site of service, method of delivery, or benefit reimbursement. In addition, Pharmacy Management has subcontract arrangements to provide PBM services for certain Public Sector customers.
	The Company's Pharmacy Management programs are provided under contracts with health plans, employers, Medicaid MCOs, state Medicaid programs, and other government agencies, and encompass risk-based and fee-for-service ("FFS") arrangements. During the three months ended March 31, 2015, Pharmacy Management paid 3.0 million adjusted commercial network claims in the Company's PBM business. As of March 31, 2015, the Company had a generic dispensing rate of 82.9 percent within its commercial PBM business. In addition, during the three months ended March 31, 2015, the Company paid 14.8 million adjusted PBA claims and 27.9 thousand specialty dispensing claims. Adjusted claim totals apply a multiple of three for each 90-day and traditional mail claim. In addition, as of March 31, 2015, Pharmacy Management served 0.9 million commercial PBM members, 10.5 million members in its medical pharmacy management programs, and 26 states and the District of Columbia in its PBA business.
	Corporate
	This segment of the Company is comprised primarily of operational support functions such as sales and marketing and information technology, as well as corporate support functions such as executive, finance, human resources and legal.
	Summary of Significant Accounting Policies
	Recent Accounting Pronouncements
	In May 2014, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2014-09, "Revenue from Contracts with Customers (Topic 606)" ("ASU 2014-09"), which is a new comprehensive revenue recognition standard that will supersede virtually all existing revenue guidance under GAAP. This ASU is effective for calendar years beginning after December 15, 2016. The Company is currently assessing the potential impact this ASU will have on the Company's consolidated results of operations, financial position, and cash flows.
	In June 2014, the FASB issued ASU No. 2014-12, "Compensation—Stock Compensation (Topic 718): Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved After the Requisite Service Period" ("ASU 2014-12"), which revises the accounting treatment for stock compensation tied to performance targets. This ASU is effective for calendar years beginning after December 15, 2015. The guidance is not expected to materially impact the Company's consolidated results of operations, financial position, or cash flows.
	In August 2014, the FASB issued ASU No. 2014-15, "Presentation of Financial Statements—Going Concern (Subtopic 205-40)" ("ASU 2014-15"), which provides guidance in GAAP about management's responsibility to evaluate whether there is substantial doubt about an entity's ability to continue as a going concern and to provide related footnote disclosures. This amendment should reduce diversity in the timing and content of footnote disclosures. This ASU is effective for the annual period beginning after December 15, 2016 and for annual and interim periods thereafter. The guidance is not expected to materially impact the Company's consolidated results of operations, financial position, or cash flows.
	In February 2015, the FASB issued ASU No. 2015-02, "Amendments to the Consolidation Analysis" ("ASU 2015-02"), which amends certain requirements for determining whether a variable interest entity must be consolidated. The amendments are effective for annual and interim reporting periods of public entities beginning after December 31, 2015. The guidance is not expected to materially impact the Company's consolidated results of operations, financial position, or cash flows.
	In April 2015, the FASB issued ASU No. 2015-03, "Interest—Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs" ("ASU 2015-03"). The amendments in this ASU require that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. This guidance is effective for annual and interim reporting periods of public entities beginning after December 15, 2015. The guidance is not expected to materially impact the Company's consolidated results of operations, financial position, or cash flows.
	In April 2015, the FASB issued ASU No. 2015-05, "Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Customer's Accounting for Fees Paid in a Cloud Computing Arrangement ("ASU 2015-05"), which provides guidance to clarify the customer's accounting for fees paid in a cloud computing arrangement. This guidance is effective for annual periods and interim reporting periods of public entities beginning after December 15, 2015. The guidance is not expected to materially impact the Company's consolidated results of operations, financial position, or cash flows.
	Use of Estimates
	The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Significant estimates of the Company include, among other things, accounts receivable realization, valuation allowances for deferred tax assets, valuation of goodwill and intangible assets, medical claims payable, other medical liabilities, contingent consideration, stock compensation assumptions, tax contingencies and legal liabilities. Actual results could differ from those estimates.
	Managed Care and Other Revenue
	Managed Care Revenue.    Managed care revenue, inclusive of revenue from the Company's risk, EAP and ASO contracts, is recognized over the applicable coverage period on a per member basis for covered members. The Company is paid a per member fee for all enrolled members, and this fee is recorded as revenue in the month in which members are entitled to service. The Company adjusts its revenue for retroactive membership terminations, additions and other changes, when such adjustments are identified, with the exception of retroactivity that can be reasonably estimated. The impact of retroactive rate amendments is generally recorded in the accounting period that terms to the amendment are finalized, and that the amendment is executed. Any fees paid prior to the month of service are recorded as deferred revenue. Managed care revenues approximated $728.8 million and $646.1 million for the three months ended March 31, 2014 and 2015, respectively.
	Fee-For-Service and Cost-Plus Contracts.    The Company has certain fee-for-service contracts, including cost-plus contracts, with customers under which the Company recognizes revenue as services are performed and as costs are incurred. This includes revenues received in relation to Patient Protection and Affordable Care Act ("ACA") fees billed on a cost reimbursement basis. Revenues from these contracts approximated $59.7 million and $79.0 million for the three months ended March 31, 2014 and 2015, respectively.
	Block Grant Revenues.    The Maricopa Contract (as defined below) was partially funded by federal, state and county block grant money, which represented annual appropriations. The Company recognized revenue from block grant activity ratably over the period to which the block grant funding applied. Block grant revenues were approximately $33.0 million for the three months ended March 31, 2014. The Maricopa Contract terminated on March 31, 2014.
	Performance-Based Revenue.    The Company has the ability to earn performance-based revenue under certain risk and non-risk contracts. Performance-based revenue generally is based on either the ability of the Company to manage care for its clients below specified targets, or on other operating metrics. For each such contract, the Company estimates and records performance-based revenue after considering the relevant contractual terms and the data available for the performance-based revenue calculation. Pro-rata performance-based revenue may be recognized on an interim basis pursuant to the rights and obligations of each party upon termination of the contracts. Performance-based revenues approximated $3.0 million and $4.5 million for the three months ended March 31, 2014 and 2015, respectively.
	Rebate Revenue.    The Company administers a rebate program for certain clients through which the Company coordinates the achievement, calculation and collection of rebates and administrative fees from pharmaceutical manufacturers on behalf of clients. Each period, the Company estimates the total rebates earned based on actual volumes of pharmaceutical purchases by the Company's clients, as well as historical and/or anticipated sharing percentages. The Company earns fees based upon the volume of rebates generated for its clients. The Company does not record as rebate revenue any rebates that are passed through to its clients. Total rebate revenues approximated $4.1 million and $15.9 million for the three months ended March 31, 2014 and 2015, respectively.
	In relation to the Company's PBM business, the Company administers rebate programs through which it receives rebates from pharmaceutical manufacturers that are shared with its customers. The Company recognizes rebates when the Company is entitled to them and when the amounts of the rebates are determinable. The amount recorded for rebates earned by the Company from the pharmaceutical manufacturers is recorded as a reduction of cost of goods sold.
	PBM and Dispensing Revenue
	Pharmacy Benefit Management Revenue.    The Company recognizes PBM revenue, which consists of a negotiated prescription price (ingredient cost plus dispensing fee), co-payments collected by the pharmacy and any associated administrative fees, when claims are adjudicated. The Company recognizes PBM revenue on a gross basis (i.e. including drug costs and co-payments) as it is acting as the principal in the arrangement and is contractually obligated to its clients and network pharmacies, which is a primary indicator of gross reporting. In addition, the Company is solely responsible for the claims adjudication process, negotiating the prescription price for the pharmacy, collection of payments from the client for drugs dispensed by the pharmacy, and managing the total prescription drug relationship with the client's members. If the Company enters into a contract where it is only an administrator, and does not assume any of the risks previously noted, revenue will be recognized on a net basis. PBM revenues approximated $81.2 million and $185.8 million for the three months ended March 31, 2014 and 2015, respectively.
	Dispensing Revenue.    The Company recognizes dispensing revenue, which includes the co-payments received from members of the health plans the Company serves, when the specialty pharmaceutical drugs are shipped. At the time of shipment, the earnings process is complete; the obligation of the Company's customer to pay for the specialty pharmaceutical drugs is fixed, and, due to the nature of the product, the member may neither return the specialty pharmaceutical drugs nor receive a refund. Revenues from the dispensing of specialty pharmaceutical drugs on behalf of health plans were $55.7 million and $46.5 million for the three months ended March 31, 2014 and 2015, respectively.
	Significant Customers
	Customers exceeding ten percent of the consolidated Company's net revenues
	The Company provides behavioral healthcare management and other related services to members in the state of Iowa pursuant to contracts with the State of Iowa (the "Iowa Contracts"). The Company currently has two contracts; the Iowa Medicaid Contract and Iowa Medicaid Integrated Health Home Provider Agreement ("IHH Agreement"). Under the Iowa Medicaid Contract, the Company is responsible for providing managed mental health and substance abuse treatment to enrollees under a Medicaid 1915(b) waiver, as well as substance abuse treatment services plan funded by federal block grant and state appropriations under the authority of the Iowa Department of Public Health. The Iowa Health and Wellness Plan for members who qualify as an "exempt individual", as defined in 441 of the Iowa Administrative Code, were also added to the contract on January 1, 2014. The latest Iowa Medicaid Contract began on January 1, 2010 and extends through June 30, 2015 unless sooner terminated by the parties. The Iowa Department of Human Services and the Iowa Department of Public Health has the right to terminate the Iowa Medicaid Contract upon 30 days notice for any reason or no reason at all. We expect that the Iowa Medicaid Contract will be extended to coincide with the start date of the new Iowa High Quality Healthcare Initiative, as discussed below, however there can be no assurance that the Iowa Medicaid Contract will be extended. Under the IHH Agreement, the Company establishes a health home for individuals identified with serious and persistent mental illness through enrolled provider organizations capable of providing enhanced care. The IHH Agreement began on July 1, 2013 and extends through June 30, 2016 unless sooner terminated by either party with 60 days notice for any reason or no reason at all. The IHH program is part of the new Iowa High Quality Healthcare Initiative and we expect that the end of the IHH agreement will coincide with the start date of the new initiative. The Iowa Contracts generated net revenues of $103.2 million and $127.2 million for the three months ended March 31, 2014 and 2015, respectively.
	On February 16, 2015 the Iowa Department of Human Services (the "Agency") released the Iowa High Quality Healthcare Initiative Request for Proposal ("RFP"). The Agency intends to contract on a statewide basis with two to four successful bidders with a demonstrated capacity to coordinate care and provide quality outcomes for the Medicaid and Children's Health Insurance Program ("CHIP") populations. The program will enroll the majority of the Iowa Medicaid and CHIP populations and will also provide services for individuals qualifying for Iowa Department of Public Health ("IDPH") funded substance abuse services. The anticipated start of the contract is January 1, 2016 for an initial period of three years and the ability for the Agency to extend the contract for two additional two year terms. The RFP includes the services provided by the Company's current Iowa Contracts. The Company intends to submit a proposal on this RFP. There can be no assurance that the Company will be awarded a contract pursuant to the RFP, or that the terms of any contract awarded pursuant to the RFP will be similar to the current Iowa Contracts.
	The Company provides behavioral healthcare management and other related services to members in the state of Florida pursuant to contracts with the State of Florida (the "Florida Contracts"). The Company had behavioral healthcare contracts with various areas in the State of Florida (the "Florida Areas") which were part of the Florida Medicaid program. The State of Florida implemented a new system of mandated managed care through which Medicaid enrollees will receive integrated healthcare services, and in 2014 phased out the behavioral healthcare programs under which the Florida Areas' contracts operated. The Company has a contract with the State of Florida to provide integrated healthcare services under the new program ("the Florida Medicaid Contract"). The Florida Medicaid Contract began on February 4, 2014 and extends through December 31, 2018, unless sooner terminated by the parties. The State of Florida has the right to terminate the Florida Medicaid Contract with cause, as defined, upon 24 hour notice and upon 30 days notice for any reason or no reason at all. The Florida Contracts generated net revenues of $31.8 million and $106.0 million for the three months ended March 31, 2014 and March 31, 2015, respectively.
	Through March 31, 2014, the Company provided behavioral healthcare management and other related services to approximately 680,000 members in Maricopa County, Arizona as the Regional Behavioral Health Authority ("RBHA") for GSA6 ("Maricopa County") pursuant to a contract with the State of Arizona (the "Maricopa Contract"). The Maricopa Contract was for the management of the publicly funded behavioral health system that delivered mental health, substance abuse and crisis services for adults, youth, and children. The Maricopa Contract terminated on March 31, 2014. The Maricopa Contract generated net revenues of $201.0 million for the three months ended March 31, 2014.
	Customers exceeding ten percent of segment net revenues
	In addition to the Iowa Contracts, the Florida Contracts, and the Maricopa Contract previously discussed, the following customers generated in excess of ten percent of net revenues for the respective segment for the three months ended March 31, 2014 and 2015 (in thousands):
	Segment		Term Date		2014			2015
	Commercial
	Customer A		June 30, 2014(1)		$	55,540		$	—
	Customer B		December 31, 2019			42,898			58,198
	Customer C		August 14, 2017			22,652			32,497
	Public Sector
	None
	Specialty Solutions
	Customer A		November 30, 2016			12,379			15,094
	Customer D		December 31, 2017(2)			33,390			33,817
	Customer E		June 30, 2016(3)			12,574			1,745	*
	Customer F		June 30, 2017			16,552			23,161
	Customer G		January 31, 2016			11,307			15,203
	Customer H		April 1, 2017 to October 1, 2017(4)			1,526	*		13,329
	Pharmacy Management
Customer I		November 30, 2015 to April 30, 2016(4)			28,579			28,445	*
Customer J		December 16, 2016			—			74,605
*	Revenue amount did not exceed ten percent of net revenues for the respective segment for the period presented. Amount is shown for comparative purposes only.
-1	The contract has terminated.
-2	On December 31, 2014, this contract was amended and extended through December 31, 2017. Historically the Company provided services on a risk basis. Under the amended contract, the funding arrangement will be a combination of risk and ASO based services.
-3	The contract transitioned from risk to ASO based services effective July 1, 2014.
-4	The customer has more than one contract. The individual contracts are scheduled to terminate at various points during the time period indicated above.
Concentration of Business
The Company also has a significant concentration of business with various counties in the State of Pennsylvania (the "Pennsylvania Counties") which are part of the Pennsylvania Medicaid program. Net revenues from the Pennsylvania Counties in the aggregate totaled $90.1 million and $91.6 million for the three months ended March 31, 2014 and 2015, respectively.
The Company's contracts with customers typically have terms of one to three years, and in certain cases contain renewal provisions (at the customer's option) for successive terms of between one and two years (unless terminated earlier). Substantially all of these contracts may be immediately terminated with cause and many of the Company's contracts are terminable without cause by the customer or the Company either upon the giving of requisite notice and the passage of a specified period of time (typically between 60 and 180 days) or upon the occurrence of other specified events. In addition, the Company's contracts with federal, state and local governmental agencies generally are conditioned on legislative appropriations. These contracts generally can be terminated or modified by the customer if such appropriations are not made.
Fair Value Measurements
The Company has certain assets and liabilities that are required to be measured at fair value on a recurring basis. These assets and liabilities are to be measured using inputs from the three levels of the fair value hierarchy, which are as follows:
Level 1—Inputs are unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date.
Level 2—Inputs include quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the asset or liability (i.e., interest rates, yield curves, etc.), and inputs that are derived principally from or corroborated by observable market data by correlation or other means (market corroborated inputs).
Level 3—Unobservable inputs that reflect the Company's assumptions about the assumptions that market participants would use in pricing the asset or liability. The Company develops these inputs based on the best information available, including the Company's data.
In accordance with the fair value hierarchy described above, the following table shows the fair value of the Company's assets and liabilities that are required to be measured at fair value as of December 31, 2014 and March 31, 2015 (in thousands):
		December 31, 2014
		Level 1			Level 2			Level 3			Total
Assets
Cash and cash equivalents(1)		$	—		$	139,280		$	—		$	139,280
Restricted cash(2)			—			65,992			—			65,992
Investments:
U.S. government and agency securities			4,303			—			—			4,303
Obligations of government-sponsored enterprises(3)			—			15,315			—			15,315
Corporate debt securities			—			246,886			—			246,886
Certificates of deposit			—			1,150			—			1,150
Total assets held at fair value		$	4,303		$	468,623		$	—		$	472,926
Liabilities
Contingent consideration		$	—		$	—		$	58,153		$	58,153
Total liabilities held at fair value		$	—		$	—		$	58,153		$	58,153
		March 31, 2015
		Level 1			Level 2			Level 3			Total
Assets
Cash and cash equivalents(4)		$	—		$	48,176		$	—		$	48,176
Restricted cash(5)			—			69,330			—			69,330
Investments:
U.S. government and agency securities			4,944			—			—			4,944
Obligations of government-sponsored enterprises(3)			—			15,315			—			15,315
Corporate debt securities			—			281,173			—			281,173
Certificates of deposit			—			1,150			—			1,150
Total assets held at fair value		$	4,944		$	415,144		$	—		$	420,088
Liabilities
Contingent consideration		$	—		$	—		$	73,122		$	73,122
Total liabilities held at fair value		$	—		$	—		$	73,122		$	73,122
-1	Excludes $116.0 million of cash held in bank accounts by the Company.
-2	Excludes $149.3 million of restricted cash held in bank accounts by the Company.
-3	Includes investments in notes issued by the Federal Home Loan Bank.
-4	Excludes $183.2 million of cash held in bank accounts by the Company.
-5	Excludes $136.3 million of restricted cash held in bank accounts by the Company.
For the three months ended March 31, 2015, the Company has not transferred any assets between fair value measurement levels.
The carrying values of financial instruments, including accounts receivable and accounts payable, approximate their fair values due to their short-term maturities. The estimated fair value of the Company's term loan of $243.8 million as of March 31, 2015 was based on current interest rates for similar types of borrowings and is in Level 2 of the fair value hierarchy. The estimated fair values may not represent actual values of the financial instruments that could be realized as of the balance sheet date or that will be realized in the future.
All of the Company's investments are classified as "available-for-sale" and are carried at fair value.
The contingent consideration liability reflects the fair value of potential future payments related to the CDMI, LLC ("CDMI") and Cobalt Therapeutics, LLC ("Cobalt") acquisitions. The CDMI purchase agreement provides for potential contingent payments up to a maximum aggregate amount of $165.0 million. The potential future payments are contingent upon CDMI meeting certain client retention, client conversion, and gross profit milestones through December 31, 2016. The Cobalt purchase agreement provides for potential contingent payments up to a maximum aggregate amount of $6.0 million. The potential future payments are contingent upon engagement of new members and new contract execution through June 30, 2017.
As of the balance sheet date, the fair value of contingent consideration is determined based on probabilities of payment, projected payment dates, discount rates, and projected revenues, gross profits, client base, member engagement, and new contract execution. The projected revenues, gross profits, client base, member engagement, and new contract execution are derived from the Company's latest internal operational forecasts. The Company used a probability weighted discounted cash flow method to arrive at the fair value of the contingent consideration. Changes in the operational forecasts, probabilities of payment, discount rates, or projected payment dates may result in a change in the fair value measurement. Any changes in the fair value measurement are reflected as income or expense in the consolidated statements of income. As the fair value measurement for the contingent consideration is based on inputs not observed in the market, these measurements are classified as Level 3 measurements as defined by fair value measurement guidance.
For CDMI, the following unobservable inputs were used in the fair value measurement of contingent consideration: (i) discount rate of 14.5 percent; (ii) probabilities of payment for the individual components of the contingent consideration arrangement of approximately zero to 100 percent; and (iii) projected payment dates of 2015 to 2017. For CDMI, the Company estimated undiscounted future contingent payments of $65.7 million and $80.6 million as of December 31, 2014 and March 31, 2015, respectively. As of March 31, 2015, the fair value of the short term and long term contingent consideration for CDMI was $11.5 million and $58.3 million, respectively. The increase is mainly a result of improvements in operational forecasts and probabilities of payment.
For Cobalt, the following unobservable inputs were used in the fair value measurement of contingent consideration: (i) discount rate of 14.5 percent; (ii) probabilities of payment for the individual components of the contingent consideration arrangement of approximately 5 to 70 percent; and (iii) projected payment dates of 2015 to 2017. For Cobalt, the Company estimated undiscounted future contingent payments of $4.2 million as of December 31, 2014 and March 31, 2015. As of March 31, 2015, the fair value of the short term and long term contingent consideration for Cobalt was $0.3 million and $3.0 million, respectively.
As of March 31, 2015, the fair value of the short term and long term contingent consideration was $11.8 million and $61.3 million, respectively, and is included in accrued liabilities and contingent consideration, respectively, in the consolidated balance sheets. The change in the fair value of the contingent consideration was $15.0 million for the three months ended March 31, 2015, which was recorded as direct service costs and other operating expenses in the consolidated statements of income. The increase was mainly a result of changes in the present value and estimated undiscounted liability, as noted above.
The following table summarizes the Company's liability for contingent consideration (in thousands):
		March 31,
		2015
Balance as of beginning of period		$	58,153
Change in fair value			14,969
Balance as of end of period		$	73,122
Investments
If a debt security is in an unrealized loss position and the Company has the intent to sell the debt security, or it is more likely than not that the Company will have to sell the debt security before recovery of its amortized cost basis, the decline in value is deemed to be other-than-temporary and is recorded to other-than-temporary impairment losses recognized in income in the consolidated statements of income. For impaired debt securities that the Company does not intend to sell or it is more likely than not that the Company will not have to sell such securities, but the Company expects that it will not fully recover the amortized cost basis, the credit component of the other-than-temporary impairment is recognized in other-than-temporary impairment losses recognized in income in the consolidated statements of income and the non-credit component of the other-than-temporary impairment is recognized in other comprehensive income.
As of December 31, 2014 and March 31, 2015, there were no unrealized losses that the Company determined to be other-than-temporary. No realized gains or losses were recorded for the three months ended March 31, 2014 or 2015. The following is a summary of short-term and long-term investments at December 31, 2014 and March 31, 2015 (in thousands):
		December 31, 2014
		Amortized			Gross			Gross			Estimated
		Cost			Unrealized			Unrealized			Fair Value
					Gains			Losses
U.S. government and agency securities		$	4,305		$	—		$	(2	)	$	4,303
Obligations of government-sponsored enterprises(1)			15,318			1			(4	)		15,315
Corporate debt securities			247,118			8			(240	)		246,886
Certificates of deposit			1,150			—			—			1,150
Total investments at December 31, 2014		$	267,891		$	9		$	(246	)	$	267,654
		March 31, 2015
		Amortized			Gross			Gross			Estimated
		Cost			Unrealized			Unrealized			Fair Value
					Gains			Losses
U.S. government and agency securities		$	4,939		$	5		$	—		$	4,944
Obligations of government-sponsored enterprises(1)			15,310			6			(1	)		15,315
Corporate debt securities			281,306			34			(167	)		281,173
Certificates of deposit			1,150			—			—			1,150
Total investments at March 31, 2015		$	302,705		$	45		$	(168	)	$	302,582
-1	Includes investments in notes issued by the Federal Home Loan Bank.
The maturity dates of the Company's investments as of March 31, 2015 are summarized below (in thousands):
		Amortized			Estimated
		Cost			Fair Value
2015		$	229,473		$	229,364
2016			72,597			72,582
2017			635			636
Total investments at March 31, 2015		$	302,705		$	302,582
Income Taxes
The Company's effective income tax rates were 51.2 percent and 36.5 percent for the three months ended March 31, 2014 and 2015, respectively. These rates differ from the federal statutory income tax rate primarily due to state income taxes, permanent differences between book and tax income, and changes to recorded tax contingencies and valuation allowances. The Company also accrues interest and penalties related to unrecognized tax benefits in its provision for income taxes. The effective income tax rate for the three months ended March 31, 2015 is lower than the effective rate for the three months ended March 31, 2014 mainly due to the inclusion of valuation allowances in the prior year on certain deferred assets, and the reversal of tax contingencies in the current year from the favorable settlement of state income tax examinations.
The Company files a consolidated federal income tax return for the Company and most of its eighty-percent or more controlled subsidiaries. The Company files a separate consolidated federal income tax return for AlphaCare of New York, Inc. ("AlphaCare") and its parent, AlphaCare Holdings, Inc. ("AlphaCare Holdings"). The Company and its subsidiaries also file income tax returns in various state and local jurisdictions. With few exceptions, the Company is no longer subject to state or local income tax assessments by tax authorities for years ended prior to 2011.
Net Operating Loss Carryforwards.    The Company has $3.0 million of federal net operating loss carryforwards ("NOLs") available to reduce its federal consolidated taxable income in 2015 and subsequent years. These NOLs will expire in 2018 through 2019 if not used and are subject to examination and adjustment by the Internal Revenue Service ("IRS"). AlphaCare has $24.5 million of federal NOLs available to reduce its consolidated taxable income in 2015 and subsequent years. These NOLs will expire in 2033 through 2034 if not used and are subject to examination and adjustment by the IRS. The Company and its subsidiaries also have $160.5 million of state NOLs available to reduce state taxable income at certain subsidiaries in 2015 and subsequent years. Most of these NOLs will expire in 2017 through 2034 if not used and are subject to examination and adjustment by the respective state tax authorities.
Deferred tax assets as of December 31, 2014 and March 31, 2015 are shown net of valuation allowances of $12.4 million and $11.9 million, respectively. These valuation allowances mostly relate to uncertainties regarding the eventual realization of the AlphaCare NOLs and certain state NOLs. Determination of the amount of deferred tax assets considered realizable requires significant judgment and estimation regarding the forecasts of future taxable income which are consistent with the plans and estimates the Company uses to manage the underlying businesses. Although consideration is also given to potential tax planning strategies which might be available to improve the realization of deferred tax assets, none were identified which were both prudent and reasonable. Future changes in the estimated realizable portion of deferred tax assets could materially affect the Company's financial condition and results of operations.
Health Care Reform
The Patient Protection and the Affordable Care Act ("ACA"), as amended by the Health Care and Education Reconciliation Act of 2010 (collectively, the "Health Reform Law"), imposes a mandatory annual fee on health insurers for each calendar year beginning on or after January 1, 2014. The Company has obtained rate adjustments which the Company expects will cover the direct costs of these fees and the impact from non-deductibility of such fees for federal and state income tax purposes. To the extent the Company has a state public sector customer that does not renew, there may be some impact due to taxes paid where the timing and amount of recoupment of these additional costs is uncertain. In the event the Company is unable to obtain rate adjustments to cover the financial impact of the annual fee, the fee may have a material impact on the Company. For 2014, the ACA fee was $21.4 million which has been paid. For 2015, the ACA fee is estimated to be $27.7 million and is included in accrued liabilities in the consolidated balance sheets. Of these amounts, $5.1 million and $6.9 million was expensed in the three months ended March 31, 2014 and 2015, respectively, which was included in direct service costs and other operating expenses in the consolidated statements of income. The Company has recorded revenues of $3.2 million and $11.7 million in the three months ended March 31, 2014 and 2015, respectively, associated with the accrual for the reimbursement of the economic impact of the ACA fees from its customers.
Stock Compensation
At December 31, 2014 and March 31, 2015, the Company had equity-based employee incentive plans, which are described more fully in Note 6 in the Company's Annual Report on Form 10-K for the year ended December 31, 2014, with the exception of the Performance-Based Restricted Stock Units issued during the three months ended March 31, 2015, which are described below. The Company recorded stock compensation expense of $4.5 million and $13.9 million for the three months ended March 31, 2014 and 2015, respectively. Stock compensation expense recognized in the consolidated statements of income for the three months ended March 31, 2014 and 2015 has been reduced for forfeitures, estimated at four percent for both periods.
The weighted average grant date fair value of all stock options granted during the three months ended March 31, 2015 was $14.00 as estimated using the Black-Scholes-Merton option pricing model, which also assumed an expected volatility of 25.03 percent based on the historical volatility of the Company's stock price.
The benefits of tax deductions in excess of recognized stock compensation expense are reported as a financing cash flow, rather than as an operating cash flow. In the three months ended March 31, 2014 and 2015, $0.5 million and $3.0 million, respectively, of benefits of such tax deductions related to stock compensation expense were realized and as such were reported as financing cash flows. For the three months ended March 31, 2014, the net change to additional paid in capital related to tax benefits (deficiencies) was $0.4 million, which includes $0.5 million of excess tax benefits offset by $(0.1) million of excess tax deficiencies. For the three months ended March 31, 2015, the net change to additional paid in capital related to tax benefits (deficiencies) was $2.9 million, which includes $3.0 million of excess tax benefits offset by $(0.1) million of excess tax deficiencies.
Summarized information related to the Company's stock options for the three months ended March 31, 2015 is as follows:
		Options			Weighted
					Average
					Exercise
					Price
Outstanding, beginning of period			3,321,063		$	50.58
Granted			765,428			63.96
Forfeited			(9,874	)		52.76
Exercised			(828,844	)		46.8
Outstanding, end of period			3,247,773		$	54.69
Vested and expected to vest at end of period			3,197,065		$	54.59
Exercisable, end of period			1,611,562		$	49.18
All of the Company's options granted during the three months ended March 31, 2015 vest ratably on each anniversary date over the three years subsequent to grant and have a ten year life.
Summarized information related to the Company's nonvested restricted stock awards ("RSAs") for the three months ended March 31, 2015 is as follows:
		Shares			Weighted
					Average
					Grant Date
					Fair Value
Outstanding, beginning of period			1,626,827		$	57.66
Awarded			—			—
Vested			(70,238	)		56.95
Forfeited			—			—
Outstanding, ending of period			1,556,589		$	57.69
Summarized information related to the Company's nonvested restricted stock units ("RSUs") for the three months ended March 31, 2015 is as follows:
		Shares			Weighted
					Average
					Grant Date
					Fair Value
Outstanding, beginning of period			156,695		$	54.88
Awarded			172,810			63.95
Vested			(78,036	)		52.89
Forfeited			(1,353	)		56.6
Outstanding, ending of period			250,116		$	61.76
The vesting period for RSAs ranges from 12 months to 42 months. In general, RSUs vest ratably on each anniversary over the three years subsequent to grant. In addition, the RSUs outstanding at the beginning of the period contain associated performance hurdle(s) that must be met in order for the awards to vest. The RSUs granted during the three months ended March 31, 2015 do not contain associated performance hurdles.
During the three months ended March 31, 2015, the Company granted 43,900 Performance-Based Restricted Stock Units ("PSUs") to members of management. The PSUs are subject to market-based conditions. The estimated fair value of the PSUs granted was $85.00, which was derived from a Monte Carlo simulation. Significant assumptions utilized in estimating the value of the awards granted include an expected dividend yield of 0%, a risk free rate of 1%, and expected volatility of 15% to 52% (average of 28%). The PSUs will entitle the grantee to receive a number of shares of the Company's Common Stock determined over a three-year performance period ending on December 31, 2017 and vesting on March 4, 2018, the settlement date, provided the grantee remains in the service of the Company on the settlement date. The Company expenses the cost of these awards ratably over the requisite service period. The number of shares for which the PSUs will be settled will be a percentage of shares for which the award is targeted and will depend on the Company's Total Shareholder Return (as defined below), expressed as a percentile ranking of the Company's Total Shareholder Return as compared to the Company's Peer Group (as defined below). The number of shares for which the PSUs will be settled vary from zero to 200 percent of the shares specified in the grant. Total Shareholder Return is determined by dividing the average share value of the Company's Common Stock over the 30 trading days preceding January 1, 2018 by the average share value of the Company's Common Stock over the 30 trading days beginning on January 1, 2015, with a deemed reinvestment of any dividends declared during the performance period. The Company's Peer Group includes 54 companies which comprise the S&P Health Care Services Industry Index, which was selected by the Compensation Committee of the Company's Board of Directors and includes a range of healthcare companies operating in several business segments.
Long Term Debt and Capital Lease Obligations
On July 23, 2014, the Company entered into a $500.0 million Credit Agreement with various lenders that provides for Magellan Rx Management, Inc. (a wholly owned subsidiary of Magellan Health, Inc.) to borrow up to $250.0 million of revolving loans, with a sublimit of up to $70.0 million for the issuance of letters of credit for the account of the Company, and a term loan in an original aggregate principal amount of $250.0 million (the "2014 Credit Facility"). The 2014 Credit Facility is guaranteed by substantially all of the non-regulated subsidiaries of the Company and will mature on July 23, 2019, but the Company holds an option to extend the 2014 Credit Facility for an additional one year period.
Under the 2014 Credit Facility, the annual interest rate on revolving and term loan borrowings is equal to (i) in the case of base rate loans, the sum of a borrowing margin of 0.50 percent plus the higher of the prime rate, one-half of one percent in excess of the overnight "federal funds" rate, or the Eurodollar rate for one month plus 1.00 percent, or (ii) in the case of Eurodollar rate loans, the sum of a borrowing margin of 1.50 percent plus the Eurodollar rate for the selected interest period, which rates shall be adjusted from time to time based on the Company's total leverage ratio. The Company has the option to borrow in base rate loans or Eurodollar rate loans at its discretion. Letters of credit issued bear interest at the rate of 1.625 percent. The commitment commission on the 2014 Credit Facility is 0.20 percent of the unused Revolving Loan Commitment, which rate shall be adjusted from time to time based on the Company's total leverage ratio.
On September 30, 2014, the Company completed a draw-down of the $250.0 million term loan. The borrowings will initially be maintained as a Eurodollar loan. The term loan is subject to certain quarterly amortization payments. As of March 31, 2015 the remaining balance on the term loan was $243.8 million. The term loan will mature on July 23, 2019. As of March 31, 2015, the term loan bore interest at a rate of 1.50 percent plus the London Interbank Offered Rate ("LIBOR"), which was equivalent to a total interest rate of 1.6756 percent. During the period the term loan was outstanding, from September 30, 2014 through March 31, 2015, the weighted average interest rate was 1.67085 percent. As of March 31, 2015, the contractual maturities of the term loan were as follows: 2015—$9.4 million; 2016—$15.6 million; 2017—$25.0 million; 2018—$25.0 million; and 2019—$168.8 million.
There were $24.6 million and $24.1 million of capital lease obligations at December 31, 2014 and March 31, 2015, respectively. The Company had $32.9 million and $33.4 million of letters of credit outstanding at December 31, 2014 and March 31, 2015, respectively, and no revolving loan borrowings at December 31, 2014 or March 31, 2015.
Redeemable Non-Controlling Interest
As of March 31, 2015 the Company held an 82% equity interest in AlphaCare Holdings. The other shareholders of AlphaCare Holdings have the right to exercise put options, requiring the Company to purchase up to 50% of the remaining shares prior to January 1, 2017 provided certain membership levels are attained. After December 31, 2016 the other shareholders of AlphaCare Holdings have the right to exercise put options requiring the Company to purchase all or any portion of the remaining shares. In addition, after December 31, 2016 the Company has the right to purchase all remaining shares. Non-controlling interests with redemption features, such as put options, that are not solely within the Company's control are considered redeemable non-controlling interests. Redeemable non-controlling interest is considered to be temporary and is therefore reported in a mezzanine level between liabilities and stockholders' equity on the Company's consolidated balance sheet at the greater of the initial carrying amount adjusted for the non-controlling interest's share of net income or loss or its redemption value. The carrying value of the non-controlling interest as of December 31, 2014 and March 31, 2015 was $5.9 million and $8.5 million, respectively. The $2.6 million increase in carrying value is a result of the impact of additional capital provided by the Company, partially offset by operating losses. The Company recognizes changes in the redemption value on a quarterly basis and adjusts the carrying amount of the non-controlling interest to equal the redemption value at the end of each reporting period. Under this method, this is viewed at the end of the reporting period as if it were also the redemption date for the non-controlling interest. The Company will reflect redemption value adjustments in the earnings per share calculation if redemption value is in excess of the carrying value of the non-controlling interest. As of March 31, 2015, the carrying value of the non-controlling interest exceeded the redemption value and therefore no adjustment to the carrying value was required.
Reclassifications
Certain prior year amounts have been reclassified to conform with the current year presentation.

Net_Income_per_Common_Share_At

Net Income per Common Share Attributable to Magellan Health, Inc.	3 Months Ended
	Mar. 31, 2015
Net Income per Common Share Attributable to Magellan Health, Inc.
Net Income per Common Share Attributable to Magellan Health, Inc.	NOTE B—Net Income per Common Share Attributable to Magellan Health, Inc.
	The following tables reconcile income attributable to common shareholders (numerator) and shares (denominator) used in the computations of net income per share attributable to common shareholders (in thousands, except per share data):
		Three Months Ended
		March 31,
		2014		2015
	Numerator:
	Net income attributable to Magellan Health, Inc.	$	25,720	$	7,288
	Denominator:
	Weighted average number of common shares outstanding—basic		27,370		25,319
	Common stock equivalents—stock options		594		450
	Common stock equivalents—RSAs		32		514
	Common stock equivalents—RSUs		54		46
	Common stock equivalents—PSUs		—		68
	Common stock equivalents—employee stock purchase plan		1		2
	Weighted average number of common shares outstanding—diluted		28,051		26,399
	Net income attributable to Magellan Health, Inc. per common share—basic	$	0.94	$	0.29
	Net income attributable to Magellan Health, Inc. per common share—diluted	$	0.92	$	0.28
	The weighted average number of common shares outstanding for the three months ended March 31, 2014 and 2015 were calculated using outstanding shares of the Company's common stock. Common stock equivalents included in the calculation of diluted weighted average common shares outstanding for the three months ended March 31, 2014 and 2015 represent stock options to purchase shares of the Company's common stock, RSAs, RSUs, PSUs and stock purchased under the Employee Stock Purchase Plan.
	The Company had additional potential dilutive securities outstanding representing 0.3 million and 1.0 million options for the three months ended March 31, 2014 and 2015, respectively, that were not included in the computation of dilutive securities because they were anti-dilutive for the period. Had these shares not been anti-dilutive, all of these shares would not have been included in the net income attributable to common shareholder per common share calculation as the Company uses the treasury stock method of calculating diluted shares.

Business_Segment_Information

Business Segment Information	3 Months Ended
	Mar. 31, 2015
Business Segment Information
Business Segment Information	NOTE C—Business Segment Information
	The accounting policies of the Company's segments are the same as those described in Note 1—"General." The Company evaluates performance of its segments based on profit or loss from operations before stock compensation expense, depreciation and amortization, interest expense, interest and other income, changes in the fair value of contingent consideration recorded in relation to acquisitions, gain on sale of assets, special charges or benefits, and income taxes ("Segment Profit"). Management uses Segment Profit information for internal reporting and control purposes and considers it important in making decisions regarding the allocation of capital and other resources, risk assessment and employee compensation, among other matters. Public Sector subcontracts with Pharmacy Management and Specialty Solutions to provide pharmacy benefits management services and radiology benefits management services for certain of Public Sector's customers. In addition, Pharmacy Management provides pharmacy benefits management for the Company's employees covered under its medical plan. As such, revenue, cost of care, cost of goods sold and direct service costs and other related to these arrangements are eliminated. The Company's segments are defined above.
	The following tables summarize, for the periods indicated, operating results by business segment (in thousands):
			Commercial			Public			Specialty			Pharmacy			Corporate			Consolidated
						Sector			Solutions			Management			and
															Elimination
	Three Months Ended March 31, 2014
	Managed care and other revenue		$	188,891		$	497,943		$	105,434		$	55,378		$	(18,055	)	$	829,591
	PBM and dispensing revenue			—			—			—			139,624			(2,740	)		136,884
	Cost of care			(111,202	)		(422,518	)		(73,652	)		(16,391	)		18,055			(605,708	)
	Cost of goods sold			—			—			—			(128,031	)		2,733			(125,298	)
	Direct service costs and other			(40,276	)		(42,958	)		(15,141	)		(35,551	)		(30,796	)		(164,722	)
	Stock compensation expense(1)			155			274			414			303			3,326			4,472
	Less: non-controlling interest segment profit (loss)(2)			—			(1,330	)		—			—			—			(1,330	)
	Segment profit (loss)		$	37,568		$	34,071		$	17,055		$	15,332		$	(27,477	)	$	76,549
			Commercial			Public			Specialty			Pharmacy			Corporate			Consolidated
						Sector			Solutions			Management			and
															Elimination
	Three Months Ended March 31, 2015
	Managed care and other revenue		$	152,525		$	422,977		$	124,342		$	49,068		$	(262	)	$	748,650
	PBM and dispensing revenue			—			—			—			258,793			(26,475	)		232,318
	Cost of care			(82,130	)		(346,930	)		(93,273	)		5			—			(522,328	)
	Cost of goods sold			—			—			—			(243,538	)		25,331			(218,207	)
	Direct service costs and other			(39,210	)		(51,387	)		(20,174	)		(63,548	)		(30,131	)		(204,450	)
	Stock compensation expense(1)			171			309			509			8,856			4,056			13,901
	Changes in fair value of contingent consideration			100									14,869						14,969
	Less: non-controlling interest segment profit (loss)(2)			—			(120	)		—			—			26			(94	)
	Segment profit (loss)		$	31,456		$	25,089		$	11,404		$	24,505		$	(27,507	)	$	64,947
	-1	Stock compensation expense and changes in the fair value of contingent consideration recorded in relation to the acquisitions are included in direct service costs and other operating expenses, however this amount is excluded from the computation of Segment Profit.
	-2	The non-controlling portion of AlphaCare's segment profit (loss) is excluded from the computation of Segment Profit.
	The following table reconciles Segment Profit to income before income taxes (in thousands):
			Three Months Ended
			March 31,
			2014			2015
	Segment profit		$	76,549		$	64,947
	Stock compensation expense			(4,472	)		(13,901	)
	Changes in fair value of contingent consideration			—			(14,969	)
	Non-controlling interest segment profit (loss)			(1,330	)		(94	)
	Depreciation and amortization			(20,229	)		(23,496	)
	Interest expense			(836	)		(1,626	)
	Interest income			311			466
	Income before income taxes		$	49,993		$	11,327

Commitments_and_Contingencies

Commitments and Contingencies	3 Months Ended
	Mar. 31, 2015
Commitments and Contingencies
Commitments and Contingencies	NOTE D—Commitments and Contingencies
	Legal
	The Company's operating activities entail significant risks of liability. From time to time, the Company is subject to various actions and claims arising from the acts or omissions of its employees, network providers or other parties. In the normal course of business, the Company receives reports relating to deaths and other serious incidents involving patients whose care is being managed by the Company. Such incidents occasionally give rise to malpractice, professional negligence and other related actions and claims against the Company or its network providers. Many of these actions and claims received by the Company seek substantial damages and therefore require the Company to incur significant fees and costs related to their defense.
	The Company is also subject to or party to certain class actions and other litigation and claims relating to its operations or business practices. In the opinion of management, the Company has recorded reserves that are adequate to cover litigation, claims or assessments that have been or may be asserted against the Company, and for which the outcome is probable and reasonably estimable. Management believes that the resolution of such litigation and claims will not have a material adverse effect on the Company's financial condition or results of operations; however, there can be no assurance in this regard.
	Stock Repurchases
	On October 22, 2014 the Company's board of directors approved a new stock repurchase plan which authorized the Company to purchase up to $200 million of its outstanding common stock through October 22, 2016. Stock repurchases under the program may be purchased from time to time in open market transactions (including blocks) or in privately negotiated transactions. The timing of repurchases and the actual amount purchased will depend on a variety of factors including the market price of the Company's shares, general market and economic conditions, and other corporate considerations. Repurchases may be made pursuant to plans intended to comply with Rule 10b5-1 under the Securities Exchange Act of 1934, which could allow the Company to purchase its shares during periods when it otherwise might be prevented from doing so under insider trading laws or because of self-imposed trading blackout periods. Repurchases are expected to be funded from working capital and anticipated cash from operations. The repurchase authorization does not require the purchase of a specific number of shares and is subject to suspension or termination by the Company's board of directors at any time.
	Pursuant to this program, the Company made open market purchases as follows (aggregate cost excludes broker commissions and is reflected in millions):
	Period	Total Number		Average		Aggregate
		of Shares		Price Paid		Cost
		Purchased		per Share
	November 24, 2014 - December 31, 2014		232,170	$	60.65	$	14.1
	January 1, 2015 - March 31, 2015		509,935		62.14		31.7
			742,105			$	45.8
	During the period from April 1, 2015 through April 27, 2015, the Company made additional open market purchases of 101,547 shares of the Company's common stock at an aggregate cost of $7.2 million (excluding broker commissions).

Acquisitions

Acquisitions	3 Months Ended
	Mar. 31, 2015
Acquisitions
Acquisitions	NOTE E—Acquisitions
	Acquisition of AlphaCare Holdings, Inc.
	Pursuant to the August 13, 2013 stock purchase agreement (the "AlphaCare Agreement"), on December 31, 2013 the Company acquired a 65% equity interest in AlphaCare Holdings, the holding company for AlphaCare, a Health Maintenance Organization ("HMO") in New York that operates a New York Managed Long-Term Care Plan in Bronx, New York, Queens, Kings and Westchester Counties, and Medicare Plans in Bronx, New York, Queens and Kings Counties.
	During the three months ended March 31, 2015, the Company purchased an additional $23.6 million in shares of Series B Participating Preferred Stock and Series C Participating Preferred Stock. As of March 31, 2015, the Company held an 82% voting interest and the remaining shareholders held an 18% voting interest in AlphaCare Holdings.
	Based on the Company's 82% equity interest in AlphaCare Holdings, the Company has included the results of operations in its consolidated financial statements. The Company reports the results of operations of AlphaCare Holdings within the Public Sector segment.
	Acquisition of CDMI, LLC
	Pursuant to the March 31, 2014 purchase agreement (the "CDMI Agreement") with CDMI, on April 30, 2014 the Company acquired all of the outstanding equity interests of CDMI. CDMI provides a range of clinical consulting programs and negotiates and administers drug rebates for managed care organizations and other customers. As consideration for the transaction, the Company paid a base price of $201.1 million, including net receipts of $3.9 million for working capital adjustments. In addition to the base purchase price, the CDMI Agreement provides for potential contingent payments up to a maximum aggregate amount of $165.0 million. The potential future payments are contingent upon CDMI meeting certain client retention, client conversion, and gross profit milestones through December 31, 2016.
	As of March 31, 2015, the Company established a working capital receivable of $0.1 million that was reflected as a reduction to goodwill.
	Other Acquisitions
	Pursuant to the January 15, 2015 purchase agreement (the "HSM Agreement") with HSM Physical Health, Inc. ("HSM") and HSM Companies Inc., on January 31, 2015 the Company acquired all of the outstanding equity interests of HSM. HSM provides cost containment and utilization management services focused on physical and musculoskeletal health specialties. As consideration for the transaction, the Company paid a base price of $13.5 million in cash, subject to working capital adjustments. The Company reports the results of operations of HSM within its Specialty Solutions segment. The Company's estimated fair values of HSM's assets acquired and liabilities assumed at the date of acquisition are determined based on certain valuations and analyses that have yet to be finalized, and accordingly, the assets acquired and liabilities assumed are subject to adjustment once the analyses are completed. The Company will make appropriate adjustments to the purchase price allocations prior to the completion of the measurement period as required.

Subsequent_Events

Subsequent Events	3 Months Ended
	Mar. 31, 2015
Subsequent Events
Subsequent Events	NOTE F—Subsequent Events
	Pursuant to the March 17, 2015 Purchase Agreement (the "4D Agreement") with 4D Pharmacy Management Systems, Inc. ("4D"), on April 1, 2015 the Company acquired (the "4D Acquisition") all of the outstanding equity interests of 4D. 4D is a privately held, full-service PBM serving managed care organizations, employers and government-sponsored benefit programs, such as Medicare Part D plans.
	As consideration for the 4D Acquisition, the Company paid $55 million in cash, subject to working capital adjustments. There are additional potential contingent payments up to an aggregate amount of $30 million. The contingent payment provisions provide for (i) cash payments of up to $10 million based on the achievement of certain growth targets in the underlying dual eligible membership served by 4D during calendar year 2015 and (ii) cash payments of up to $20 million for retention of certain business through 2018. The Company funded the 4D Acquisition with cash on hand. The Company will report the results of operations of 4D within its Pharmacy Management segment.

Summary_of_Significant_Account

Summary of Significant Accounting Policies (Policies)	3 Months Ended
	Mar. 31, 2015
Summary of Significant Accounting Policies
Recent Accounting Pronouncements	Recent Accounting Pronouncements
	In May 2014, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2014-09, "Revenue from Contracts with Customers (Topic 606)" ("ASU 2014-09"), which is a new comprehensive revenue recognition standard that will supersede virtually all existing revenue guidance under GAAP. This ASU is effective for calendar years beginning after December 15, 2016. The Company is currently assessing the potential impact this ASU will have on the Company's consolidated results of operations, financial position, and cash flows.
	In June 2014, the FASB issued ASU No. 2014-12, "Compensation—Stock Compensation (Topic 718): Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved After the Requisite Service Period" ("ASU 2014-12"), which revises the accounting treatment for stock compensation tied to performance targets. This ASU is effective for calendar years beginning after December 15, 2015. The guidance is not expected to materially impact the Company's consolidated results of operations, financial position, or cash flows.
	In August 2014, the FASB issued ASU No. 2014-15, "Presentation of Financial Statements—Going Concern (Subtopic 205-40)" ("ASU 2014-15"), which provides guidance in GAAP about management's responsibility to evaluate whether there is substantial doubt about an entity's ability to continue as a going concern and to provide related footnote disclosures. This amendment should reduce diversity in the timing and content of footnote disclosures. This ASU is effective for the annual period beginning after December 15, 2016 and for annual and interim periods thereafter. The guidance is not expected to materially impact the Company's consolidated results of operations, financial position, or cash flows.
	In February 2015, the FASB issued ASU No. 2015-02, "Amendments to the Consolidation Analysis" ("ASU 2015-02"), which amends certain requirements for determining whether a variable interest entity must be consolidated. The amendments are effective for annual and interim reporting periods of public entities beginning after December 31, 2015. The guidance is not expected to materially impact the Company's consolidated results of operations, financial position, or cash flows.
	In April 2015, the FASB issued ASU No. 2015-03, "Interest—Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs" ("ASU 2015-03"). The amendments in this ASU require that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. This guidance is effective for annual and interim reporting periods of public entities beginning after December 15, 2015. The guidance is not expected to materially impact the Company's consolidated results of operations, financial position, or cash flows.
	In April 2015, the FASB issued ASU No. 2015-05, "Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Customer's Accounting for Fees Paid in a Cloud Computing Arrangement ("ASU 2015-05"), which provides guidance to clarify the customer's accounting for fees paid in a cloud computing arrangement. This guidance is effective for annual periods and interim reporting periods of public entities beginning after December 15, 2015. The guidance is not expected to materially impact the Company's consolidated results of operations, financial position, or cash flows.
Use of Estimates	Use of Estimates
	The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Significant estimates of the Company include, among other things, accounts receivable realization, valuation allowances for deferred tax assets, valuation of goodwill and intangible assets, medical claims payable, other medical liabilities, contingent consideration, stock compensation assumptions, tax contingencies and legal liabilities. Actual results could differ from those estimates.
Revenue recognition	Managed Care and Other Revenue
	Managed Care Revenue.    Managed care revenue, inclusive of revenue from the Company's risk, EAP and ASO contracts, is recognized over the applicable coverage period on a per member basis for covered members. The Company is paid a per member fee for all enrolled members, and this fee is recorded as revenue in the month in which members are entitled to service. The Company adjusts its revenue for retroactive membership terminations, additions and other changes, when such adjustments are identified, with the exception of retroactivity that can be reasonably estimated. The impact of retroactive rate amendments is generally recorded in the accounting period that terms to the amendment are finalized, and that the amendment is executed. Any fees paid prior to the month of service are recorded as deferred revenue. Managed care revenues approximated $728.8 million and $646.1 million for the three months ended March 31, 2014 and 2015, respectively.
	Fee-For-Service and Cost-Plus Contracts.    The Company has certain fee-for-service contracts, including cost-plus contracts, with customers under which the Company recognizes revenue as services are performed and as costs are incurred. This includes revenues received in relation to Patient Protection and Affordable Care Act ("ACA") fees billed on a cost reimbursement basis. Revenues from these contracts approximated $59.7 million and $79.0 million for the three months ended March 31, 2014 and 2015, respectively.
	Block Grant Revenues.    The Maricopa Contract (as defined below) was partially funded by federal, state and county block grant money, which represented annual appropriations. The Company recognized revenue from block grant activity ratably over the period to which the block grant funding applied. Block grant revenues were approximately $33.0 million for the three months ended March 31, 2014. The Maricopa Contract terminated on March 31, 2014.
	Performance-Based Revenue.    The Company has the ability to earn performance-based revenue under certain risk and non-risk contracts. Performance-based revenue generally is based on either the ability of the Company to manage care for its clients below specified targets, or on other operating metrics. For each such contract, the Company estimates and records performance-based revenue after considering the relevant contractual terms and the data available for the performance-based revenue calculation. Pro-rata performance-based revenue may be recognized on an interim basis pursuant to the rights and obligations of each party upon termination of the contracts. Performance-based revenues approximated $3.0 million and $4.5 million for the three months ended March 31, 2014 and 2015, respectively.
	Rebate Revenue.    The Company administers a rebate program for certain clients through which the Company coordinates the achievement, calculation and collection of rebates and administrative fees from pharmaceutical manufacturers on behalf of clients. Each period, the Company estimates the total rebates earned based on actual volumes of pharmaceutical purchases by the Company's clients, as well as historical and/or anticipated sharing percentages. The Company earns fees based upon the volume of rebates generated for its clients. The Company does not record as rebate revenue any rebates that are passed through to its clients. Total rebate revenues approximated $4.1 million and $15.9 million for the three months ended March 31, 2014 and 2015, respectively.
	In relation to the Company's PBM business, the Company administers rebate programs through which it receives rebates from pharmaceutical manufacturers that are shared with its customers. The Company recognizes rebates when the Company is entitled to them and when the amounts of the rebates are determinable. The amount recorded for rebates earned by the Company from the pharmaceutical manufacturers is recorded as a reduction of cost of goods sold.
	PBM and Dispensing Revenue
	Pharmacy Benefit Management Revenue.    The Company recognizes PBM revenue, which consists of a negotiated prescription price (ingredient cost plus dispensing fee), co-payments collected by the pharmacy and any associated administrative fees, when claims are adjudicated. The Company recognizes PBM revenue on a gross basis (i.e. including drug costs and co-payments) as it is acting as the principal in the arrangement and is contractually obligated to its clients and network pharmacies, which is a primary indicator of gross reporting. In addition, the Company is solely responsible for the claims adjudication process, negotiating the prescription price for the pharmacy, collection of payments from the client for drugs dispensed by the pharmacy, and managing the total prescription drug relationship with the client's members. If the Company enters into a contract where it is only an administrator, and does not assume any of the risks previously noted, revenue will be recognized on a net basis. PBM revenues approximated $81.2 million and $185.8 million for the three months ended March 31, 2014 and 2015, respectively.
	Dispensing Revenue.    The Company recognizes dispensing revenue, which includes the co-payments received from members of the health plans the Company serves, when the specialty pharmaceutical drugs are shipped. At the time of shipment, the earnings process is complete; the obligation of the Company's customer to pay for the specialty pharmaceutical drugs is fixed, and, due to the nature of the product, the member may neither return the specialty pharmaceutical drugs nor receive a refund. Revenues from the dispensing of specialty pharmaceutical drugs on behalf of health plans were $55.7 million and $46.5 million for the three months ended March 31, 2014 and 2015, respectively.
	Significant Customers
	Customers exceeding ten percent of the consolidated Company's net revenues
	The Company provides behavioral healthcare management and other related services to members in the state of Iowa pursuant to contracts with the State of Iowa (the "Iowa Contracts"). The Company currently has two contracts; the Iowa Medicaid Contract and Iowa Medicaid Integrated Health Home Provider Agreement ("IHH Agreement"). Under the Iowa Medicaid Contract, the Company is responsible for providing managed mental health and substance abuse treatment to enrollees under a Medicaid 1915(b) waiver, as well as substance abuse treatment services plan funded by federal block grant and state appropriations under the authority of the Iowa Department of Public Health. The Iowa Health and Wellness Plan for members who qualify as an "exempt individual", as defined in 441 of the Iowa Administrative Code, were also added to the contract on January 1, 2014. The latest Iowa Medicaid Contract began on January 1, 2010 and extends through June 30, 2015 unless sooner terminated by the parties. The Iowa Department of Human Services and the Iowa Department of Public Health has the right to terminate the Iowa Medicaid Contract upon 30 days notice for any reason or no reason at all. We expect that the Iowa Medicaid Contract will be extended to coincide with the start date of the new Iowa High Quality Healthcare Initiative, as discussed below, however there can be no assurance that the Iowa Medicaid Contract will be extended. Under the IHH Agreement, the Company establishes a health home for individuals identified with serious and persistent mental illness through enrolled provider organizations capable of providing enhanced care. The IHH Agreement began on July 1, 2013 and extends through June 30, 2016 unless sooner terminated by either party with 60 days notice for any reason or no reason at all. The IHH program is part of the new Iowa High Quality Healthcare Initiative and we expect that the end of the IHH agreement will coincide with the start date of the new initiative. The Iowa Contracts generated net revenues of $103.2 million and $127.2 million for the three months ended March 31, 2014 and 2015, respectively.
	On February 16, 2015 the Iowa Department of Human Services (the "Agency") released the Iowa High Quality Healthcare Initiative Request for Proposal ("RFP"). The Agency intends to contract on a statewide basis with two to four successful bidders with a demonstrated capacity to coordinate care and provide quality outcomes for the Medicaid and Children's Health Insurance Program ("CHIP") populations. The program will enroll the majority of the Iowa Medicaid and CHIP populations and will also provide services for individuals qualifying for Iowa Department of Public Health ("IDPH") funded substance abuse services. The anticipated start of the contract is January 1, 2016 for an initial period of three years and the ability for the Agency to extend the contract for two additional two year terms. The RFP includes the services provided by the Company's current Iowa Contracts. The Company intends to submit a proposal on this RFP. There can be no assurance that the Company will be awarded a contract pursuant to the RFP, or that the terms of any contract awarded pursuant to the RFP will be similar to the current Iowa Contracts.
	The Company provides behavioral healthcare management and other related services to members in the state of Florida pursuant to contracts with the State of Florida (the "Florida Contracts"). The Company had behavioral healthcare contracts with various areas in the State of Florida (the "Florida Areas") which were part of the Florida Medicaid program. The State of Florida implemented a new system of mandated managed care through which Medicaid enrollees will receive integrated healthcare services, and in 2014 phased out the behavioral healthcare programs under which the Florida Areas' contracts operated. The Company has a contract with the State of Florida to provide integrated healthcare services under the new program ("the Florida Medicaid Contract"). The Florida Medicaid Contract began on February 4, 2014 and extends through December 31, 2018, unless sooner terminated by the parties. The State of Florida has the right to terminate the Florida Medicaid Contract with cause, as defined, upon 24 hour notice and upon 30 days notice for any reason or no reason at all. The Florida Contracts generated net revenues of $31.8 million and $106.0 million for the three months ended March 31, 2014 and March 31, 2015, respectively.
	Through March 31, 2014, the Company provided behavioral healthcare management and other related services to approximately 680,000 members in Maricopa County, Arizona as the Regional Behavioral Health Authority ("RBHA") for GSA6 ("Maricopa County") pursuant to a contract with the State of Arizona (the "Maricopa Contract"). The Maricopa Contract was for the management of the publicly funded behavioral health system that delivered mental health, substance abuse and crisis services for adults, youth, and children. The Maricopa Contract terminated on March 31, 2014. The Maricopa Contract generated net revenues of $201.0 million for the three months ended March 31, 2014.
	Customers exceeding ten percent of segment net revenues
	In addition to the Iowa Contracts, the Florida Contracts, and the Maricopa Contract previously discussed, the following customers generated in excess of ten percent of net revenues for the respective segment for the three months ended March 31, 2014 and 2015 (in thousands):
	Segment		Term Date		2014			2015
	Commercial
	Customer A		June 30, 2014(1)		$	55,540		$	—
	Customer B		December 31, 2019			42,898			58,198
	Customer C		August 14, 2017			22,652			32,497
	Public Sector
	None
	Specialty Solutions
	Customer A		November 30, 2016			12,379			15,094
	Customer D		December 31, 2017(2)			33,390			33,817
	Customer E		June 30, 2016(3)			12,574			1,745	*
	Customer F		June 30, 2017			16,552			23,161
	Customer G		January 31, 2016			11,307			15,203
	Customer H		April 1, 2017 to October 1, 2017(4)			1,526	*		13,329
	Pharmacy Management
	Customer I		November 30, 2015 to April 30, 2016(4)			28,579			28,445	*
	Customer J		December 16, 2016			—			74,605
	*	Revenue amount did not exceed ten percent of net revenues for the respective segment for the period presented. Amount is shown for comparative purposes only.
	-1	The contract has terminated.
	-2	On December 31, 2014, this contract was amended and extended through December 31, 2017. Historically the Company provided services on a risk basis. Under the amended contract, the funding arrangement will be a combination of risk and ASO based services.
	-3	The contract transitioned from risk to ASO based services effective July 1, 2014.
	-4	The customer has more than one contract. The individual contracts are scheduled to terminate at various points during the time period indicated above.
	Concentration of Business
	The Company also has a significant concentration of business with various counties in the State of Pennsylvania (the "Pennsylvania Counties") which are part of the Pennsylvania Medicaid program. Net revenues from the Pennsylvania Counties in the aggregate totaled $90.1 million and $91.6 million for the three months ended March 31, 2014 and 2015, respectively.
	The Company's contracts with customers typically have terms of one to three years, and in certain cases contain renewal provisions (at the customer's option) for successive terms of between one and two years (unless terminated earlier). Substantially all of these contracts may be immediately terminated with cause and many of the Company's contracts are terminable without cause by the customer or the Company either upon the giving of requisite notice and the passage of a specified period of time (typically between 60 and 180 days) or upon the occurrence of other specified events. In addition, the Company's contracts with federal, state and local governmental agencies generally are conditioned on legislative appropriations. These contracts generally can be terminated or modified by the customer if such appropriations are not made.
Fair Value Measurements	Fair Value Measurements
	The Company has certain assets and liabilities that are required to be measured at fair value on a recurring basis. These assets and liabilities are to be measured using inputs from the three levels of the fair value hierarchy, which are as follows:
	Level 1—Inputs are unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date.
	Level 2—Inputs include quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the asset or liability (i.e., interest rates, yield curves, etc.), and inputs that are derived principally from or corroborated by observable market data by correlation or other means (market corroborated inputs).
	Level 3—Unobservable inputs that reflect the Company's assumptions about the assumptions that market participants would use in pricing the asset or liability. The Company develops these inputs based on the best information available, including the Company's data.
	In accordance with the fair value hierarchy described above, the following table shows the fair value of the Company's assets and liabilities that are required to be measured at fair value as of December 31, 2014 and March 31, 2015 (in thousands):
			December 31, 2014
			Level 1			Level 2			Level 3			Total
	Assets
	Cash and cash equivalents(1)		$	—		$	139,280		$	—		$	139,280
	Restricted cash(2)			—			65,992			—			65,992
	Investments:
	U.S. government and agency securities			4,303			—			—			4,303
	Obligations of government-sponsored enterprises(3)			—			15,315			—			15,315
	Corporate debt securities			—			246,886			—			246,886
	Certificates of deposit			—			1,150			—			1,150
	Total assets held at fair value		$	4,303		$	468,623		$	—		$	472,926
	Liabilities
	Contingent consideration		$	—		$	—		$	58,153		$	58,153
	Total liabilities held at fair value		$	—		$	—		$	58,153		$	58,153
			March 31, 2015
			Level 1			Level 2			Level 3			Total
	Assets
	Cash and cash equivalents(4)		$	—		$	48,176		$	—		$	48,176
	Restricted cash(5)			—			69,330			—			69,330
	Investments:
	U.S. government and agency securities			4,944			—			—			4,944
	Obligations of government-sponsored enterprises(3)			—			15,315			—			15,315
	Corporate debt securities			—			281,173			—			281,173
	Certificates of deposit			—			1,150			—			1,150
	Total assets held at fair value		$	4,944		$	415,144		$	—		$	420,088
	Liabilities
	Contingent consideration		$	—		$	—		$	73,122		$	73,122
	Total liabilities held at fair value		$	—		$	—		$	73,122		$	73,122
	-1	Excludes $116.0 million of cash held in bank accounts by the Company.
	-2	Excludes $149.3 million of restricted cash held in bank accounts by the Company.
	-3	Includes investments in notes issued by the Federal Home Loan Bank.
	-4	Excludes $183.2 million of cash held in bank accounts by the Company.
	-5	Excludes $136.3 million of restricted cash held in bank accounts by the Company.
	For the three months ended March 31, 2015, the Company has not transferred any assets between fair value measurement levels.
	The carrying values of financial instruments, including accounts receivable and accounts payable, approximate their fair values due to their short-term maturities. The estimated fair value of the Company's term loan of $243.8 million as of March 31, 2015 was based on current interest rates for similar types of borrowings and is in Level 2 of the fair value hierarchy. The estimated fair values may not represent actual values of the financial instruments that could be realized as of the balance sheet date or that will be realized in the future.
	All of the Company's investments are classified as "available-for-sale" and are carried at fair value.
	The contingent consideration liability reflects the fair value of potential future payments related to the CDMI, LLC ("CDMI") and Cobalt Therapeutics, LLC ("Cobalt") acquisitions. The CDMI purchase agreement provides for potential contingent payments up to a maximum aggregate amount of $165.0 million. The potential future payments are contingent upon CDMI meeting certain client retention, client conversion, and gross profit milestones through December 31, 2016. The Cobalt purchase agreement provides for potential contingent payments up to a maximum aggregate amount of $6.0 million. The potential future payments are contingent upon engagement of new members and new contract execution through June 30, 2017.
	As of the balance sheet date, the fair value of contingent consideration is determined based on probabilities of payment, projected payment dates, discount rates, and projected revenues, gross profits, client base, member engagement, and new contract execution. The projected revenues, gross profits, client base, member engagement, and new contract execution are derived from the Company's latest internal operational forecasts. The Company used a probability weighted discounted cash flow method to arrive at the fair value of the contingent consideration. Changes in the operational forecasts, probabilities of payment, discount rates, or projected payment dates may result in a change in the fair value measurement. Any changes in the fair value measurement are reflected as income or expense in the consolidated statements of income. As the fair value measurement for the contingent consideration is based on inputs not observed in the market, these measurements are classified as Level 3 measurements as defined by fair value measurement guidance.
	For CDMI, the following unobservable inputs were used in the fair value measurement of contingent consideration: (i) discount rate of 14.5 percent; (ii) probabilities of payment for the individual components of the contingent consideration arrangement of approximately zero to 100 percent; and (iii) projected payment dates of 2015 to 2017. For CDMI, the Company estimated undiscounted future contingent payments of $65.7 million and $80.6 million as of December 31, 2014 and March 31, 2015, respectively. As of March 31, 2015, the fair value of the short term and long term contingent consideration for CDMI was $11.5 million and $58.3 million, respectively. The increase is mainly a result of improvements in operational forecasts and probabilities of payment.
	For Cobalt, the following unobservable inputs were used in the fair value measurement of contingent consideration: (i) discount rate of 14.5 percent; (ii) probabilities of payment for the individual components of the contingent consideration arrangement of approximately 5 to 70 percent; and (iii) projected payment dates of 2015 to 2017. For Cobalt, the Company estimated undiscounted future contingent payments of $4.2 million as of December 31, 2014 and March 31, 2015. As of March 31, 2015, the fair value of the short term and long term contingent consideration for Cobalt was $0.3 million and $3.0 million, respectively.
	As of March 31, 2015, the fair value of the short term and long term contingent consideration was $11.8 million and $61.3 million, respectively, and is included in accrued liabilities and contingent consideration, respectively, in the consolidated balance sheets. The change in the fair value of the contingent consideration was $15.0 million for the three months ended March 31, 2015, which was recorded as direct service costs and other operating expenses in the consolidated statements of income. The increase was mainly a result of changes in the present value and estimated undiscounted liability, as noted above.
	The following table summarizes the Company's liability for contingent consideration (in thousands):
			March 31,
			2015
	Balance as of beginning of period		$	58,153
	Change in fair value			14,969
	Balance as of end of period		$	73,122
Investments	Investments
	If a debt security is in an unrealized loss position and the Company has the intent to sell the debt security, or it is more likely than not that the Company will have to sell the debt security before recovery of its amortized cost basis, the decline in value is deemed to be other-than-temporary and is recorded to other-than-temporary impairment losses recognized in income in the consolidated statements of income. For impaired debt securities that the Company does not intend to sell or it is more likely than not that the Company will not have to sell such securities, but the Company expects that it will not fully recover the amortized cost basis, the credit component of the other-than-temporary impairment is recognized in other-than-temporary impairment losses recognized in income in the consolidated statements of income and the non-credit component of the other-than-temporary impairment is recognized in other comprehensive income.
	As of December 31, 2014 and March 31, 2015, there were no unrealized losses that the Company determined to be other-than-temporary. No realized gains or losses were recorded for the three months ended March 31, 2014 or 2015. The following is a summary of short-term and long-term investments at December 31, 2014 and March 31, 2015 (in thousands):
			December 31, 2014
			Amortized			Gross			Gross			Estimated
			Cost			Unrealized			Unrealized			Fair Value
						Gains			Losses
	U.S. government and agency securities		$	4,305		$	—		$	(2	)	$	4,303
	Obligations of government-sponsored enterprises(1)			15,318			1			(4	)		15,315
	Corporate debt securities			247,118			8			(240	)		246,886
	Certificates of deposit			1,150			—			—			1,150
	Total investments at December 31, 2014		$	267,891		$	9		$	(246	)	$	267,654
			March 31, 2015
			Amortized			Gross			Gross			Estimated
			Cost			Unrealized			Unrealized			Fair Value
						Gains			Losses
	U.S. government and agency securities		$	4,939		$	5		$	—		$	4,944
	Obligations of government-sponsored enterprises(1)			15,310			6			(1	)		15,315
	Corporate debt securities			281,306			34			(167	)		281,173
	Certificates of deposit			1,150			—			—			1,150
	Total investments at March 31, 2015		$	302,705		$	45		$	(168	)	$	302,582
	-1	Includes investments in notes issued by the Federal Home Loan Bank.
	The maturity dates of the Company's investments as of March 31, 2015 are summarized below (in thousands):
			Amortized			Estimated
			Cost			Fair Value
	2015		$	229,473		$	229,364
	2016			72,597			72,582
	2017			635			636
	Total investments at March 31, 2015		$	302,705		$	302,582
Income Taxes	Income Taxes
	The Company's effective income tax rates were 51.2 percent and 36.5 percent for the three months ended March 31, 2014 and 2015, respectively. These rates differ from the federal statutory income tax rate primarily due to state income taxes, permanent differences between book and tax income, and changes to recorded tax contingencies and valuation allowances. The Company also accrues interest and penalties related to unrecognized tax benefits in its provision for income taxes. The effective income tax rate for the three months ended March 31, 2015 is lower than the effective rate for the three months ended March 31, 2014 mainly due to the inclusion of valuation allowances in the prior year on certain deferred assets, and the reversal of tax contingencies in the current year from the favorable settlement of state income tax examinations.
	The Company files a consolidated federal income tax return for the Company and most of its eighty-percent or more controlled subsidiaries. The Company files a separate consolidated federal income tax return for AlphaCare of New York, Inc. ("AlphaCare") and its parent, AlphaCare Holdings, Inc. ("AlphaCare Holdings"). The Company and its subsidiaries also file income tax returns in various state and local jurisdictions. With few exceptions, the Company is no longer subject to state or local income tax assessments by tax authorities for years ended prior to 2011.
	Net Operating Loss Carryforwards.    The Company has $3.0 million of federal net operating loss carryforwards ("NOLs") available to reduce its federal consolidated taxable income in 2015 and subsequent years. These NOLs will expire in 2018 through 2019 if not used and are subject to examination and adjustment by the Internal Revenue Service ("IRS"). AlphaCare has $24.5 million of federal NOLs available to reduce its consolidated taxable income in 2015 and subsequent years. These NOLs will expire in 2033 through 2034 if not used and are subject to examination and adjustment by the IRS. The Company and its subsidiaries also have $160.5 million of state NOLs available to reduce state taxable income at certain subsidiaries in 2015 and subsequent years. Most of these NOLs will expire in 2017 through 2034 if not used and are subject to examination and adjustment by the respective state tax authorities.
	Deferred tax assets as of December 31, 2014 and March 31, 2015 are shown net of valuation allowances of $12.4 million and $11.9 million, respectively. These valuation allowances mostly relate to uncertainties regarding the eventual realization of the AlphaCare NOLs and certain state NOLs. Determination of the amount of deferred tax assets considered realizable requires significant judgment and estimation regarding the forecasts of future taxable income which are consistent with the plans and estimates the Company uses to manage the underlying businesses. Although consideration is also given to potential tax planning strategies which might be available to improve the realization of deferred tax assets, none were identified which were both prudent and reasonable. Future changes in the estimated realizable portion of deferred tax assets could materially affect the Company's financial condition and results of operations.
Health Care Reform	Health Care Reform
	The Patient Protection and the Affordable Care Act ("ACA"), as amended by the Health Care and Education Reconciliation Act of 2010 (collectively, the "Health Reform Law"), imposes a mandatory annual fee on health insurers for each calendar year beginning on or after January 1, 2014. The Company has obtained rate adjustments which the Company expects will cover the direct costs of these fees and the impact from non-deductibility of such fees for federal and state income tax purposes. To the extent the Company has a state public sector customer that does not renew, there may be some impact due to taxes paid where the timing and amount of recoupment of these additional costs is uncertain. In the event the Company is unable to obtain rate adjustments to cover the financial impact of the annual fee, the fee may have a material impact on the Company. For 2014, the ACA fee was $21.4 million which has been paid. For 2015, the ACA fee is estimated to be $27.7 million and is included in accrued liabilities in the consolidated balance sheets. Of these amounts, $5.1 million and $6.9 million was expensed in the three months ended March 31, 2014 and 2015, respectively, which was included in direct service costs and other operating expenses in the consolidated statements of income. The Company has recorded revenues of $3.2 million and $11.7 million in the three months ended March 31, 2014 and 2015, respectively, associated with the accrual for the reimbursement of the economic impact of the ACA fees from its customers.
Stock Compensation	Stock Compensation
	At December 31, 2014 and March 31, 2015, the Company had equity-based employee incentive plans, which are described more fully in Note 6 in the Company's Annual Report on Form 10-K for the year ended December 31, 2014, with the exception of the Performance-Based Restricted Stock Units issued during the three months ended March 31, 2015, which are described below. The Company recorded stock compensation expense of $4.5 million and $13.9 million for the three months ended March 31, 2014 and 2015, respectively. Stock compensation expense recognized in the consolidated statements of income for the three months ended March 31, 2014 and 2015 has been reduced for forfeitures, estimated at four percent for both periods.
	The weighted average grant date fair value of all stock options granted during the three months ended March 31, 2015 was $14.00 as estimated using the Black-Scholes-Merton option pricing model, which also assumed an expected volatility of 25.03 percent based on the historical volatility of the Company's stock price.
	The benefits of tax deductions in excess of recognized stock compensation expense are reported as a financing cash flow, rather than as an operating cash flow. In the three months ended March 31, 2014 and 2015, $0.5 million and $3.0 million, respectively, of benefits of such tax deductions related to stock compensation expense were realized and as such were reported as financing cash flows. For the three months ended March 31, 2014, the net change to additional paid in capital related to tax benefits (deficiencies) was $0.4 million, which includes $0.5 million of excess tax benefits offset by $(0.1) million of excess tax deficiencies. For the three months ended March 31, 2015, the net change to additional paid in capital related to tax benefits (deficiencies) was $2.9 million, which includes $3.0 million of excess tax benefits offset by $(0.1) million of excess tax deficiencies.
	Summarized information related to the Company's stock options for the three months ended March 31, 2015 is as follows:
			Options			Weighted
						Average
						Exercise
						Price
	Outstanding, beginning of period			3,321,063		$	50.58
	Granted			765,428			63.96
	Forfeited			(9,874	)		52.76
	Exercised			(828,844	)		46.8
	Outstanding, end of period			3,247,773		$	54.69
	Vested and expected to vest at end of period			3,197,065		$	54.59
	Exercisable, end of period			1,611,562		$	49.18
	All of the Company's options granted during the three months ended March 31, 2015 vest ratably on each anniversary date over the three years subsequent to grant and have a ten year life.
	Summarized information related to the Company's nonvested restricted stock awards ("RSAs") for the three months ended March 31, 2015 is as follows:
			Shares			Weighted
						Average
						Grant Date
						Fair Value
	Outstanding, beginning of period			1,626,827		$	57.66
	Awarded			—			—
	Vested			(70,238	)		56.95
	Forfeited			—			—
	Outstanding, ending of period			1,556,589		$	57.69
	Summarized information related to the Company's nonvested restricted stock units ("RSUs") for the three months ended March 31, 2015 is as follows:
			Shares			Weighted
						Average
						Grant Date
						Fair Value
	Outstanding, beginning of period			156,695		$	54.88
	Awarded			172,810			63.95
	Vested			(78,036	)		52.89
	Forfeited			(1,353	)		56.6
	Outstanding, ending of period			250,116		$	61.76
	The vesting period for RSAs ranges from 12 months to 42 months. In general, RSUs vest ratably on each anniversary over the three years subsequent to grant. In addition, the RSUs outstanding at the beginning of the period contain associated performance hurdle(s) that must be met in order for the awards to vest. The RSUs granted during the three months ended March 31, 2015 do not contain associated performance hurdles.
	During the three months ended March 31, 2015, the Company granted 43,900 Performance-Based Restricted Stock Units ("PSUs") to members of management. The PSUs are subject to market-based conditions. The estimated fair value of the PSUs granted was $85.00, which was derived from a Monte Carlo simulation. Significant assumptions utilized in estimating the value of the awards granted include an expected dividend yield of 0%, a risk free rate of 1%, and expected volatility of 15% to 52% (average of 28%). The PSUs will entitle the grantee to receive a number of shares of the Company's Common Stock determined over a three-year performance period ending on December 31, 2017 and vesting on March 4, 2018, the settlement date, provided the grantee remains in the service of the Company on the settlement date. The Company expenses the cost of these awards ratably over the requisite service period. The number of shares for which the PSUs will be settled will be a percentage of shares for which the award is targeted and will depend on the Company's Total Shareholder Return (as defined below), expressed as a percentile ranking of the Company's Total Shareholder Return as compared to the Company's Peer Group (as defined below). The number of shares for which the PSUs will be settled vary from zero to 200 percent of the shares specified in the grant. Total Shareholder Return is determined by dividing the average share value of the Company's Common Stock over the 30 trading days preceding January 1, 2018 by the average share value of the Company's Common Stock over the 30 trading days beginning on January 1, 2015, with a deemed reinvestment of any dividends declared during the performance period. The Company's Peer Group includes 54 companies which comprise the S&P Health Care Services Industry Index, which was selected by the Compensation Committee of the Company's Board of Directors and includes a range of healthcare companies operating in several business segments.
Long Term Debt and Capital Lease Obligations	Long Term Debt and Capital Lease Obligations
	On July 23, 2014, the Company entered into a $500.0 million Credit Agreement with various lenders that provides for Magellan Rx Management, Inc. (a wholly owned subsidiary of Magellan Health, Inc.) to borrow up to $250.0 million of revolving loans, with a sublimit of up to $70.0 million for the issuance of letters of credit for the account of the Company, and a term loan in an original aggregate principal amount of $250.0 million (the "2014 Credit Facility"). The 2014 Credit Facility is guaranteed by substantially all of the non-regulated subsidiaries of the Company and will mature on July 23, 2019, but the Company holds an option to extend the 2014 Credit Facility for an additional one year period.
	Under the 2014 Credit Facility, the annual interest rate on revolving and term loan borrowings is equal to (i) in the case of base rate loans, the sum of a borrowing margin of 0.50 percent plus the higher of the prime rate, one-half of one percent in excess of the overnight "federal funds" rate, or the Eurodollar rate for one month plus 1.00 percent, or (ii) in the case of Eurodollar rate loans, the sum of a borrowing margin of 1.50 percent plus the Eurodollar rate for the selected interest period, which rates shall be adjusted from time to time based on the Company's total leverage ratio. The Company has the option to borrow in base rate loans or Eurodollar rate loans at its discretion. Letters of credit issued bear interest at the rate of 1.625 percent. The commitment commission on the 2014 Credit Facility is 0.20 percent of the unused Revolving Loan Commitment, which rate shall be adjusted from time to time based on the Company's total leverage ratio.
	On September 30, 2014, the Company completed a draw-down of the $250.0 million term loan. The borrowings will initially be maintained as a Eurodollar loan. The term loan is subject to certain quarterly amortization payments. As of March 31, 2015 the remaining balance on the term loan was $243.8 million. The term loan will mature on July 23, 2019. As of March 31, 2015, the term loan bore interest at a rate of 1.50 percent plus the London Interbank Offered Rate ("LIBOR"), which was equivalent to a total interest rate of 1.6756 percent. During the period the term loan was outstanding, from September 30, 2014 through March 31, 2015, the weighted average interest rate was 1.67085 percent. As of March 31, 2015, the contractual maturities of the term loan were as follows: 2015—$9.4 million; 2016—$15.6 million; 2017—$25.0 million; 2018—$25.0 million; and 2019—$168.8 million.
	There were $24.6 million and $24.1 million of capital lease obligations at December 31, 2014 and March 31, 2015, respectively. The Company had $32.9 million and $33.4 million of letters of credit outstanding at December 31, 2014 and March 31, 2015, respectively, and no revolving loan borrowings at December 31, 2014 or March 31, 2015.
Redeemable Non-controlling Interest	Redeemable Non-Controlling Interest
	As of March 31, 2015 the Company held an 82% equity interest in AlphaCare Holdings. The other shareholders of AlphaCare Holdings have the right to exercise put options, requiring the Company to purchase up to 50% of the remaining shares prior to January 1, 2017 provided certain membership levels are attained. After December 31, 2016 the other shareholders of AlphaCare Holdings have the right to exercise put options requiring the Company to purchase all or any portion of the remaining shares. In addition, after December 31, 2016 the Company has the right to purchase all remaining shares. Non-controlling interests with redemption features, such as put options, that are not solely within the Company's control are considered redeemable non-controlling interests. Redeemable non-controlling interest is considered to be temporary and is therefore reported in a mezzanine level between liabilities and stockholders' equity on the Company's consolidated balance sheet at the greater of the initial carrying amount adjusted for the non-controlling interest's share of net income or loss or its redemption value. The carrying value of the non-controlling interest as of December 31, 2014 and March 31, 2015 was $5.9 million and $8.5 million, respectively. The $2.6 million increase in carrying value is a result of the impact of additional capital provided by the Company, partially offset by operating losses. The Company recognizes changes in the redemption value on a quarterly basis and adjusts the carrying amount of the non-controlling interest to equal the redemption value at the end of each reporting period. Under this method, this is viewed at the end of the reporting period as if it were also the redemption date for the non-controlling interest. The Company will reflect redemption value adjustments in the earnings per share calculation if redemption value is in excess of the carrying value of the non-controlling interest. As of March 31, 2015, the carrying value of the non-controlling interest exceeded the redemption value and therefore no adjustment to the carrying value was required.
Reclassifications	Reclassifications
	Certain prior year amounts have been reclassified to conform with the current year presentation.

General_Tables

General (Tables)	3 Months Ended
	Mar. 31, 2015
General
Schedule of customers generating in excess of ten percent of net revenues for respective segment	In addition to the Iowa Contracts, the Florida Contracts, and the Maricopa Contract previously discussed, the following customers generated in excess of ten percent of net revenues for the respective segment for the three months ended March 31, 2014 and 2015 (in thousands):
	Segment		Term Date		2014			2015
	Commercial
	Customer A		June 30, 2014(1)		$	55,540		$	—
	Customer B		December 31, 2019			42,898			58,198
	Customer C		August 14, 2017			22,652			32,497
	Public Sector
	None
	Specialty Solutions
	Customer A		November 30, 2016			12,379			15,094
	Customer D		December 31, 2017(2)			33,390			33,817
	Customer E		June 30, 2016(3)			12,574			1,745	*
	Customer F		June 30, 2017			16,552			23,161
	Customer G		January 31, 2016			11,307			15,203
	Customer H		April 1, 2017 to October 1, 2017(4)			1,526	*		13,329
	Pharmacy Management
	Customer I		November 30, 2015 to April 30, 2016(4)			28,579			28,445	*
	Customer J		December 16, 2016			—			74,605
	*	Revenue amount did not exceed ten percent of net revenues for the respective segment for the period presented. Amount is shown for comparative purposes only.
	-1	The contract has terminated.
	-2	On December 31, 2014, this contract was amended and extended through December 31, 2017. Historically the Company provided services on a risk basis. Under the amended contract, the funding arrangement will be a combination of risk and ASO based services.
	-3	The contract transitioned from risk to ASO based services effective July 1, 2014.
	-4	The customer has more than one contract. The individual contracts are scheduled to terminate at various points during the time period indicated above.
Schedule of fair value of financial assets and liabilities	In accordance with the fair value hierarchy described above, the following table shows the fair value of the Company's assets and liabilities that are required to be measured at fair value as of December 31, 2014 and March 31, 2015 (in thousands):
			December 31, 2014
			Level 1			Level 2			Level 3			Total
	Assets
	Cash and cash equivalents(1)		$	—		$	139,280		$	—		$	139,280
	Restricted cash(2)			—			65,992			—			65,992
	Investments:
	U.S. government and agency securities			4,303			—			—			4,303
	Obligations of government-sponsored enterprises(3)			—			15,315			—			15,315
	Corporate debt securities			—			246,886			—			246,886
	Certificates of deposit			—			1,150			—			1,150
	Total assets held at fair value		$	4,303		$	468,623		$	—		$	472,926
	Liabilities
	Contingent consideration		$	—		$	—		$	58,153		$	58,153
	Total liabilities held at fair value		$	—		$	—		$	58,153		$	58,153
			March 31, 2015
			Level 1			Level 2			Level 3			Total
	Assets
	Cash and cash equivalents(4)		$	—		$	48,176		$	—		$	48,176
	Restricted cash(5)			—			69,330			—			69,330
	Investments:
	U.S. government and agency securities			4,944			—			—			4,944
	Obligations of government-sponsored enterprises(3)			—			15,315			—			15,315
	Corporate debt securities			—			281,173			—			281,173
	Certificates of deposit			—			1,150			—			1,150
	Total assets held at fair value		$	4,944		$	415,144		$	—		$	420,088
	Liabilities
	Contingent consideration		$	—		$	—		$	73,122		$	73,122
	Total liabilities held at fair value		$	—		$	—		$	73,122		$	73,122
	-1	Excludes $116.0 million of cash held in bank accounts by the Company.
	-2	Excludes $149.3 million of restricted cash held in bank accounts by the Company.
	-3	Includes investments in notes issued by the Federal Home Loan Bank.
	-4	Excludes $183.2 million of cash held in bank accounts by the Company.
	-5	Excludes $136.3 million of restricted cash held in bank accounts by the Company.
Summary of the Company's liability for contingent consideration	The following table summarizes the Company's liability for contingent consideration (in thousands):
			March 31,
			2015
	Balance as of beginning of period		$	58,153
	Change in fair value			14,969
	Balance as of end of period		$	73,122
Summary of short-term and long-term "available-for-sale" investments	The following is a summary of short-term and long-term investments at December 31, 2014 and March 31, 2015 (in thousands):
			December 31, 2014
			Amortized			Gross			Gross			Estimated
			Cost			Unrealized			Unrealized			Fair Value
						Gains			Losses
	U.S. government and agency securities		$	4,305		$	—		$	(2	)	$	4,303
	Obligations of government-sponsored enterprises(1)			15,318			1			(4	)		15,315
	Corporate debt securities			247,118			8			(240	)		246,886
	Certificates of deposit			1,150			—			—			1,150
	Total investments at December 31, 2014		$	267,891		$	9		$	(246	)	$	267,654
			March 31, 2015
			Amortized			Gross			Gross			Estimated
			Cost			Unrealized			Unrealized			Fair Value
						Gains			Losses
	U.S. government and agency securities		$	4,939		$	5		$	—		$	4,944
	Obligations of government-sponsored enterprises(1)			15,310			6			(1	)		15,315
	Corporate debt securities			281,306			34			(167	)		281,173
	Certificates of deposit			1,150			—			—			1,150
	Total investments at March 31, 2015		$	302,705		$	45		$	(168	)	$	302,582
	-1	Includes investments in notes issued by the Federal Home Loan Bank.
Summary of maturity dates of investments	The maturity dates of the Company's investments as of March 31, 2015 are summarized below (in thousands):
			Amortized			Estimated
			Cost			Fair Value
	2015		$	229,473		$	229,364
	2016			72,597			72,582
	2017			635			636
	Total investments at March 31, 2015		$	302,705		$	302,582
Schedule of stock option activity	Summarized information related to the Company's stock options for the three months ended March 31, 2015 is as follows:
			Options			Weighted
						Average
						Exercise
						Price
	Outstanding, beginning of period			3,321,063		$	50.58
	Granted			765,428			63.96
	Forfeited			(9,874	)		52.76
	Exercised			(828,844	)		46.8
	Outstanding, end of period			3,247,773		$	54.69
	Vested and expected to vest at end of period			3,197,065		$	54.59
	Exercisable, end of period			1,611,562		$	49.18
Schedule of nonvested restricted stock award activity	Summarized information related to the Company's nonvested restricted stock awards ("RSAs") for the three months ended March 31, 2015 is as follows:
			Shares			Weighted
						Average
						Grant Date
						Fair Value
	Outstanding, beginning of period			1,626,827		$	57.66
	Awarded			—			—
	Vested			(70,238	)		56.95
	Forfeited			—			—
	Outstanding, ending of period			1,556,589		$	57.69
Schedule of nonvested restricted stock units	Summarized information related to the Company's nonvested restricted stock units ("RSUs") for the three months ended March 31, 2015 is as follows:
			Shares			Weighted
						Average
						Grant Date
						Fair Value
	Outstanding, beginning of period			156,695		$	54.88
	Awarded			172,810			63.95
	Vested			(78,036	)		52.89
	Forfeited			(1,353	)		56.6
	Outstanding, ending of period			250,116		$	61.76

Net_Income_per_Common_Share_At1

Net Income per Common Share Attributable to Magellan Health, Inc. (Tables)	3 Months Ended
	Mar. 31, 2015
Net Income per Common Share Attributable to Magellan Health, Inc.
Computation of basic and diluted earnings per share	The following tables reconcile income attributable to common shareholders (numerator) and shares (denominator) used in the computations of net income per share attributable to common shareholders (in thousands, except per share data):
		Three Months Ended
		March 31,
		2014		2015
	Numerator:
	Net income attributable to Magellan Health, Inc.	$	25,720	$	7,288
	Denominator:
	Weighted average number of common shares outstanding—basic		27,370		25,319
	Common stock equivalents—stock options		594		450
	Common stock equivalents—RSAs		32		514
	Common stock equivalents—RSUs		54		46
	Common stock equivalents—PSUs		—		68
	Common stock equivalents—employee stock purchase plan		1		2
	Weighted average number of common shares outstanding—diluted		28,051		26,399
	Net income attributable to Magellan Health, Inc. per common share—basic	$	0.94	$	0.29
	Net income attributable to Magellan Health, Inc. per common share—diluted	$	0.92	$	0.28

Business_Segment_Information_T

Business Segment Information (Tables)	3 Months Ended
	Mar. 31, 2015
Business Segment Information
Schedule of operating results by business segment	The following tables summarize, for the periods indicated, operating results by business segment (in thousands):
			Commercial			Public			Specialty			Pharmacy			Corporate			Consolidated
						Sector			Solutions			Management			and
															Elimination
	Three Months Ended March 31, 2014
	Managed care and other revenue		$	188,891		$	497,943		$	105,434		$	55,378		$	(18,055	)	$	829,591
	PBM and dispensing revenue			—			—			—			139,624			(2,740	)		136,884
	Cost of care			(111,202	)		(422,518	)		(73,652	)		(16,391	)		18,055			(605,708	)
	Cost of goods sold			—			—			—			(128,031	)		2,733			(125,298	)
	Direct service costs and other			(40,276	)		(42,958	)		(15,141	)		(35,551	)		(30,796	)		(164,722	)
	Stock compensation expense(1)			155			274			414			303			3,326			4,472
	Less: non-controlling interest segment profit (loss)(2)			—			(1,330	)		—			—			—			(1,330	)
	Segment profit (loss)		$	37,568		$	34,071		$	17,055		$	15,332		$	(27,477	)	$	76,549
			Commercial			Public			Specialty			Pharmacy			Corporate			Consolidated
						Sector			Solutions			Management			and
															Elimination
	Three Months Ended March 31, 2015
	Managed care and other revenue		$	152,525		$	422,977		$	124,342		$	49,068		$	(262	)	$	748,650
	PBM and dispensing revenue			—			—			—			258,793			(26,475	)		232,318
	Cost of care			(82,130	)		(346,930	)		(93,273	)		5			—			(522,328	)
	Cost of goods sold			—			—			—			(243,538	)		25,331			(218,207	)
	Direct service costs and other			(39,210	)		(51,387	)		(20,174	)		(63,548	)		(30,131	)		(204,450	)
	Stock compensation expense(1)			171			309			509			8,856			4,056			13,901
	Changes in fair value of contingent consideration			100									14,869						14,969
	Less: non-controlling interest segment profit (loss)(2)			—			(120	)		—			—			26			(94	)
	Segment profit (loss)		$	31,456		$	25,089		$	11,404		$	24,505		$	(27,507	)	$	64,947
	-1	Stock compensation expense and changes in the fair value of contingent consideration recorded in relation to the acquisitions are included in direct service costs and other operating expenses, however this amount is excluded from the computation of Segment Profit.
	-2	The non-controlling portion of AlphaCare's segment profit (loss) is excluded from the computation of Segment Profit.
Schedule of reconciliation of Segment Profit to consolidated income before income taxes
			Three Months Ended
			March 31,
			2014			2015
	Segment profit		$	76,549		$	64,947
	Stock compensation expense			(4,472	)		(13,901	)
	Changes in fair value of contingent consideration			—			(14,969	)
	Non-controlling interest segment profit (loss)			(1,330	)		(94	)
	Depreciation and amortization			(20,229	)		(23,496	)
	Interest expense			(836	)		(1,626	)
	Interest income			311			466
	Income before income taxes		$	49,993		$	11,327

Commitments_and_Contingencies_

Commitments and Contingencies (Tables)	3 Months Ended
	Mar. 31, 2015
Commitments and Contingencies
Schedule of stock repurchases made under open market	Pursuant to this program, the Company made open market purchases as follows (aggregate cost excludes broker commissions and is reflected in millions):
	Period	Total Number		Average		Aggregate
		of Shares		Price Paid		Cost
		Purchased		per Share
	November 24, 2014 - December 31, 2014		232,170	$	60.65	$	14.1
	January 1, 2015 - March 31, 2015		509,935		62.14		31.7
			742,105			$	45.8

General_Details

General (Details) (USD $)	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014
	segment
Operating results by business segment
Number of segments	5
Revenues	$980,968,000	$966,475,000
Commercial | Risk Based Product
Operating results by business segment
Covered Lives	2,700,000
Revenues	69,700,000
Commercial | ASO (Administrative Services Only)
Operating results by business segment
Covered Lives	15,100,000
Revenues	31,300,000
Commercial | EAP (Employee Assistance Programs)
Operating results by business segment
Covered Lives	13,400,000
Revenues	51,500,000
Public Sector | Risk Based Product
Operating results by business segment
Covered Lives	1,400,000
Revenues	407,800,000
Public Sector | ASO (Administrative Services Only)
Operating results by business segment
Covered Lives	1,800,000
Revenues	15,200,000
Specialty Solutions | Risk Based Product
Operating results by business segment
Covered Lives	7,200,000
Revenues	110,200,000
Specialty Solutions | ASO (Administrative Services Only)
Operating results by business segment
Covered Lives	15,000,000
Revenues	14,100,000
Pharmacy Management
Operating results by business segment
Number of multiple applied for adjusted claim	3
Number of days for applying the multiple	90 days
Number of states served	26
Pharmacy Management | PBM (Pharmacy Benefit Management)
Operating results by business segment
Adjusted claims paid	3,000,000
Pharmacy Management | PBA (Pharmacy Benefit Administration)
Operating results by business segment
Adjusted claims paid	14,800,000
Pharmacy Management | Specialty Dispensing
Operating results by business segment
Adjusted claims paid	$27,900
Pharmacy Management | Commercial PBM
Operating results by business segment
Generic dispensing rate (as a percent)	82.90%
Number of members served	900,000
Pharmacy Management | Medical pharmacy management programs
Operating results by business segment
Number of members served	10,500,000
Managed Healthcare
Operating results by business segment
Number of segments	2

General_Details_2

General (Details 2) (USD $)	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014
Net revenues
Managed Care Revenue	$646,100,000	$728,800,000
Fee-For-Service and Cost-Plus Contracts Revenue	79,000,000	59,700,000
Block Grant Revenues		33,000,000
Performance-Based Revenue	4,500,000	3,000,000
Rebate Revenues	15,900,000	4,100,000
PBM Revenue	185,800,000	81,200,000
Dispensing Revenue	46,500,000	55,700,000
Significant customers
Revenues generated	980,968,000	966,475,000
Maricopa County Regional Behavioral Health Authority
Significant customers
Number of members receiving behavioral healthcare management and other related services		680,000
Revenues generated		201,000,000
Iowa Contracts
Significant customers
Number of contracts	2
Revenues generated	127,200,000	103,200,000
Iowa Medicaid Contract
Significant customers
Termination notice period without cause	30 days
Iowa Medicaid Integrated Health Home Provider Agreement
Significant customers
Termination notice period without cause	60 days
Florida Medicaid Contract
Significant customers
Termination notice	1 day
Termination notice period without cause	30 days
Florida Contracts
Significant customers
Revenues generated	106,000,000	31,800,000
Commercial | Customer A | Service
Significant customers
Revenues generated		55,540,000
Commercial | Customer B | Service
Significant customers
Revenues generated	58,198,000	42,898,000
Commercial | Customer C | Service
Significant customers
Revenues generated	32,497,000	22,652,000
Specialty Solutions | Customer A | Service
Significant customers
Revenues generated	15,094,000	12,379,000
Specialty Solutions | Customer D | Service
Significant customers
Revenues generated	33,817,000	33,390,000
Specialty Solutions | Customer E | Service
Significant customers
Revenues generated	1,745,000	12,574,000
Specialty Solutions | Customer F | Service
Significant customers
Revenues generated	23,161,000	16,552,000
Specialty Solutions | Customer G | Service
Significant customers
Revenues generated	15,203,000	11,307,000
Specialty Solutions | Customer H | Service
Significant customers
Revenues generated	13,329,000	1,526,000
Minimum number of contracts per customer	1
Pharmacy Management | Customer I | Service
Significant customers
Revenues generated	28,445,000	28,579,000
Minimum number of contracts per customer	1
Pharmacy Management | Customer J | Service
Significant customers
Revenues generated	$74,605,000

General_Details_3

General (Details 3) (USD $)	3 Months Ended
In Thousands, unless otherwise specified	Mar. 31, 2015	Mar. 31, 2014
Concentration of Business
Net revenue	$980,968	$966,475
Minimum
Concentration of Business
Term of Contract	1 year
Term of renewed contract	1 year
Notice period for termination of contract	60 days
Maximum
Concentration of Business
Term of Contract	3 years
Term of renewed contract	2 years
Notice period for termination of contract	180 days
Pennsylvania Counties
Concentration of Business
Net revenue	$91,600	$90,100

General_Details_4

General (Details 4) (USD $)	Mar. 31, 2015	Dec. 31, 2014
Assets
Restricted Cash	$205,586,000	$215,325,000
Investments	302,582,000	267,654,000
Cash held in bank accounts by the Company, unrestricted	183,200,000	116,000,000
Cash held in bank accounts by the Company, restricted	136,300,000	149,300,000
Liabilities
Contingent consideration	73,122,000	58,153,000
Level 2 | Term Loan
Liabilities
Fair value of debt	243,800,000
Fair value measured on recurring basis | Level 1
Assets
Total assets measured at fair value	4,944,000	4,303,000
Fair value measured on recurring basis | Level 1 | U.S. Government and agency securities
Assets
Investments	4,944,000	4,303,000
Fair value measured on recurring basis | Level 2
Assets
Total assets measured at fair value	415,144,000	468,623,000
Fair value measured on recurring basis | Level 2 | Other than cash held in bank accounts by Company
Assets
Cash and Cash Equivalents	48,176,000	139,280,000
Restricted Cash	69,330,000	65,992,000
Fair value measured on recurring basis | Level 2 | Obligations of government-sponsored enterprises
Assets
Investments	15,315,000	15,315,000
Fair value measured on recurring basis | Level 2 | Corporate debt securities
Assets
Investments	281,173,000	246,886,000
Fair value measured on recurring basis | Level 2 | Certificates of deposit
Assets
Investments	1,150,000	1,150,000
Fair value measured on recurring basis | Level 3
Liabilities
Contingent consideration	73,122,000	58,153,000
Total liabilities held at fair value	73,122,000	58,153,000
Fair value measured on recurring basis | Total
Assets
Total assets measured at fair value	420,088,000	472,926,000
Liabilities
Contingent consideration	73,122,000	58,153,000
Total liabilities held at fair value	73,122,000	58,153,000
Fair value measured on recurring basis | Total | Other than cash held in bank accounts by Company
Assets
Cash and Cash Equivalents	48,176,000	139,280,000
Restricted Cash	69,330,000	65,992,000
Fair value measured on recurring basis | Total | U.S. Government and agency securities
Assets
Investments	4,944,000	4,303,000
Fair value measured on recurring basis | Total | Obligations of government-sponsored enterprises
Assets
Investments	15,315,000	15,315,000
Fair value measured on recurring basis | Total | Corporate debt securities
Assets
Investments	281,173,000	246,886,000
Fair value measured on recurring basis | Total | Certificates of deposit
Assets
Investments	$1,150,000	$1,150,000

General_Details_5

General (Details 5) (USD $)	3 Months Ended
	Mar. 31, 2015	Dec. 31, 2014	Apr. 30, 2014	Jul. 01, 2014
Fair value measurement of contingent consideration
Fair value of the short term contingent consideration	$11,800,000
Fair value of the long term contingent consideration	61,319,000	49,839,000
Fair value of the contingent consideration	73,122,000
Changes in fair value of contingent liabilities in relation to acquisition	14,969,000
Liability for contingent consideration
Balance as of beginning of period	58,153,000
Changes in fair value	14,969,000
Balance as of end of period	73,122,000
Direct service costs and other operating expenses
Fair value measurement of contingent consideration
Changes in fair value of contingent liabilities in relation to acquisition	15,000,000
Liability for contingent consideration
Changes in fair value	15,000,000
CDMI
Contingent consideration disclosures
Maximum potential contingent payments			165,000,000
Fair value measurement of contingent consideration
Fair values inputs - Discount Rate (as a percent)	14.50%
Estimated undiscounted future contingent payments	80,600,000	65,700,000
Fair value of the short term contingent consideration	11,500,000
Fair value of the long term contingent consideration	58,300,000
CDMI | Minimum
Fair value measurement of contingent consideration
Fair value inputs - Probability Of Payment (as a percent)	0.00%
CDMI | Maximum
Fair value measurement of contingent consideration
Fair value inputs - Probability Of Payment (as a percent)	100.00%
Cobalt
Contingent consideration disclosures
Maximum potential contingent payments				6,000,000
Fair value measurement of contingent consideration
Fair values inputs - Discount Rate (as a percent)	14.50%
Estimated undiscounted future contingent payments	4,200,000	4,200,000
Fair value of the short term contingent consideration	300,000
Fair value of the long term contingent consideration	$3,000,000
Cobalt | Minimum
Fair value measurement of contingent consideration
Fair value inputs - Probability Of Payment (as a percent)	5.00%
Cobalt | Maximum
Fair value measurement of contingent consideration
Fair value inputs - Probability Of Payment (as a percent)	70.00%

General_Details_6

General (Details 6) (USD $)	3 Months Ended		12 Months Ended
In Thousands, unless otherwise specified	Mar. 31, 2015	Mar. 31, 2014	Dec. 31, 2014
Short-term and long-term investments
Other-than-temporary unrealized losses	$0		$0
Realized gains or losses	0	0
Amortized Cost	302,705		267,891
Gross Unrealized Gains	45		9
Gross Unrealized Losses	-168		-246
Estimated Fair Value	302,582		267,654
U.S. Government and agency securities
Short-term and long-term investments
Amortized Cost	4,939		4,305
Gross Unrealized Gains	5
Gross Unrealized Losses			-2
Estimated Fair Value	4,944		4,303
Obligations of government-sponsored enterprises
Short-term and long-term investments
Amortized Cost	15,310		15,318
Gross Unrealized Gains	6		1
Gross Unrealized Losses	-1		-4
Estimated Fair Value	15,315		15,315
Corporate debt securities
Short-term and long-term investments
Amortized Cost	281,306		247,118
Gross Unrealized Gains	34		8
Gross Unrealized Losses	-167		-240
Estimated Fair Value	281,173		246,886
Certificates of deposit
Short-term and long-term investments
Amortized Cost	1,150		1,150
Estimated Fair Value	$1,150		$1,150

General_Details_7

General (Details 7) (USD $)	Mar. 31, 2015	Dec. 31, 2014
In Thousands, unless otherwise specified
Amortized Cost
Investments amortized cost maturity dates 2015	$229,473
Investments amortized cost maturity dates 2016	72,597
Investments amortized cost aturity dates 2017	635
Amortized Cost	302,705	267,891
Estimated Fair Value
Investments fair value maturity dates 2015	229,364
Investments fair value maturity dates 2016	72,582
Investments fair value maturity dates 2017	636
Estimated Fair Value	$302,582	$267,654

General_Details_8

General (Details 8) (USD $)	3 Months Ended
In Millions, unless otherwise specified	Mar. 31, 2015	Mar. 31, 2014	Dec. 31, 2014
Income Taxes
Effective income tax rates (as a percent)	36.50%	51.20%
The ownership percentage for which the entity files a consolidated federal income tax return, low end of range	80.00%
Deferred Tax Assets, Valuation Allowance	$11.90		$12.40
Federal
Income Taxes
Operating Loss Carryforwards	3
State
Income Taxes
Operating Loss Carryforwards	160.5
AlphaCare | Federal
Income Taxes
Operating Loss Carryforwards	$24.50

General_Details_9

General (Details 9) (USD $)	3 Months Ended		12 Months Ended
In Millions, unless otherwise specified	Mar. 31, 2015	Mar. 31, 2014	Dec. 31, 2015	Dec. 31, 2014
General
Projected fees Under Affordable Care Act			$27.70
Fees Under Affordable Care Act Expense	6.9	5.1		21.4
Amount of Revenues Associated with Accrual for Reimbursement of Economic Impact of Affordable Care Act Fees from its Customers	$11.70	$3.20

General_Details_10

General (Details 10) (USD $)	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014
Share-based compensation
Stock compensation expense	$13,901,000	$4,472,000
Estimated forfeitures (as a percent)	4.00%	4.00%
Tax benefit from exercise of stock options and vesting of stock awards - financing cash flow	2,961,000	517,000
Change to additional paid in capital related to tax net benefits (deficiencies)	2,900,000	400,000
Excess tax benefits of tax deductions in recognized stock compensation expenses	3,000,000	500,000
Tax deficiencies and adjustments from exercise of stock options and vesting of stock awards	-100,000	-100,000
Stock options
Stock options, nonvested restricted stock awards and nonvested restricted stock units
Grants in period, weighted average grant date fair value (in dollars per share)	$14
Expected volatility (as a percent)	25.03%
Stock option activity
Outstanding, beginning of period (in shares)	3,321,063
Granted (in shares)	765,428
Forfeited (in shares)	-9,874
Exercised (in shares)	-828,844
Outstanding, end of period (in shares)	3,247,773
Vested and expected to vest end of period (in shares)	3,197,065
Exercisable, end of period (in shares)	1,611,562
Weighted average exercise price of stock options
Outstanding, beginning of period (in dollars per share)	$50.58
Granted (in dollars per share)	$63.96
Forfeited (in dollars per share)	$52.76
Exercised (in dollars per share)	$46.80
Outstanding, end of period (in dollars per share)	$54.69
Vested and expected to vest end of period (in dollars per share)	$54.59
Exercisable, end of period (in dollars per share)	$49.18
Assumptions used for estimating value of awards granted
Vesting period	3 years
Life of options (Expiration period)	10 years
Restricted stock awards
Nonvested restricted stock awards and units
Outstanding, beginning of period (in shares)	1,626,827
Vested (in shares)	-70,238
Outstanding, ending of period (in shares)	1,556,589
Weighted average exercise price of nonvested restricted stock award and units
Outstanding, beginning of period (in dollars per share)	$57.66
Vested (in dollars per share)	$56.95
Outstanding, ending of period (in dollars per share)	$57.69
Restricted stock awards | Minimum
Assumptions used for estimating value of awards granted
Vesting period	12 months
Restricted stock awards | Maximum
Assumptions used for estimating value of awards granted
Vesting period	42 months
Restricted Stock Units (RSUs)
Assumptions used for estimating value of awards granted
Vesting period	3 years
Nonvested restricted stock awards and units
Outstanding, beginning of period (in shares)	156,695
Awarded (in shares)	172,810
Vested (in shares)	-78,036
Forfeited (in shares)	-1,353
Outstanding, ending of period (in shares)	250,116
Weighted average exercise price of nonvested restricted stock award and units
Outstanding, beginning of period (in dollars per share)	$54.88
Awarded (in dollars per share)	$63.95
Vested (in dollars per share)	$52.89
Forfeited (in dollars per share)	$56.60
Outstanding, ending of period (in dollars per share)	$61.76
Performance Based Restricted Stock Units ("PSUs")
Assumptions used for estimating value of awards granted
Expected dividend yield (as a percent)	0.00%
Risk-free interest rate (as a percent)	1.00%
Expected volatiliy, minimum (as a percent)	15.00%
Expected volatility, maximum (as a percent)	52.00%
Expected volatilty, average (as a percent)	28.00%
Vesting period	3 years
Number of trading days considered for average share value	30
Number of companies in peer group	54
Nonvested restricted stock awards and units
Awarded (in shares)	43,900
Estimated fair value	$85
Performance Based Restricted Stock Units ("PSUs") | Minimum
Assumptions used for estimating value of awards granted
Percentage of shares to be settled	0
Performance Based Restricted Stock Units ("PSUs") | Maximum
Assumptions used for estimating value of awards granted
Percentage of shares to be settled	200

General_Details_11

General (Details 11) (USD $)	0 Months Ended	3 Months Ended	0 Months Ended
In Millions, unless otherwise specified	Jul. 23, 2014	Mar. 31, 2015	Sep. 30, 2014	Dec. 31, 2014
Debt disclosures
Capital lease obligations		24.1		$24.60
Revolving Loan borrowings
Debt disclosures
Revolving borrowings outstanding		0		0
Letter of Credit
Debt disclosures
Letters of credit outstanding		33.4		32.9
Term Loan
Long-term Debt and Capital Lease Obligations
Amount of term loan borrowings outstanding		243.8
Long-term Debt, Fiscal Year Maturity
2015		9.4
2016		15.6
2017		25
2018		25
2019		168.8
Credit Facility 2014
Long-term Debt and Capital Lease Obligations
Maximum borrowing capacity	500
Term of option to extend credit facility	1 year
Credit Facility 2014 | Revolving Loan borrowings
Long-term Debt and Capital Lease Obligations
Maximum borrowing capacity	250
Commitment commission (as a percent)		0.20%
Credit Facility 2014 | Letter of Credit
Long-term Debt and Capital Lease Obligations
Maximum borrowing capacity	70
Stated interest rate (as a percent)		1.63%
Credit Facility 2014 | Term Loan
Long-term Debt and Capital Lease Obligations
Maximum borrowing capacity	250
Credit Facility 2014 | Revolving and Term Loan Borrowings
Long-term Debt and Capital Lease Obligations
Borrowing margin (as a percent)		0.50%
Credit Facility 2014 | Overnight Federal Funds rate | Revolving and Term Loan Borrowings
Long-term Debt and Capital Lease Obligations
Basis spread on variable rate (as a percent)		0.50%
Credit Facility 2014 | Eurodollar rate for one month | Revolving and Term Loan Borrowings
Long-term Debt and Capital Lease Obligations
Basis spread on variable rate (as a percent)		1.00%
Credit Facility 2014 | Eurodollar denominated loans | Eurodollar rate for selected interest period | Term Loan
Long-term Debt and Capital Lease Obligations
Proceeds from issuance of debt			$250
Effective borrowing margin (as a percent)		1.50%
Effective interest rate (as a percent)		1.68%
Weighted average interest rate (as a percent)		1.67%
Credit Facility 2014 | Eurodollar denominated loans | Eurodollar rate for selected interest period | Revolving and Term Loan Borrowings
Long-term Debt and Capital Lease Obligations
Borrowing margin (as a percent)		1.50%

General_Details_12

General (Details 12) (USD $)	3 Months Ended	12 Months Ended
	Mar. 31, 2015	Dec. 31, 2014
Redeemable Non-Controlling Interest disclosures
Redeemable non-controlling interest	$8,548,000	$5,957,000
AlphaCare Holdings Inc.
Redeemable Non-Controlling Interest disclosures
Percentage of ownership held	82.00%
Percentage of remaining shares which the entity may be required to purchase in the event of exercise of put options by other shareholders		50.00%
Redeemable non-controlling interest	8,500,000	5,900,000
Increase (Reduction) in carrying value as a result of operating income (losses)	$2,600,000

Net_Income_per_Common_Share_At2

Net Income per Common Share Attributable to Magellan Helath Services, Inc (Details) (USD $)	3 Months Ended
In Thousands, except Share data, unless otherwise specified	Mar. 31, 2015	Mar. 31, 2014
Numerator:
Net income attributable to Magellan Health, Inc.	$7,288	$25,720
Denominator:
Weighted average number of common shares outstanding-basic (in shares)	25,319,000	27,370,000
Common stock equivalents-stock options (in shares)	450,000	594,000
Common stock equivalents-RSAs (in shares)	514,000	32,000
Common stock equivalents-RSUs (in shares)	46,000	54,000
Common stock equivalents- PSUs( in shares)	68,000
Common stock equivalents-employee stock purchase plan (in shares)	2,000	1,000
Weighted average number of common shares outstanding-diluted (in shares)	26,399,000	28,051,000
Net income attributable to Magellan Health, Inc. per common share-basic (in dollars per share)	$0.29	$0.94
Net income attributable to Magellan Health, Inc. per common share-diluted (in dollars per share)	$0.28	$0.92
Potential dilutive securities excluded from computation of dilutive securities (in shares)	1,000,000	300,000

Business_Segment_Information_D

Business Segment Information (Details) (USD $)	3 Months Ended
In Thousands, unless otherwise specified	Mar. 31, 2015	Mar. 31, 2014
Operating results by business segment
Managed care and other revenue	$748,650	$829,591
PBM and dispensing	232,318	136,884
Cost of care	-522,328	-605,708
Cost of goods sold	-218,207	-125,298
Direct service costs and other	-204,450	-164,722
Stock compensation expense	13,901	4,472
Changes in fair value of contingent consideration	14,969
Less: non-controlling interest segment profit (loss)	-94	-1,330
Segment profit (loss)	64,947	76,549
Operating segments | Commercial
Operating results by business segment
Managed care and other revenue	152,525	188,891
Cost of care	-82,130	-111,202
Direct service costs and other	-39,210	-40,276
Stock compensation expense	171	155
Changes in fair value of contingent consideration	100
Segment profit (loss)	31,456	37,568
Operating segments | Public Sector
Operating results by business segment
Managed care and other revenue	422,977	497,943
Cost of care	-346,930	-422,518
Direct service costs and other	-51,387	-42,958
Stock compensation expense	309	274
Less: non-controlling interest segment profit (loss)	-120	-1,330
Segment profit (loss)	25,089	34,071
Operating segments | Specialty Solutions
Operating results by business segment
Managed care and other revenue	124,342	105,434
Cost of care	-93,273	-73,652
Direct service costs and other	-20,174	-15,141
Stock compensation expense	509	414
Segment profit (loss)	11,404	17,055
Operating segments | Pharmacy Management
Operating results by business segment
Managed care and other revenue	49,068	55,378
PBM and dispensing	258,793	139,624
Cost of care	5	-16,391
Cost of goods sold	-243,538	-128,031
Direct service costs and other	-63,548	-35,551
Stock compensation expense	8,856	303
Changes in fair value of contingent consideration	14,869
Segment profit (loss)	24,505	15,332
Corporate and Elimination
Operating results by business segment
Managed care and other revenue	-262	-18,055
PBM and dispensing	-26,475	-2,740
Cost of care		18,055
Cost of goods sold	25,331	2,733
Direct service costs and other	-30,131	-30,796
Stock compensation expense	4,056	3,326
Less: non-controlling interest segment profit (loss)	26
Segment profit (loss)	($27,507)	($27,477)

Business_Segment_Information_D1

Business Segment Information (Details 2) (USD $)	3 Months Ended
In Thousands, unless otherwise specified	Mar. 31, 2015	Mar. 31, 2014
Reconciliation of segment profit to income before income taxes
Segment profit	$64,947	$76,549
Stock compensation expense	-13,901	-4,472
Changes in fair value of contingent consideration	-14,969
Noncontrolling Interest Segment Profit Exclusion	-94	-1,330
Depreciation and amortization	-23,496	-20,229
Interest expense	-1,626	-836
Interest income	466	311
Income before income taxes	$11,327	$49,993

Commitments_and_Contingencies_1

Commitments and Contingencies (Details) (October 2014 Share Repurchase Program, USD $)	1 Months Ended		3 Months Ended	4 Months Ended
In Millions, except Share data, unless otherwise specified	Apr. 27, 2015	Dec. 31, 2014	Mar. 31, 2015	Mar. 31, 2015	Oct. 22, 2014
October 2014 Share Repurchase Program
Stock Repurchases
Amount authorized under stock repurchase plan					$200
Share repurchases made in open market (in shares)	101,547	232,170	509,935	742,105
Average Price Paid per Share (in dollars per share)		$60.65	$62.14
Aggregate Cost	$7.20	$14.10	$31.70	$45.80

Acquisitions_Details

Acquisitions (Details) (USD $)	3 Months Ended	1 Months Ended	0 Months Ended
	Mar. 31, 2015	Apr. 30, 2014	Jan. 31, 2015	Dec. 31, 2014	Dec. 31, 2013	Jul. 01, 2014
Acquisition disclosures
Fair value of the contingent consideration	$73,122,000			$58,153,000
Changes in fair value of contingent liabilities in relation to acquisition	14,969,000
AlphaCare Holdings Inc.
Acquisitions
Percentage of equity interest acquired					65.00%
Amount of additional Preferred Shares purchased	23,600,000
Percentage of ownership held	82.00%
Voting interest of remaining shareholders	18.00%
CDMI
Acquisitions
Amount of consideration paid in cash		201,100,000
Reduction to consideration paid due to net receipts received for working capital adjustments		3,900,000
Acquisition disclosures
Maximum potential contingent payments		165,000,000
Working capital receivable	100,000
Cobalt
Acquisition disclosures
Maximum potential contingent payments						6,000,000
HSM
Acquisitions
Amount of consideration paid in cash			$13,500,000

Subsequent_Events_Details

Subsequent Events (Details) (Subsequent event, Acquisition 4 D Member, USD $)	0 Months Ended
In Millions, unless otherwise specified	Apr. 30, 2015	Apr. 30, 2015
Subsequent events
Consideration paid	$55
Maximum potential contingent payments	30	30
Achievement of growth targets
Subsequent events
Maximum potential contingent payments	10	10
Retention Of Certain Business Through 2018
Subsequent events
Maximum potential contingent payments	$20	$20