UnitedHealthcare, two other insurers lose protests over $58B Tricare contracts

Morgan Haefner - Print  | 

The U.S. Government Accountability Office dismissed protests from UnitedHealthcare, Health Net and WellPoint over losing two large military healthcare contract bids valued at a combined $58 billion.

The U.S. Department of Defense unexpectedly dumped UnitedHealthcare when it inked separate five-year contracts with Humana and Health Net to manage Tricare in July. The Minnetonka, Minn.-based payer has managed care for Tricare's West Region since 2012, according to Military Times.

Tricare consolidated its North, South and West Regions into two — East and West — with only one insurer servicing eastern states and areas and another servicing western states and areas. Louisville, Ky.-based Humana previously provided managed care to 3.1 million individuals in Tricare's South Region, which will grow to about 6 million in the reassigned East Region. Humana's contract is valued at about $40.5 billion. Rancho Cordova, Calif.-based Health Net, a subsidiary of St. Louis-based Centene, previously managed care for beneficiaries in the North Region and will shift to the West Region. Health Net's contract is valued at about $17.7 billion.

UnitedHealthcare, which bid on both contracts, protested its losses in August along with two other bidders — Health Net and Indianapolis-based Anthem subsidiary WellPoint. Despite being granted the West Region contract, Health Net argued it should have been awarded the larger East Region. WellPoint filed its protest over the East Region contract.

In a Tuesday statement obtained by Star Tribune, UnitedHealthcare said it "remains fully committed to serving the healthcare needs of our country's military service members, retirees and their families in the Tricare West Region, including a successful transition."  

Tricare has 9.4 million beneficiaries worldwide. Under the new contracts, healthcare delivery will begin 2017. 

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