UnitedHealthCare Takes Next Step in TRICARE Protest

by: Matthew Potter
June 23, 2011

Category: Business Line, Companies, Congress, Contract Additions, Contract Awards, Department of Defense, Editorial, Events, Federal Budget Process, GAO, logistics, medicine, Protest, Services | RSS 2.0

As we had written last week the Government Accountability Office (GAO) had ruled against UnitedHealthcare’s protest of the award of the Southern Region TRICARE contract. This meant that the contract would go to Humana (HUM) who had actually been the incumbent back in 2009 when the government tried to award the latest group of TRICARE medical management contracts.

TRICARE is the medical insurance program offered by the Pentagon to its active duty members, their dependents, retirees and selected Reservists and National Guardsmen. The country is divided into regions and one insurance company is awarded a contract to manage it. These contracts are quite large in the region of $4-5 billion a year.

In 2009 the government attempted to award new five year contracts for the different regions. Three of the contracts were protested for various reasons but normally because the source selection criteria were not followed correctly. Two of the three have been resolved but the Southern one still remains in a legal battle. Originally Humana lost the contract to UnitedHealthcare but protested. That led to a decision to have a new contest which Humana then one. UnitedHealthcare then protested that decision. The GAO denied the protest and let the award to Humana stand.

Now Unitedhealthcare has decided to sue in the U.S. District Court of Federal Claims which is the next step in the protest process. In their press release from Tuesday the company states: “The Pentagon disregarded its own stated goals for this contract, and military families’ access to quality health care in the South will be put at risk as a result.” The company continues to believe that the decision by the government to choose companies for the TRICARE offering low reimbursement rates limits care and choice for the military.

The lawsuit should take a few months to decide and the current TRICARE contract should continue with Humana

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