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UnitedHealth Is Final Choice for Tricare West Contract

by: Matthew Potter
March 20, 2012

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

Almost two weeks ago it came out that the Department of Defense had made a final decision in to whom to award the TRICARE West management contract to. The rumors were that UnitedHealth (UNH) would be the winner and that was confirmed at the end of last week.

UnitedHealth won the over $20 billion, 5 year contract after a series of competitions, awards and protests that have taken almost three years to resolve. The losing company, TriWest Healthcare Alliance, had been formed to just manage the contract.

One of the issues facing TriWest was the fact that they had paid a fine of $10 million to the U.S. Government after a whistleblower lawsuit about pricing. How much this affected the source selection is of course impossible to know.

There are reports that UnitedHealth will most likely absorb some of the jobs that TriWest will lose to help it manage the contract.

TRICARE is the U.S. military’s primary medical provider. It is used to cover active duty members, their dependents, retirees and selected Reserve and National Guard personnel. In 2008-2009 new five year contracts to manage the different regions were awarded but several faced protests and took some years to work out.

Defense Department medical costs have increased greatly over the last ten years as the military has fought in Iraq and Afghanistan, grown in size and also gained more retirees. This has caused the TRICARE, Veterans and other health care programs to grow significantly. The recent Obama budget proposal hopes to begin reining in this cost growth by in some ways requiring members to pay more in co-pays and fees. Whether that is politically acceptable remains to be seen. Certainly TRICARE will be a big part of that budget discussion.

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3 Comments

  1. TRICARE Disputes to Continue as TriWest to Protest UnitedHealth’s Win | Defense Procurement News on March 27th, 2012 2:01 am

    […] this month the U.S. Department of Defense decided to award the TRICARE West management contract to UnitedHealth Group (UNH). This was the culmination of […]

  2. Emedist.com on April 4th, 2012 5:00 pm

    UnitedHealth wins 5-year Tricare contract…

    The country’s largest private health plan is getting bigger, by almost 3 million members and $1.4 billion in income during the next five years, thanks to a contract to administer Tricare benefits for active and retired service members and their famili….

  3. TRICARE West Contract Finally Settled in UnitedHealth’s Favor | Defense Procurement News on July 6th, 2012 2:32 am

    […] a final round of awards and protests the Government Accountability Office (GAO) has upheld the award earlier this year to UnitedHealth (UNH). The GAO ruled in a protest by the incumbent, TriWest to the award in […]

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