Filed under: Business Line, Companies, Contract Awards, Events, IT, logistics, medicine, Press Releases
Health, National Security, and Engineering Solutions Company to Provide Support for the Military Health System Nurse Advice Line
RESTON, Va., Nov. 4, 2013 /PRNewswire/ — Leidos (NYSE: LDOS), a health, national security, and engineering solutions company, was awarded a prime contract by the Defense Health Agency (DHA) to provide consultative, analytical, decision making, managerial, and implementation support services for a Nurse Advice Line (NAL) that will support the Military Health System (MHS). The single-award firm fixed-price contract has a one-year base period of performance, four one-year options, and a total contract value of approximately $178 million if all options are exercised.
The NAL program is designed to advance the DHA’s goals of improving the availability and quality of care for its beneficiaries while reducing the overall cost of care. NAL beneficiaries will receive around-the-clock access to nurse advice line services where customer calls will be triaged using patented nurse triage algorithms to determine the most appropriate and effective level of care.
Under the contract, Leidos will provide NAL services to more than nine million eligible TRICARE beneficiaries in all 50 states, making it one of the largest and most complex programs of its kind. The scope of work includes call center services, nurse triage services, medical appointing services and administrative support delivered by an expert team of customer service representatives, registered telehealth nurses, and appointment clerks. This team of professionals will provide TRICARE beneficiaries clinical advice and urgent care support based on nationally recognized algorithms, protocols, and guidelines; and enable eligible military enrollees to schedule, cancel, and reschedule appointments through the MHS Composite Health Care System and the Coast Guard’s Epic electronic health record system.
“We are proud to have been selected to work with DHA to provide nurse advice line services to millions of military beneficiaries across the United States. Improving the availability, quality, and cost effectiveness of healthcare for our military service members and their families are national priorities, and we are honored to support these important goals,” said Steve Comber, group president, Leidos Health.
The company, formerly named Science Applications International Corporation (SAIC), changed its name to Leidos, Inc. on September 27, 2013 [in connection with the spin-off of its former technical, engineering and enterprise information technology business, which has assumed the company’s former name]. Leidos has submitted a change-of-name agreement to the U.S. government to recognize the name change, which is currently under review by the responsible Defense Contract Management Agency contracting officer.
Leidos is a science and technology solutions leader working to address some of the world’s toughest challenges in national security, health, and engineering. The Company’s 23,000 employees support vital missions for our government and the commercial sector, develop innovative solutions to drive better outcomes, and defend our Nation’s digital and physical infrastructure from ‘new world’ threats. Leidos is headquartered in Reston, Va. and had approximately $6 billion in revenues for fiscal year 2013, on a pro forma basis, following the spin-off of the company’s technical, engineering and enterprise IT business on Sept. 27, 2013. For more information, visit www.Leidos.com.
Statements in this announcement, other than historical data and information, constitute forward-looking statements that involve risks and uncertainties. A number of factors could cause our actual results, performance, achievements, or industry results to be very different from the results, performance, or achievements expressed or implied by such forward-looking statements. Some of these factors include, but are not limited to, the risk factors set forth in Leidos’ Annual Report on Form 10-K for the period ended January 31, 2013, and other such filings that Leidos makes with the SEC from time to time. Due to such uncertainties and risks, readers are cautioned not to place undue reliance on such forward-looking statements, which speak only as of the date hereof.
Filed under: Business Line, Companies, Events, logistics, medicine, Press Releases
PHOENIX (Sept. 4, 2013) — TriWest Healthcare Alliance has been awarded a five year contract by the Department of Veterans Affairs (VA) to administer the VA Patient-Centered Community Care (VAPCCC) program to serve nearly half of the Veterans eligible for care in the country.
The VAPCCC contract enhances access to health care services for Veterans by making a quality provider network available close to the Veteran’s home. This contract ensures Veterans receive coordinated, high quality care in their community when VA refers behavioral health and specialty care to the network.
“TriWest is humbled and proud to have been awarded this contract. We look forward to the privilege of serving our nation’s heroes and partnering with VA to enhance access to care for Veterans in 28 states,” said TriWest Chief Executive Officer and President, David J. McIntyre, Jr. “We have proven expertise in providing access to quality health care and pride ourselves on delivering best-in-class customer service to our nation’s Veterans, even in the most rural areas. It’s who we are. It’s what we do. Supporting VA and our fellow citizens through this new program will be a significant privilege.”
Through VAPCCC, TriWest will provide access to high quality health care services through their network of providers as well as referral management, patient appointing, medical documentation tracking, coordination of admissions and discharges in community facilities, clinical quality management and claims payment. According to VA, the total value of the VAPCCC contract over a five year period is estimated at $4.3 Billion.
“After serving as a Navy physician for 26 years, I fully appreciate TriWest’s strong culture of service,” said Frank Maguire, TriWest’s Chief Medical Officer for the past ten years. “Veterans can be assured that we will apply the full measure of our knowledge, compassion, experience and our owner’s expansive provider network to deliver access to high quality specialty and behavioral health care they’ve earned and deserve.”
TriWest Healthcare Alliance was founded in 1996 by 16 not-for-profit health plans and two university hospital system to provide Service members and their families, and Veterans and their families, with access to high quality health care and customer service. According to Rich Boals, TriWest’s Chairman of the Board and the President and CEO of Blue Cross Blue Shield of Arizona, “it has been and remains an honor to have the opportunity to deliver excellence for those who have sacrificed so much for their fellow Americans at a solid value to the taxpayer. And, we are looking forward to delivering this service in support of VA as it seeks to meet the needs of our nation’s heroes.”
The geographic area includes VAPCCC Regions 3, 5 and 6, encompassing Veterans Integrated Services Network (VISNs) 9, 15, 16, 17, 18, 20, 21 and 22. The VISNs cover all or portions of 28 states, including: Alabama, Alaska, Arizona, Arkansas, California, Colorado, Florida, Georgia, Hawaii, Idaho, Illinois, Indiana, Kansas, Kentucky, Louisiana, Mississippi, Missouri, Montana, Nevada, New Mexico, Ohio, Oklahoma, Oregon, Tennessee, Texas, Virginia, Washington and West Virginia, as well as American Samoa, Guam and the Northern Mariana Islands.
About TriWest Healthcare Alliance
TriWest Healthcare Alliance has been On a Mission to Serve® America’s military families and Veterans since 1996. It is our privilege to deliver award-winning customer service and provide access to high-quality health care including behavioral health, crisis management and counseling for this deserving population.
Filed under: Business Line, Companies, Contract Awards, Events, General Dynamics, IT, logistics, medicine, Services, U.S. Army
The U.S. military has been spending a larger and larger portion of its budget on medical care and facilities over the last decade. This has been driven by the operations in Iraq and Afghanistan, the recent growth in the size of the military, a large number of retirees along with members dependents. Primary care is through the TRICARE program which operates as a HMO basically. The different services also operate hospitals and clinics across the globe and the U.S.
During the recent round of Base Realignment and Closure (BRAC) hospitals were moved, expanded or built new to handle the changes in personnel assigned to the bases. There was also substantial investment at FT Sam Houston in San Antonio, TX as BRAC dictated centralization of all medical training there. This meant that facilities across the U.S. had to be merged as Army, Navy and Air Force training will take place there.
All of this work requires contractors to manage, execute and conduct the required work. General Dynamics (GD), for example, received recently 3 task orders from the U.S. Army to support their medical facilities. These are worth together about $100 million and have a period of performance of just over 2 years.
They will have GD provide equipment and movement services as 2 new facilities are stood up at FT Riley and FT Benning. These are new hospitals built as BRAC moved substantial numbers of troops to these sites from other U.S. bases. Both are planned to open in 2014. The third task will support new equipment and services for 2 clinics in Korea.
As the U.S. sorts out its budget issues there may be changes to plans right now for this type of investment but there will be some continued efforts to build new and better medical facilities for even a smaller U.S. military.
Filed under: Business Line, development program, Editorial, logistics, medicine
C-PERL Will Produce Nerve Agent Bioscavenger Butyrylcholinesterase for Defense Threat Reduction Agency using Proprietary Protein Production System.
SAVAGE, Md., Oct. 24, 2012 /PRNewswire/ — Chesapeake PERL has been awarded a contract to develop the human nerve agent bioscavenger butyrylcholinesterase (BChE) as a potential nerve agent countermeasure for the Defense Threat Reduction Agency (DTRA). The contract will fund development of a recombinant human BChE and its production in C-PERL’s PERLXpress high efficiency protein manufacturing system. C-PERL will collaborate with the US Army Medical Research Institute of Chemical Defense (located on the Aberdeen Proving Grounds, MD) to test the circulatory stability and anti-nerve agent protective efficacy of the recombinant BChE, with the ultimate objective of advancing a product into human clinical trials.
BChE is the lead bioscavenger candidate based on its ability to afford protection over a broad range of highly toxic organophosphorus nerve agents. It is a natural mammalian blood protein that can be administered either prophylactically or post-exposure, but is normally present at low concentrations in human plasma making it both expensive to produce and severely limited in supply. DTRA is seeking economical alternative production methods utilizing recombinant technology, and has selected C-PERL for its experience in manufacturing high quality proteins using its highly automated, efficient and cost-effective PERLXpress production system.
Chesapeake PERL is a biological manufacturer specializing in the production of high quality proteins, including glycosylated and lipid-associated proteins, multimeric forms and self-assembling macromolecular structures. PERLXpress, the Company’s proprietary, highly automated in vivo implementation of the Baculovirus Expression Vector System, employs whole insect larvae as mini-bioreactors. The tissue heterogeneity of the insect bioreactors leads to very high levels of protein expression as well as protein modification and processing that closely resemble native versions of the same proteins, and the system flexibility enables rapid, precisely controlled production from micrograms to tens of grams of protein. www.c-perl.com.
Filed under: Business Line, Companies, IT, logistics, medicine, SAIC
Company to Provide Research and Development Support Services to the Warfighter Performance Department
MCLEAN, Va., Oct. 15, 2012 /PRNewswire/ — Science Applications International Corporation (SAIC) (NYSE: SAI) announced today it was awarded a prime contract by the Naval Health Research Center (NHRC) to provide research and development support services to the NHRC Warfighter Performance department. The single-award cost-plus fixed-fee (CPFF) contract has a one-year base period of performance, four one-year options and a total contract value of approximately $24 million, if all options are exercised. Work will be performed primarily in San Diego, Calif.
The NHRC Warfighter Performance department conducts research related to the measurement, maintenance, restoration, enhancement, and modeling of human performance in military operational environments. Under the contract, SAIC will provide research and development support services specifically in aspects of human performance, physiology and psychology investigative studies that involve planning, coordinating, designing, and executing experimental protocols that meet with the overall mission of the research objectives. Work will include the study and development of new strategies for enhancing human performance, including: load carriage impact on injury and performance; thermoregulation as it relates to prevention of heat illness and return to duty from a heat injury; exposure to cold temperature and cold water operations; operations performed at altitude; surveillance markers of Traumatic Brain Injury (TBI) relative to biomechanics and cognitive function; definition of patterns of resiliency to physical and psychological injury; enhance training strategies to improve post deployment behavioral health outcomes; and establish return-to-duty criteria for wounded service members.
“We are pleased to continue supporting the Naval Health Research Center and providing the scientific and technical expertise to help ensure our military personnel are ready for duty, and can perform at the highest levels – both physically and psychologically,” said Steve Comber, SAIC senior vice president and business unit general manager.
SAIC is a FORTUNE 500® scientific, engineering, and technology applications company that uses its deep domain knowledge to solve problems of vital importance to the nation and the world, in national security, energy and the environment, critical infrastructure, and health. The Company’s approximately 40,000 employees serve customers in the U.S. Department of Defense, the intelligence community, the U.S. Department of Homeland Security, other U.S. Government civil agencies and selected commercial markets. Headquartered in McLean, Va., SAIC had annual revenues of approximately $10.6 billion for its fiscal year ended January 31, 2012. For more information, visit http://www.saic.com/. SAIC: From Science to Solutions®
Statements in this announcement, other than historical data and information, constitute forward-looking statements that involve risks and uncertainties. A number of factors could cause our actual results, performance, achievements, or industry results to be very different from the results, performance, or achievements expressed or implied by such forward-looking statements. Some of these factors include, but are not limited to, the risk factors set forth in SAIC’s Annual Report on Form 10-K for the period ended January 31, 2012, and other such filings that SAIC makes with the SEC from time to time. Due to such uncertainties and risks, readers are cautioned not to place undue reliance on such forward-looking statements, which speak only as of the date hereof.
Filed under: Boeing, Business Line, Companies, Congress, Department of Defense, development program, Events, Federal Budget Process, logistics, medicine, Military Aviation, production program, Proposal, Restructuring, Services, U.S. Air Force
As part of the Budget Control Act last year that emerged after a failed consensus between President Obama and Congress to deal with the U.S. government’s budget issues a plan was put in place for automatic cuts to spending. This sequestration of funds requires about $1 Trillion in cuts over the next 10 years. In FY13 this would amount to just under $100 billion with half coming out of the defense budget.
The way the Pentagon is approaching this is to apply the cuts evenly across all appropriations and spending which amounts to a 9.4% reduction in spending. This may be adjusted as they get closer to the actual implementation to fully fund some critical items such as personnel and medical costs which would mean some investment programs may see bigger cuts.
For some programs a 9.4% reduction would not be that significant. You buy less of an item, you maybe drive, fly or sail it less, you don’t have as much training supplies as in the past. For others it might be much worse. A 10% cut in R&D for a program could cause multi-year delays in completing development or testing meaning the system wouldn’t get into service as soon. It may be that a program would be cancelled as it wouldn’t be executable without that level of funding.
There are concerns with some of the big acquisition programs that utilize multi-year production contracts. These rely on a 5 year deal with the OEM providing for a specific number of items to be delivered each year. If the 9.4% cut happens and this number is reduced below the minimum the contract may have to be renegotiated leading to cost increases. The KC-46A tanker contract also faces some issues as it is a Firm Fixed Price (FFP) contract and the cut may reduce its funding below what was negotiated with Boeing (BA) when the contract was awarded which also could lead to a need to renegotiate.
As expected pretty much every one is against sequestration and have lately spoken up about dealing with it. Primarily by transferring the spending reductions from the Pentagon to other parts of the Federal government. This includes legislators, Pentagon officials, industry, local governments and employees. All would expect to see some hardship as the spending cuts are implemented.
The media is full of articles such as this, Sequestration threatens Portsmouth Naval Shipyard jobs, workload, from Seacoastonline.com.
Congressman Connelly (D-VA), who has a lot of defense contractors and civil servants in his district, wants Congress to stop campaigning and stay in DC to work out a resolution.
Studies are being done to calculate how many jobs will be lost due to the budget cuts and what industries will be affected the most.
There is also discussion of the effect beyond defense as the rest of the government would lose $50 billion in funding which would cause programs to be cut, eliminated and people laid off.
Overall the issue will continue to be there through the November elections. Most likely no attempt will be made to deal with this until after that when the lame duck Congress will have to also deal with the expiration of the Bush tax cuts and other budget issues. There probably will be a big omnibus bill that addresses all of this.
Will sequestration actually happen for defense? It is hard to say right now. Everyone should be planning for it and calculating how to implement it. This includes the Services, acquisition program managers, and contractors. The U.s. should be expecting reduced defense spending as the fighting in Afghanistan and Iraq winds down and wartime requirements are eliminated. It would be better if it was done in a more planned fashion.
General Dynamics Awarded $42 Million to Support U.S. Army Medical Research and Development Programs — Press Release
Filed under: Business Line, Companies, Events, General Dynamics, logistics, medicine, Press Releases
FAIRFAX, Va., Sept. 11, 2012 /PRNewswire/ — General Dynamics Information Technology, a business unit of General Dynamics (NYSE: GD), was awarded a $41.8 million task order by the U.S. Army Medical Research Materiel Command to provide support services for vaccine, drug and medical device development programs to the U.S. Army Medical Materiel Development Activity. This task order was awarded under the TRICARE Evaluation, Analysis and Management Support (TEAMS) contract vehicle and has a term of four years and seven months. USAMMDA is the U.S. Department of Defense’s advanced medical materiel development activity for products designed to protect and preserve the lives of service members.
General Dynamics will deliver a wide range of services to help the USAMMDA guide new medical technologies through the U.S. Food and Drug Administration regulatory and certification process and develop plans to bring these new products into service. General Dynamics has partnered with Tunnell Government Services Inc., a life sciences technical services consulting leader in biotechnology, medical devices and pharmaceutical product development, on this contract. The companies will provide health, medical research, clinical trial and regulatory expertise as well as information, acquisition and program management support services.
“Medical research plays a critical role in ensuring that U.S. servicemen and servicewomen are protected before, during and after a mission,” said Marcus Collier, senior vice president, Health and Civilian Solutions division, General Dynamics Information Technology. “Our unique combination of health, military and IT expertise will help the USAMMDA develop new leading-edge medical solutions.”
General Dynamics anticipates hiring more than 30 new employees to perform this work at Fort Detrick in Frederick, Md. The company has supported the USAMMDA for four years under a task order issued by the U.S. Army Medical Research Acquisition Activity.
USAMMDA develops new drugs, vaccines and medical support devices that enhance readiness, ensure provisions of the highest quality medical care to the DoD and maximize the survival of medical casualties on the battlefield. The product managers at USAMMDA guide promising new concepts and technologies developed in the USAMRMC laboratories through advanced development and the regulatory process to obtain U.S. FDA certification. Upon FDA certification, USAMMDA works in conjunction with the U.S. Army Medical Materiel Agency to develop plans for fielding medical materiel.
For more information about General Dynamics Information Technology, please visit www.gdit.com.
More information about General Dynamics is available online at www.generaldynamics.com.
U.S. Navy Awards Multi-Million Dollar Contract to Innovation for Pharmacy Automation Technologies — Press Release
Filed under: Business Line, Companies, Events, IT, logistics, medicine, Press Releases
Industry Leader Wins Contract With Value Up to $49 Million for Navy Pharmacy Initiative
JOHNSON CITY, N.Y., Aug. 17, 2012 /PRNewswire/ — Innovation, makers of PharmASSIST® pharmacy automation solutions, today announced that the U.S. Navy has awarded the company a 5-Year Indefinite Delivery/Indefinite Quantity contract up to $49 million to supply pharmacy automation technologies to U.S. Navy high-volume sites and outpatient pharmacies around the world. According to the U.S. Navy, Innovation was the only company who fully met the technical requirements of their published Generic Functional Systems Requirement (GFSR).
“Innovation is pleased that the U.S. Navy has awarded us this significant contract to upgrade their pharmacies’ prescription fulfillment processes and quality control,” said Mary Reno, CEO, Innovation. “We look forward to this opportunity to assist Navy pharmacies in achieving their goal of standardized workflow and dispensing platforms. Most importantly, our various technologies will help Navy pharmacies reach the specific quality objectives that they require to ensure the utmost in patient safety for our service men and women.”
The main objectives of this U.S. Navy initiative are to:
Replace current “end-of-life” pharmacy automation equipment and provide a more standardized process flow for many of the naval outpatient pharmacies.
Improve the quality of dispensing by reducing the opportunities for errors.
Increase the volume capability while reducing the wait time for patients.
Reduce operating costs related to improved inventory management, efficient staff utilization, and increased security.
U.S. Navy hospitals previously acquired their pharmacy automation systems individually. The new contract calls for central acquisition and management to enable U.S. Navy outpatient pharmacies to implement a standardized pharmacy automation system throughout the life of the contract.
Innovation, a leader in the world of automated prescription dispensing and workflow systems, offers the PharmASSIST family of products to address the prescription growth, quality assurance, pharmacy workflow, and cost control challenges of all types of pharmacies. Using PharmASSIST pharmacy automation solutions, pharmacies increase operational efficiency, enhance patient safety, and set new benchmarks for quality, productivity, and customer satisfaction. For more information, visit www.innovat.com.
Department of Defense Exercises Options Under Contract for Nerve Agent Medical Countermeasure Program — Press Release
Filed under: Business Line, Companies, development program, Events, logistics, medicine, Press Releases
ANNAPOLIS, Md., Aug. 9, 2012 /PRNewswire/ — PharmAthene, Inc. (NYSE Amex: PIP), a biodefense company developing medical countermeasures against biological and chemical threats, announced today that the Department of Defense (DoD) has elected to exercise its option to accelerate funding for PharmAthene’s rBChE nerve agent medical countermeasure program contingent on the achievement of key milestone activities.
“We believe this is a timely decision given the recent headlines about the potential threat of chemical weapons. PharmAthene is proud to be working in collaboration with the DoD to address this threat and provide innovative new solutions for our partners,” remarked Eric I. Richman, President and Chief Executive Officer. “We have enjoyed a productive collaboration with the DoD for many years, beginning with our first generation nerve agent countermeasure, Protexia® which completed a Phase I clinical study. We are pleased to be continuing our partnership to advance a next generation platform to deliver a flexible and efficient manufacturing approach, and a cost-effective solution to our government client in support of this important national security initiative.”
A recombinant form of human butyrylcholinesterase, rBChE, is a naturally occurring protein found in minute quantities in blood. It functions as a natural bioscavenger, like a sponge, to absorb toxins such as organophosphorous poisons (nerve agents) and certain pesticides, before they cause irreversible neurological damage. Nonclinical studies in animals suggest rBChE has the potential to provide significant protection against chemical nerve agent poisoning when administered prophylactically (prior to exposure to nerve agent) and also may increase survival when administered therapeutically (following nerve agent exposure).
PharmAthene is developing rBChE as a pre- and post-exposure therapy for casualties on the battlefield or civilian victims of nerve agent attacks. Nerve agents belong to a class of compounds known as organophosphorus (OP) agents. OP nerve agents, such as sarin gas, soman, tabun or VX, enter the blood stream via inhalation or absorption through the skin. The nerve agents travel in the circulatory system to the brain and muscles causing the nerves to become over-stimulated which leads to massive convulsions and death in severe cases.
About PharmAthene, Inc.
PharmAthene was formed to meet the critical needs of the United States and its allies by developing and commercializing medical countermeasures against biological and chemical weapons. PharmAthene’s lead product development programs include:
SparVax™ – a second generation recombinant protective antigen (rPA) anthrax vaccine
Recombinant BChE- a novel bioscavenger for the prevention and treatment of morbidity and mortality associated with exposure to chemical nerve agents
Valortim® – a fully human monoclonal antibody for the prevention and treatment of anthrax infection
In addition, pursuant to a final judgment issued May 31, 2012 from the Delaware Court of Chancery, PharmAthene is entitled to 50% of the net profits over 10 years from all sales of SIGA Technologies’ ST-246®, a novel smallpox antiviral agent being developed by SIGA for the treatment and prevention of morbidity and mortality associated with exposure to the causative agent of smallpox, and related products, once SIGA receives the first $40 million in net profits from sales of ST-246®. For more information about PharmAthene, please visit www.PharmAthene.com.
Filed under: Acquisitions, Business Line, Companies, Events, IT, logistics, medicine, SAIC, Seeking Alpha
Here is an article I wrote for Seeking Alpha about SIAC’s recent acquisition of a healthcare IT business.
Filed under: Acquisitions, Business Line, Companies, Events, IT, logistics, medicine, Press Releases, SAIC
Company Adds Leading Healthcare IT Consulting Firm To Health Solutions Business, Bolstering Growth Plans In Commercial Healthcare Market
MCLEAN, Va., July 17, 2012 /PRNewswire/ — Science Applications International Corporation (SAIC) (NYSE: SAI) today announced it has entered into a definitive agreement to acquire maxIT Healthcare Holdings, Inc., a leading healthcare IT (Information Technology) consulting firm based in Westfield, Ind.
maxIT Healthcare, the largest private independent healthcare IT consulting company in North America, provides a comprehensive range of healthcare IT services and solutions primarily to commercial hospital groups and other medical delivery organizations. These include IT strategy and planning, electronic health record (EHR) implementation and optimization, and management consulting across a broad range of activities such as accountable care transformation, revenue cycle improvement, and support in meeting the U.S. Government’s meaningful use requirements necessary to obtain incentive payments from the government in connection with implementing EHR capability.
maxIT Healthcare has an extensive commercial customer base and has served more than 600 hospitals, hospital groups, physician practices and accountable care organizations (ACOs) in the U.S. and Canada. The company’s established expertise and knowledge within commercial hospitals and ambulatory clinics, as well as its exceptional reputation, will be combined with SAIC’s Vitalize Consulting Solutions (VCS) team, which SAIC acquired in 2011, bringing together some of the best consultants in the commercial healthcare industry. This combination creates the nation’s largest commercial consulting practice in EHR implementation and optimization services and enables the combined operations to better serve healthcare providers by helping them achieve their universal objectives – reduced healthcare costs, effective use of data to make more informed decisions, and improved patient care.
The combination of maxIT Healthcare with VCS also strengthens SAIC’s capabilities to provide EHR implementation and integration services to its strong base of Federal healthcare customers as they increasingly migrate toward the incorporation of commercial off the shelf (COTS) EHR applications. As both commercial and Federal healthcare providers begin to fully extract value from their EHR solutions, SAIC is well positioned to leverage its service offerings in systems integration and interoperability, health sciences and advanced data analytics to assist providers in realizing the promise of personalization in delivering value based healthcare.
As a result of the acquisition, approximately 1,300 employees from maxIT Healthcare will join SAIC’s Health Solutions Business Unit (HSBU), led by Steve Comber. HSBU is a part of the Health, Energy and Civil Solutions Group, led by SAIC Group President Joe Craver.
“The maxIT Healthcare team brings significant capabilities and talent to SAIC, as well as an outstanding reputation with its customers for providing the highest level of service,” said Craver. “Combined with our acquisition of VCS, this deal enhances SAIC’s capabilities to address the nation’s challenge of rising healthcare costs, access to quality care, and the need to improve patient outcomes.”
“The combined strengths of maxIT, SAIC and VCS will be a significant differentiator in the healthcare IT market. We look forward to continued growth as part of the SAIC team, while maintaining flexibility to meet the ever-changing needs of the healthcare market,” said Mike Sweeney, president and CEO of maxIT Healthcare.
Parker Hinshaw, maxIT Healthcare founder, added, “We share so much already with the SAIC team – high ethical values and culture, financially sound business practices, and most importantly, our passion for making a significant difference in one of the most important industries in the world, healthcare.”
The acquisition is expected to close in August 2012, subject to customary closing conditions, including expiration or early termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act. At closing, SAIC will pay approximately $473 million, subject to adjustment, from cash on hand to acquire maxIT Healthcare. In addition, SAIC expects to pay up to $20 million to maxIT Healthcare shareholders after receipt of certain tax refunds following closing.
Filed under: Business Line, Companies, Congress, Contract Awards, Department of Defense, Events, Federal Budget Process, IT, logistics, medicine, Protest, Services, UnitedHealth
In 2009 the Department of Defense attempted to award new contracts to administer their primary healthcare program, TRICARE. These are regional contracts with the country divided up in groups of states as well as a contract to provide overseas services. The Western and Southern regions due to the density of military bases were the two largest and amount to several billion a year. As to be expected competition was fierce for these by different health insurance companies. It is just now, over three years later, that the government is finally resolving these contracts due to the amount of protests and reviews required.
The Western Region contract is worth about $21 billion over its predicted five year life. After 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 2012.
TriWest has had the contract since 2003 and won the original re-compete in 2009. This decision was protested by UnitedHealth. In the last three years there have been new competitions, awards and protests. This final decision should stand and UnitedHealth will become the provider.
This is unfortunate for TriWest as their primary business is the TRICARE contract and the company may have to fold without it. There is a good chance that many of their employees could be absorbed by UnitedHealth as is often the case when a new company takes over an existing contract but that is not guaranteed.
The Defense Department faces growing pressure on their health spending which has increased dramatically over the last ten years due to the fighting in Iraq and Afghanistan. Not only has the size of the military grown with more dependents there are also more retirees and severely injured that require health care. TRICARE is the primary mechanism for this.
The Obama Administration has proposed raising the co-pays and annual payments that the military and retirees make but that was struck out of the 2013 defense budget by Congress loathe to pass those costs onto the military. Obama has threatened to veto the bill as it stands due to that provision but many times once the bill is complete it will be signed.
Filed under: Business Line, Companies, Contract Awards, Department of Defense, Events, GAO, logistics, medicine, Protest, Services, UnitedHealth
Earlier 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 almost two years of effort to award this very large contract. Previous attempts to award the nearly $20 billion contract were protested by the loser as TriWest Health Alliance the incumbent and UnitedHealth attempted to win the contract.
TRICARE is the main medical insurance program for the U.S. military. It covers active duty members, their dependents, retirees and some Reservists and National Guard members. Under TRICARE personnel utilize civil providers as well as military medical facilities and the companies with the contracts manage the execution of their benefits. The U.S. is divided into regions and different contracts are awarded to various contractors to operate them. TriWest had been formed to do the West contract and has had it until the latest round of contracts in 2009.
Now only ten days after the announcement of the award to UnitedHealth after two rounds of protest TriWest is saying it will file a protest against this latest decision. In their press release the company states that this is due to concerns that the “contract is the result of a flawed and unfair process.” Specifically they believe that due to their lower price the contest should be re-evaluated.
The normal process for the protest is that it will be reviewed by the Service awarding, then may go to the Government Accountability Organization (GAO) and ultimately to the Federal Courts if a party is not satisfied. The result of the review could be denying the protest allowing UnitedHealth to keep the contract, a direction to redo the source selection, a new contest or in rare cases the award is overturned and given to the protester. Protests normally are allowed 100 days. During the protest the new contract cannot be executed so UnitedHealth’s effort will be placed on hold.
The contract is the majority of TriWest’s business. The near term health of the company requires them to keep it. They have little to lose by protesting this award.
Filed under: Business Line, Companies, Contract Awards, development program, Events, Federal Budget Process, Harris Corporation, IT, logistics, medicine, Services
Earlier this month the Veteran’s Administration (VA) cancelled a contract with ASM Research that was intended to develop a key component of the agency’s Electronic Health Record (EHR) system. The $102 million contract was for the “enterprise service bus” which would allow other applications to communicate with each other and the overall system. Since the whole point of the EHR is to speed sharing of information the bus would be a major enabler of this.
The contract with ASM was cancelled less then two months after award due to what turned out to be issue with conflicts of interest with some of the sub-contractors hired by ASM that may have affected the bid process.
Now the vA has awarded a new contract for the work to Harris Corporation (HRS). This contract has a value of $80 million and is for the same basic work. While Harris is best known as a manufacturer of radios and communications systems it also has an active healthcare solutions group.
This works on information systems as well as those to share and manage data. Many defense contractors have looked at getting into this business as they DoD and Federal Government are expected to spend billions on healthcare over the next decade. Much of this will go to large scale IT programs and systems.
Filed under: Business Line, Companies, Congress, Contract Awards, Department of Defense, Events, Federal Budget Process, logistics, medicine, Protest, Services, UnitedHealth
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.
Filed under: Business Line, Companies, Contract Awards, Department of Defense, development program, Events, medicine, Services
The U.S. Department of Defense’s Joint Project Manager Transformational Medical Technologies (JPM-TMT) issued a contract to MediVector, Inc. for further development of their Favipiravir (T-705) drug. This contract has a value of almost $140 million.
Favipiravir aids in treating flu systems while also reducing its spread among personnel. While flu may sound like a minor inconvenience compared to other biological weapons such as anthrax it can have a serious, short term effect on unit availability and capability. The JPM-TMT is also concerned with developments of artificial or weaponized flu strains.
The JPM-TMT’s goal is to invest its money into products that might have near term availability to treat different types of diseases. Favipiravir has shown promise so far and with the military investment might see accelerated development and trials.
Since 9/11 the U.S. has invested billions in developing means to not only protect its military from biological weapons and pandemics but also made efforts to protect the U.S. population. This has included investment in production facilities as well as new and better treatments for a variety of illnesses.
Filed under: Business Line, Companies, Contract Additions, Contract Awards, Department of Defense, Events, Humana, logistics, medicine, Protest, Services, UnitedHealth
Updated – To make clear this was an Agency level protest and not a GAO one.
TRICARE is the primary medical insurance program for the United States’ military. It covers those personnel, their dependents and retirees along with selected Reservists and National Guardsmen. It functions like a HMO for its members. The Defense Department divides up the country into regions and awards large contracts to individual health insurers to manage these. In 2009 new contracts were awarded but three of them were protested by different losers. Since then the Department of Defense has been working through the protests and getting new contracts in place.
The contracts are awarded regionally to provide management of care and providers. The West contract was originally won by the incumbent, TriWest, but UnitedHealth Group (UNH) protested. The Department of Defense upheld the protest and the contract was put up for bid again. Again TriWest and UnitedHealth bid on the contract. Now it is expected that a decision on the winner will be made in the near future.
Of course with the history of these contracts there is no guarantee that the loser may protest this decision. With the Southern contract Humana (HUM) and UnitedHealth went trough several iterations as the awards and protests followed each other. The last decision was by a Federal court in October that sided with Humana. This contract was in protest and litigation for over two years.
If the government can make a decision with this contract that sticks it should close out this saga. TRICARE contracts are usually only for five years so the next round should be coming up in 2014-2015. Expect competition to be just as fierce with that round.
Military health care is in transition as the Department of Defense looks for ways to reduce costs. These have increased greatly over the last decade due to the commitments to Iraq and Afghanistan and the larger size of the military. There are also now much more retirees and veterans who need care. In the next budget there is a proposal to increase the co-pays and fees paid by members for their TRICARE. There will also be pressure to reduce payments to service providers.
Even so expect the large health insurance companies compete for these contracts just like the last round.
Filed under: Business Line, Companies, Contract Awards, Department of Defense, development program, Events, logistics, medicine, S&T, Services, States
The U.S. Defense Department has spent a lot of money over the last ten years on advanced medical technology and research. This has been driven by the nature of the threat of biological Weapons of Mass Destruction (WMD) as well as ways to treat soldiers on the battlefield better and more quickly. This has included billions on new vaccines and treatments for WMD potential such as anthrax and plague as well as those to allow personnel to operate in environments where diseases like Yellow Fever are common. Another area has been in treatment capabilities with improved bandages or anti-bacterialogical equipment.
Entegrion, a small bioreasearch company in North Carolina, received a contract to continue its work on flash freezing plasma. This will allow better storage and transport of the blood component used to provide transfusions on the battlefield. The contract with the Department of Defense is worth almost $44 million.
The contract is for four years with all options and will if things go well take the product through the third phase of clinical trials and then into license application.
Entigrion has also received other contracts from the military to work on products to treat shock and bleeding.
The U.S. has had great success in reducing the number of battlefield deaths in Iraq and Afghanistan. Part of this is due to the new technology for medical treatment as well as a ability to transport wounded quickly to large and effective hospitals.
The other thing is that much of this work will be applicable to the civilian population as well improving their medical treatment and health.
General Dynamics Awarded Military Health System Support Contract by TRICARE Management Activity — Press Release
Filed under: Business Line, Companies, Events, General Dynamics, logistics, medicine, Press Releases
General Dynamics Awarded Military Health System Support Contract by TRICARE Management Activity
FAIRFAX, Va., Sept. 23, 2011 /PRNewswire/ — General Dynamics Information Technology, a business unit of General Dynamics (NYSE: GD), has been awarded a five-year, $14.3 million task order by the TRICARE Management Activity (TMA) under the TRICARE Evaluation, Analysis and Management Support (TEAMS) contract. General Dynamics was originally awarded the TEAMS indefinite delivery, indefinite quantity contract in July 2008.
General Dynamics will provide program management services to the Defense and Veterans Brain Injury Center (DVBIC). Work will include program administration, conference planning, strategic communications and accounting support. The company will also coordinate information systems and technology services, including phone lines and computer access for DVBIC headquarters in Washington, D.C., and its Johnstown, Pa., and Charlottesville, Va., sites.
“General Dynamics has a long history of supporting vital health systems projects within the TRICARE Management Activity and the Military Health System,” said Zannie Smith, senior vice president of Army Solutions for General Dynamics Information Technology. “We will provide DVBIC with the program management and technical support they need to ensure service members, their dependents and veterans with traumatic brain injury receive the high-quality care they deserve.”
DVBIC is the primary traumatic brain injury component of the Defense Centers of Excellence for Psychological Health and Traumatic Brain Injury. It serves thousands of patients through a comprehensive network of 17 physical sites throughout the U.S. Departments of Defense and Veterans Affairs. In addition to treating service members and veterans with all levels of traumatic brain injury, the center conducts an extensive research program and provides education about brain injuries to families, the public and clinical providers.
Through the TEAMS contract, General Dynamics provides critical management support to the Defense Health Information Management System’s Electronic Health Record (EHR) program, an enterprise-wide medical clinical information system, used in all fixed military medical and deployed facilities, that generates, maintains, stores and provides secure online access to comprehensive patient records. The company also provides program and functional management services to the Defense Blood Standard System program office, which ensures the distribution of safe and effective blood products.
For more information about General Dynamics Information Technology, please visit www.gdit.com.
More information about General Dynamics is available at www.generaldynamics.com.
SOURCE General Dynamics Information Technology
Filed under: Business Line, Companies, development program, EADS, EADS Astrium, General Dynamics, IT, logistics, medicine, production program, S&T, Satellites, space
IBM (IMB) expanded its capabilities in the area of security analytical support through the acquisition of British company i2 yesterday. i2 provides software that does data analysis in support of law enforcement and military operations. The value of the transaction was not announced.
IBM has invested several billion since 2006 on companies that provide this and other types of security related services in order to bolster its capabilities in this market. The move also illustrates the further commitment of government and defense contractors to what is to be an expected growth area in the future as the U.S. military and others invest in more sophisticated computer security and intelligence support functions.
While IBM did not say how much they paid for i2 in 2008 it was last sold for $185 million indicating that this deal would be substantially more as the company has had some growth since then.
It is expected that Merger & Acquisition (M&A) activity will be accelerating and the deals will be getting larger. Recently there have been two deals in the billion dollar range by larger aerospace and defense companies. First, General Dynamics (GD) acquired Vangent a health IT company for $980 million and EADS’ (EADS:P) satellite division, Astrium, agreed to acquire satellite communications company Vizada for $960 million.
These two deals expand the company’s capabilities in less traditional markets for them but ones that it is felt the U.S. especially will be spending billions on in the near future. This is move away from their past efforts in developing, producing and supporting large platforms such as aircraft, vehicles and military communication systems.
Filed under: Acquisitions, Boeing, Business Line, Companies, Congress, Contract Additions, Contract Awards, Department of Defense, development program, Events, Federal Budget Process, General Dynamics, IT, ITT Corporation, L-3, Lockheed Martin, logistics, medicine, Military Aviation, northrop grumman, Northrop Grumman Corp., production program, Restructuring, Services, U.S. Air Force, U.S. Army, U.S. Navy
Most of the large and mid-sized defense contractors reported their most recent quarterly results in the last few weeks. While for the quarter the results were mixed with some seeing decent increases in earnings and revenue while others saw a drop overall they all felt that they would meet or exceed their estimates for the full year. The 2011 defense budget still remained high due to the extra spending for Afghanistan and Iraq as well as investment in some major weapon systems. The 2012 budget is working its way through Congress and will see some reductions based on proposals by the Services as well as Congress’ directed cuts but overall will be about the same as 2011. Spending beyond that could be considerably reduced based on the new debt reduction “super committee” as well as the pressure to decrease overall Federal deficits.
As the focus of the defense budget changes from paying for the troops in Afghanistan and Iraq and the equipment and supplies they need to invest in new systems to replace older one or achieve new technologies some defense contractors will prosper over others. If the discussed defense cuts are followed through and amounts vary from $35 billion to $70 billion a year from a $700 billion budget then some major programs will be canceled, the size of the military will decrease greatly and parts of the defense industry in the U.S. will disappear. This will either be through M&A activity or just loss of contracts causing companies to fold up.
There have already been moves by the larger defense contractors to adjust to the potential changes in how the U.S. Defense Department spends its money. ITT Corporation (ITT) has decided to split yet again into three different companies basically separating their flat performing defense business from more successful water and chip manufacturing areas. L-3 Communications Holding (L3) while it had a good quarter announced that it too was spinning off part of itself to adjust to what it sees as the future in the U.S. It is setting up its Scientific, Engineering, Technical and Analytical (SETA) business as a new company. SETA contractors support government offices most often in acquisition and research and development. Many of these positions were converted to government positions and new Organizational Conflict of Interest (OCI) rules prevent companies that provide SETA services to also bid on large hardware programs. L-3 is adjusting by getting out of the business.
Perhaps the biggest adjustment was by Northrop Grumman (NOC) who moved to separate their entire shipbuilding segment earlier this year. Rather then sell it to one of their competitors they set up a new company entirely, Huntington Ingalls Industries (HII). This was in realization that future U.S. Navy shipbuilding plans were so limited it could not necessarily support the current number of shipyards in the U.S. HII has already moved to close its yard in Louisiana with significant effect on the local economy.
Other companies have moved out to use M&A to position themselves. Many of the larger companies such as Boeing (BA) and Lockheed Martin (LMT) have been buying intelligence and cyber security companies to expand their opportunities. General Dynamics (GD) earlier this week made a big move by spending almost $1 billion on a health IT company. With the focus on health care reform including improvements in record keeping and storage IT may become a big source of business for government contractors. The company, Vangent, which was privately held also just completed a large contract with the Census Bureau that should be offered again in a few years.
The U.S. military is pursuing some large programs over the next decade. These if they are canceled or cut back will have the largest effect on revenues and earnings. For Lockheed Martin it is the F-35 Joint Strike Fighter that is finally moving towards large scale production. A reduction in planned quantities will severely affect that company. For Boeing it is the KC-46A new aerial tanker as the Air Force plans to buy at least 179 initially at a cost of over $30 billion. General Dynamics has major ship and submarine construction programs and the Navy if it cuts these will limit GD’s future performance.
Right now the next several months should see major defense contractors maintain their revenues and earnings except in odd cases where contracts are restructured or ending. Once the 2012 budget is decided upon that will give an indication of how next year will be. Then 2013 and out should start to see some cuts in defense spending with similar effect on the companies. It can be expected that there will be a decrease in performance accelerating if severe cuts are made by the United States. The ability of the contractors to move to different business areas in response to these cuts will dictate how badly they are affected. All indications are right now that this sector will struggle in the next few years to maintain what they have let alone growing it even more. There may be more moves coming similar to those by Northrop, ITT and L-3.
Photo from Images_of_Money’s Flickr photostream.
Article first published as Defense Industry Projects a Good 2011 but 2012 and Out Look Worse on Technorati.
Filed under: Boeing, Business Line, Companies, General Dynamics, IT, Lockheed Martin, logistics, medicine, Northrop Grumman Corp.
With the foreseeable reduction in U.S. defense spending one way that defense contractors can mitigate its effects is to branch out their business lines into areas that might see increased government spending in the future. That is why the large companies such as Boeing (BA), Lockheed Martin (LMT) and others have been investing in intelligence and cyber security companies and capabilities.
Now General Dynamics (GD) has done the same by acquiring a large health care IT provider, Vangent. THe deal to buy Vangent from its private equity firm owner, Veritas Capital, is valued at almost $1 billion which makes it one of the largest recent M&A moves by a defense contractor in recent times.
Not only is the Defense Department expected to invest heavily in electronic health records and data sharing systems but also Federal organizations like the Veterans Administration (VA), Health & Human Services (HHS), and many of the states. GD through this acquisition is positioning themselves to take advantage of this market. Vangent itself had over the past year invested in smaller companies that had done significant work in the area of government medical services.
The “Obamacare” health reform act is also going to require a large investment in health IT. It will reward doctors, hospitals, insurance companies and other health care providers who spend money on Electronic Health Records and other technology. This will create a large market for companies offering those products which could include GD and other defense contractors like Northrop Grumman (NOC) who have provided government IT services to states such as Virginia.
GD already provides health related services to some parts of the Defense Department including the Medical Communications for Combat Casualty Care (MC4) system. This is attempting to build electronic health care records for military members.
The addition of Vangent will only expand GD’s capabilities and perhaps help it ride out the coming period of reduced investment in weapon systems and combat support networks. It can be expected that other defense contractors may follow suit in the next few years as they look for potential acquisitions who can expand their offerings and products.
Filed under: Business Line, Companies, Contract Additions, Contract Awards, Department of Defense, development program, Editorial, Events, Federal Budget Process, medicine, production program, S&T, Services
One of the the threats that must be faced by the U.S. military today and its allies is that of biological warfare. This not only includes more exotic agents such as anthrax or the plague but also other more mundane diseases. At the same time the U.S. through the Department of Health and Human Services as well as Defense is also researching ways to protect the U.S. population and its own troops from pandemics.
If a large unit gets a flu or other disease outbreak it can render it ineffective for a significant period of time. During World War II for example many U.S. units had a lot of non-battle casualties from diseases such as malaria, trench foot and more exotic tropical ones such as yellow fever. An aggressive inoculation and preventative capability will help prevent those kind of outbreaks and maintain unit strength and capability.
With this in mind since over the last several years the U.S. has been funding research on new vaccines, better ways to mass produce them and stockpiles for these kind of eventualities. Vandalia Research just received a contract worth about $1 million to begin the research into scaling-up production and further development of their pandemic flu vaccine.
Since 2005 it has been estimated that the Federal government has spent over $2 billion on this type of research. Part of this was related to the failure to produce sufficient amounts of H1N1 flu vaccine in 2009. Much of the money has gone for ways to produce the vaccines using cellular reproduction rather then the traditional egg based system.
The U.S. should be expected to continue funding this type of research for the next several years as it develops new manufacturing processes and stockpiles of vaccines to protect against potential pandemic outbreaks.
Filed under: Business Line, Companies, Contract Additions, Contract Awards, Department of Defense, Editorial, Events, Federal Budget Process, IT, logistics, medicine, Protest, Services
The United States’ Department of Defense spends a great deal of money on health care. They are responsible for not only the active duty members but also their dependents, retirees as well as National Guardsmen and Reservists. The fighting since 9/11 has seen the expansion of the size of the military. Many personnel have families. There has also been an increase in the number of wounded and those needing long term car. The sustained fighting and activity also caused more retirees. Combined these pressures have required that total spending dramatically increase. In 2010 it was almost $50 billion or roughly 8 percent of the defense budget.
This has been recognized by leadership such as departing Secretary of Defense Robert Gates and some moves have been proposed to reduce spending or slow the rate of growth. If changes are not made then more-and-more of available funding will go for personnel related matters leaving less for investment in new weapons and technology. At the same time the growth has made this an attractive area for large U.S. health insurance companies and they are currently fighting over the contracts to manage the health care program.
The basic program used to do this is called TRICARE. It is like a large HMO that requires the military participants to pay a small upfront fee and then co-pays for visits and services. Because the military is so large and geographically diverse the Department of Defense centrally manages the program and divides the U.S. into regions with a contract for each. There are also omnibus contracts for overseas and dental care. The contracts average values of $4-5 billion a year.
In 2009 the Department went ahead and awarded the next set of five year contracts for the different regions. These were bid on by familiar insurance companies such as Aetna (AET), Humana (HUM) and UnitedHealth. In the late summer the winners were announced and often the incumbent did not retain the contract. Immediately several protests were filed by the losers.
Incredibly two of these protests remain unsettled today almost two years later. That indicates the importance of these contracts to the providers. In a time when the entire health care market in the U.S. is about to see radical change TRICARE does offer some stability at least for the next several years and may provide a decent source of revenues and income for these companies to offset future changes in the civilian market.
UnitedHealthCare is pursuing protests for the South and West contracts. The South has now gone through two source selection cycles with UnitedHealth winning the first one over Humana who protested which led to a new competition. This was awarded to Humana in March and that was protested by UnitedHealth. The Government Accountability Office (GAO) upheld the award and UnitedHealth has now sued in Federal Court which is the final step in the protest process. UnitedHealth believes that Humana in order to minimize costs has reduced the proposed payments to providers to such an extent that few if any will accept TRICARE patients leading to poorer choice for military members. The GAO did not sustain that argument.
UnitedHealth and Humana have also been fighting over the West contract. Here UnitedHealth was the incumbent and Humana won the new contract. That protest has also led to a decision to have a new contest that is yet to occur.
The size of the TRICARE management contracts and their value has caused those companies involved in them to try to win and keep them. Despite pressure by the Defense Department to reduce costs they are expected to remain sizable for a variety of reasons. They offer some stability as the U.S. moves to reform the civilian market. It can be expected that these protests will continue for the next few months as the contract awards are worked through.
Article first published as Companies Continue Fights for U.S. Military Health Care Contracts on Technorati.
Filed under: Business Line, Companies, Congress, Contract Additions, Contract Awards, Department of Defense, Editorial, Events, Federal Budget Process, GAO, logistics, medicine, Protest, Services
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