Tricare beneficiaries across 21 western states won’t know for another three months whether TriWest Healthcare Alliance will continue to administer their health care benefit beyond March of next year.
After 16 years, TriWest lost its latest bid to continue to run the Tricare West Region under a third-generation support contract, this one worth an estimated $20.5 billion over almost six years.
Defense Department officials awarded the contract instead to a company new to Tricare users, a subsidiary of UnitedHealth Group of Minnetonka, Minn., the nation’s largest health insurance entity.
TriWest, however, is protesting that award to the Government Accountability Office. The GAO has until early July to decide whether the contract was awarded properly.
David J. McIntyre Jr., TriWest’s president and chief executive officer, said Tuesday the challenge is based on two issues. One is that contract officials “disregarded several hundred million dollars” in discounts that TriWest had guaranteed. Even ignoring those discounts, said McIntyre, the government conceded TriWest’s bid was lower than its rival’s.
TriWest also argues that UnitedHealth was judged to offer “best value” based only on a review of performance on its five largest accounts, and not on a broader review of problems raised by providers or beneficiaries that resulted over the years in legal judgments and hefty fines.
“Do a Google search like my 9-year-old (son) did of this other entity. I mean you have to wonder: with that lengthy list of items, of not delivering on their commitments, of being fined (and) I mean massive fines, not just one but a whole lot of them — whether that really merits being rated at the top category of past performance,” McIntyre said.
In July 2009 UnitedHealth won the South Region contract and TriWest the West contract. But Humana, the incumbent contractor for the South, filed a protest, and in 2011 the GAO reversed UnitedHealth’s award. UnitedHealth lost its final protest of the South contract last July.
Tricare decided to reopen bidding on UnitedHealth’s argument that too much weight had been given TriWest’s promise to negotiate discounts below Medicare levels and not enough on quality of care. By last September, TriWest appeared more vulnerable when it agreed to pay $10 million to settle whistle-blower claims the company had failed to pass along to the military certain discounts it had negotiated with providers.
The West region serves almost 2.9 million beneficiaries, including those in Washington.
Matt Stearns, spokesman for UnitedHealth Military &Veterans Services, the business unit that would serve the western region, declined to comment on specifics of McIntyre’s “unfortunate” reaction.
“It’s typical for an incumbent who has lost an award to claim the process is unfair. But the unfounded public assertions will only cause beneficiary and provider confusion,” Stearns said.
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