Tricare managed-care changeover halted for protest review

Published 7:43 pm Friday, August 13, 2010

Transition to new managed-care contractors for six million Tricare beneficiaries across 30 states has been halted while the Government Accountability Office reviews protests filed by losing bidders.

Tricare Management Activity announced in July that Aetna Government Health Plans of Hartford, Conn., won the contract competition and would be taking over the North Region contract from Health Net Federal Services. Since then Health Net has filed two protests with GAO over loss of the contract with potential value of $16.7 billion in revenue over five years.

Officials also announced that UnitedHealth Military &Veterans Services of Minnetonka, Minn., would take over the South Region from Humana Military Healthcare Services. But Humana too is protesting the award, potentially worth $21.9 billion.

The protests, filed in late July, led to stop-work orders on the two contracts until the accountability office rules on the protests. It does so routinely within 100 days. That delay, combined with the required 10-month transition, means new contracts for the north and south regions will not take effect before the fall of 2010. Until then, beneficiaries should see no change to services.

Anxiety among beneficiaries is high, however, based on volume and contents of e-mails sent to this column.

“Here we go again,” wrote retired Air Force Lt. Col. Garry Fincher. “As soon as you get familiar with a health care system and enjoy good service and quick responses to your inquiries, the government changes the system.”

A Fincher family member will be receiving chemo treatments through the planned transition period, leaving the retiree worried that continuity of care will suffer or their doctor will opt out of the managed care network.

“But, again, we have no recourse but to swallow hard,” Fincher said.

Interviews with the presidents of the two companies on the cusp of losing these valuable contracts reinforced the notion that disruption of services will be inevitable for many patients.

“I think our protest will be successful,” said Dave Baker, president and chief executive officer of Humana Military Healthcare Services. “But if I’m wrong and the new contractor actually takes over, there will be some changes” including to composition of provider networks.

The North Region of 3 million beneficiaries includes Connecticut, Delaware, District of Columbia, Illinois, Indiana, Iowa (Rock Island Arsenal area only), Kentucky (except Fort Campbell area), Maine, Maryland, Massachusetts, Michigan, Missouri (St. Louis area only), New Hampshire, New Jersey, New York, North Carolina, Ohio, Pennsylvania, Rhode Island, Vermont, Virginia, West Virginia and Wisconsin.

The South Region, with 2.9 million beneficiaries, is Alabama, Arkansas, Florida, Georgia, Kentucky (Fort Campbell area only), Louisiana, Mississippi, Oklahoma, South Carolina, Tennessee, and Texas (excluding western areas).

TriWest Healthcare Alliance has retained its managed care support contractor for 2.7 million beneficiaries in the West Region.

The managed care support contracts have no impact on Tricare for Life, the robust supplement to Medicare so prized by elderly beneficiaries.

Officials said the new contracts will use financial incentives to “encourage exceptional customer service; high quality care; detection of fraud, waste, and abuse; increased electronic claims processing; better program management, improved preventive care and cost savings.”

Officials conceded that Tricare Prime, the managed care option, “may be discontinued” in some areas.

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