Fight Over Lucrative TRICARE Contracts Won’t Affect Beneficiaries, Defense Says

Bid protests over the Defense Department’s latest TRICARE contract award won’t disrupt beneficiaries’ access to health care, the military health system has assured TRICARE enrollees.

“The current TRICARE contracts will remain in place until the protests are resolved,” said a statement from the military health system communications office. “The DHA’s [Defense Health Agency] top priority during this protest period is to maintain quality and continuity of care for its TRICARE beneficiaries in all regions.”

Three contractors have filed protests related to the multi-billion dollar TRICARE 2017 contracts Defense awarded late last month, including one of the winners, reportedly. Defense awarded Health Net Federal Services the TRICARE West Region contract, which is worth $18 billion over the next six years, compared to the $41 billion East Region contract awarded to Humana (the contractor currently managing TRICARE South). Health Net Federal Services, according to an Aug. 8 Federal News Radio report, filed a bid protest with the Government Accountability Office, as did losing bidders UnitedHealthcare and Wellpoint Military Care. Health Net Federal Services would not comment on the matter on Monday, but released a statement after it received the TRICARE West Region contract.

“We are honored and humbled to be awarded the TRICARE West Region contract to serve this extraordinary population of beneficiaries, as well as supplement and extend the healthcare missions of the Department of Defense,” said Billy Maynard, president and CEO of Health Net Federal Services, in a July 21 statement, the day the contracts were awarded. The contractor has worked with DoD since 1988, managing the TRICARE North Region.

The new contracts, which take effect nine months after the award date, consolidated the three TRICARE regions (North, South and West) into two (East and West) regions. The East Region merges the North and South regions, and therefore is a more lucrative contract than the West Region one. The awards do not change the benefits available to enrollees and offer all the same options.

UnitedHealthcare, one of the losing bidders, is currently managing the TRICARE West contract. The contractor filed a protest on both the West and East award decisions. “Throughout this process, UnitedHealthcare remains committed to continuing to deliver high-quality health care to our current West Region beneficiaries,” said Bruce Jasurda, the company’s vice president of communications, in an email.

Wellpoint Military Care (part of Anthem, Inc.) said it filed a formal protest over the award after a July 28 meeting with representatives from the Defense Health Agency to discuss the contract process. “Following the debrief session, the company believes there were material errors in the evaluation process and findings, which warranted a formal protest,” said Cathy Taylor, Anthem’s staff vice president for brand public relations, by email.

GAO is set to weigh in on the protests by November.

Defense would not comment specifically on the T-2017 awards because of the pending protests. 

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