The Government Accountability Office identified six flaws in how the Defense Department awarded a lucrative military health benefits contract to Aetna over Health Net, according to
a newly released GAO report.
In July, the
Defense Department awarded Aetna one of three regional Tricare contracts, which provide health benefits to active-duty military personnel and their families and retirees. The contract takes effect in April 2010. Health Net had held the contract since 2004. The contract is worth up to $17 billion over six years.
Health Net filed a protest with the GAO over the contract award, and on Nov. 4, the GAO upheld the Woodland Hills, Calif.-based insurer's protest.
In a report posted on its Web site, the GAO concluded that Aetna may have gained access to proprietary information about Health Net's contract performance after a former high-level Tricare employee helped Aetna prepare its bid. The GAO recommended a full investigation into alleged impropriety and that Health Net be reimbursed the costs of pursing the protest. If an unfair competitive advantage is determined, Aetna would be excluded from bidding process, “thereby leaving Health Net as the only viable awardee,” the GAO concluded in the report.
The Defense Department is reviewing the GAO's recommendations.
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