The Defense Department has selected Humana Military Healthcare Services, Louisville, Ky., for a $3.8 billion, five-year managed-care contract to cover 1.1 million military family members and retirees in the Southeast.
If the Pentagon's decision stands, the contract will be the first under the military's Tricare managed-care program that has not been awarded to Foundation Health Federal Services.
Foundation, based in Rancho Cordova, Calif., so far has won three regional Tricare contracts with a combined value of nearly $5 billion and covering more than 2 million beneficiaries.
The Humana contract-which covers beneficiaries in Alabama, Florida, Georgia, Mississippi, South Carolina, Tennessee and parts of Louisiana and Arkansas-is scheduled to begin July 1, 1996.
The contract also covers claims processing from overseas for beneficiaries of the Civilian Health and Medical Program of the Uniformed Services, or CHAMPUS.
Humana will work with Blue Cross and Blue Shield of South Carolina, Options Mental Health and CMG Health to provide managed-care plans for CHAMPUS beneficiaries in the eight affected states.
A spokesman for Foundation, which bid for the contract, said the company hasn't decided whether it would protest the award. He hinted that it might not because of its previous contract awards.
"We've got plenty to keep us busy," said Foundation spokesman Kurt Davis.
Losing bidders have protested all the previous contract awards, however. In fact, Foundation earlier this year was awarded the largest previous contract, a $2.5 billion deal covering 1.2 million beneficiaries in California and Hawaii, based on its protest of a previous award to Qual-Med, a Pueblo, Colo.-based HMO owned by Health Systems International.
Defense Department officials say losing bidders nearly always protest any contract award valued at more than $1 billion.