In a major restructuring of how it delivers health benefits, the Department of Defense awarded contracts to three managed-care organizations to cover 8.7 million military personnel and dependents. Over five years, the contracts for the military's Tricare program could be worth as much as $26 billion. The companies are Health Net Federal Services, Rancho Cordova, Calif.; Humana Military Healthcare Services, Louisville, Ky.; and TriWest Healthcare Alliance Corp., Phoenix. As part of the restructuring, the Defense Department combined 12 Tricare regions into three, with Health Net administering the North region, Humana the South and TriWest the West. Sierra Military Health Services, a subsidiary of Sierra Health Services, Las Vegas, was not selected nor was Aetna, Hartford, Conn. Under the previous system, seven companies held Tricare contracts. William Winkenwerder, assistant secretary of defense for health affairs, said the restructuring will improve the quality of care available to beneficiaries. In addition, the military expects to achieve some financial savings because of reduced bureaucracy and better financial incentives for the managed-care companies. -- by Jeff Tieman
Contracts awarded in overhauled Tricare program
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