UnitedHealthcare will fight to continue providing health coverage for U.S. military members through Tricare after losing out on the Pentagon's 2017 contracts worth up to $58.2 billion to its top competitors.
The incumbent Tricare health insurer on Monday filed two bid protests with the U.S. Government Accountability Office, disputing the U.S. Defense Department's contract awards for Tricare's West and East regions in 2017. The Defense Department announced last month that UnitedHealthcare's rivals Humana and Centene Corp. would take over managing Tricare in the two regions beginning in April 2017.
GAO is expected to rule on the bid protest by Nov. 9, as the agency has 100 days to analyze and respond to the company's request.
Humana previously managed Tricare's South region, and will provide healthcare coverage for 6 million Tricare members in the 32-state East region under a new $40.5 billion contract that could potentially last for five years. Centene and new acquisition Health Net will take over the 21-state West region and approximately 3.4 million Tricare members in the shake-up. Both contractors will cover Iowa, Missouri and Texas. Under the contract requirements, no single company can hold more than one Tricare regional management contract.
UnitedHealthcare served approximately 3 million Tricare members in 2015 and raked in $650 million in annual revenue through the contract, according to Wall Street estimates.
“Throughout this process, UnitedHealthcare remains committed to continuing to deliver high-quality healthcare to our current West region beneficiaries,” said Bruce Jasurda, a spokesman for UnitedHealthcare's military and veterans division.
The Defense Department and the Defense Health Agency said in 2014 that they would shift Tricare from a three-region system—North, South and West—to two coverage areas.
UnitedHealthcare has disputed Tricare contract awards in the past. In June 2011, it sued the Defense Department in the U.S. Court of Federal Claims over its decision to award Humana the $23 billion South region contract. It secured the West region contract in 2012 after another protest.
