Jan
23Humana’s Uncertainty Regarding Tricare Contract
Tagged Under : Contract, Tricare Contract
Like we have mentioned in our previous articles, renewal of contracts regarding health care is not that easy nowadays. Read some current news about health insurance deals and you’ll find out that most companies involved do not come easily into an agreement. Most issues are budget related while some just simply have too many competitions and lost the bidding.
According to a recent report, Humana is not certain whether it will win another five-year contract to dispense Tricare benefits in the southern region. Last July, UnitedHealth Group’s subsidiary United Military & Veterans Services won the “third generation” contract for the South region. Humana lost the bid to keep that contract, which it had held since 1996. The third-generation contract period was supposed to begin in 2010, but Humana challenged the bid award process.
In October 2009, the Government Accountability Office sustained the protest, finding that Tricare Management Activity, which runs Tricare, had failed in its bid appraisals to account adequately for how much Humana’s network discounts could save the government. In Dec. 23, 2009, notice to shareholders filed with the Securities and Exchange Commission, Humana said it had learned of the TMA’s “intent to implement corrective action” in line with the GAO’s recommendations.
To further elucidate the situation, TMA spokesman Austin Camacho said in an e-mailed statement: “The corrective action could include a range of different processes but will include some sort of proposal evaluation and new source selection decision as the GAO recommended. The same or a different company could be selected.”
For now, while TMA sorts out the contracting for the next long-term period, Humana has been awarded a temporary extension of its current Tricare contract, so it will continue administering benefits until at least March 31, 2011.
