UnitedHealthcare officially has won a challenge to take on a $20 billion contract managing active-duty and retired military and their families living in the western U.S.
The health insurer said this week that the U.S. Government Accountability Office affirmed Tuesday theU.S. Department of Defense's decision in March to award the contract.
The defense department had awarded the 21-state TRICARE West contract to TriWest Healthcare Alliance of Phoenix, Ariz., but reversed the decision in March after a challenge from UnitedHealthcare, which employs about 4,000 in Connecticut.
"UnitedHealth Military & Veterans Services is honored to be able to put our expertise and experience to work on behalf of TRICARE West beneficiaries, and we look forward to working with the Defense Department and the incumbent contractor to ensure a smooth transition for service members, retirees and their families," said Lori C. McDougal, CEO of UnitedHealth Military & Veterans Services. "We are committed to working with the Department of Defense to ensure beneficiaries have access to cost-effective, quality and innovative care."
The five-year contract starting April 1, 2013 is for 2.9 million TRICARE West beneficiaries in Alaska, Arizona, California, Colorado, Hawaii, Idaho, Iowa except for Rock Island Arsenal area, Kansas, Minnesota, Missouri except for theSt. Louisarea, Montana, Nebraska, Nevada, New Mexico, North Dakota, Oregon, South Dakota, portions of Texas including El Paso, Utah, Washington and Wyoming.
The contract will mean $1.4 billion in revenue over the course of five years for UnitedHealthcare's Military & Veterans Services business unit, which will process claims and manage costs and risk management as well detecting fraud-and-abuse.
Essentially, UnitedHealthcare will act as a third-party administrator for the $20 billion that the federal government spends on health care for the military and veteran families in the region.
This is one of three TRICARE contracts. UnitedHealth Group, the parent of UnitedHealthcare, was disputing a contract for TRICARE South up until late last year. That contract was awarded to Humana.