UnitedHealthcare protests losing out on federal contracts

UnitedHealthcare has filed protests against a federal decision last month to award two large contracts in military health care to rival insurers.

The Minnetonka-based insurer currently is one of three vendors with a multiyear contract to provide services to military members, veterans and their families through the government's Tricare program.

New contracts to manage the federal health program start next year and were awarded to Kentucky-based Humana and a division of St. Louis-based Centene Corp. — not UnitedHealthcare.

The new contracts have a combined value of up to $58 billion over multiple years. UnitedHealthcare says it bid on both contracts and therefore is protesting both decisions.

"On Aug. 1, UnitedHealthcare filed a protest with the Government Accountability Office [GAO] on both … contract award decisions," the insurer said Wednesday in a statement. "Throughout this process, UnitedHealthcare remains committed to continuing to deliver high quality health care to our current west region beneficiaries."

Past contract awards in the Tricare program have drawn protests from losing insurers that sometimes have resulted in changes.

In a statement Wednesday, the U.S. Department of Defense said it could not comment on how it came to decisions on the new contract awards. The GAO usually adjudicates protests within 100 days.

Currently, UnitedHealthcare serves as the vendor for western states, Humana operates in the south and Centene works in the northeast.

The new contracts combine the south and northeast states into one east region, where Humana would manage care under the contract awards announced in July. Centene would replace UnitedHealthcare as vendor for the west region.

The government's Defense Health Agency said in a statement Wednesday that it's switching to a two-region structure to reduce administrative variation and costs. The change also "provides seamless support to a mobile Tricare beneficiary population, especially for those families with special needs as they transition from one assignment to another," the Defense Health Agency said.

On a website explaining the new contracts, the Department of Defense says that multiple vendors have filed formal protests, which isn't unusual.

Christopher Snowbeck • 612-673-4744

Twitter: @chrissnowbeck