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UnitedHealthcare protests military health insurance contract reversal Posted: March 10th, 2011

By Maryalene LaPonsie

In 2009, UnitedHealthcare was awarded a contract to provide medical insurance to military members in the TRICARE South Region. Now, 20 months later, the Department of Defense plans to revert the contract back to the previous provider, Humana Military Healthcare Services. UnitedHealthcare has filed a formal protest with the Government Accountability Office (GAO) over the reversal.

"The Department of Defense got it right nearly two years ago when it awarded the TRICARE contract to UnitedHealthcare based on quality, value, innovation and price," said Lori McDougal, CEO of UnitedHealthcare's military division, in a statement.

According to UnitedHealthcare, TRICARE Management Activity, the agency awarding the contract, made 13 amendments to its original solicitation. The insurer asserts that Humana was awarded the contract after it guaranteed significant discounts in the amount that it would pay providers in the region. The Pentagon's decision to revert to Humana would drive doctors and hospitals out of the network, and reduce access for beneficiaries, McDougal said.

The TRICARE South Region spans 11 states and provides medical coverage to 3 million active and retired members of the Armed Forces as well as their families. According to standard government procedures, the UnitedHealthcare protest should trigger a stay of the health insurance contract award while the GAO investigates UnitedHealthcare's concerns.