The U.S. Government Accountability Office (GAO) announced 30 JUL that it has affirmed the Pentagon’s $20.5 billion contract award of the TRICARE West Region to United Healthcare, a United Health Group company. UnitedHealth is scheduled to take over the West Region contract in April 1, 2013. The Region includes Alaska, Arizona, California, Colorado, Hawaii, Idaho, Iowa (excluding Rock Island Arsenal area), Kansas, Minnesota, Missouri (except the St. Louis area), Montana, Nebraska, Nevada, New Mexico, North Dakota, Oregon, South Dakota, Texas (the southwestern corner, including El Paso), Utah, Washington and Wyoming. TriWest has blanketed the Washington area in recent weeks with ads attacking UnitedHealth and saying that “Military families deserve better.” The ads usually highlight UnitedHealth’s prior legal woes, including a $350 million settlement the insurer paid after the American Medical Association alleged it had manipulated payments to doctors. The agreement was announced in January 2009. Some ads also point to negative comments about UnitedHealth by Consumer Reports magazine, which the Minnetonka, Minnesota- based UnitedHealth has tried to deflect with positive reviews from similar sources.
TriWest owes its existence to Tricare. The company has helped manage military medical services for the past 16 years, after being founded in 1996 by David McIntyre Jr., the company’s chief executive officer and a former aide to Republican Senator John McCain. It is owned by a holding company made up of a group of nonprofit Blue Cross Blue Shield plans and university hospital systems. The military health work has generated more than $20 billion in contracts for the company since fiscal 2000, according to data compiled by Bloomberg. Without the contract, “it is likely” the company would shut down, McIntyre has previously said. “There are options that remain,” Scott Celley, a TriWest spokesman, said in a phone interview. He declined to comment on the company’s next moves, saying TriWest officials need to review the details of the decision.
The GAO decision found that the Defense Department’s evaluation of the competing bids “was reasonable,” Ralph O. White, the GAO’s managing associate general counsel for procurement law, said in a statement. It denied TriWest’s protest on all counts, he said. The decision expresses no view as to the merits of these firms' respective proposals. White’s office is under no obligation to consider issues such as a vendor’s prior legal settlements or Consumer Reports ratings in its review unless the Pentagon specifically said such items would play a factor in its decision-making, said Daniel Gordon, who stepped down in December as President Barack Obama’s top procurement official. Companies may file suit in the U.S. Court of Federal Claims over contract disputes. [Source: NAUS Weekly Update & Bloomberg Kathleen Miller articles 3 Jul 2012 ++]