The start of new Tricare contracts remains up in the air as a protest involving the West Region’s $65.1 billion contract heads to federal court.

Although Defense Health Agency officials say there will be no disruption to patient care, the ongoing dispute could delay some of the improvements beneficiaries were expecting. The new Tricare contracts, for example, would allow patients to transfer specialty care referrals to a new doctor when they move, even if their new duty station is not in their current Tricare region. Also possibly delayed are service improvements that are expected to reduce the average time to answer customers’ calls to 20 seconds.

Eventually, the new contracts “will improve military readiness, health care delivery, clinical quality, patient safety and beneficiary access to health care … while containing costs for more than 9.6 million Tricare beneficiaries,” said DHA spokesman Peter Graves.

The new contracts for the Tricare East and West regions, with a potential combined value of $136 billion over nine years, were originally scheduled to start in August 2024. While the dispute over the Tricare West contract moves through the court, the current contracts will remain in effect to ensure there is no disruption to patient care, Graves said.

Pitched battle

The Government Accountability Office announced Tuesday that it had denied Health Net Federal Services’ second protest and affirmed defense health officials’ selection in December of TriWest Healthcare Alliance Corp. of Phoenix as the new managed care support contractor for the Tricare West Region.

Health Net, the current Tricare contractor for the West Region, has confirmed to Military Times that they will take the next step, going to the U.S. Court of Federal Claims to challenge the selection.

Health Net “disagrees with the Government Accountability Office’s decision to deny our protest,” company officials told Military Times.

While the dispute involves just the West Region, the delay could affect both contracts, Graves said. The $70.9 billion East Region contract was awarded to Humana Government Business (Humana Military) of Louisville, Kentucky, the current contractor.

In light of Health Net’s stated intention to challenge the decision in federal court, he said, the Defense Health Agency hasn’t taken immediate actions to start work on the T-5 contract, a reference to this being the fifth in a series of Tricare contracts. The agency “will wait until a decision is published by the Court of Federal Claims before starting work on either T-5 contract,” he said.

DHA officials are now waiting for Health Net to file its protest with the court so that they “may review the complaint’s merits,” Graves said.

Meanwhile, current Tricare contracts will continue.

“We are proud to continue partnering with the DHA, the service branches of the military, and our providers in support of beneficiaries under the current Tricare contract throughout 2023 and 2024,” Health Net officials stated.

There are now more than 2.8 million Tricare beneficiaries in the West Region. Once the dispute is settled, an additional 1.5 million will be transferred there from six states now in the East Region: Arkansas, Illinois, Louisiana, Oklahoma, Texas and Wisconsin.

Who’s best?

According to information made public in the GAO’s announcement of its decision, Health Net officials argued that TriWest lacks an existing Tricare network, while Health Net already has an established one. They also argued that TriWest will face various technical challenges and risks that defense health officials failed to reasonably consider.

The Defense Health Agency’s source selection decision document stated that Health Net was rated as “acceptable/low risk” in network management, while TriWest was rated “outstanding/low risk,” according to information in the the GAO decision.

Defense health officials said they were well-aware of the risks.

“The agency contends that its evaluator carefully considered TriWest’s approach to network management and concluded that it was outstanding and would permit a rapid network build in the western region,” according to the GAO decision.

In addition, health agency evaluators noted that TriWest could cover significant portions of the required network through its existing network of providers, “and that TriWest proposed to supplement that existing network with major health plans in all 26 states in the coverage area. The evaluators further recognized that TriWest had obtained letters of commitment from these new prospective providers,” according to the GAO.

“This was part of TriWest’s overall approach to build a network with significant excess capacity, and as a result, TriWest proposed to exceed the solicitation’s requirement by significant margins,” according to information in the GAO decision

The GAO decision also noted that in reviews of past performance, the Defense Health Agency concluded that, although the two bidders received the same rating, TriWest’s performance was superior for several reasons.

Both Health Net and TriWest were contracted for a similar managed care effort for the Department of Veterans Affairs’ Patient-Centered Community Care. But the agency noted that “contractor performance assessment reports reflected that Health Net experienced negative performance issues … that resulted in the VA indicating that it would not recommend [Health Net] for similar requirements in the future, while the [contractor performance assessment reports] for TriWest during the same period reflected positively assessed performance,” according to the GAO decision.

“VA declined to exercise options on Health Net’s contract and instead expanded TriWest’s contract to cover the region formerly operated by Health Net,” according to information in the decision.

In its protest, Health Net argued that both Health Net and TriWest experienced substantial performance problems with the VA contracts, but both had improved their performance over time, and the agency’s evaluations didn’t treat these similar trends equally.

However, the GAO decision stated “we cannot conclude that impermissible disparate treatment occurred in this case.”

Karen has covered military families, quality of life and consumer issues for Military Times for more than 30 years, and is co-author of a chapter on media coverage of military families in the book "A Battle Plan for Supporting Military Families." She previously worked for newspapers in Guam, Norfolk, Jacksonville, Fla., and Athens, Ga.

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