Health Net Federal Services, the company that oversees health services for military patients in Tricare's West Region, has filed a second protest against the Defense Department's selection of TriWest Healthcare Alliance to manage the contract for the next nine years, a move that could delay the expected transition in 2024.
According to Government Accountability Office records, Health Net filed a bid protest on May 1, its second since the Defense Department announced last December it had selected TriWest as the regional contract manager, responsible for providing health care to 4.5 million DoD beneficiaries in 26 states.
Health Net filed a protest within weeks of that contract announcement in February, but as the Government Accountability Office moved to review the decision, the DoD withdrew the award to reconsider its evaluation.
After examining the contract selection records, DoD announced April 20 that it had upheld its decision in choosing TriWest. Health Net then moved to file another protest, which now will be considered by the GAO, the federal agency that investigates contract awards and bid protests.
Health Net officials told Military.com that they filed the protest because they believe they have done a good job with their past Tricare contracts and they have concerns about TriWest’s business model.
"We are concerned the selection committee did not properly consider the risks associated with TriWest Healthcare Alliance's decentralized, large-business, subcontractor structure, which we believe undermines the important contribution of small businesses such as Service-Disabled Veteran-Owned and Veteran-Owned companies that currently provide the best possible support to the military community," a Health Net spokesperson wrote in an email.
"We are following the established process to challenge this decision. In the meantime, we remain focused on delivering exceptional contract performance that benefits our military beneficiaries, as we have done for the last 35 years," the spokesperson added.
The fifth-generation Tricare Managed Care Support contracts, known as T-5, are worth up to $136 billion over a nine-year period which was to start in 2024.
Whether the protest will affect the timeline has yet to be determined. The GAO has until Aug. 9 to render a decision. Contract service originally was expected to begin in January 2024 but was delayed until August 2024 following the prior reconsideration of the award.
A Defense Health Agency spokesman said Thursday that the schedule will remain on track barring any litigation that may follow the GAO's decision. Health Net has a right to take the issue to federal court if GAO supports DoD's selection.
"Assuming GAO denies or dismisses all protest allegations and there is no subsequent litigation, DHA may proceed with contract performance, including a one-year transition period," DHA spokesman Peter Graves wrote in an email to Military.com on Thursday. "Start of health care delivery would then begin in August-September 2024."
The Tricare health program provides private health care treatment, referrals, customer service, claims processing and other support services to roughly 9.6 million beneficiaries, including active-duty personnel, some members of the Reserve and National Guard, military retirees and family members.
Under the contract, Humana Military, which currently oversees the Tricare East Region, will remain as the regional contractor, responsible for nearly 5 million beneficiaries in 24 states. That contract is worth up to $70.9 billion over nine years.
If upheld, the T-5 contract award will shift 3 million beneficiaries currently in the West Region from Health Net to TriWest. The contract also moves 1.5 million beneficiaries in Arkansas, Illinois, Louisiana, Oklahoma, Texas and Wisconsin from the Tricare East Region to the West.
TriWest oversaw the Tricare West Region from 1996 to 2013 and currently manages the Department of Veterans Affairs' Community Care Network in the western United States and Hawaii.
-- Patricia Kime can be reached at Patricia.Kime@Military.com. Follow her on Twitter @patriciakime