New Tricare Contracts Delayed by Months as Tricare West Region Contractor Fights to Retain Its Position

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A medical support assistant at Kenner Army Health Clinic
A medical support assistant in Kenner Army Health Clinic's Wilkerson Pediatric Clinic checks the credentials of a teenager prior to an appointment. (U.S. Army photo by Lesley Atkinson)

The expected start for the next generation of Tricare contracts has been delayed as a result of a lawsuit filed by Health Net over the Defense Health Agency's decision to award the contract for the western half of the U.S. to TriWest Healthcare Alliance.

Under the DHA's original timeline, the new contracts, which will be responsible for providing civilian health services to 9.6 million military personnel, retirees and their families, were scheduled to begin in August 2024.

But the 12-month turnover required for the anticipated start date has yet to begin, with the dispute now under consideration in the U.S. Court of Federal Claims.

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"As of this date, no T5 Transition-In activities have taken place," DHA spokesman Peter Graves said in an email Tuesday, referring to the fifth generation of Tricare contracts, known as T5. "The Health Net Federal Services' protest filed with the Court of Federal Claims remains pending."

DHA officials previously have said there will be no disruption to patient care, given that the current contracts will remain in place. But planned improvements to Tricare, such as allowing patients to transfer specialty care referrals after a move regardless of Tricare region and improvements to customer service, won't start until the new contract is in place.

After DHA awarded the Tricare East and West contracts, worth up to $136 billion over nine years, to Humana Government Business, also known as Humana Military, and TriWest last December, Health Net, which currently manages the Tricare West region, filed protests over the decision, arguing that TriWest did not have an existing Tricare network in place and would face technical challenges that could disrupt patient care.

The Government Accountability Office rejected those arguments and upheld the DHA's decision to award the contract to TriWest.

In its lawsuit, Health Net largely makes the same case. In its defense, TriWest says it plans to utilize the network it manages as the primary regional contractor in the West for the Department of Veterans Affairs' Patient Centered Community Care program and augment that network with subcontractors from major health networks in the 26 states it will oversee.

"DHA determined that TriWest's proposal offered the best value for providing comprehensive health care to our nation's military service members, their families, and military retirees. Health Net's subjective disagreement with DHA's decision should be rejected," TriWest attorneys wrote in court documents.

Sealed oral arguments on the case are scheduled for Dec. 20 in Washington, D.C.

The delay affects both contracts because, as part of the next generation of contracts, 1.5 million Tricare beneficiaries who live in Arkansas, Illinois, Louisiana, Oklahoma, Texas and Wisconsin will shift from the East Region to the West Region.

Related: Tricare Costs Are Going Up Again in 2024

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