In a major shift, the Department of Defense (DOD) has selected Humana Military and Health Net Federal Services to manage its Tricare health insurance system, parting ways with UnitedHealthcare. The new contracts, worth a combined $59 billion, apply to the program that serves US military members and their families.
The new contracts will also be built around a new condensed regional system: instead of separate contracts for North, South, and West regions, DoD has established only 2 coverage regions—East and West.
Health Net Federal was assigned the $18 billion contract for the 21-state West region, while Humana now has the contract for the 32-state East region, worth $41 billion. Previously, Humana had managed the South region, UnitedHealthcare had managed the East region, and Health Net had managed the West region.
According to an article in Military.com, DoD is describing the change as a "reorganization," rather than a rebidding process, that will "simplify the system for both government and users."
"If the contracts are managed well and the handoff is smooth, the change should have very little impact on Tricare beneficiaries, including Tricare for Life users," according to the Military.com article. "But the relationship between beneficiary and contractor can quickly go bad when payments to providers are slow to process or the contractor kicks back to the patient bills for services that should be covered."
Representatives from DoD say the change will make it easier for beneficiaries to move from region to region, and will facilitate the use of electronic health records (EHR).
Federal News Radio reported that under the new contracts, Health Net and Humana will be required to handle all referrals to outside providers electronically and to "ensure private providers can interface" with the EHR system DoD is rolling out in its military treatment facilities.
APTA is aware that the Tricare reorganization may create issues related to physical therapy reimbursement, and will work on behalf of the membership to address them with DoD and the managed care companies.
