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UnitedHealth Sues Over Tricare Contract

The long battle between Louisville-based insurer Humana and Minnesota-based UnitedHealth over the awarding of the lucrative military Tricare contract is moving into a new venue.

Humana lost the $23 billion contract to provide insurance to military families the South to UnitedHealth two years ago, but quickly challenged the ruling and won the appeal the next year.

That victory was then challenged by UnitedHealth, but was upheld by the General Accounting Office.

UnitedHealth is now suing the Defense Department in the U.S. Court of Federal Claims over its decision to give the contract back to Humana.

The company has argued that Humana’s cost savings were built on low reimbursements to doctors; Reimbursements that were so low, they could deter healthcare providers from seeing Tricare patients.

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UnitedHealth to “Pursue All Available Options” to Challenge Humana Tricare Award

After a contentious two year dispute, Louisville insurance giant Humana will retain a lucrative military contract.

Humana held the military’s Tricare contract for years. It allows the company to provide insurance for active and retired members of the armed services and their families throughout the south.

Humana lost the contract to Minnesota-based UnitedHealth in 2009, but quickly challenged the ruling and won the appeal the next year. That victory was then challenged by UnitedHealth. The company argued that Humana’s cost savings were built on low reimbursements to doctors. Reimbursements that were so low, they could deter healthcare providers from seeing Tricare patients.

But the Government Accountability Office has rejected that claim and the final decision now goes to the Department of Defense. UnitedHealth says the flaws in Humana’s bid are significant.

“We intend to pursue all available options, including legal action, to ensure any TRICARE South contract award by the Department of Defense provides the best access to quality health care for military members and their families,” said company officials in statement.

Humana Military CEO Dave Baker issued a statement saying he’s pleased with the GAO’s decision. Company officials declined to comment further.

The contract begins next year and will be worth about $23 billion over five years.

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Humana Wins Another Round in Tricare Dispute

The U.S. Government Accountability Office has ruled against Minnesota-based UnitedHealth in a protest over the awarding of the lucrative Tricare military contract.

Humana previously held the contract, which allows the company to provide insurance and benefits to military members, retirees and their families in the south. Humana lost a renewal bid to UnitedHealth in 2009, but appealed the decision. In 2010, the GAO ruled that Humana’s bid had not been properly considered and, after another review, changed its decision. UnitedHealth then appealed that decision on the grounds that Humana’s proposed reimbursements to doctors were too low. On Tuesday afternoon, the GOA rejected the protest. The final decision is up to the Department of Defense.

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Local News Politics

Humana’s Department of Defense Contract Challenged

The dispute over a profitable Department of Defense insurance contract continues.

Last month, Humana won its appeal to retain the DoD’s TRICARE contract to provide health benefits to active and retired military personnel and their families in the south. Humana lost the contract to Minnesota-based UnitedHealth two years ago, but quickly filed the appeal, saying the DoD did not equally judge insurers.

Now UnitedHealth has challenged the decision in favor of Humana’s appeal. The company says it provides better quality and prices for the DoD and healthcare providers.

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Humana Waiting On TRICARE Ruling

Louisville-based heath insurer Humana is still waiting on a ruling from the Government Accountability Office is a dispute over a large military contract.

The GAO has until late October to respond to Humana’s protest, which concerns the Department of Defense’s TRICARE insurance plan for active-duty and retired personnel. Director of Legislative and Public Affairs Julie Ice says Humana filed the complaint after losing the contract to the Minnesota-based UnitedHealth Group.

“The protest was basically filed on questions with areas of concern on how they rated the proposals,” she says.

Ice says the ruling could be appealed.

“There are avenues you can take should the company choose to do that,” she says. “We have not, obviously, made that decision at this point.”

The protest was filed in July. Humana has held the TRICARE contract for the south since 1996. Last year, it generated about 3.3 billion dollars for the company. It expires in March 2010.