GAO Denies Protest Over Major Tricare Change

A plan to consolidate Tricare's three regions into two is set to go ahead after the Government Accountability Office on Tuesday announced it denied a series of protests to the contract.

"In denying the protests, GAO concluded that the agency's evaluation was reasonable, consistent with the terms of the solicitation, and in accordance with procurement laws and regulations," Ralph White, the office's managing associate general counsel for procurement law, said in a statement.

The two five-year contracts, known simply as "T2017," are worth over $58 billion and were awarded in July to the insurers Humana and HealthNet. Nine protests were filed against that decision, and all were denied Nov. 9 by the GAO. Although further legal action in the Court of Federal Claims is possible, it's expected the new contracts will now go forward as planned.

Under the new plan, Tricare's current three regions -- South, North and West -- will be consolidated into two regions, East and West. Humana will manage the East region, while HealthNet will manage the West region.

About 9.2 million beneficiaries are enrolled in the military's Tricare health care system. Coverage rules are set by law and don't depend on which contractor is administering the system. Contractors are responsible for processing claims, providing customer support, managing referrals and establishing and maintaining provider networks, among other tasks.

The new East region will include the District of Columbia; Alabama; Arkansas; Connecticut; Delaware; Florida; Georgia; Illinois; Indiana; the Rock Island Arsenal area of Iowa; Kentucky; Louisiana; Maine; Maryland; Massachusetts; Michigan; Mississippi; the St. Louis, Missouri, area; New Hampshire; New Jersey; New York; North Carolina; Ohio; Oklahoma; Pennsylvania; Rhode Island; South Carolina; Tennessee; most of Texas; Vermont; Virginia; West Virginia and Wisconsin.

The new West region will include Alaska; Arizona; California; Colorado; Hawaii; Idaho; all of Iowa except the Rock Island Arsenal area; Kansas; Minnesota; all of Missouri except the St. Louis area; Montana; Nebraska; Nevada; New Mexico; North Dakota; Oregon; South Dakota; west Texas; Utah; Washington and Wyoming.

Tricare officials said the new contracts improve efficiency within the system.

"In designing the T2017 contracts, we retained the best parts of prior contracts and incorporated new best practices to improve access, quality and safety," Dr. Karen S. Guice, acting assistant secretary of defense for health affairs, said in a statement. "We've added new controls to provide a more seamless transition to the new contracts. We'll work very closely with our new partners to test their systems and ensure a smooth handoff of care for all of our beneficiaries."

The new contracts will likely start in late summer of 2017, although no official start date has been announced. The decision comes on the heels of two other major Tricare decisions. A dental contractor swap is set to take place on May 1, 2017, while a decision to remove CVS from the system’s retail pharmacy network goes into effect Dec. 1.

-- Amy Bushatz can be reached at amy.bushatz@military.com.