1:23pm

Wed June 15, 2011
Science/Health

UnitedHealth Challenges Humana 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.