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Release No: 616-03
August 21, 2003

Tricare Contracts Awarded

Dr. William Winkenwerder Jr., assistant secretary of defense for health affairs, addressed today’s award of the Tricare contracts to Health Net Federal Services, Rancho Cordova, Calif.; Humana Military Healthcare Services, Louisville, Ky.; and TriWest Healthcare Alliance Corp., Phoenix, Ariz. The three contracts are valued at an estimated $6.4 billion, which does not include the target health care costs for option periods two through five that will be negotiated prior to exercising each option. Health care costs for these three contracts, for option periods two through five, are estimated to range between $19.5 billion to $20.5 billion. The new contracts will replace the current seven contracts over the next 14 months and will be simpler for the government to administer.

These contractors will provide health care services to our 8.7 million uniformed services beneficiaries and support to military hospitals and clinics in the United States. They put customer satisfaction first by providing meaningful incentives for top performance in telephone access, claims payment and quality medical outcomes.

"The new contracts are part of the secretary’s transformation efforts and will make a strong program better," said Winkenwerder. "Our new contractors will be strategic partners in support of medical readiness and their added value includes optimizing care in our military medical facilities, ensuring access to the highest quality civilian providers and offering preventive and outreach strategies for our beneficiaries."

Each contract includes at least a nine-month transition, plus five one-year option periods for health care delivery and support. The transition begins on Sept. 1, 2003. The turnover of responsibility for services in the newly aligned Tricare North, South and West regions will be phased in, starting with areas in the West region on June 1, 2004, and will be completed by November 2004.

"I anticipate a smooth transition," said Winkenwerder. "Through the transition period, beneficiaries will receive information about enrollment choices, primary care manager selections and the availability of specialists."

"I am very pleased with this next generation of Tricare contracts. They will take us to the next step in focusing on our patients, claims efficiency, ease of portability and enhancing our military medical facilities," said Lt. Gen. James B. Peake, Army surgeon general and commander U.S. Army Medical Command.

"These contracts will afford the Military Health System greater flexibility and opportunity to execute the health care benefits enacted by Congress," said Vice Adm. Michael L. Cowan, surgeon general of the Navy and chief, Bureau of Medicine and Surgery. "Naval medicine looks forward to working with our sister services and our Tricare partners to deliver a world-class benefit—centered on families, grounded by Force Health Protection."

"The award of these contracts concludes an intense process of dedication and inter-service cooperation. It also marks the beginning of new partnerships specifically designed to focus on our beneficiaries, to reward quality, and help us strengthen our expeditionary Air Force," said Lt. Gen. George Peach Taylor, surgeon general of the Air Force.

Health Net Federal Services is the awardee for the $2.2 billion contract for the Tricare North region and will provide support and health care services in Connecticut, Delaware, the District of Columbia, Illinois, Indiana, Kentucky, Maine, Maryland, Massachusetts, Michigan, New Hampshire, New Jersey, New York, North Carolina, Ohio, Pennsylvania, Rhode Island, Vermont, Virginia, West Virginia and Wisconsin.

Humana Military Healthcare Services is the awardee for the $2 billion contract for the Tricare South region and will provide support and health care services in Alabama, Arkansas, Florida, Georgia, Louisiana, Mississippi, Oklahoma, South Carolina, Tennessee and the eastern portion of Texas.

TriWest Healthcare Alliance Corp. is the awardee for the $2.1 billion contract for the Tricare West region and will provide support and health care services in Alaska, Arizona, California, Colorado, Hawaii, Idaho, Iowa, Kansas, Minnesota, Missouri, Montana, Nebraska, Nevada, New Mexico, North Dakota, Oregon, South Dakota, the western portion of Texas, Utah, Washington and Wyoming.

During the transition period, beneficiaries will continue to file claims with their current Tricare contractor. Eligible Tricare beneficiaries are encouraged to contact the Defense Manpower Data Center Support Office (DSO) to ensure enrollment information in the Defense Enrollment Eligibility Reporting System (DEERS) is current. DEERS enrollment may be verified by contacting the DSO at (800) 538-9552, or by visiting the nearest uniformed services personnel office. A list of personnel offices is available at http://www.dmdc.osd.mil/rsl.

The Military Health System is an integrated delivery system, one that is unique in its mission and composition, yet is based on sound business practices in health care purchasing and services delivery.


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