Tricare Awards New Healthcare Contract Focusing On Lessons Learned | Federal News Network

Military and retired family members who use TRICARE will see changes in their health care starting in 2024. The Defense Health Agency (DHA) announced its new contract for TRICARE services on December 22. The new civilian healthcare contract, known as the T-5, will begin in 2024.

Humana Government Business and TriWest Healthcare Alliance Corporation will be regional contractors, with Humana covering the TRICARE East region and TriWest providing coverage for the TRICARE West region.

The $138 billion combined contract will serve approximately 10 million patients in the health network. With the new contract, the Department of Defense replaces Health Net Federal Services with TriWest Healthcare in the TRICARE West region

Contractors work with the DHA in healthcare delivery, combining contractor resources with the Army’s direct medical care system to provide health, medical, and administrative support services to service members, retirees, and eligible family members or dependents. While active duty members get direct, no-cost health care, commercial health care providers are contracted to provide services for their dependents and retirees. The DHA said the new contracts will provide beneficiaries with greater flexibility in the provider network, improved telehealth appointments, and more efficient referral transfers between the two regions.

Humana and Healthnet won the contract for the services in 2016 after a process that led to nine protests, all of which were ultimately dismissed. The DHA expected protests due to the large size of the contract. The agency had pre-emptively asked the Government Accountability Office and other acquisition experts to look into the process before awarding the award in an effort to stave off protests. The DHA wanted to prevent problems after the award of the 2009 contract to TRICARE led to protests that delayed execution of the contract for nearly three years.

While the contract was offered in a competitive bidding process, only two bids were submitted, guaranteeing them the contract and no prospect of protests.

In addition to changing the provider, the T-5 nodes also bring about a change in the configuration of the regions. The new boundaries for the two territories will move Arkansas, Illinois, Louisiana, Oklahoma, Texas, and Wisconsin from the eastern region to the western region. These six states will bring approximately 1.5 million beneficiaries to the TriWest Healthcare region.

“Moving these six states to the Western Region will create a more even balance of Tricare residents managed by each regional contractor. This move will also streamline processes and standards for both regions,” said a statement from TRICARE.

While some previous changes to the program caused significant problems for beneficiaries, TRICARE hopes that with a year to go, this next change will provide an even better experience. The transition period begins February 1.

“The transition planning time has been scheduled for a full year. This is to ensure that healthcare delivery is ready for all 9.6 million beneficiaries on the first day of the new decade.”

In 2016, TRICARE moved from managing three regions to the current two. United Healthcare lost territory and failed to renew the contract. Problems raised the process of rolling out the T-2017 contract. Patients have reported being dropped from TRICARE listings, losing their payment information and seeing referrals build up. Adding to the confusion, the DHA increased the cost of co-payments during that transition period.

The terms of the new contract are a cost plus award fee contract and a fixed-price, fixed-price contract with a transition period of 12 months. It then moves on to eight elective one-year health care delivery terms, plus a transition period. This contract also includes incentives and performance guarantees.

Military service organizations including the American Military Officers Association pressed the DHA last year to minimize disruption to patients during the transition and ensure that new contractors have adequate networks to care for beneficiaries. The group raised concerns that the contracts focused on value-based service, which could harm patients.