This summer the Department of Defense ruled on the newest contracts for its TriCare health insurance system, but not everyone is happy with the $18 billion agreement, which is expected to go into effect next April.

The DoD selected Health Net Federal Services to administer the Western region’s TriCare insurance, which includes Colorado. TriCare provides civilian health benefits for military personnel, military retirees and their dependents.

At the same time, Humana Military was awarded the Eastern region contract totaling $41 billion.

Both contracts are set to take effect next year, but Health Net’s win has already drawn protest by several entities, to include a formal appeal by UnitedHealthcare, which acted as the DoD’s previous TriCare administrator in the West.

“UnitedHealthcare submitted proposals for both the East and West regions and is protesting the contract awards,” according to a report by the Military Times. “The West region contract is valued at $49 million in the initial phase and up to $17.7 billion for the duration of the five-year contract.”

The article acknowledges appeals are a regular occurrence in the world of government contracting, and not cause for concern. But some local businesses, based on prior experience, are bracing for a bumpy transition.

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Shifting contracts among the DoD and insurance administrators is common. Beyond the military, the government conducts similar negotiations regarding the administration of Medicare and Medicaid.

The last TriCare switch in 2013, however, caught some businesses off-guard — and cost them both time and money navigating the new structure.

In spring 2013, UnitedHealthcare took over the TriCare contract from TriWest Healthcare Alliance for the Western region.

After the change took effect in April of that year, providers encountered a sudden lack of referrals, slow payments, new billing codes and a forced reduction in services.

Lynette Crow-Iverson owns HealthQuest Medical Services, which provides occupational medical services, including the evaluation and treatment of work-related injuries.

Crow-Iverson said she employs a board-certified anesthesiologist, but was told she wasn’t allowed to offer pain management services because contract language called for a specific occupational medicine designation.

“I spent two years fighting that battle,” Crow-Iverson said. “For two years we couldn’t offer pain management. That was 20 percent of my business.”

Crow-Iverson is concerned this transition will bring similar headaches, and said she wants to see Health Net representatives in Colorado Springs speaking with providers about the needs of the local business community.

“We don’t know if there will be grandfathered providers, or if we have to renegotiate rates,” Crow-Iverson said. “We don’t know if have to redo our contracts.”

When asked to comment, Health Net spokesperson Brad Kieffer said his company is adhering to a quiet period during the appeals process and was unable to offer a statement.


Andy Merritt is chief defense industry officer with the Colorado Springs Regional Business Alliance, and reiterated the negotiations are pretty standard.

“This is not the first time TriCare has changed hands for the region,” he said.

In fact, Health Net administered TriCare for the Western region as recently as 2004.

“But it’s always significant when it occurs,” he added. “Changing contractors for health care is a significant undertaking.”

Previous issues included the transferring of medical records in 2013, Merritt said.

“Lots of patients had issues with information not transferring correctly,” he said. “Procedures that were approved were showing up as not approved. Administrative transitions are our biggest concern — making sure they are handled quickly so there’s no disruption to care.”

Merritt said the RBA has been involved with Congressman Doug Lamborn’s office to ease the transition.

Lamborn offered this statement:

“Given our community’s past history when TriWest transitioned to [UnitedHealthcare] and the many providers who were negatively impacted, I am certainly very concerned about the stability of our provider network during these transition periods. UHC is currently in the middle of their contract protest so we don’t yet know the final outcome. However, my office is working hard to build early relationships with Health Net since they also manage our VA Choice network. I am hopeful that Health Net will take a deeper look at our unique community of providers in order to facilitate the smoothest possible transition for our TriCare beneficiaries.”

The RBA and its health care sector team will facilitate collaboration between administrators, providers and politicians “in any way we can,” Merritt said. “The more we can engage early, the smoother this will go,” he said.


Despite past hiccups, including delayed payments from previous administrators, local hospital systems are looking at the transition as a relatively minor bump in the road.

“Our current claims experience is business as usual and similar to the process we have with any other payer,” said Kathleen McCreary, vice president of payer relations and network development for UCHealth. “Any time there’s a change in contractors, the billing and payment process also changes, but we’re prepared to work with any payer chosen by the DoD to make sure the transition is as smooth as possible.”

UCHealth, as a system, has some of the highest TriCare patient counts in the state, according to McCreary.

“University of Colorado Hospital [TriCare patient numbers are] actually higher than Memorial and, taken together, these numbers make us the highest volume TriCare provider in the region, demonstrating UCHealth’s firm commitment to serve our military personnel and their families by giving them access to some of the nation’s best medical care,” McCreary said, adding UCHealth has recently reached out to Health Net in order to begin collaborating on the transition.

“We’ve already worked with Health Net on our [Veterans Association] Choice Program, so we already have a relationship established,” she said.

Regarding slow processing during previous transitions, McCreary said, “I believe we’ve gotten past all that.”

Chris Valentine, director of marketing and communications for Centura’s Penrose-St. Francis Health Services, said that, in Colorado, “there are 197,685 TriCare beneficiaries who have been aligned with United Healthcare since 2012 as their administrator. All … will transition to Health Net.”

Centura’s dealings with insurance administrators have been relatively painless, he said.

Centura has also maintained a working relationship with Health Net since early 2015 for the VA population in Colorado, Valentine added.

“This relationship has been favorable,” he said. “We anticipate the same type of relationship with Health Net for the TriCare population.”

While large health care providers have the resources to navigate such changes, Crow-Iverson wants more communication with small businesses.

During the transition in 2013, Crow-Iverson said there should have been more attention paid to Colorado Springs due to its large active duty and retired military population.

But there’s not much that can be done until the appeals process is over, she said.

“I don’t know how the Pentagon makes these decisions. Half the time they are made by people who aren’t in our world. I want the people who make the decisions to meet with us,” she said. “But we’ve been on our own.”