Pentagon Extends Health Net’s TRICARE Contract by 1 Year, Plans Review
The Department of Defense has extended Health Net's current regional TRICARE contract through March 31, 2011, the Sacramento Business Journal reports.
During the one-year contract extension, DOD officials plan to review concerns about the way it selected Aetna to replace Health Net as its TRICARE contractor during negotiations over the summer.
The new contract includes a 10-month base period and five one-year options. The deal could be worth nearly $17 billion.
Health Net previously held the contract to administer benefits for military personnel, retirees and their dependents in TRICARE's northern region.
In July 2009, DOD announced that it would award the contract to Aetna effective April 1, 2010.Â
Health Net appealed the decision, and the Government Accountability Office upheld the appeal in a November report. The GAO report suggested that Aetna might have gained access to proprietary information about Health Net's previous performance when Aetna hired a former high-level TRICARE official.ÂThe finding prompted DOD to conduct an investigation of the contract-awarding process (Robertson, Sacramento Business Journal, 1/22). This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.