The U.S. Department of Defense plans to award the North Region Managed Care Support contract to Health Net Federal Services L.L.C.
Pentagon officials have notified Health Net Federal, a unit of Health Net Inc., Woodland Hills, Calif. (NYSE:HNT), that they intend to give the contract to Health Net Federal, according to Health Net.
Health Net is now the managed care contractor for the Tricare North Region.
“Health Net is honored to continue to serve our active duty, National Guard and Reserve members, and military retirees and their families in the North Region,” Health Net President Jay Gellert says in a statement.
Aetna Inc., Hartford (NYSE:AET), another contender for the contract award, says it “is reviewing the basis for the decision and will seek to determine the best path forward.”
“We are extremely disappointed with this decision,” Susan Peters, president of the Aetna Government Health Plans unit, says in a statement.
Tricare is a program that manages health benefits for military personnel, dependents and retirees who get care away from military and Veterans Department facilities.
The contract for the North Region covers “the District of Columbia and the states of Connecticut, Delaware, Illinois, Indiana, Iowa (Rock Island Arsenal area only); Kentucky (except the Fort Campbell area); Maine, Maryland, Massachusetts, Michigan, Missouri (St. Louis area only); New Hampshire, New Jersey, New York, North Carolina, Ohio, Pennsylvania, Rhode Island, Vermont, Virginia, West Virginia, and Wisconsin.”
The initial 10-month “base period” has a value of about $2.8 billion, and there are also 5 1-year “option periods.” If the government pays for all option periods, the total value of the contract could be about $17 billion, officials say.