Aetna's Tricare contract under review for "appearance of impropriety"

The health plan had hired a former Tricare official to prepare its bid. As a result, the contract might be up for bid again.

By Emily Berry — Posted Dec. 3, 2009

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The U.S. Government Accountability Office said it found that Aetna created the appearance of an unfair advantage in its pursuit of the Tricare contract it was awarded earlier this year. The GAO is recommending that the government re-evaluate the contract bids.

Tricare is the Dept. of Defense's health plan for current and retired military service members, their families and survivors. Tricare management is split into three regions: South, North and West.

The new North contract, originally awarded to Aetna, would be worth an estimated $16.7 billion over five years.

The GAO upheld a contract award protest by Health Net, which holds the current Tricare contract for the North region. The partially redacted decision and recommendations were released to the public Nov. 17.

Among several reasons it listed to uphold Health Net's protest, the GAO found that Aetna "created the appearance of impropriety" in its pursuit of the contract by hiring a former chief of staff for the Tricare Management Activity to prepare its bid.

Though it did not examine whether an unfair advantage actually existed, the GAO did find that Aetna created what could be perceived as one. The former TMA official Aetna hired had access to inside information, and Aetna should have disclosed that to the bid review officer, the GAO found.

Aetna spokesman Alfred Laberge said in an e-mailed statement, "We look forward to TMA's review of these issues and feel confident that Aetna acted appropriately at all times." He did not specifically address any of the GAO's findings.

Health Net spokeswoman Molly Tuttle said the company was "pleased with the outcome and strong findings in our sustained protest," and would await the TMA's decision whether to accept the GAO's recommendations. The TMA has until Jan. 4, 2010, to make that decision.

The GAO also has recommended that Tricare re-bid the contract for the South region, sustaining a protest by incumbent contractor Humana, which had lost out to UnitedHealth Group in the bid process for the next contract period.

TriWest Healthcare Alliance, the current contractor for the West region, won the contract for the next five years.

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