TriWest appeals government contract bid lost to UnitedHealth
After TriWest Healthcare Alliance lost its only contract — a $17 billion agreement to provide services to military personnel — the company is fighting for its survival.
TriWest lost the bid to UnitedHealth Group, which provides insurance for 30 million Americans, including millions of government employees.
TriWest has held the contract to provide health care services for Tricare, the Pentagon's health program, for 21 Western states and about 2.9 million people since 1996.
TriWest is fighting back. First, it appealed the lost contract to the Government Accountability Office, claiming the Pentagon miscalculated its bid by more than $100,000 and failed to investigate what TriWest CEO Dave McIntyre called United's "troubling record."
Then, TriWest launched an ad campaign showcasing its competitor's faults. A full-page ad in USA TODAY, as well as other publications, and billboards at the Pentagon subway station list United's past lawsuits. TriWest also asked members of Congress to write a letter to the Defense Department questioning why the decision was made. And finally, TriWest created a website, savemymilitaryhealthcare.com, that compares TriWest and United's records.
"We believe the people who will be affected should see their record," McIntyre said.
United maintains that its track record is "excellent," but that it won't engage in negative campaigning against a competitor.
"While TriWest resorts to rhetoric, we've been focused on putting our experience and resources to work on the needs of the Tricare beneficiaries," said United spokesman Matt Stearns. "We certainly expect TriWest will be a reliable partner during the transition to help ensure minimal disruption."
United responded to the new bid with advertising in Washington political publications stating that it looks forward to working with the military.
The battle began in September when TriWest paid $10 million to settle a Justice Department lawsuit in which whistle-blowers claimed TriWest "systematically defrauded" Tricare by billing the government at rates higher than what it negotiated with health care providers. The lawsuit by four whistle-blowers also said TriWest sent 3,000 claims through one location a day to intentionally bypass checks to avoid late-payment fees, and that it paid claims for ineligible beneficiaries.
The whistle-blowers earned $1.7 million from the lawsuit; TriWest's $10 million settlement was for the portion of the lawsuit that accused it of billing the government higher-than-negotiated rates.
"The rest of it was reviewed and not acted on," McIntyre said. "The lawsuit was not accurate at all. It's a whistle-blower suit — we don't know why it happened."
TriWest settled, McIntyre said, because the suit was costing $1 million a month to pay lawyers and check internal procedures. Although TriWest exists because of its government contract, he said the money spent on the suit and internal checks is "not the government's. The money's from our bottom line."
The settlement did not affect the contract decision based on what he learned from the government, McIntyre said. Instead, he said, United's bid was for a lower price, and both companies received an "exceptional" rating. TriWest deserved that rating, McIntyre said, but United did not.
