UnitedHealth Group Inc (NYSE:UNH) faces flak from Pentagon
Northern, WI 05/06/2013 (tradewatchmedia) – The largest insurer in the United States, UnitedHealth Group Inc (NYSE:UNH) (Closed: $58.92, Down by 0.94%) was rebuked by the Pentagon after many military families started experiencing extensive delays in acquiring medical-care referrals from it. The Minnetonka, Minnesota-based insurer took charge of a contract from TriWest Healthcare Alliance Corp. The deal was valued at around $20.5 billion. It took-over responsibility of Tricare, the military’s health care system in the western region, on April 1. All these backlogs started occurring soon after the shift of responsibility.
Temporary waiver granted
In a memo to other military leaders, assistant secretary of defence for health affairs, Jonathan Woodson said that UnitedHealth has failed to meet contractor requirements. This has prevented a vast number of beneficiaries in one particular Tricare plan from gaining access to speciality care in a timely manner. Woodson tagged this situation as an extraordinary one and said that the Pentagon has now intervened in the matter. It has granted its staff and their families a temporary waiver. Via this, members of the plan in the western region will now have access to speciality care without authorization from UnitedHealth. They will not incur any penalties either.
The duplication confusion
A spokesperson for the company, Bruce Jasurda said that these delays have been occurring due the fact that the requests for referrals that United Health has received are in excess of the standard norms since the time it took over the contract. In a phone interview he said that these large volumes have been largely driven by people who have been enquiring about authorizations and referrals that have already been submitted by them. This has created duplication of referrals in large numbers. He said that the company understands the issues that need to be improved upon and that aggressive action is being taken.
TriWest had coordinated military beneficiary care for over 16 years and almost all its revenue came from the contract. Last year, David McIntyre Jr the Chief Executive Officer of the company said that if they lost the contract, in most probability, it would shut down completely. TriWest has lost the protest that it had filed with the U.S Government Accountability office, last year. This unit is in charge of arbitrating contract disputes. The claim was that the Pentagon had not paid enough attention to the past performance issues that UnitedHealth had faced, before the contract was awarded.