UnitedHealth Switches Leaders of $21 Billion Pentagon Contract

UnitedHealth Group Inc. (UNH), the nation’s biggest health insurer, has changed the leadership of a division in charge a $20.5 billion Pentagon contract.

The switch follows complaints from the Defense Department and beneficiaries that UnitedHealth’s poor performance had led to delays in obtaining medical care. The complaints came almost immediately after the company assumed responsibility for the contract on April 1.

Lori McDougal, who served as chief executive officer for UnitedHealth’s military and veterans unit, accepted a new position with the company, said Matt Stearns, a spokesman for the Minnetonka, Minnesota-based insurer.

Tina Jonas, a former Pentagon comptroller, has been appointed as the unit’s president and has “all operational responsibilities” for the division, Stearns said. The company didn’t name a CEO of the division, he said.

Jonas previously served as president of a separate unit of UnitedHealth.

Stearns declined to comment on whether McDougal was removed from the position overseeing the contract for the military’s health program, known as Tricare, which serves active-duty military, retirees and their families. The delays affected members of the program’s Tricare Prime plan, which has 1.6 million beneficiaries in the 21 states served by UnitedHealth.

UnitedHealth “continues to be unable to comply with the requirements of their contract,” Jonathan Woodson, assistant secretary of defense for health affairs, said in a memo dated May 16. The result is that beneficiaries are prevented “from obtaining timely access to specialty care and potentially causing them to suffer harm,” he said.

-- Editor: Stephanie Stoughton, David Ellis.

To contact the reporter on this story: Kathleen Miller in Washington at Kmiller01@bloomberg.net

To contact the editor responsible for this story: Stephanie Stoughton at sstoughton@bloomberg.net

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