May 17 (Bloomberg) -- UnitedHealth Group Inc., the largest U.S. health insurer, is failing to meet terms of a $20.5 billion military contract, causing lingering delays to medical care, a Pentagon official said.
The backlogs occurred after Minnetonka, Minnesota-based UnitedHealth took over the contract last month from TriWest Healthcare Alliance Corp., according to the Defense Department. The agreement is for coordinating care in the western region of the military’s Tricare health system.
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.
Pentagon officials on May 2 temporarily waived a requirement that beneficiaries in one military plan in the western region get UnitedHealth’s authorization for specialty care. The Defense Department is now extending the waiver through June 18, according to Woodson’s memo to military officials. The original waiver had been set to expire tomorrow.
UnitedHealth is “deploying the full resources of the company to ensure that beneficiaries receive the care and service they deserve,” Lori McDougal, chief executive officer of the firm’s military and veterans unit, said in a statement.
“We are making progress in clearing pending referrals and authorizations and we continue to work in close collaboration with our government partners to meet care and access standards,” McDougal said.
The delays in the region were due to requests for referrals and care authorizations that “far exceeded the norms” since UnitedHealth took over the contract, Bruce Jasurda, a UnitedHealth spokesman, said earlier this month.
The delays affected beneficiaries in the Tricare Prime program, a plan in which participants are assigned a primary-care manager responsible for referring patients to specialists.
Those referrals require the contractor’s authorization. Participants who don’t obtain that approval are normally subject to a fee. The Pentagon is temporarily waiving that charge and the contractor authorization requirement.
There are 1.6 million Tricare Prime beneficiaries in the region served by UnitedHealth. The contractor is responsible for coordinating care for active-duty military, retirees and their families in 21 states, including California, Hawaii and Colorado.
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