UnitedHealth revamps leadership over troubled military benefits contract

Division providing health care to military in 21 states was beset by delays in care and referrals.

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United Healthcare's headquarters building in Minnetonka, at 9700 Health Care Lane.

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UnitedHealthcare Military & Veterans Inc. has changed leaders after encountering serious problems administering a new $20.5 billion federal contract to provide health care to active military members, retirees and their families in 21 states, including Minnesota.

Tina Jonas, a former undersecretary of defense now presiding over a UnitedHealth Group subsidiary called Logistics Health Inc., will take a newly created position of president at UnitedHealthcare Military & Veterans, said Bruce Jasurda, the company’s vice president of communications. The company did not name a CEO.

Jonas replaces former chief executive Lori McDougal, who oversaw the troubled start to Minnetonka-based UnitedHealthcare’s handling of a contract with the Defense Department’s Tricare program. McDougal will work in an as-yet-untitled job for Optum, a UnitedHealth Group division that focuses on health care data analytics and other services, Jasurda said.

Jasurda would not say if McDougal’s move was related to the Tricare troubles, which included long delays in referring patients to medical specialists, long waits for service calls and malfunctions on the company’s website. The Defense Department deemed the problems so serious that it invoked an emergency measure that allowed primary care doctors to automatically refer patients to specialists without review by UnitedHealthcare, the nation’s largest health care insurer by revenue and enrollment.

Federal officials imposed that rule in early May, barely a month after UnitedHealthcare began administering care for Tricare’s west region, which includes Minnesota. Tricare renewed the automatic referral process on May 18, saying United­Healthcare had not made enough progress in addressing its referral problems.

The government will decide next week whether to extend the emergency measure for a third month. It also is considering fining UnitedHealthcare for the insurance company’s missteps.

UnitedHealthcare says it has solved the problems that caused an uproar by health care providers, many of whom complained to the government.

“We have substantially processed the pending referrals and authorizations, largely clearing the previously existing queue,” Jasurda said. “We are confident that we will continue to process referrals and authorizations after the June 18 waiver expiration in a timely manner consistent with DoD [Department of Defense] guidelines.”

In addition to moving Jonas and McDougal, UnitedHealthcare Military & Veterans last week hired its first chief medical officer. He is Dr. John Mateczun, a retired Navy Vice Admiral who spent 38 years in the military, including service as Tricare’s chief medical officer.

The moves appear designed to bolster UnitedHealthcare’s understanding of the military health system.

UnitedHealth formed UnitedHealthcare Military & Veterans Inc. in 2007 specifically to go after Tricare contracts. McDougal, who has been working at UnitedHealth since 1983, was originally named chief operating officer. She became CEO in early 2008.

UnitedHealth wrested the contract for the military’s health program after a lengthy battle with incumbent TriWest, which had been the Defense Department’s contractor since 2009.

It was the first time United­Health became a lead contractor for Tricare, having lost a similar bid to administer the program in a 10-state southern region.

But the company came under pressure almost immediately after it took over management of the program.

Doctors complained of weeks-long waits for patients to get paperwork required to see medical specialists in a managed care network called Tricare Prime. Patients also reported problems with the company’s website and of being left on hold for unacceptably long periods when trying to get answers through the call center.

In early May, Defense Department officials threatened penalties and stepped in to resolve administrative headaches.

By the third week of May, with problems continuing, McDougal said that UnitedHealth was “deploying the full resources of the company to ensure that beneficiaries receive the care and service they deserve.”

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