Pentagon cancels emergency measures, lets UnitedHealthcare approve Tricare referrals

WASHINGTON - The Defense Department has lifted emergency measures imposed on UnitedHealthcare because of missteps in the administration of a contract that provides health care to military members, veterans and their families.

Beginning Wednesday, UnitedHealthcare's Military & Veterans unit will once again be able to review and authorize every referral to specialty care made by primary care doctors in the government's Tricare insurance program.

That review process had become so fraught with delays that the government suspended it from early May through Tuesday.

"Tricare Management Activity is confident that UnitedHealthcare has taken significant action to ensure the timely processing of referral and authorizations," Tricare said Tuesday in a statement to beneficiaries. "Referral issues experienced by our military treatment facilities and beneficiaries are significantly improved and the process of feedback, testing and correction is ongoing."

The resolution ends a three-month barrage of complaints and bad publicity that dogged UnitedHealthcare after its April 1 takeover of a $20.5 billion contract to administer delivery of health care in Tricare's 21-state West Region.

Dozens of care providers and patients in the Tricare Prime insurance program told of weeks-long delays in getting referrals reviewed and authorized, as well as breakdowns in the company's website and long waits on phone calls by patients seeking help. Tricare Prime has 1.7 million beneficiaries in the West Region, including 5,650 people in Minnesota.

UnitedHealthcare Military & Veterans apologized for delays caused by what it called an unexpectedly large caseload. The company transferred its CEO to another division of its corporate parent, Minnetonka-based UnitedHealth Group, and installed a president who once served as an undersecretary of defense. It also hired a retired admiral as its chief medical officer.

The company said in a statement Tuesday that it has made real, measurable progress in many aspects of its Tricare West Region operations. "UnitedHealthcare is committed to ensuring Tricare beneficiaries continue to receive timely and necessary access to care," it said.

UnitedHealthcare said it increased staffing in its referral processing section while the emergency restrictions applied and made technology and quality assurance improvements. It also launched a new online referral and authorization tool designed to get processing started instantly, cutting down the amount of time it ultimately takes to make decisions.

Tricare officials say they continue to welcome feedback from beneficiaries about how UnitedHealthcare is doing its job. "Their best bet is to contact UnitedHealthcare at 1-877-988-9378," a Tricare spokesman said in a statement. "If they still have question, they should contact the Tricare regional office West at 1-800-558-1746."

UnitedHealthcare Military & Veterans' rocky start in the military health care business came after the company won an extended battle to wrest the West Region contract from TriWest Healthcare Alliance. UnitedHealth Group formed its military insurance subsidiary in 2007 specifically to get Tricare contracts.

University of Minnesota health insurance expert and consultant Steve Parente said UnitedHealthcare's troubles were not surprising given the scope of the contract.

The Tricare troubles did not appear to affect UnitedHealth Group's share price, which has risen more than 6 percent since its subsidiary took over the military contract.

Tricare's sanctions were not in place long enough to spook Wall Street, Parente explained. "If the sanction had stayed there and dragged into 2014," he said, "it would have been a different story for the share price."