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DHA Taps Humana, Health Net for Tricare Managed Care Support Contracts

medical health doctorHumana (NYSE: HUM) and Health Net (NYSE: HNT) have won separate contracts from the Defense Health Agency to deliver managed care support services to the Military Health System under the Tricare program.

Each of the cost-plus-fixed-fee contracts awarded to Humana’s government business and Health Net’s federal services business contains a base period of nine months and five option years, the Defense Department said Thursday.

Humana’s government business received a contract with $67.4 million in base value and a potential ceiling value of $40.5 billion.

Humana will work to help MHS provide health and administrative services to Tricare beneficiaries in 33 states within the newly-created East Region that includes Washington D.C., Alabama, Connecticut and Delaware.

Health Net’s federal business will provide managed care services to Tricare program beneficiaries in 21 West Region states that include Alaska, California and Hawaii under a contract that has a base value of $49.3 million and could reach $17.7 billion in total value if all options are exercised.

Centene (NYSE: CNC) acquired Health Net in October 2015 for $6.3 billion in cash-and-stock.

DHA’s contracting operations division awarded the contracts through a competitive procurement process with four bids submitted for the East region contract and three offers in pursuit of the West region, according to DoD.

DoD’s Tricare program provides health plans, prescriptions and other medical services to approximately $9.4 million uniformed personnel and their families worldwide and is managed through separate regions that include the North, West, South and East regions in the U.S. as well as overseas.

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