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Tri-West Won’t Challenge Tri-Care Military Contract Loss To United Health - Legal Decisions & Contract Awards Allow Machin

Posted Jul 14 2012 4:10pm

This decision pretty much puts the Blue Cross subsidiary out of the military health care business as far ad administration.  There are 3 sections in the US for the contract, the north, south and west.  Health-Net after a long battle was able to keep the north, and Humana kept the south. 


Those contracts too were not without legal battles and challenges.  If you have followed this 3 year battle process it’s been a long and tedious one and was challenge not only by each company bidding but lawsuits it appears also had a strong influence on who was awarded the contracts.  In a last ditch effort, Tri-West had taken their battle to the internet with a website to maintain the contract but it appears the decision here is final, unless an additional lawsuit were filed and the context here states that Tri-West is laying down their guns in this effort.  I had posted about this effort below. 


Sure there’s a lot of politics is appears in this entire situation and Tri-West also claimed that their contract was cheaper than the one presented by United as well.  So what are we looking at here for the contract…as you know this is all done with Health IT technologies and United has been working at this end of their business longer than the other insurers as they have tons of subsidiary companies that basically allow them to make a dollar in almost every area of healthcare today, especially Health IT. 

In addition, it makes sense to take note that the HHS executive who was slated for writing and creating most of the healthcare reforms is now on the United payroll.  This was just done in the last few weeks, timing?  Steve Larsen left HHS, who was the administrator directing the enactment of US insurance regulations is now Executive Vice President of Optum’s (United subsidiary) Health Unit.
   One other interesting tidbit here he worked for Amerigroup, which is being purchased by WellPoint before taking his government role.  You can bet the lobbyists all had his number. 




It was also just a few months ago the former US Attorney General for the state of Minnesota left his role and took a job as “general counsel” for United and at this point, also remember that United filed a lawsuit against DOD wanting this contract.  The lawsuit again was pretty well publicized and one wonders if this had any impact on the decision of GAO with awarding the contract and of course we don’t know all the details lined out with the entire action.   Again my comment here on this goes back to the algorithms and IT Infrastructure being at the heart of the matter and who projected and used the best business intelligence analytics algorithms to prove their case. 


Again as mentioned in the tittle here we have “machines moving money” and of course you have to look at the expense of IT infrastructure today so in the midst of all of this and to prepare for the April 2013 contract United awards a contract to another Blue Cross subsidiary who is currently processing claims for Tri-Care, Palmetto and if you file medical claims or work in billing you are probably aware of the Palmetto division.    TriWest is owned by 11 Blue Cross and Blue Shield plans and two University Hospital systems.  One ponders here too if the Palmetto division already has the Health IT infrastructure built for claim processing, what’s going to happen here next, will United buy them up or will they use their own internal Health IT infrastructure to move the processing to their systems…it will all come down to money and how well the data systems work together I bet.


Meanwhile, officials at Tri-West have said the company more than likely will shut down as we know it today.  Again as mentioned there might be portions that could end up being purchased as this all continues to play out and we will just have to stay tuned.  United had also tried to secure the south Tri-Care contract and was briefly awarded the contract until the decision was made to keep Humana and each insurer can have no more than one region.  If you want a little more history you can read the link below from 2009 to where HealthNet and Humana filed their protests over the awards made to Aetna for the north (and it was determined Aetna somehow was not 100% honest on their disclosures)  and where United was originally awarded the contract for Tri-Care for the South region.  So originally United won the south and at the same time back in 2009 they began their plight protesting the Western region staying with Tri-West.   They had the south contract   for Tri-care awarded and then protested the west agreement way back.



At the initial awards this also became a battle of money as HealthNet of course is not as large and does not have the huge daisy chain of subsidiaries and with the initial announcement of losing the Tri-Care contract to Aetna so they had to sell off part of their northeast subsidiaries to United as without the Tri-Care contract the money in the till was not looking good to maintain.  In the end HeatlhNet did re-secure the Tri-Care contract over the complaint they filed against Aetna, but not knowing the pending outcome they had to sell off some of their business to United and transferred around $290 million to HealthNet.  Funny how this all works, all about money and United bought up the business in the northeast.

Meanwhile back at the ranch in February of 2011, the GAO ruled against United Healthcare in their initial award of the southern Tri-Care region so that went away and I guess it was time to focus on the west contract as both United and Aetna’s bids were over ruled by the GAO, so to work they went on the western region.  For Humana, this represented over 23 billion dollars that was at stake to lose.
 

You wonder today how productive law suits can be and you can’t over look this one where United sued the DOD for the initial award of the contract to Tri-West.  When you have one conglomerate that is so big, and this is all public information that for one example has 3 different medical records systems they sell via United subsidiaries for one example, how does this all work, knowing there are also subsidiaries under the same roof that provide clearinghouse services, revenue cycling, hearings aids and the list goes on.  This was a question I pondered a while back as with business intelligence today do the subsidiaries get a “heads up” from one subsidiary to another?  Just for conversation, does one division get notified of when a physicians’ group is purchased by an insurer, do all the subsidiaries get a heads up to run in with revenue accounting software, medical records, clearinghouse services, revenue cycling, wellness programs, etc. and the list could go on and on.  The capability today is certainly available with todays’ technologies.

We are also seeing this occurring with insurers buying up physician’s groups to where a lot of the business intelligence and analytics gets sold in the name of keeping costs down and I’m sure a lot of the algorithms used do just that but we seem to be reading about some of this activity running up against ethics and how it is used.  Big news all the time if you look, as it’s the machines making the decisions today, servers running 24/7 making life impacting decisions about all of us. 

One other comment made here in this article that Tri-West brought up was that was the hit they took with the $350 Million dollar settlement on the “Ingenix” algorithms case to where Governor Cuomo was able to prove that carriers were lowballing out of network charges.  The settlement was done and of course no wrong doing was admitted.  There’s a non profit organization that now handles calculating out of network charges called the FAIR data base.  For 15 years the Ingenix data based was used by most all carriers included United for calculating out of network charges. 

“FAIR Health is a national independent, not-for-profit corporation whose mission is to bring transparency to healthcare costs and health insurance information through comprehensive data products and consumer resources. FAIR Health uses its database of billions of billed medical and dental services to power a free website that enables consumers to estimate and plan their medical and dental expenditures”

At this point what can you say outside of “how about those Ingenix algorithms”. 

Back in 2009 the AMA announced the settlement of this class action suit with the Ingenix subsidiary of United Health care and just a few months ahead of this announcement, HealthNet in June of 2009 said they were going to stop using the data base. 


So let’s move forward here and and it was just announced in February of this year that doctors and patients could expect to see those checks.  Due to the nature of this being in the area of questionable algorithms, it made Chapter 19 of my series on the “Attack of the Killer Algorithms”. 


Again we come back around to ethics here and those algorithms and nobody really gets punished as this is a drop in the big United bucket with the settlement.   You just wonder when awarding the contract if the GAO took any of this into consideration, a question worth asking since all of this is all public records with the exception of the release of the decision and will we see that?  I guess we will have to wait and see.

In addition there are also many other lawsuits that have been filed with this out of network data base that was used for 15  years and not all against United, even though it was their algorithms as other insurers used it too.  Here’s a couple examples of lawsuits that was filed as they claimed they were not covered under the AMA settlement.  I sit here and think of the interest or other investment monies made on settlement monies. 


The Ingenix name was changed to Optum a while back and maybe due to this lawsuit settlement, not sure but now we refer to the analytics and algorithm arm of United under Optum.  They make a lot of money and have tools to help with underwriting and evaluating risk and sell a lot of prescription data.  This is a screenshot from a few years back. 



Something that I have said for quite a while now is that there are analytics (aka algorithms) that are created for accurate results and those that are created for desired results and the two should be the same, but it may not always be the case as with computer generated algorithms and code, things get very creative and back 3 years ago I made a post about the US needing a Department of Algorithms..or something like it to substantiate accuracy as we just don’t know.  Only your coders and programmers know for sure:)  It certainly stands to make sense as in healthcare, electronic medical records are certified and through the ONC where vendors have to demonstrate their ability to not only function, but provide accurate results, so maybe something that could be expanded into other areas, makes sense to me.   Health insurance algorithms and software have never been certified have they outside of those subsidiaries who sell medical records?

Even way back in 2009 United was already buying up Health IT companies such as AIM to help payers manage claims. Netwerkes and Ingram and Associates became part of the Ingenix umbrella with the government services group with some of the personnel working onsite at about 3000 hospitals across the US, and they paid cash.  Probably one of the largest acquisitions was Picis, another hospital analytics system, even used by the VA back in 2010, so a subsidiary of United makes profit here too. 
 

Occasionally patients have had their own direct battles with Ingenix as this one from 2009 shows and made it all the way up to ABC news and this again related back to the Ingenix out of network data base.   


Some other actions of interest included the state of Connecticut medical society demanding that Ingenix stop the requests for patient records back in 2010.  This relates back to when they took over the large group of HealthNet patients.  The claim data was sent from HealthNet to United by they were soliciting for even more information from the doctors. There are a lot of companies that use Inginex/Optum analytics, like Red Brick for one who made big news when they secured the Target store wellness contract.  I don’t what the outcome was in this San Diego case (link below)  but all carriers without notice stopped paying several groups of dermatologists and their battle ended up being with “Ingenix fraud detection algorithms” which sometimes can give false positives when looking for certain parameters with claims.  One office had to close the the doctors had to go back and try to collect from the patients on claims they had already submitted.  It would be interesting to see how this has moved along a few years later as I remember them filing suit against Ingenix.  Again when the algorithms run it still takes some human analysis to look at the entire case and not just rely on “algorithm says” especially today with using outside information from social networks and other areas as we are seeing some big areas of “flawed” data when credible gets combined with “non credible”, in other words information that is not substantiated as being the truth. 


Here’s that classic post I made back in August of 2009 inquiring about whether or not we need a US Department of Algorithms, and this thought was on my mind relative to the Madoff case, again nobody was minding the “algorithm shops” to somehow verify if the queries being run were accurate or were being over shadowed by the words “desired” results. 

By the way with all of the United subsidiaries it might be worth a mention that they do own a consulting company that can help a biotech or pharma company get their drug introduced to the FDA and have all the requirements in line for filing.  This just shows how diverse subsidiary companies can be and they all put money to the overall bottom line for the corporation and we have all read the news about insurers buying physicians groups as well, some big ones like Monarch in the OC and another group in Long Beach and a couple in Florida to where “free hearing aids” are offered via a no co pay policy, furnished again by another company of United who distributes them.   To compete, you wonder if this is why Blue Cross bought an lens company?   

In the area of international healthcare, we had this subsidiary which has since been divested buy this company in China which I understand is still part of the group even though the I3 companies were broken up.  They also own a bank funded mainly with health savings accounts and perhaps comes in handy for making loans to healthcare entities who need money. 

Insurance companies don’t always invest in straight healthcare interests and here’s one example with United investing in low income housing in New Mexico.  I think it was a couple of years ago that it was in the news about insurers investing in fast food and non healthy entities, why, because they make money from it. 

So coming back around it will be interesting to see if the GAO ruling is made public and what they based their decision on as I would think that such large contracts today certainly have to entertain looking at all aspects of any business so as to not allow one entity gain advantages over others.  With all the subsidiaries owned by companies today, that certainly is a challenge and one thing I could say is that is certainly a statement that makes it would sense for the GAO to entertain the use of big data to assure decisions have covered all of these areas.  We better evaluate those business algorithms and make sure they are in fact “fair” and accurate for consumers. 

That is what spurred my interest in creating my series which occurred by accident on “The Attack of he Killer Algorithms” to help inform consumers on how some of this takes place and to ask question if things don’t seem to be correct. Again the amount of “flawed data” and the inability of end users to understand and know the difference out there today is yet the next battle to come forward and we are seeing some of this right now in the financial areas with CEOs that basically tell us “I don’t know” and is that good enough or do we continue to be burdened with more Congressional talks about abortions?  What a waste as the more the lawmakers focus on emotional issues, the less work they get done with assuring proper and accurate computer formulas are executed that impact consumers. 

So one wonders, did Tri-West get a fair shot at this or did the political appointments and other areas of activity have an impact?  Again when you see the executive for HHS leaving and jumping ship to become a United VP one has to say hmmmm…  We know that there will be job losses and further Health IT technology consolidations through all of this.  Tri-West did say they will probably close down so it appears big business won again with focus on shareholder performance.  Let’s watch and see if any new acquisitions for United might come out of this, you think? 



If you got nothing else out of reading all of this, give some thought, the folks that have the code rule the world and actually I made another post on that topic with a TED video on how criminals use code and technology that is worth watching too, it will make you think, and maybe think again rather than sit in denial about the world changing around us.  Not everyone is a criminal out there but this is a technology war and it is what it is as in every area of life there are those that do good things and those that do something else and it always seems to come back to be money driven.  All I can ask for is accuracy and data that has not been spun for profit as simple math today is no longer a sufficient methodology to prove accuracy when spun with marketing and repeated media attention because after a while when items are repeated over and over, it starts becoming the “assumed” truth, whether in reality is is or is not.  BD   



TriWest Healthcare Alliance Corp., a closely held company created to provide medical services to the military, said today it won’t challenge the loss of a $20.5 billion contract to UnitedHealth Group Inc. (UNH)

TriWest, based in Phoenix, had the option of filing a lawsuit in U.S. Court of Federal Claims. It has 1,700 employees. David McIntyre Jr., TriWest’s chief executive officer, has said “it is likely” the Phoenix-based company would shut down without the contract.

TriWest owes its existence to Tricare, the Pentagon’s health program. Founded in 1996 by McIntyre, a former aide to Republican Senator John McCain , it has helped manage military medical services for 16 years. TriWest is owned by a holding company made up of a group of nonprofit Blue Cross Blue Shield plans and university hospital systems.

TriWest accused the Pentagon of failing to consider the costs of moving to a new provider. It also has pointed to UnitedHealth’s legal woes, including a $350 million settlement that the insurer paid after the American Medical Association claimed it had manipulated payments to doctors. The agreement was announced in January 2009.

http://www.bloomberg.com/news/2012-07-13/triwest-won-t-challenge-u-s-contract-loss-to-unitedhealth-1-.html?cmpid=yhoo


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