(Updates with Health Net comments in second paragraph, and TriWest’s plans to add employees in fifth paragraph)
Sept. 4 (Bloomberg) -- Health Net Inc. and TriWest Healthcare Alliance Corp. won U.S. Department of Veterans Affairs contracts for specialty medical care with a combined maximum value of $9.42 billion.
A unit of Woodland Hills, California-based Health Net will receive as much as $5.05 billion under an agreement to coordinate veterans’ care, according to an announcement today on a U.S. government website. The $5 billion value is a projection and Health Net doesn’t expect the maximum five-year award to produce that amount of revenue or to have a “material financial impact” in 2013, Brad Kieffer, a spokesman for the company, said in a phone interview.
TriWest, based in Phoenix, will receive as much as $4.37 billion through a similar five-year contract. The award is a lifeline for the vendor, which cut more than 1,500 workers after losing a $20.5 billion Defense Department medical contract to Minnetonka, Minnesota-based UnitedHealth Group Inc. last year.
“We have proven expertise in providing access to quality health care and pride ourselves in delivering best-in-class customer service to our nation’s veterans, even in the most rural areas,” David J. McIntyre Jr., TriWest’s chief executive officer, said in a statement. McIntyre is a former aide to Republican Senator John McCain of Arizona.
TriWest, which has about 100 employees, said in the statement it would provide services for veterans in 28 states, including Alaska, Alabama and Arizona.
The vendor plans to hire additional employees to fulfill the VA contract, probably in the Phoenix and Tacoma, Washington, areas, Scott Celley, a TriWest spokesman, said in a phone interview.
There was no incumbent vendor for the work, Celley said.
The contract is designed to arrange specialty medical services and mental health care “when the local VA Medical Center cannot readily provide the services, such as when there is a lack of available specialists, there are long wait times, or there is an extraordinary distance from the veteran’s home,” according to VA announcement posted online.
Jo Schuda, a VA spokeswoman, didn’t respond to an e-mail or a phone call seeking information about what led the VA to create the program.
Editors: Michael Shepard, Don Frederick