The military chose UnitedHealth over TriWest Healthcare Alliance Corp., a Phoenix-based company that coordinated care for military families for 17 years, for its better "technical approach," according to a federal government review published last year.
TriWest has cut 1,500 employees since losing the contract, said Scott Celley, a spokesman for the company. David McIntyre, TriWest's founder, has said the contract was the company's "only business."
In March 2012, TriWest protested the Pentagon's decision to give the contract to UnitedHealth with the Government Accountability Office, Congress's investigative arm which also arbitrates contract disputes. It said the Defense Department hadn't properly considered UnitedHealth's past performance problems.
"We have nothing further to say," Celley said in a June 10 phone interview.
Some of UnitedHealth's issues may be expected, given the military's switch to a new vendor, said Ana Gupte, an analyst with Dowling & Partners in Farmington, Connecticut.
Still, investors should "keep an eye on whether these types of things start happening in other areas of the business," she said.
"It's obviously not a good thing," she said.
More than 130 people have criticized UnitedHealth on Tricare's Facebook page. "My cancer isn't waiting for authorization!" one beneficiary wrote on April 29.