DoD's $3.38B Tricare contract awarded to Anthem Health of Indiana Inc. for healthcare services

Contract Overview

Contract Amount: $3,384,754,703 ($3.4B)

Contractor: Anthem Health of Indiana Inc

Awarding Agency: Department of Defense

Start Date: 1999-12-01

End Date: 2004-06-30

Contract Duration: 1,673 days

Daily Burn Rate: $2.0M/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: FIRM FIXED PRICE

Sector: Healthcare

Place of Performance

Location: INDIANAPOLIS, MARION County, INDIANA, 46203

State: Indiana Government Spending

Plain-Language Summary

Department of Defense obligated $3.38 billion to ANTHEM HEALTH OF INDIANA INC for work described as: Key points: 1. The contract's value suggests a significant investment in healthcare services for military personnel and their families. 2. Anthem Health of Indiana Inc. secured this large award, indicating strong performance or competitive positioning. 3. The duration of the contract (over 5 years) implies a need for sustained and reliable service delivery. 4. The firm fixed-price nature of the contract shifts cost risk to the contractor. 5. This award represents a substantial portion of the agency's spending in this category. 6. The contract's geographic focus on Indiana is noted, though Tricare serves a broader population.

Value Assessment

Rating: good

The contract's value of over $3.38 billion over its term is substantial, reflecting the scale of healthcare services provided. Benchmarking against similar large-scale healthcare contracts for military populations would be necessary for a precise value-for-money assessment. However, the firm fixed-price structure generally indicates a predictable cost for the government, assuming the contractor manages its expenses effectively. The absence of specific performance metrics in the provided data makes a detailed assessment of efficiency challenging, but the award itself suggests the contractor was deemed capable of delivering the required services at a competitive price.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that multiple bidders were likely considered. This process is designed to foster a competitive environment, encouraging lower prices and better service offerings. The fact that Anthem Health of Indiana Inc. was selected suggests they presented the most advantageous offer among the competing entities. The number of bidders (3) is moderate for a contract of this magnitude, suggesting a focused competition.

Taxpayer Impact: Full and open competition generally benefits taxpayers by driving down costs and ensuring the government receives the best possible value through a robust bidding process.

Public Impact

Beneficiaries include active-duty military personnel, retired military personnel, and their families covered under the Tricare program. Services delivered likely encompass a wide range of medical and healthcare support functions essential for maintaining the health and readiness of the military community. The geographic impact is primarily focused on Indiana, serving the Tricare beneficiaries within that state. Workforce implications include the creation or sustainment of healthcare-related jobs within Anthem Health of Indiana Inc. and its network of providers.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if contractor's internal cost management is weak, despite fixed-price structure.
Risk of service quality degradation if contractor prioritizes cost savings over patient care.
Dependence on a single contractor for critical healthcare services could pose a risk if performance falters.

Positive Signals

Awarded through full and open competition, suggesting a competitive pricing environment.
Firm fixed-price contract shifts cost risk to the contractor.
Long contract duration indicates a stable and reliable service provider was selected.

Sector Analysis

This contract falls within the Healthcare sector, specifically focusing on managed care services for a government-sponsored health insurance program. The market for healthcare administration and services, particularly for large populations like the military, is highly competitive and involves significant players. The size of this contract, exceeding $3.38 billion, places it among major federal healthcare procurements. Comparable spending benchmarks would involve analyzing other Tricare regional contracts or large-scale civilian managed care contracts.

Small Business Impact

The provided data indicates that small business participation was not a specific set-aside for this contract (ss: false, sb: false). Therefore, the primary impact on small businesses would be through potential subcontracting opportunities offered by Anthem Health of Indiana Inc. The extent of such opportunities is not detailed here, but large prime contractors are often encouraged or required to engage small businesses to foster a diverse supplier base.

Oversight & Accountability

Oversight for this contract would typically be managed by the Tricare Management Activity (TMA) within the Department of Defense. Accountability measures would be embedded in the contract's performance work statement, with regular reviews and reporting requirements. Transparency is generally maintained through contract award databases and public reporting, though specific operational details may be sensitive. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Tricare Prime
Tricare Standard
TRICARE For Life
Department of Defense Healthcare Programs
Federal Employee Health Benefits Program

Risk Flags

Contract duration is substantial, requiring sustained performance monitoring.
Large contract value necessitates rigorous oversight to ensure value for money.
Dependence on a single awardee for critical services warrants attention to performance continuity.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $3.38 billion to ANTHEM HEALTH OF INDIANA INC. See the official description on USAspending.

Who is the contractor on this award?

The obligated recipient is ANTHEM HEALTH OF INDIANA INC.

Which agency awarded this contract?

Awarding agency: Department of Defense (Tricare Management Activity).

What is the total obligated amount?

The obligated amount is $3.38 billion.

What is the period of performance?

Start: 1999-12-01. End: 2004-06-30.

What is the historical spending pattern for this specific contract or similar Tricare contracts awarded to Anthem Health of Indiana Inc.?

The provided data shows a single award of $3,384,754,703.23 with a start date of 1999-12-01 and an end date of 2004-06-30, indicating a contract duration of approximately 4.5 years. This suggests a significant, long-term commitment to the contractor for these services. To assess historical spending patterns comprehensively, one would need to examine prior contract awards to Anthem Health of Indiana Inc. for similar services, as well as other Tricare contracts within the same region or for comparable service scopes. Analyzing trends in award values, contract durations, and competition levels over time would reveal whether spending has increased, decreased, or remained stable, and how market dynamics have evolved.

How does the per-unit cost of services under this contract compare to industry benchmarks or other government healthcare contracts?

The provided data does not include specific per-unit cost breakdowns (e.g., cost per patient visit, cost per procedure). Therefore, a direct comparison to industry benchmarks or other government healthcare contracts is not possible with the given information. To perform such an analysis, detailed service utilization data and associated costs would be required. This would involve identifying the specific services rendered, the volume of each service, and the price paid per unit. Subsequently, these figures could be benchmarked against publicly available data for similar services provided by other managed care organizations or federal healthcare programs, taking into account regional variations and the specific patient population served.

What are the key performance indicators (KPIs) used to evaluate Anthem Health of Indiana Inc.'s performance under this contract, and how have they performed against these metrics?

The provided data does not specify the Key Performance Indicators (KPIs) established for this contract or Anthem Health of Indiana Inc.'s performance against them. Typically, large healthcare contracts include metrics related to access to care, quality of care, patient satisfaction, claims processing timeliness, and network adequacy. Evaluating performance would require access to the contract's Performance Work Statement (PWS) and any associated performance reports or quality assurance reviews. Without this information, it is impossible to definitively assess whether the contractor has met or exceeded performance expectations or identify any areas of concern regarding service delivery.

What is the track record of Anthem Health of Indiana Inc. with other federal contracts, particularly within the Department of Defense or healthcare sector?

The provided data focuses solely on this specific Department of Defense (DoD) contract awarded to Anthem Health of Indiana Inc. To assess their broader track record, a review of other federal contract awards to this entity would be necessary. This would involve searching federal procurement databases (like SAM.gov or FPDS) for other contracts, noting their agencies, contract types, values, durations, and performance history. Examining past performance evaluations, any contract disputes, or instances of corrective action would provide a more comprehensive understanding of their reliability and capabilities in serving the federal government, especially within the complex healthcare domain.

What are the potential risks associated with a sole-source or limited competition award for a contract of this magnitude?

This contract was awarded under 'FULL AND OPEN COMPETITION,' not sole-source or limited competition. Therefore, the risks typically associated with non-competitive awards (such as potentially higher prices due to lack of market pressure, reduced innovation, and limited contractor accountability) are mitigated in this instance. Full and open competition ensures that multiple vendors have the opportunity to bid, fostering a more competitive environment that generally leads to better value for the government and taxpayers. The presence of 3 bidders indicates a degree of competition, though the specific dynamics and potential for collusion or market concentration would require further analysis of the bidding process.

How does the total contract value of $3.38 billion compare to the overall budget allocated by the Department of Defense for healthcare services during the contract period?

The provided data does not include the Department of Defense's overall budget for healthcare services during the contract period (1999-2004). To make this comparison, one would need to research historical DoD healthcare budgets for those fiscal years. This would allow for an assessment of what percentage of the total healthcare spending this single contract represented. A large percentage might indicate a significant reliance on this specific contract or contractor for a substantial portion of healthcare delivery, while a smaller percentage might suggest it was one of many contracts supporting the broader healthcare mission.

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 3

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 4550 VICTORY LN, INDIANAPOLIS, IN, 07

Business Categories: Category Business, Not Designated a Small Business

Contract Characteristics

Cost or Pricing Data: NO

Timeline