The Department of Health and Human Services has awarded a large contract for insurance exchange eligibility management to the U.K. firm Serco, although some Wall Street analysts expect the decision to be protested by American contractors.
The contract is for intake, routing, review and troubling shooting of consumer enrollment applications in both federal and state exchanges and is worth up to $115 in the first year and up to $1.24 billion over five years, according to details posted on FedBizOpps.gov.
Serco is the world's largest air traffic control manager and one of the largest incarceration contractors, and earns about 16 percent of its revenue in the U.S., according to Reuters, contracting with the military and more than a dozen federal and state civilian agencies.
The contract date is effective July 1, although Serco has not yet publicly announced the award. Some financial observers think the award is likely to be challenged by large U.S. companies that bid for it, such as Maximus, seen as one of the front-runners.
"The unsuccessful bidders don't know yet where they fell short in the RFP scoring," Carl McDonald, a health industry analyst with Citi Research, wrote in an investors note, "but we suspect the selection of a non-U.S. company to run a major part of the health insurance exchange is likely to raise the ire of a number of politicians in D.C."
The contract, should Serco keep it or another firm successfully challenge it, will provide some of the key consumer-facing services of the insurance exchanges, including review of applications for advance premium tax credits, Medicaid and CHIP -- all starting in October.