Humana 2009 Annual Report Download - page 18

record of obtaining network provider discounts from our established network in the South Region. On
December 22, 2009, we were advised that TMA notified the GAO of its intent to implement corrective action
consistent with the discussion contained within the GAO’s decision with respect to our protest. At this time, we
are not able to determine what actions TMA will take in response to recommendations by the GAO, nor can we
determine whether or not the protest decision by the GAO will have any effect upon the ultimate disposition of
the contract award.
For the year ended December 31, 2009, military services premium revenues were approximately $3.4
billion, or 11.3% of our total premiums and ASO fees, and military services ASO fees totaled $108.4 million, or
0.3% of our total premiums and ASO fees. The TRICARE South Region contract represents approximately 97%
of total military services premiums and ASO fees.
International Operations
In August 2006, we established our subsidiary Humana Europe in the United Kingdom to provide
commissioning support to Primary Care Trusts, or PCTs, in England. Under the contracts we are awarded, we
work in partnership with local PCTs, health care providers, and patients to strengthen health-service delivery and
to implement strategies at a local level to help the National Health Service enhance patient experience, improve
clinical outcomes, and reduce costs. For the year ended December 31, 2009, revenues under these contracts were
approximately $9.0 million, or less than 0.1% of our total premium and ASO fees.
Our Products Marketed to Commercial Segment Employers and Members
We offer medical and specialty benefits to employer groups and individuals in the commercial market. Our
commercial medical products offered as HMO, PPO or ASO, more fully described in the following sections,
include offerings designed to provide additional options to the consumer. For example, our “Smart” products
give more cost control and predictability to employers and more choice and control over healthcare decision-
making to employees. Online tools and resources deliver information, convenience, and easy access for members
enrolled in our Smart products. Our other consumer offerings include products with a high deductible offering in
conjunction with a spending account.
HMO
Our commercial HMO products provide prepaid health insurance coverage to our members through a
network of independent primary care physicians, specialty physicians, and other health care providers who
contract with the HMO to furnish such services. Primary care physicians generally include internists, family
practitioners, and pediatricians. Generally, the member’s primary care physician must approve access to certain
specialty physicians and other health care providers. These other health care providers include hospitals, nursing
homes, home health agencies, pharmacies, mental health and substance abuse centers, diagnostic centers,
optometrists, outpatient surgery centers, dentists, urgent care centers, and durable medical equipment suppliers.
Because the primary care physician generally must approve access to many of these other health care providers,
the HMO product is considered the most restrictive form of a health benefit plan.
An HMO member, typically through the member’s employer, pays a monthly fee, which generally covers,
together with some copayments, health care services received from, or approved by, the member’s primary care
physician. We participate in the Federal Employee Health Benefits Program, or FEHBP, primarily with our
HMO offering in certain markets. FEHBP is the government’s health insurance program for Federal employees,
retirees, former employees, family members, and spouses. For the year ended December 31, 2009, commercial
HMO premium revenues totaled approximately $3.0 billion, or 9.9% of our total premiums and ASO fees.
PPO
Our commercial PPO products, which are marketed primarily to employer groups and individuals, include
some types of wellness and utilization management programs. However, they typically include more cost-sharing
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