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On December 22, the Department of Defense awarded $136B of TriCare T-5 contracts to Humana (HUM) in the East Region and TriWest in the West Region, Piper Sandler analyst Jessica Tassan tells investors in a research note. The analyst views the initial T-5 contracts t outcome as neutral for Accolade (ACCD) and reiterates an Overweight rating on the shares with a $13 price target. Heading into the T-5 contract awards, Accolade had teaming agreements with two of the three managed care organization bidders to provide certain navigation services under the new contracts, says Tassan. She believes the teaming agreements were with Humana and HealthNet. Accolade has worked with TriWest in the past and, a T-5 partnership "remains entirely possible," the analyst contends. Based on the initial T-5 contract awards, Tassan has visibility into Accolade's partnership with Humana in the East Region. She estimates Accolade's T-5 teaming agreement with Humana should generate $4.7M of annualized revenue, or 52% of the $9.0M Select Navigator run-rate.

Wells Fargo analyst Stephen Baxter commented on the DHA's award of the next managed care support contracts for the TRICARE East and West regions, telling investors in a research note that Humana's (HUM) contract will cover about 4.6M beneficiaries in 24 states and Washington, D.C., a decline from about 6M beneficiaries and 32 states, driven by the DHA's move to a more balanced two-region model. Baxter, who made no change to the firm's Overweight rating on Humana, notes that the DHS's move was known coming into the award, and says that Centene (CNC) lost the TRICARE West region, though there is still an opportunity for unsuccessful bidders to protest the award. Baxter made no change to the firm's Equal Weight rating on Centene shares.