Bupa is the preferred candidate to enter negotiations with the Australian Defence Force for the provision of health services to its over 60,000 permanent and 20,000 reservist personnel.
Medibank confirmed earlier this week it had been "verbally informed" by the Department of Defence that it had not been selected as the preferred tenderer for the renewal of the Garrison Health Services contract.
It said the contract contributed operating profit of $30 million last year.
According to a report on AAP, Bupa Health Services has been "ranked as the preferred respondent to enter into negotiations".
"Medibank Health Solutions, the incumbent, while considered suitable, was ranked second," they said.
"Respondents have been provided verbal advice of the outcome of their submission. The procurement process is ongoing."
In a statement, AMA president Dr Tony Bartone called on the government and successful tenderer to work closely with the medical profession to ensure that ADF personnel receive the best possible care under the new arrangements.
“The AMA was highly critical of the Medibank Health Solutions (MHS) approach to the provision of medical services when it was first awarded the Garrison Health Services Contract in 2012."
He continued, “The AMA has welcomed efforts by the Australian Defence Force to accept AMA input and advice in the development of its tender documents, but the onus is now on the selected provider to avoid making the same mistakes that disadvantage defence personnel and doctors.
“Our serving personnel deserve the best possible care from the right medical professionals, but we must avoid a managed care-style system at all costs.
“The successful tenderer will need to work closely with the profession in the development of suitable contracts for the medical professionals who look after ADF personnel. They will need to implement referral arrangements that are based on choice and quality, not the lowest cost.
“The AMA looks forward to working with the new contractor to ensure our ADF personnel receive the high-quality health services they richly deserve,” added Dr Bartone.