The Office of Federal Contract Compliance Programs (“OFCCP”) published a final rule amending its regulations concerning its jurisdictional authority over health care providers that participate in TRICARE. Effective immediately, and in direct opposition with its prior legal position, OFCCP has confirmed that it lacks authority to regulate health care providers solely because they participate in TRICARE. Notably, OFCCP would retain jurisdiction over a TRICARE provider that holds a separate federal contract or covered subcontract that meets the jurisdiction thresholds in OFCCP’s laws and regulations.
Although OFCCP unilaterally stopped scheduling affirmative action audits for TRICARE providers years ago, it never conceded that it lacked jurisdiction over them. TRICARE providers were left to wonder whether OFCCP would change its mind and start enforcing its burdensome affirmative action obligations. In addition to officially memorializing the change in its legal position, OFCCP’s final rule established a national interest exemption for TRICARE providers from federal affirmative action obligations. According to OFCCP, these actions were necessary to remove uncertainty and improve access to health care services for TRICARE beneficiaries, which includes current and retired military members and their families. OFCCP further acknowledged that its continued pursuit of jurisdiction over TRICARE providers was not the best use of its limited resources given the likelihood of additional protracted litigation with the health care industry.
Although this is good news for the health care industry, some might have been hoping for even more. OFCCP made clear that its new regulations do not address its authority over those with provider contracts under the Federal Employees Health Benefits Program or U.S. Department of Veterans Affairs Health Benefits Program. Although uncertainty remains with respect to these federal health care programs, OFCCP announced that additional guidance is coming. In the meantime, VAHBP agreements remain covered by OFCCP’s self-imposed enforcement moratorium until May 7, 2021.
If you have any questions or would like additional information, please contact Jon Bumgarner at (317) 977-1474 or jbumgarner@wp.hallrender.com or your regular Hall Render attorney.
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