Last week, the Office of Federal Contract Compliance Programs (“OFCCP”) addressed the status of TRICARE-based affirmative action compliance reviews during an agency conducted webinar. The webinar was in response to the recent passage of the National Defense Authorization Act (“NDAA”), which included language confirming that TRICARE network providers would not be considered federal subcontractors for purposes of OFCCP jurisdiction. Although brief in duration, the OFCCP used the webinar to announce several new positions, as well as confirm a few others. Specifically:
- OFCCP has not given up in the TRICARE fight and continues to litigate the Florida Hospital of Orlando case even after passage of the NDAA. Briefs have been filed, and a decision is forthcoming from the Department of Labor’s Administrative Review Board.
- OFCCP is arguing that the NDAA does not apply retroactively, which means health care providers that received compliance review scheduling letters prior to the passage of the NDAA may still be required to cooperate. That being said, if TRICARE was the only jurisdictional basis for the scheduling of the compliance review, OFCCP intends to send a letter indicating that the review is “on hold” pending the outcome of the Florida Hospital of Orlando litigation. If, however, there was a separate basis for jurisdiction in addition to TRICARE, OFCCP will send a letter indicating that it plans to move forward with the compliance review, and the employer will be given 30 days to respond. The period of review will be based on the date of the original scheduling letter.
- OFCCP is rescinding Directive 293, which was unofficially released in December of 2010 and intended to clarify its jurisdiction over health care providers and insurers. According to OFCCP, the decision to rescind Directive 293 was based on “recent legislation and related developments in pending litigation.”
- The rescission of Directive 293 should not be taken as a sign that OFCCP is shying away from the health care industry. On the contrary, OFCCP announced that it will continue to use a “case-by-case approach to make coverage determinations in keeping with its regulatory principles applicable to contract and subcontract relationships and OFCCP case law.”
- It is expected that OFCCP will continue to schedule compliance reviews over health care providers with federal contracts or covered subcontracts other than TRICARE network agreements. These may include certain arrangements under the Federal Employee Health Benefit Plan, Medicare Parts C or D or prime contracts or covered subcontracts in which services are provided to the Departments of Defense, Veterans Affairs, Homeland Security, Health and Human Services, the Federal Bureau of Prisons or other Executive Branch agencies.
- OFCCP confirmed its long held position that Medicare Parts A and B and Medicaid are considered federal financial assistance, which, like grants, do not give rise to OFCCP jurisdiction.
Although the OFCCP’s webinar provided some helpful guidance for the health care industry, questions remain regarding the impact of the NDAA on OFCCP’s potential jurisdiction over TRICARE providers. And, it is still unknown whether OFCCP will be able to successfully establish a jurisdictional basis over health care providers that participate in Medicare Parts C and D. More litigation between OFCCP and the health care industry is likely. We will continue to monitor and report about any new developments.
If you have questions regarding this topic, please contact Jon Bumgarner at 317.977.1474 or jbumgarner@wp.hallrender.com or your regular Hall Render attorney.
