Posts Tagged ‘OFCCP’

An Administrative Law Judge recently ruled that hospitals providing healthcare under TRICARE are subject to Federal affirmative action regulations and OFCCP jurisdiction.  Although appeals to this ruling are bound to occur, TRICARE providers with 50 or more employees and $50,000 or more in TRICARE payments are well-advised to comply with OFCCP’s regulations.

In the case, OFCCP v. Florida Hospital of Orlando, OFCCP contended that because of Florida Hospital’s  participation in the TRICARE program, it is therefore a Federal subcontractor under Executive Order 11246, Section 503 of the Rehabilitation Act of 1973, and the Vietnam Era Veterans’ Readjustment Assistance Act.  The judge sided with OFCCP.

TRICARE is the Department of Defense’s health care program for active duty and retired military and their families.  The Department of Defense has contracted with a subsidiary of Humana, Inc. to provide managed health care.  In turn, Humana creates “Hospital Agreements” with health care facilities to establish a network of providers that are reimbursed through TRICARE.

There were factors in the case that seemed to help Florida Hospital:  1) the “Hospital Agreement” does not contain language requiring compliance with affirmative action laws and 2) the Department of Defense considers TRICARE to be a federal financial assistance program which are exempt from OFCCP’s jurisdiction.  The judge disagreed with both of these contentions.

Citing OFCCP v.UPMC Braddock as precedent, it was ruled that Humana has a federal contract to provide healthcare services to TRICARE recipients.  Since Florida Hospital provides some of those services under their “Hospital Agreement” they meet the regulatory definition of “subcontractor.”

Despite the fact that the Department of Defense has issued regulations stating that TRICARE is federal financial assistance, the judge again cited OFCCP v.UPMC Braddock:

As the ARB stated in UPMC Braddock, the Secretary’s regulations implementing the Executive Order take precedence over contrary regulations and contractual provisions from other agencies. 

This seems to set a standard that if OFCCP’s regulations contradict another government agency’s, OFCCP will be given precedence.  This is a strong indicator that if a company is in doubt of its affirmative action obligations, it is safer to assume the need to comply.