OFCCP Issues Final Rule On TRICARE Participation And Covered Health Care Providers

• Published date: 08 July 2020
• Law Firm: Littler Mendelson
• Author: Mr David Goldstein, Kelcy L. Palmer and Meredith C. Shoop

On July 2, 2020, the Office of Federal Contract Compliance Programs (OFCCP) issued a final rule¹ amending its regulations to confirm the agency lacks jurisdiction over health care providers whose sole government contract is based on the providers' participation in TRICARE, ending 13 years of controversy and uncertainty over this issue.

Background

OFCCP is the agency within the U.S. Department of Labor that is responsible for enforcing Executive Order 11246, Section 503 of the Rehabilitation Act of 1973, and the Vietnam Era Veterans Readjustment Assistance Act of 1974, laws that require federal contractors and subcontractors to implement and maintain affirmative action programs for women, minorities, individuals with disabilities, and protected veterans.

TRICARE is the Department of Defense (DOD) program that pays for the medical benefits of active duty and retired military personnel and their families. The DOD has various direct contractors that administer the TRICARE program: Humana Military Health System; International SOS; Health Net; Express Scripts, United Concordia, Wisconsin Physicians Service, and US Family Health Plan.² These direct contractors, in turn, enter into agreements with hospitals and other medical providers to supply medical care and supplies to military personnel and their family members covered by TRICARE.

During the Obama administration, OFCCP began to assert jurisdiction over health care providers based on their participation in TRICARE. Health care providers objected to OFCCP's assertion of jurisdiction, resulting in litigation. Although Congress attempted to resolve the issue in 2011 by including a provision in the National Defense Authorization Act (NDAA) for Fiscal Year 2012 barring OFCCP from asserting jurisdiction over a health care provider based on TRICARE participation, OFCCP continued its enforcement efforts.

Litigation over OFCCP's jurisdiction continued until 2014, when, faced with the prospect of further congressional action, OFCCP closed pending audits against TRICARE providers and agreed to a five-year moratorium on TRICARE audits, which it extended for two more years in 2018. The moratorium did not, however, resolve the jurisdictional issue; it merely left health care providers in an extended state of uncertainty.

OFCCP Relinquishes all Claims to Jurisdiction based on TRICARE Participation

In the July 2, 2020 edition of the Federal Register, OFCCP ended this state of uncertainty with the publication of a Final...