In a temporary win for health care providers, the U.S. Department of Labor’s Office of Federal Contract Compliance Programs (“OFCCP”) recently acknowledged the “difference in understanding” over the definition of a TRICARE subcontractor and announced a 5-year moratorium on enforcement of obligations related to affirmative action programs and recordkeeping for most health care providers affiliated with TRICARE.
Prior to the moratorium, the OFCCP asserted jurisdiction over health care providers that entered into subcontracts to provide medical services on behalf of TRICARE, the U.S. Department of Defense’s healthcare program for military personnel and their families. According to the OFCCP, health care providers’ contractual relationship with a TRICARE administrator rendered them “federal subcontractors” subject to OFCCP oversight. Health care providers, however, vigorously contested the OFCCP’s oversight, arguing that their TRICARE subcontracts did not cause them to become covered subcontractors.
OFCCP to Spend Next 5 Years Educating TRICARE Subcontractors
In DIR 2014-01 – TRICARE Subcontractor Enforcement Activities, the OFCCP announced the five-year moratorium and the OFCCP’s plan to focus on “outreach and technical assistance to educate [the] TRICARE subcontractor community about their affirmative action obligations.” During this time, the OFCCP also will attempt to clarify who is a covered subcontractor by “working with other federal agencies.”
While the OFCCP will continue to investigate complaints of discrimination, all enforcement related to affirmative action programs and recordkeeping will cease, effective immediately, for the next 5 years. The OFCCP will administratively close any open cases within 30 business days. If a TRICARE subcontractor receives a desk-audit letter from the OFCCP, the entity should send a copy of its agreement to participate in the TRICARE program along with a written request to administratively close the audit to the local OFCCP office.
Bottom Line
Health care providers who are currently subject to an OFCCP audit solely because they are a TRICARE subcontractor are “off the hook.” Moreover, during the next five years, the OFCCP will not initiate any audits of TRICARE subcontractors. During the moratorium, TRICARE subcontractors should pay careful attention to the OFCCP’s “outreach and technical assistance” as the assistance will likely foreshadow the OFCCP’s post-moratorium definition of a subcontractor.
Stay tuned for further developments.