Hospital that accepts TRICARE is subject to affirmative action obligations imposed on federal contractors
On October 18, 2010, a Department of Labor Administrative Law Judge (ALJ)issued his opinion in the case of OFCCP v. Florida Hospital of Orlando. The Administrative Law Judge found that the hospital was a subcontractor of a managed care services provider's contract between TRICARE and Humana Military Healthcare Services, Inc., and was subject to the affirmative action obligations imposed on federal contractors. The DOL's Office of Federal Contract Compliance Programs (OFCCP) affirmative action regulations require the preparation of annual affirmative action plans for women and minorities, certain veteran categories, and individuals with disabilities, imposes extensive and complicated record-keeping obligations for applicants and hires, and requires all non-executive vacancies being filled with external candidates to be listed with state workforce agencies. TRICARE is the Department of Defense's (DOD) program that pays for the medical benefits for active duty and retired military personnel and their families. OFCCP attempted to initiate an audit of the Florida Hospital of Orlando, and the hospital resisted, claiming it was not a covered government contractor. The ALJ found that since the hospital participated in the TRICARE program, it was a federal subcontractor since they assumed the performance of the TRICARE administrator, Humana Military Healthcare Services, Inc. In doing so, the ALJ rejected the DOD's argument that its program was one of federal financial assistance, and not a contract to provide actual medical services.
Practice pointer. This decision may have wide-reaching implications for health care providers who bill to TRICARE if they do not have an affirmative action plan in place to comply with OFCCP's requirements. In today's economic situation, this decision may also result in increasing the cost of providing health care services, in a time when the federal government is attempting to emphasize making health care more affordable.
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