Healthcare Provider’s TRICARE Participation Does Not Trigger Affirmative Action Obligations

In November of 2010, we advised clients of a new Administrative law judge decision issued October 18, 2010, proclaiming that hospitals and long term care facilities that accepted TRICARE funds would be considered by the OFCCP to be government contractors subject to affirmative action plan requirements. TRICARE is the healthcare program that covers active duty soldiers, retired veterans, and their families.

On December 31, 2011, President Obama signed into law the National Defense Authorization Act (NDAA).  Section 715 of the NDAA includes a provision that healthcare providers are not subject to Department of Labor Office of Contract Compliance Programs (OFCCP) affirmative action requirements on the basis of participation in TRICARE.

The OFCCP sought to subject healthcare providers to affirmative action requirements on the basis of participation in TRICARE by issuing Directive 293.  This directive stated that a healthcare provider’s participation in TRICARE triggered affirmative action obligations.  Nevertheless, the NDAA essentially overruled the OFCCP directive by stating that participation in TRICARE does not trigger affirmative action obligations.

Of importance, healthcare providers should note that other things may subject them to affirmative action obligations.  Some of these ways include having a contract directly with a federal agency (i.e. The Veterans Administration).  Additionally, the OFCCP has maintained that receipt of Medicare Part C and Part D funds may subject the recipient to OFCCP jurisdiction. This concept, which was incorporated into OFCCP Directive 293, was not overturned by the NDAA.

The fight to determine whether healthcare providers are subject to affirmative action requirements on the basis of participation in TRICARE is still developing.  OFCCP Director Patricia Shiu stated, “Section 715 of the NDAA seeks to exempt certain TRICARE providers from complying with civil rights laws that – for nearly half a century – have prohibited employment discrimination and ensured affirmative action for vulnerable workers. Our commitment to enforcing those laws is unwavering. This isn’t over yet.”  As such, we anticipate further developments in this area.  The Aging Services Group at HBSS will keep you up to date with this ever changing area of the law.