It should be an easy matter for an employer to determine which federal laws apply to it. Not so, however, given the way in which the Department of Labor’s Office of Federal Contract Compliance Programs (OFCCP) administers and enforces the federal affirmative action laws (Executive Order 11246, the Rehabilitation Act, and the Vietnam Era Veterans Readjustment Assistance Act).
In the last sixteen months, OFCCP has (a) issued an expansive and controversial new “Directive 293,” asserting broad and deep jurisdiction over health care providers who participate in TRICARE, FEHBP or Medicare and Medicaid programs; (b) been slapped on the wrist by Congress when it passed the 2012 National Defense Authorization Act (NDAA), which expressly exempts from OFCCP jurisdiction medical providers who participate in the TRICARE program; and (c) issued without substantial comment a notice that it is withdrawing Directive 293 along with two older directives exempting Medicare Parts A and B and Medicaid from coverage.
As OFCCP is wont to do, it has withdrawn directives without replacing them. It has simply announced that it is suspending reviews of TRICARE participants (pending an appellate decision on an open case), and that it will otherwise approach health care providers on a “case by case” basis. See Notice of Rescission Directive 293, Coverage of Health Care Providers and Insurers, issued December 16, 2010. (PDF)
Of course, given the provisions of the NDAA, it is not at all clear how OFCCP believes it may be able to assert jurisdiction based on TRICARE participation, regardless of the outcome of the pending case.
Ultimately, much will depend on the outcome of a case pending in federal district court, OFCCP v. UPMC Braddock. UPMC is an appeal of an Administrative Review Board (ARB) decision holding that three hospitals which did not directly contract with the federal government are, nonetheless, covered subcontractors subject to OFCCP jurisdiction. The ARB found jurisdiction based on an HMO contract covering federal government employees, despite federal acquisition regulations excepting such contracts from the definition of covered “subcontractors.”
Under current circumstances, any health care provider that receives a notice of compliance review would be wise to closely examine the basis for OFCCP’s jurisdiction. If the review is based on participation in federal FEHBP, Medicare, or Medicaid programs, there is certainly reasonable doubt that OFCCP actually has jurisdiction.
For a detailed analysis of the history of OFCCP and the health care industry, see AHLA Connections, Vol. 15, Issue 5, May 2011 (“New Assertions of Jurisdiction by OFCCP”) .
- Member of the Firm