A New Year's Gift for Health Care Providers:
TRICARE and Affirmative Action

President Obama gave health care providers a New Year's gift on Dec. 31, 2011, by signing the National Defense Authorization Act for Fiscal Year 2012 (NDAA). The NDAA contains a very short section that limits the use of TRICARE contracts when determining whether a health care provider is a federal contractor under the Federal Acquisition Regulations or any other law.

In recent years, the Office of Federal Contractor Compliance Programs (OFCCP), which enforces laws and regulations related to affirmative action, has taken the position that TRICARE agreements are federal subcontracts that subject health care providers to its jurisdiction. An Administrative Law Judge agreed with the OFCCP in a decision that is currently on appeal. The NDAA directly impacts the OFCCP's position. According to the new law, "[f]or the purpose of determining whether network providers under such provider network agreements are subcontractors . . . , a TRICARE managed care support contract that includes the requirement to establish, manage, or maintain a network of providers may not be considered to be a contract for the performance of health care services or supplies on the basis of such requirement."

This legislation effectively overrules the OFCCP's position that TRICARE contracts create federal contracts. Health care providers could still be obligated to comply with affirmative action laws and regulations if they are a party to a contract with the federal government (or its agencies) or if they provide services to a federal contractor that are necessary for that contractor to complete the federal contract. (For more details related to coverage of health care providers see our previous article.)

We anticipate that the OFCCP will continue to seek ways to assert jurisdiction over health care providers, so providers should remain mindful of the nature of their contracts and whether those contracts subject them to affirmative action requirements.

If you have questions related to affirmative action obligations, please contact Tami A. Earnhart at (317) 236-2235 or at tami.earnhart@icemiller.com.

This publication is intended for general information purposes only and does not and is not intended to constitute legal advice. The reader must consult with legal counsel to determine how laws or decisions discussed herein apply to the reader's specific circumstances.