Hospitals that Provide Services to Government Employees Through an HMO are Government Contractors, Court Rules

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Healthcare providers who treat government employees through a health maintenance organization are government subcontractors subject to the jurisdiction of the Office of Federal Contract Compliance Programs (OFCCP), according to a ruling of the United States District Court for the District of Columbia.  In UPMC Braddock v. Harris, Civil Action No. 09-1210 (D.D.C. Mar. 30, 2013) (summary judgment order),  the district court upheld a decision of the Department of Labor’s Administrative Review Board that three hospitals affiliated with the University of Pittsburgh Medical Center that entered into contracts with an HMO, which, in turn, had contracted with the U.S. Office of Personnel Management (OPM) to provide coverage for federal employees who participate in the Federal Employees Health Benefits Program, were government subcontractors required to comply with certain federal affirmative action and equal employment regulations. As the district court explained, “[b]ecause the hospitals provide a portion of the medical care that the Health Plan agreed to supply to federal employees under its OPM contract, the hospitals’ agreements with the Health Plan are necessary to the performance of that contract. Thus . . . those agreements are ‘subcontracts’ within the meaning” of federal law.  The hospitals’ status as federal government subcontractors places them within the jurisdiction of the OFCCP, the agency that enforces certain federal affirmative action and equal employment opportunity requirements governing those who do business with the federal government.  A copy of the ruling is available by clicking here.

Reporter, Ramsey Prather, Atlanta, + 1 404 572 4624, rprather@kslaw.com.