OFCCP Issues Final Rule On TRICARE

Fox Rothschild LLP

Fox Rothschild LLP

On July 2, 2020, the U.S. Department of Labor (DOL) Office of Federal Contract Compliance Programs (OFCCP) published the final rule, “Affirmative Action and Nondiscrimination Obligations of Federal Contractors and Subcontractors: TRICARE Providers.” 

As we reported April 28 in an article published in Medical Economics, this rule, which was proposed in November 2019, puts an end to the decades-long debate regarding whether or not health care providers that provide care to TRICARE beneficiaries are subject to the OFCCP’s authority to enforce various obligations under Executive Order 11246, Section 503 of the Rehabilitation Act of 1973 (Section 503), and the Vietnam Era Veterans’ Readjustment Assistance Act of 1974 (VEVRA).

The new rule provides that health care providers that care for TRICARE beneficiaries are not government contractors or subcontractors within the meaning of 41 C.F.R. § 60-1.3 and are thus not subject to OFCCP authority.

Alternatively, it provides that TRICARE beneficiaries are exempt from the requirements under E.O. 11246, Section 503, and VEVRA because there is a “national interest” in providing certainty to TRICARE providers and patients and ensuring access to care to active and veteran uniformed service members and their families.

This rule does not apply to other federal health systems such as the Federal Employees Health Benefits Program or the Veterans Affairs Health Benefits Program (VAHBP).  However, OFCCP Directive 2018-02 provides a moratorium on OFCCP enforcement of the VAHBP through May 7, 2021.  We will continue to monitor OFCCP guidance on these programs. 

Any health care provider that contracts directly or indirectly with the federal government is still subject to OFCCP authority. Where health care providers have questions as to their obligations as federal contractors or subcontractors, they should contact experienced counsel for guidance.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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