OFCCP Lacks Jurisdiction Over Florida Hospital Participating in TRICARE

by Snell & Wilmer

[authors: Kathryn Hackett King and John F. Lomax, Jr.]

The Office of Federal Contract Compliance Programs (OFCCP) lacks jurisdiction over a hospital that is a TRICARE health services provider in light of the National Defense Authorization Act (NDAA), the Department of Labor’s Administrative Review Board held on October 19, 2012. This ruling is significant for the health care industry, over which OFCCP has sought to expand its jurisdiction in recent years based on TRICARE contracts and subcontracts.  

TRICARE is the Department of Defense’s (DOD) health care program for active and retired military members. Since at least 2005, Florida Hospital has provided health care services for TRICARE beneficiaries through a provider network established by Humana Military Healthcare Services, Inc. (HMHS). HMHS, in turn, had a prime federal contract with DOD. In 2007, OFCCP initiated a compliance review of Florida Hospital, requesting copies of its affirmative action programs and other employment-related data. Florida Hospital declined to submit any data and asserted that OFCCP lacked jurisdiction over the hospital. In response, OFCCP issued an administrative complaint. In October 2010, an Administrative Law Judge held that OFCCP had jurisdiction over Florida Hospital because the hospital was a federal subcontractor, as it (1) provided medical services to TRICARE beneficiaries and (2) therefore, performed a “portion” of HMHS’s obligations under the prime federal contract.

Florida Hospital appealed this ruling to the Administrative Review Board. While the appeal was pending, the NDAA was signed into law in December 2011. Section 715 of the NDAA provides:

For the purpose of determining whether network providers . . . are subcontractors for purposes of the Federal Acquisition Regulation or any other law, 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 suppliers. . . .

As noted in our April 26, 2012 Legal Alert, following the enactment of the NDAA, OFCCP rescinded its enforcement directive - Directive 293 (Coverage of Health Care Providers and Insurers), which had outlined OFCCP's policy for determining whether it has jurisdiction over health care providers and insurers based on their relationship with federal health care programs.

Several months later, on October 19, 2012, the Administrative Review Board issued its decision in the Florida Hospital case, dismissing OFCCP’s complaint against Florida Hospital in its entirety. The majority found that Section 715 of the NDAA applies retroactively to Florida Hospital and that the statute prevents OFCCP from exercising jurisdiction over this hospital that provides health care services for TRICARE beneficiaries. Specifically, in light of Section 715 of the NDAA, Florida Hospital’s agreement with HMHS to provide health care services for TRICARE beneficiaries is not a “subcontract” within the meaning of OFCCP regulations. See OFCCP v. Florida Hospital of Orlando, DOL ARB No. 11-011 (Oct. 19, 2012) (citing 41 C.F.R. § 60-1.3). Since Florida Hospital is not subject to OFCCP’s jurisdiction, it is not subject to the federal affirmative action laws that required covered entities to develop and implement affirmative action plans.

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.

© Snell & Wilmer | Attorney Advertising

Written by:

Snell & Wilmer

Snell & Wilmer on:

Readers' Choice 2017
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
Sign up using*

Already signed up? Log in here

*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Custom Email Digest
Privacy Policy (Updated: October 8, 2015):

JD Supra provides users with access to its legal industry publishing services (the "Service") through its website (the "Website") as well as through other sources. Our policies with regard to data collection and use of personal information of users of the Service, regardless of the manner in which users access the Service, and visitors to the Website are set forth in this statement ("Policy"). By using the Service, you signify your acceptance of this Policy.

Information Collection and Use by JD Supra

JD Supra collects users' names, companies, titles, e-mail address and industry. JD Supra also tracks the pages that users visit, logs IP addresses and aggregates non-personally identifiable user data and browser type. This data is gathered using cookies and other technologies.

The information and data collected is used to authenticate users and to send notifications relating to the Service, including email alerts to which users have subscribed; to manage the Service and Website, to improve the Service and to customize the user's experience. This information is also provided to the authors of the content to give them insight into their readership and help them to improve their content, so that it is most useful for our users.

JD Supra does not sell, rent or otherwise provide your details to third parties, other than to the authors of the content on JD Supra.

If you prefer not to enable cookies, you may change your browser settings to disable cookies; however, please note that rejecting cookies while visiting the Website may result in certain parts of the Website not operating correctly or as efficiently as if cookies were allowed.

Email Choice/Opt-out

Users who opt in to receive emails may choose to no longer receive e-mail updates and newsletters by selecting the "opt-out of future email" option in the email they receive from JD Supra or in their JD Supra account management screen.


JD Supra takes reasonable precautions to insure that user information is kept private. We restrict access to user information to those individuals who reasonably need access to perform their job functions, such as our third party email service, customer service personnel and technical staff. However, please note that no method of transmitting or storing data is completely secure and we cannot guarantee the security of user information. Unauthorized entry or use, hardware or software failure, and other factors may compromise the security of user information at any time.

If you have reason to believe that your interaction with us is no longer secure, you must immediately notify us of the problem by contacting us at info@jdsupra.com. In the unlikely event that we believe that the security of your user information in our possession or control may have been compromised, we may seek to notify you of that development and, if so, will endeavor to do so as promptly as practicable under the circumstances.

Sharing and Disclosure of Information JD Supra Collects

Except as otherwise described in this privacy statement, JD Supra will not disclose personal information to any third party unless we believe that disclosure is necessary to: (1) comply with applicable laws; (2) respond to governmental inquiries or requests; (3) comply with valid legal process; (4) protect the rights, privacy, safety or property of JD Supra, users of the Service, Website visitors or the public; (5) permit us to pursue available remedies or limit the damages that we may sustain; and (6) enforce our Terms & Conditions of Use.

In the event there is a change in the corporate structure of JD Supra such as, but not limited to, merger, consolidation, sale, liquidation or transfer of substantial assets, JD Supra may, in its sole discretion, transfer, sell or assign information collected on and through the Service to one or more affiliated or unaffiliated third parties.

Links to Other Websites

This Website and the Service may contain links to other websites. The operator of such other websites may collect information about you, including through cookies or other technologies. If you are using the Service through the Website and link to another site, you will leave the Website and this Policy will not apply to your use of and activity on those other sites. We encourage you to read the legal notices posted on those sites, including their privacy policies. We shall have no responsibility or liability for your visitation to, and the data collection and use practices of, such other sites. This Policy applies solely to the information collected in connection with your use of this Website and does not apply to any practices conducted offline or in connection with any other websites.

Changes in Our Privacy Policy

We reserve the right to change this Policy at any time. Please refer to the date at the top of this page to determine when this Policy was last revised. Any changes to our privacy policy will become effective upon posting of the revised policy on the Website. By continuing to use the Service or Website following such changes, you will be deemed to have agreed to such changes. If you do not agree with the terms of this Policy, as it may be amended from time to time, in whole or part, please do not continue using the Service or the Website.

Contacting JD Supra

If you have any questions about this privacy statement, the practices of this site, your dealings with this Web site, or if you would like to change any of the information you have provided to us, please contact us at: info@jdsupra.com.

- hide
*With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name. Or, sign up using your email address.