TRICARE Providers Exempt From OFCCP Requirements

Constangy, Brooks, Smith & Prophete, LLP

Constangy, Brooks, Smith & Prophete, LLP

The Final Rule is out, and it’s good news!

The Office of Federal Contract Compliance Programs issued a Final Rule providing that it has no authority over TRICARE health care providers. The Rule follows a notice and comment period and is effective August 31.

Ending a jurisdictional saga spanning more than a decade, the OFCCP declares that it lacks authority over federal health care providers who participate in TRICARE. The OFCCP’s rationale is based on the National Defense Authorization Act of 2012, which provides that network providers participating in TRICARE managed support contracts are not considered federal subcontractors. Although the OFCCP under prior administrations took a more expansive view of this language, the OFCCP has now determined that the correct interpretation of the Act removes TRICARE providers from its authority.

The OFCCP also established a national interest exemption for TRICARE providers.

“OFCCP believes that lasting certainty for TRICARE health care providers and patients is in the national interest.

The agency identified three reasons for adopting the national interest exemption:

  • Because of the administrative costs and burdens associated with complying with the OFCCP’s regulatory requirements, “OFCCP is concerned that the prospect of exercising authority over TRICARE providers is affecting or will affect the government’s ability to provide health care to uniformed service members, veterans, and their families.”
  • Lengthy battles over jurisdiction with TRICARE providers is not the best use of agency resources.
  • An exemption will provide “uniformity and certainty” for TRICARE providers regarding their legal obligations.

With the national interest exemption, TRICARE providers would continue to be excluded from OFCCP jurisdiction even if the National Defense Authorization Act is amended or a new administration interprets the Act differently.

Of course, health care providers with other types of federal contracts are still subject to the OFCCP’s jurisdiction and enforcement.

Thus ends the protracted and tortured history of the OFCCP’s authority over TRICARE health care providers. Considering the additional burdens health care providers currently face with the COVID-19 pandemic, the timing couldn’t be better.

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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