The Office of Federal Contracts Compliance Programs (OFCCP), the branch of the U.S. Department of Labor charged with overseeing affirmative action obligations, has recently targeted the healthcare industry for increased enforcement. Healthcare providers have comfortably operated for years under the belief that receipt of funding from the government does not subject them to the affirmative action obligations imposed on federal contractors, which includes creating an affirmative action plan and maintaining various records.

The OFCCP recently argued that contracts to provide medical services for a government agency do create affirmative action obligations. Consequently, a flurry of administrative actions has ensued as healthcare providers challenged the OFCCP's new position. An OFCCP Directive issued on December 16, 2010, summarizes recent legal interpretations and affirms the agency's position that the receipt of most Medicare or federal grants alone does not create federal contractor status. However, contracts to provide health care services for TRICARE beneficiaries or other federal agencies are now deemed to create affirmative action obligations.