The Office of Federal Contract Compliance Programs (“OFFCP”), which is part of the Labor Department, has been on a crusade to impose government contractor affirmative action program requirements on hospitals that serve the TRICARE and FEHB programs. A couple of years ago, Congress tried to rein in OFCCP in a measure intended to protect TRICARE providers. OFCCP could not take no for an answer.

Recently, in reaction to a bill (HR 3633) introduced by Rep. Tim Walberg to complete the job of reining in OFCCP, the Labor Department announced a five year OFCCP enforcement moratorium for TRICARE providers. The purpose of the moratorium is to educate providers about the affirmative action program requirements, which are complex.

As the American Hospital Association has explained  in support of HR 3633, OFFCP’s aggressive enforcement actions against this sector can discourage their participation in the TRICARE and FEHB programs:

The AHA previously explained in testimony to this committee that hospitals can spend hundreds of hours and tens of thousands of dollars simply updating and maintaining the Affirmative Action Plan required by the OFCCP. This time and capital expenditure increases dramatically during audit years, and the OFCCP is conducting compliance reviews with increasing regularity. 

These additional administrative costs divert vital resources from hospitals’ central mission of providing quality patient care. Faced with the risk of these increased burdens, some hospitals may decide to stop providing services to participants in TRICARE or the FEHBP, thus limiting the health care options available to federal employees, service members, and their families. 

AHA is not seeking an exemption from general employment discrimination laws, just these affirmation action program requirements applicable to government contractors and subcontractors. OPM has ruled that hospitals are not FEHBP subcontractors but that fact has not deterred OFCCP.

This week OFCCP issued an enforcement directive  implementing this five year moratorium.  The directive explains that the moratorium extends to healthcare entities that have network contracts with TRICARE or with TRICARE and FEHBP carriers but not FEHBP carriers alone. How equitable. However, health care entities that serve TRICARE also likely serve the FEHBP so it may be a distinction without a difference. Hopefully in the next five years, Congress will enact HR 3633.