As previewed earlier this year, OFCCP is scheduled to publish on November 6, 2019 its proposed rule making addressing jurisdiction for TRICARE contractors and subcontractors.  As a reminder, OFCCP has had an audit moratorium in place since 2014 for employers that participate in TRICARE.

The proposed rule making seeks to codify OFCCP’s most recent position that TRICARE contractors and subcontractors should not be subject to OFCCP jurisdiction – or more precisely, that OFCCP

lacks authority over Federal health care providers who participate in TRICARE.

The Notice explains

[t]he proposed rule is intended to increase access to care for uniformed service members and veterans and to provide certainty for health care providers who serve beneficiaries of TRICARE.

This is the latest chapter in a very long, and winding story as to the question of whether OFCCP has jurisdiction over health care providers that receive TRICARE funds as their sole source of federal funding, with OFCCP taking varying positions along the way.

The agency is proposing to revise the definition of “subcontractor” in its regulations to exclude health care providers “with agreements to furnish medical services and supplies to individuals participating in TRICARE.”

In the event that is not an acceptable amendment, OFCCP proposes to establish “a national interest exemption from Executive Order 11246, Section 503 of the Rehabilitation Act of 1973, and the Vietnam Era Veterans’ Readjustment Assistance Act of 1974 for health care providers with agreements to furnish medical services and supplies to individuals participating in TRICARE.”

Today’s proposed rule making reflects OFCCP’s determination that

special circumstances in the national interest justify proposing the exemption as it would improve uniformed service members’ and veterans’ access to medical care, more efficiently allocate OFCCP’s limited resources for enforcement activities, and provide greater uniformity, certainty, and notice for health care providers participating in TRICARE.

To be clear, however, OFCCP’s proposal addresses authority over only TRICARE participants. Specifically, the notice states

OFCCP would nevertheless have authority over health care providers participating in TRICARE if they hold a separate covered Federal contract or
subcontract.

Thus, if they haven’t already done so, health care provides should take steps to understand the sources of their federal revenue to ascertain whether the modification will apply.

When formally published, the proposed rule making will be open for public comment and will remain open for 30 days.