TRICARE is a Department of Defense (DoD) program that pays for the medical benefits of active duty and retired military personnel and their families. Creating a strong provider network through TRICARE is obviously in the best interests of our veterans and current service members. Unfortunately, however, an obscure agency within the Department of Labor has long been a roadblock to building a strong provider network that is able to deliver the quality medical care that our soldiers deserve. Now is the time to remove that roadblock.
The TRICARE Program is administered through three contractors retained by the DoD. These three (3) contractors, in turn enter into contracts with hospitals and other medical providers that actually provide the medical care and supplies to military personnel and their family members.
The Office of Federal Contract and Compliance Programs (OFCCP) is an agency within the United States Department of Labor that is charged with enforcing the government’s rules imposing affirmative action obligations on federal contractors and subcontractors. Not long after President Obama took office, OFCCP began to argue that it had jurisdiction over healthcare providers that participate in the TRICARE program based on the theory that TRICARE participation constitutes a federal subcontract.
This assertion of jurisdiction by the OFCCP had significant consequences. Compliance with the OFCCP’s rules is extremely burdensome, with costs of compliance easily exceeding the revenue generated from TRICARE participation. As a result, providers that were not already doing business with the government became unwilling to participate in the TRICARE program.
Recognizing the consequences of the OFCCP’s position, Congress passed and President Obama signed into law, the National Defense Authorization Action for fiscal year 2012 (the “NDAA”), which included a provision clearly intended to foreclose OFCCP exercising its jurisdiction over a healthcare provider based on TRICARE participation.
Amazingly, however, OFCCP refused to accept this direct exercise of Congressional authority. Shortly after the legislation was signed, OFCCP’s then Director, Patricia Shiu, famously declared that “this is not over yet,” and the agency continued to assert jurisdiction over TRICARE participants, arguing that OFCCP was not bound by the language in the NDAA.
Concerned over the OFCCP’s disregard of Congressional authority, a bill was introduced in the House, initially with bipartisan support, to protect healthcare providers from OFCCP’s overreaching. The Protecting Health Care Providers from Increased Administrative Burdens Act, not only would have addressed OFCCP’s flouting of the NDAA, but would also have further circumscribed OFCCP’s jurisdiction by also exempting health care provider participating in other federal health programs. Specifically, the bill provided:
A State, a local government, or other recipient that receives a payment from the Federal Government, directly or indirectly and regardless of reimbursement methodology, related to the delivery of health care services to individuals, whether or not such individuals are or have been employed by the Federal Government, shall not be treated as a Federal contractor or subcontractor by the Office of Federal Contract Compliance Programs based on the work performed or actions taken by such individuals that resulted in the receipt of such payments.
Then Subcommittee Chair Tim Walberg (R-MI) described the bill as an attempt to “reign in executive overreach” and “prevent an administrative nightmare for healthcare providers” and those needing access to care. A subcommittee hearing on this bill was held on March 13, 2014, in which the author of this article testified along with others.
In response to this proposed legislation and the impending hearing, then Secretary of Labor Thomas Perez sent a letter to house leaders on March 11, 2014 offering what he characterized as a compromise. According to Perez,
I believe that . . . in lieu of legislative action, we can come to a workable administrative solution that addresses your concerns and provides greater clarity to the TRICARE subcontractor community while maintaining important civil rights protections . . . The Department can achieve those goals by having OFCCP exercise prosecutorial discretion over the next five years to limit its enforcement activities with regard to TRICARE subcontractors while it engages in extensive outreach and technical assistance to inform TRICARE participants of their responsibilities and works with other Federal agencies to clarify coverage of health care providers under Federal statutes applicable to contractors and subcontractors.
In other words, OFCCP offered a five year moratorium on OFCCP audits based on TRICARE participation while still maintaining that – in spite of the NDAA – it still had authority to audit those TRICARE participants. In discussing this proposal at the March 13, 2014 hearing, both Republican and Democrat subcommittee members acknowledged that it had been the intent of the Congress in enacting the NDAA to clearly establish that the OFCCP had no jurisdiction over Tricare providers. Nevertheless, the ranking member of the committee, Joe Courtney (D-CT), indicated that he was willing to accept the Secretary’s proposal given that it would delay enforcement for five (5) years and that, by then, he expected that the issue would resolve itself, as there would be a new President and Labor Secretary.
Four years have now passed and the moratorium will expire in a year. Over the past four years, OFCCP has never backed off of its claim of jurisdiction over TRICARE providers. Nor has the OFCCP made any effort to obtain a judicial ruling on this issue. Indeed, to the contrary, OFCCP used the moratorium as a means to prevent the issue from being litigated and resolved.
As a result, to this day, many healthcare systems refuse to participate in the TRICARE program, and military members and their families are denied the access to some of the best medical care. At the same time, taxpayers pay more for the medical care that our service members do receive.
It is now time for OFCCP to make clear that under this administration the agency will now follow the law. The language of the NDAA is clear and the intent of the Congress is clear. It is time for OFCCP to replace the moratorium with an unambiguous statement that a healthcare provider’s participation in the TRICARE program does not subject that provider to the OFCCP’s jurisdiction or require the provider to comply with the rules that OFCCP enforces.