OFCCP v. Healthcare Industry: The Battle Isn’t Over Yet

The saga of OFCCP v. Florida Hospital of Orlando is synonymous with OFCCP’s ongoing battle to establish jurisdiction over healthcare providers. In late-2008, OFCCP brought an enforcement action after the Hospital objected to OFCCP’s jurisdiction, claiming it was not a covered “subcontractor.” An administrative law judge in October 2012 found the Hospital to be a covered subcontractor because its services were “necessary” to the performance of Humana’s contract – satisfying the first prong of the “subcontractor” definition.

Then came the December 2012 National Defense Authorization Act (NDAA), which expressly exempted from OFCCP jurisdiction medical providers who participate in the TRICARE program. As we reported in July 2013, the Administrative Review Board (ARB) concluded OFCCP could assert jurisdiction over Florida Hospital based on the first prong (despite the 2012 NDAA). The ARB nonetheless remanded the case to the Administrative Law Judge because the payments to the hospital under TRICARE might constitute exempt “federal financial assistance.”

And so we waited, again.

As we reported just a few weeks ago, in the face of a proposed bill (H.R. 3633) which could have broadly exempted healthcare providers, not just TRICARE participants, the DOL’s Secretary Perez agreed in a letter to a 5-year moratorium on compliance investigations of TRICARE employers.

Today, an Administrative Law Judge dismissedafter OFCCP withdrew its complaint against Florida Hospital.

Is the fight over? Hardly. As OFCCP has repeatedly stated, it will continue to determine jurisdiction over healthcare providers on a “case-by-case” basis, and TRICARE involvement is only one such basis. Healthcare providers must continue to assess their federal government connections to determine affirmative action coverage.