Hospitals Providing Medical Care to Federal Employees Covered by HMOs May Be Subject to OFCCP’s Affirmative Action and Other Requirements

Over the years, the Office of Federal Contract Compliance Programs (OFCCP), which enforces affirmative action and equal opportunity regulations for federal contractors and subcontractors, has tried to assert jurisdiction over hospitals that provide medical care to federal employees in various controversial ways. For example, OFCCP has claimed hospitals are federal subcontractors when they provide medical services to Blue Cross/Blue Shield and/or HMO policyholders pursuant to the insurance providers’ agreements with the Office of Personnel Management (OPM). The U.S. District Court for the District of Columbia just gave the green light to OFCCP to assert its jurisdiction over hospitals, at least where HMOs covering federal employees are involved.

In UPMC Braddock v. Harris (D.D.C. No. 09-01210, 3/30/13), the D.C. district court held that three hospitals affiliated with the University of Pittsburgh Medical Center (UPMC) are federal subcontractors based on their providing medical services to federal employees covered by an HMO that in turn contracts with the OPM to provide coverage for federal employees participating in the Federal Employees Health Benefits Program. This case has been pending since 2009, and upholds the decision of the Department of Labor’s Administrative Review Board (ARB) that the hospitals are federal subcontractors.