In a decision that could expand the jurisdiction of the Office of Federal Contract Compliance Programs over health care providers, an administrative law judge with the U.S. Department of Labor has held that a hospital that subcontracted to provide medical services to TRICARE beneficiaries is a federal subcontractor subject to the affirmative action laws. If not reversed on appeal, this decision could have widespread implications for hospitals, rehabilitation centers and hospices. Any such entity that receives more than $50,000 annually for medical services performed under such a TRICARE subcontract could be subject to OFCCP jurisdiction and required to comply with the affirmative action laws.

TRICARE is a government program that provides medical benefits for active and retired military, and their dependents.

In this case, Humana Military Healthcare Services, Inc., had an agreement with TRICARE Management Activity of the Department of Defense to establish a healthcare provider network for beneficiaries under the program, and Florida Hospital of Orlando was a “participating hospital.” Neither TRICARE nor the hospital considered the hospital to be a federal subcontractor.