As teased earlier this year, the Office of Federal Contract Compliance Programs has issued a Notice of Proposed Rulemaking formally addressing its authority over TRICARE health care providers.  You may remember some of our previous blog posts regarding the OFCCP’s assertion of jurisdiction over TRICARE health care providers and the temporary moratorium on compliance evaluations for TRICARE providers, which is in place until May 7, 2021. 

The OFCCP is proposing to permanently end its jurisdiction over TRICARE health care providers.  Reversing its previously held legal opinion, the proposed rule provides that the OFCCP lacks authority over federal health care providers who participate in TRICARE.  Specifically, the OFCCP seeks to revise its definition of “subcontractor” to exclude health care providers with agreements to furnish medical services and supplies to individuals participating in TRICARE.

In its reasoning for this reversal, the OFCCP cites concern that exercising authority over TRICARE providers affects the government’s ability to provide health care to uniformed service members, veterans, and their families.  Additionally, the agency posits that Congress’ enactment of Section 715 of the 2012 National Defense Authorization Act, which provides that TRICARE network providers are not subcontractors under the Federal Acquisition Regulations, clearly shows Congress disagreed with the agency’s prior position that it had authority over TRICARE providers.

As an alternative, the 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 TRICARE providers.  The agency asserts the exemption “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.”

Before health care provides start celebrating, they should remember that the OFCCP would still have authority over TRICARE providers if they hold a separate covered federal contract or subcontract.  But when it comes to TRICARE itself, those entities may soon be off the hook for good.

The OFCCP is requesting comments that will help it evaluate the impact of federal subcontractor status on health care providers’ decision to participate in the TRICARE network.  Comments will be accepted until December 6, 2019.  If you would like to submit a comment, you may do so here by searching for Regulatory Information Number (RIN) 1250-AA08.