Blog Category: Affirmative Action
Written by: *Dan Baum
The Office of Federal Contract Compliance Programs (“OFFCP”) announced that they will rescind Directive 293. Directive 293 provides guidance in determining whether a health insurance provider falls under OFFCP’s jurisdiction. OFFCP jurisdiction is necessary to subject healthcare employers to Affirmative Action commands.
Prior to this, a ruling by OFFCP had announced for the first time that it has jurisdiction over healthcare providers enrolling in the Medicare advantage program and Medicare prescription drug programs (parts C and D). Historically, the OFCCP has taken the position that participation in Medicare, TRICARE and Medicaid is a healthcare provider’s acceptance of financial assistance, not their acceptance of a government contract. Healthcare organizations with 50 or more employees that enter into employment contracts with the federal government are subject to affirmative action obligations under the Rehabilitation Act of 1973, and the amended Veteran’s Readjustment Assistance Act of 1974. The two acts require employers to ensure non-discrimination in their employment practices, and create written affirmative action plans to ensure compliance.
Because healthcare providers’ acceptance of Medicaid has traditionally been viewed as financial assistance, they were usually outside of OFCCP’s jurisdiction. However, in Florida Hospital of Orlando, an Administrative Law Judge (“ALJ”) stated that healthcare providers participating in TRICARE are government contractors, implicating that they would be subjected to Affirmative Action requirements. However, the passage of the National Defense Authorization Act essentially reversed the findings of Florida Hospital and directive 293. In response, the OFCCP gave up their fight for obtaining jurisdiction by rescinding the directive.
For now healthcare providers will not be subjected to Affirmative Action requirements under the OFCCP, however, OFCCP stated in a webinar that they will be reviewing on a case-by-case basis to determine whether Medicare (specifically parts C and D) providers will be subjected to OFCCP contract/subcontract jurisdiction. Therefore providers must continue to monitor their sources of federal revenue to determine whether they are within OFCCP’s jurisdiction, and if so, ensure compliance with Affirmative Action regulations.