On December 31, 2011, Section 715 of the National Defense Authorization Act for Fiscal Year 2012 was signed into law. Section 715 states that network providers and providers of medical services under TRICARE are not subcontractors that are subject to the Office of Federal Contract Compliance Program’s (“OFCCP”) jurisdiction. This new law was created in response to the OFCCP asserting jurisdiction over network providers and providers of medical services under TRICARE.

In October of 2010, an Administrative Law Judge ruled that health care providers that contract to be part of a network of TRICARE providers are subcontractors covered by federal affirmative action laws and regulations. Florida Hospital of Orlando, Case No.; 2009-OFC-00002 (Oct. 18, 2010). On December 16, 2010, the OFCCP issued Directive 293 that provided guidance for assessing when the relationship of health care providers and insurers (“HCP”) with a federal entity or program or a third party federal contractor rendered the HCP a federal contractor or subcontractor for purposes of OFCCP jurisdiction. The passage of Section 715 negates the Florida Hospital of Orlando decision and Directive 293.

To learn more about how this new law may affect your company or if you have any questions regarding this issue, be sure to contact your employment counsel at Smith, Gambrell & Russell, LLP.