Let’s break down OFCCP v. Florida Hospital of Orlando, ARB Case No. 11-011 (July 22, 2013). TRICARE is a program of the Department of Defense. Its job is to make sure military personnel and their families have access to healthcare. TRICARE contracts with “managed care support” systems (e.g. Humana Military Healthcare Services) to establish networks of healthcare providers (e.g. hospitals) who, in turn, agree to provide medical services. In the middle of a fight over the OFCCP’s claimed jurisdiction to audit the Florida Hospital of Orlando – and faced with the fear that government affirmative action requirements would drive up the cost of health care for military personnel – Congress enacted the NDAA in 2011. The NDAA excluded TRICARE contracts that “establish, manage, or maintain a network of providers” from the universe of contracts for the performance of healthcare services or supplies. This provision seemed to mean that hospitals contracting with TRICARE’s managed care support systems could not be considered to have a government contract to provide healthcare services and were free from affirmative action requirements and OFCCP review.

Recently, the ARB ruled otherwise. Revisiting an earlier decision in the same dispute, the ARB concluded that, although the NDAA stopped the OFCCP from asserting that the hospitals had a government contract to provide healthcare services, the NDAA left open another route for the OFCCP to get to the hospital. The hospital had sub-contracted with the managed care support system (Humana) to provide a service that was necessary to Humana’s contract with TRICARE. A sub-contract to provide nonpersonal services that are necessary for the performance of a government contract is a basis for OFCCP jurisdiction even if the NDAA stops us from calling it a government contract to provide healthcare services. To read the first part of the series, please click here.

Don’t let yourself think this is over now. Two members of the ARB dissented from the ruling and more appeals seem likely.