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Hospitals and OFCCP Jurisdiction – The Saga Continues and Recent Hopes are Dashed

December 17, 2015


We recently wrote about H.R. 3633, a bipartisan Bill that would remove any doubt that Congress intends to exempt Hospitals from OFCCP jurisdiction based on their position as a TRICARE network provider.

Recall that TRICARE is the U.S. Defense Department’s medical insurance program. In the last several years, the OFCCP has asserted jurisdiction over hospitals that serve as TRICARE providers. The OFCCP continues to assert that these hospitals are subcontractors and required to comply with OFCCP rules. Some hospitals challenged this position, litigated and lost.478740625

In response to the OFCCP’s claims, which some argue disregard Congressional intent, the Chairman and ranking member of the House Workforce Protections Subcommittee introduced H.R. 3633. The Bill would eliminate any argument of jurisdiction based on payment related to the delivery of healthcare services. It would broadly exempt healthcare services from OFCCP jurisdiction. These means no need to comply with their rules or face audits and penalties. (Keep in mind, of course, that this does nothing to EEOC jurisdiction, of course, so hospitals still need to have a fair and non-discriminatory hiring process.)

The Bill had momentum and two days before a scheduled hearing, lo and behold, the Secretary of Labor submitted a letter to the committee proposing that a legislative solution could be avoided in favor of an administrative solution – including a proposed five year moratorium on enforcement actions, stopping any on-going compliance evaluations, education and technical assistance to subcontractors about OFCCP jurisdiction and sub-contractor obligations, etc. In other words, the Labor Department would suspend enforcement while they “educate” hospitals that they are, indeed, subject to enforcement and on how to comply. Clearly, not exactly giving up the fight.

The letter was seen as a favorable step and one of the cosponsors of the Bill withdrew that co-sponsorship. So now, H.R. 3633 may not move forward and we’ll wait and see whether the Labor Department implements the changes contained in their letter. Too bad, the Bill gave hope of resolving the matter. We’ll keep watching the situation.

In the meantime, hospitals need to be certain that their selection processes are fair, and consistent with all relevant laws and regulations, and that every selection decision can be objectively defended via a well designed and documented selection system.

To learn more about legally defensible, selection tools and systems, see our Whitepaper on:

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Bryan Warren Bryan Warren is the President of J3 Personica, a consulting, assessment, training, and coaching firm, and a guest blogger for PSI. Bryan is an expert in progressive talent strategies, with a particular focus on leader and physician selection and development.