UPDATE: President Signed into Law – Exemption of Tricare Providers from Federal Acquisition Regulation Requirements

President Obama signed the National Defense Authorization Act on 12/31/11. The Act includes a provision that healthcare providers are not subject to Department of Labor Office of Contract Compliance Programs (OFCCP) affirmative action requirements on the basis of participation in TRICARE. TRICARE is the Department of Defense’s healthcare program for the military.

We had previously advised you of this Bill when it passed the Senate – see —>U.S. Senate Passes a Bill Including Langauge that Exempts Tricare Providers from Federal Acquisition Regulation Requirement

Health care providers that provide services pursuant to TRICARE, VA and Medicare Advantage contracts have continuously struggled to determine whether or not they are considered subcontractors under the Federal Acquisition Regulation (“FAR”), by simply being a provider, and therefore required to comply with its provisions.  Compliance with the FAR as a subcontractor requires providers to implement affirmative actions plans and other related requirements.  The interpretation of the applicability of the FAR to providers has also subjected providers to significant audits by the Office of Federal Contract Compliance Programs  (“OFCCP”) at the U.S Department of Labor.

Section 715 of the National Defense Authorization Act eliminates TRICARE as a basis for a healthcare provider being subject to the jurisdiction of the OFCCP.

Section 715, provides –  “For the purpose of determining whether network providers under such provider network agreements are subcontractors for purposes of the Federal Acquisition Regulation or any other law, a TRICARE managed care support contract that includes the requirement to establish, manage, or maintain a network of providers may not be considered to be a contract for the performance of health care services or supplies on the basis of such requirement.”

While the law is clear on TRICARE, health care providers may continue to be subject to the FAR via a federal contract or subcontract. OFCCP has, and may very well in the future, aggressively audit in other areas.  Health care providers should continue to evaluate their contractual relationships to understand whether or not there may be FAR obligations and to what extent they are subject to them through non-TRICARE relationships.

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