HEALTHCARE AND OFCCP - Microsoft › files › 984ac533...OFCCP requests desk and onsite audit of Florida Hospital under affirmative action laws. Florida Hospital protests OFCCP’s
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4. Virtually all employers are required to engage in EEO.
5. Affirmative action goes a step further: Proof of good faith efforts to recruit women and minorities.• EEO is neutral, affirmative action is
proactive
6. EO 11246 includes responsibility to prepare affirmative action plans, track race and sex of job applicants, reach out to a broader recruiting network.
7. Paperwork threshold begins at single contract of $50k and 50 employees.
� OFCCP cites Bridgeport for non-compliance with affirmative action program (AAP) requirements (E.O. 11246, Sec. 503 of Rehabilitation Act, and Vietnam Era Veterans’ Readjustment Assistance Act (VEVRAA)).
� Bridgeport claims it is not a federal contractor or “subcontractor.”
• According to OFFCP regulations, who is a “federal subcontractor”?
Subcontract means any agreement or arrangement between a contractor and any person (in which the parties do not stand in the relationship of the employer andemployee) if the agreement is one:
1. For the purchase, sale or use of personal property or non-personal services which, in whole or in part, is necessary to the performance of any one or more contracts; or
2. Under which any portion of the contractor’s obligation under any one or more contracts is performed, undertaken, or assumed.
� Step 1: Identify the Prime Contract/Prime Contractor
• Requires a contract between federal government agency and employer for purchase or use of personal property or non-personal services during the period of investigation
� Step 2: Identify any Secondary Contract(s) (between the Prime Contractor and Subcontractor(s))
• Does the contract between the Prime and Sub require the Sub to provide any portion of the actual products or services required of the Prime Contractor? OR
• Is the contract between the Prime and Sub “necessary” to the performance of the Prime contract?
� Step 3: Do the Prime- and Sub-contractors have 50 employees and a $50,000 single covered contract?
OFCCP v. Florida Hospital of Orlando, (ALJ Case No. 2009-OFC-0002)(Oct. 18, 2010),
on appeal to Administrative Review Board (ARB Case No. 11-011)
• The Prime Contract:
� TRICARE (DOD’s health care program for uniformed services members/families) contracts with regional program managers (i.e., HealthNetFederal Services, Humana Military Healthcare Services, Inc., and TriWest Healthcare Alliance).
• Program Managers agree to enroll patients, manage referrals process claims, provide customer service, underwrite healthcare costs, and establish networks of providers.
• TRICARE pays Program Managers for their various services.
3. Contractor obligations mandated by OFCCP cannot be altered or limited by contractual language (in other words, we don’t care what another agency says).
4. Under each of the three major Federal health programs, an entity can enter into a prime contract for various kinds of services (insurance, health care, administrative support).
6. When the subcontractor, in turn, contracts out part of its contract, OFCCP has jurisdiction over both subs as long as the second subcontract meets the same test – “subcontractor subcontracting.”
� A covered prime or subcontractor may have multiple contracts with companies, and OFCCP has jurisdiction over all.
7. OFCCP does not have jurisdiction over an insurance reimbursement agreement between a health care provider (e.g. a doctor or hospital) and a federal contractor contracted to provide health insurance only (the Bridgeport case).
8. Reimbursements pursuant to Medicare Part A and Part B are not contracts but rather federal financial assistance. (Stay tuned for Medicare Parts C and D).
� TRICARE, FEHBP and Medicare Advantage Part D enter direct contracts to provide health insurance for members, including fee for services and PPO.
• This creates a direct contract with the insurer: insurer covered.
� Example: OPM, the direct contracting agency for FEHBP, contracts with Blue Cross/Blue Shield to provide health insurance for certain federal employees. Blue Cross covered. (Bridgeport case).
� UPMC contracted with FEHBP to put HMO in place, the UPMC Health Plan. Health Plan’s contract with FEHBP was to provide medical services. Health Plan then contracted with hospitals to provide medical services.
� Hospital provided medical services were necessary to UPMC Health Plan performing its prime contract. Hospitals are covered subs.
� Footnote 9: OFCCP will look at PPOs, HMOs on case by case basis. Not all same.
� OPM had contract with Humana. Humana was obligated to establish a provider network.
� Florida Hospital had “agreement” (quotation in original) with Humana to provide health care services to TRICARE beneficiaries.
� OFCCP determined that Florida Hospital performed a portion of the medical services that Humana contracted to provide. Hospital was therefore covered.
� One of most controversial findings by OFCCP in all 3 cases.
� Example: CMS, Medicare’s contracting agency, contracts with a health plan to provide a PPO Health Plan that includes prescription drugs for Medicare Advantage members (Medicare Part D).
� Health plan in turn contracts with pharmacy company to provide prescription drugs and with Hospital to provide medical services required by the PPO. Both are covered because they provide a portion of the services the PPO health plan contracted to CMS.
• Rather, Insurer provides payment or partial payment to defray the cost of obtaining medical supplies.
• Insured must pay the health care provider the full cost of services and then seek reimbursement from the insurance plan.
• Sometimes insurance plan enters into a contract with the provider to directly pay (reimburse) the provider saving the trouble to file a claim and obtain reimbursement. Doesn’t change the analysis.
� Reimbursement Agreements between insurer and health care provider DO NOT create covered contracts.
• Prime contract is insurance contract only, to provide health insurance to Federal Program members.
• Payment of fees directly to the health care providers is neither necessary to performance of prime contract or fulfilling a portion of the prime contract.
• Analogous to Bridgeport case: Contract at issue was merely a reimbursement agreement between hospital and prime contractor, BCBS. BCBS only contracted to provide insurance services for health plan members, not health care services.
• Query: Do these kinds of arrangements still exist?
� In some cases, reimbursement agreement may be combined with contract to provide medical services.
• Company has a prime contract with OPM to establish and maintain a PPO for one of the FEHBP’s health plans. � Contract provides company will establish a network
of health care providers to provide specific health care services to beneficiaries of the health plans.
� Company contracts with Medical Practice to provide medical services.
� Contract also provides for a reimbursement agreement.
� Medical Practice is a covered subcontractor because its contract with Company is necessary to Company’s fulfillment of its contract with OPM.
• Example: Company X, that receives Medicare Part A and Part B reimbursements also holds a contract with Medicare (CMS) to establish a Medicare Advantage PPO and to be reimbursed for health care services under the PPO. PPO contract also includes establishment of a prescription drug plan and claims processing services.
� Companies contracting with Company X to provide health care services, prescription drugs or claims processing would be covered subs.
• DOD correctly determined that in-network providers are recipients of federal financial assistance.
� Federal Grant Act, not OFCCP regs, determines whether TRICARE reimbursements are federal financial assistance.• Prong 1 of Grant Act satisfied: DOD has expressly
disavowed contractor relationship.
• Prong 2 of Grant Act satisfied: Reimbursements are not for the direct benefit of the US Government; benefits are for members.
• Even under OFCCP’s own regs, there is no basis to find contractor status.
� All the duties listed by Humana (the prime contractor) relate to the administration and reimbursement of health benefits, not the delivery of health care services to TRICARE beneficiaries.
� Therefore, Florida Hospital did not undertake or assume any Humana obligations under the contract.
� Nor did Florida Hospital sell any services to Humana that were necessary to Humana’s performance of its own duties.
• Humana only underwrites the cost of these services pursuant to its “complex” agreement with DOD, or directly reimburses providers and/or beneficiaries with government funds.
• Florida Hospital’s argument is that Humana is more like an insurer.