OFCCP Rescinds Directive 293 On Coverage Of Health Care Providers & Insurers

by Art Gutman Ph.D., Professor, Florida Institute of Technology

The rescission was announced on April 25, 2012 and is effective immediately. The directive applied to provider and insurers connected to federal health care programs. The main body of the statement is relatively short and to the point: Accordingly:

Directive 293 restates existing OFCCP policy for determining whether health care providers and insurers are covered contractors or subcontractors based on their relationship with federal health care programs. As noted in the Directive, OFCCP found that changes in the health care industry and recent case decisions warranted issuance of such guidance, and obsolete directives needed to be rescinded. Directive 293 stated that OFCCP uses a case-by-case approach in making coverage determinations because of the wide-array of relationships health care providers and insurers may have with the federal government. However, recent legislation and related developments in pending litigation warrant rescission of Directive 293 at this time. OFCCP will continue to use a case-by-case approach to make coverage determinations in keeping with its regulatory principles applicable to contract and subcontract relationships and OFCCP case law.  This rescission should not be interpreted as reinstating prior Directive Numbers 189 and 262.

The rescission also renders as obsolete Directive 262 (on health care providers for Federal Employees Health Benefits Program; 3/17/03) and Directive 189 (Heath care entities receiving Medicare and/or Medicaid (12/16/93).

This action is not surprising in view of President Obama’s signing of the National Defense Authorization Act (NDAA) of 2012, which exempts from OFCCP coverage medical providers participating in the DoD TRICARE program for active and retired military personnel (see Alert on 1/11/12). It also effectively reverses two cases that favored the OFCCP and were pending appeal; OFCCP v. Florida Hosp. of Orlando   [ALJ Case No. 2009-OFC-00002, October 18, 2010] and  OFCCP v. UPMC Braddock, [ARB Case No. 08-048 (May 29, 2009]. Florida Hospital was deemed a covered subcontractor based on its contract with another hospital (Humana) that provided health care services to TRICARE beneficiaries, and UPMC Braddock was deemed a covered subcontractor because its contract to provide medical products and services to federal government employees through the Health Maintenance Organization.

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