JUDGE SAYS HOSPITALS ACCEPTING MILITARY PAYMENTS MUST FOLLOW FEDERAL RULES
Hospital executive fear ruling could impose a host of new and onerous requirements on their facilities
Three years ago, executives with Florida Hospital in Orlando received word that federal inspectors wanted to poke around their personnel files to ensure the provider was meeting its equal-opportunity hiring obligations as a subcontractor to the U.S. Defense Department.
The request seemed odd. Neither the hospital nor the Defense Department considered the massive 2,084-bed Orlando hospital a contractor. A protracted legal battle ensued, and last month Florida Hospital got some unwelcome news that experts say will reverberate in the halls of thousands of other healthcare providers.
Yes, an administrative law judge ruled, Florida Hospital is a federal subcontractor because it provides more than $100,000 in healthcare services to active-duty military personnel, retirees and their families through the Tricare program.
The ruling means Florida Hospital, like any federal contractor, will now have to navigate the federal rules on equal-opportunity hiring (see chart, p. 7) just as it also begins to grapple with a flood of new regulations in the Patient Protection and Affordable Care Act.
Officials in the healthcare industry and the Defense Department have said in court filings and interviews that however well-intentioned the nondiscrimination inspectors may be, they are creating a risk of shrinking the Tricare network for military personnel and their families because the work involved with equal-opportunity compliance is so onerous.
“I wonder if it will potentially have an impact on the number of people who will accept Tricare,” said Patrick Carrier, president and CEO of the five-hospital Christus Santa Rosa Health System in San Antonio, a city that includes one of the highest concentrations of military personnel in the country. “We’re going to be expected to do more with less, and adding new requirements and regulations at a time like this seems to be inappropriate.”
Fighting the decision
Critics of the decision, including the American Hospital Association, say it will increase the time and expense of workforce policies that hospitals already follow. Their lawyers are scrambling to overturn the decision before it becomes a new precedent that the U.S. Labor Department’s Office of Federal Contract Compliance Programs (OFCCP) could apply to healthcare providers across the country.
Florida Hospital is appealing the conclusion to the Labor Department’s Administrative Review Board. The AHA and the three private managedcare contractors in Tricare filed motions last week requesting friend-of-the-court status so they could join the fight.
No matter how the administrative appeal goes, the case appears headed for litigation in federal courts, which could drag on for years. However, attorneys say healthcare clients are facing the decision today whether to maintain multiyear agreements to care for Tricare beneficiaries knowing that new federal
Florida Hospital in Orlando is fighting
a request from the Defense Department for the hospital’s
Carrier: “We’re going to be expected to do more with less.”