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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

per­son­nel files.

Car­rier: “We’re go­ing to be ex­pected to do more with less.”

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