Congress Clears Defense Measure that Includes Provisions Addressing whether TRICARE Healthcare Providers are Subject to OFCCP Requirements, Provides Expanded USERRA Rights to Members of the National Guard

Updated: January 5, 2012

Both the House and Senate have approved a conference report (pdf) to the National Defense Authorization Act for Fiscal Year 2012 (H.R. 1540), a bill that authorizes appropriations for the Department of Defense (DoD). The final measure includes a provision stipulating that in determining whether TRICARE network providers are to be considered subcontractors subject to affirmative action and other requirements governed by the Department of Labor’s Office of Federal Contract Compliance Programs (OFCCP), TRICARE managed care support contracts that include the requirement to establish, manage, or maintain a network of providers will not be considered to be a contract for the performance of health care services or supplies on the basis of that requirement. The conference report also contains provisions extending certain reemployment rights under the Uniformed Services Employment and Reemployment Rights Act (USERRA) to members of the National Guard called to respond to domestic emergencies.

The House of Representatives had approved an earlier version of H.R. 1540 in May of 2011 that did not include these provisions. The Senate cleared its own version of the DoD bill (S. 1867) on December 1 that expressly excluded health care providers under the TRICARE network from being considered contractors. Therefore, the conference report was drafted to resolve the discrepancies between the two measures. On Wednesday the House of Representatives approved the reconciliations made by the report by a vote of 283-136. The Senate followed suit on Thursday with a vote of 86-13 in favor of the changes.


TRICARE is the DoD’s health care program for active duty and retired military and their families. In a directive issued last December, the OFCCP clarified instances in which it believed health care providers and insurers are subject to OFCCP requirements. Generally, the OFCCP’s position is that certain arrangements with the Federal Employees Health Benefit Program (FEHBP) and TRICARE constitute government contracts that create OFCCP jurisdiction. The drafters of the conference report recognized that the Administration:

is currently undertaking a review with relevant agencies . . . to clarify the coverage of health care providers under federal statutes applicable to contractors and subcontractors. The conferees agree that this is a complex issue which merits continued review from the Committees on Armed Services of the Senate and the House of Representatives and other committees of jurisdiction in the Senate and the House of Representatives.

To this end, the conference report adds to the bill a new section 715, Maintenance of the adequacy of provider networks under the TRICARE program:

In establishing rates and procedures for reimbursement of providers and other administrative requirements, including those contained in provider network agreements, the Secretary shall, to the extent practicable, maintain adequate networks of providers, including institutional, professional, and pharmacy. 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.

During the House debate on the bill, an attempt was made to exclude the above provision, but ultimately failed.


The bill also extends certain USERRA rights to members of the National Guard who have been called up to carry out homeland security missions in the United States. Current law does not afford National Guard members serving domestically the same USERRA protections it does for those serving overseas. The amendment revises section 4312 of USERRA to include full time National Guardsmen called up for federal homeland security missions for possible exemption from the Act’s 5-year limit on service. The conference report adds the same provision that was included in the Senate bill as a new Section 575.

The President is expected to sign this measure into law.

Update:  On December 31, 2011, President Obama signed this bill into law.

Photo credit: MBPHOTO, Inc.

Information contained in this publication is intended for informational purposes only and does not constitute legal advice or opinion, nor is it a substitute for the professional judgment of an attorney.