Proposed bill protects hospitals from 'federal contractor' designation

A proposed bill may keep the government from classifying hospitals as federal contractors or subcontractors because they receive federal payments.

HR 3633 aims to prevent the Office of Federal Contract Compliance Programs (OFCCP) from categorizing hospitals and other healthcare providers as contractors.

The measure is necessary because OFCCP officials consider hospitals that serve patients in programs such as Medicare, Federal Employees' Health Benefit Program (FEHBP) and TRICARE military healthcare managed care networks as federal contractors, Rep. Tim Walberg (R-Mich.) said in his opening statement at a hearing this week before the House Education & the Workforce subcommittee.

Supporters of the bill argue that hospitals already face heavy compliance and regulation, and the classification would create additional burdens. The American Hospital Association (AHA) fears the OFCCP, which enforces federal anti-discrimination laws that apply to federal contractors, would classify healthcare facilities as such "virtually overnight," without warning, Curt Kirschner, designated outside counsel for the AHA, testified.

Although the OFCCP acknowledges that it does not have jurisdiction over hospitals participating in Medicare or the FEHBP, Kirschner said that "within the past few years, however, the agency has laid the groundwork for a jurisdictional land grab based on essentially meaningless distinctions between the ways healthcare providers participate in federally funded health benefit programs." 

However, the bill's opponents argue the OFCCP's compliance burdens are small and the agency only conducts about 4,000 compliance reviews each year. Therefore, contractors only have a 2 percent chance of a review--"an extremely small percentage when contrasted with 700 billion spent in federal contract dollars," Fatima Goss Graves, vice president at the National Women's Law Center, testified.

 To learn more:
- here's the bill
- read Walberg's opening statement
- check out Kirschner's testimony (.pdf)
- here's Graves' testimony (.pdf)
- here's a link to all hearing testimony

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