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Additional Federal Contractor Obligations

February 17, 2011 | No Comments
Posted by Frank Ciesla

The Office of Federal Contract Compliance Programs on December 16, 2010 issued Transmittal Number 293, which is attached to this blog.  The purpose of that transmittal is to alert healthcare providers that they may be considered subcontractors subject to the requirements of the Office of Federal Contract Compliance Programs.  While it has been clear (and continues to be clear) that participation in Part A and Part B of the Medicare Program, does not subject a provider to the contractual obligations of a government contract (as set forth in bullet number 3 on page 5 of Transmittal 293), the transmittal further provides on page 11:

“However, OFCCP may have jurisdiction over a health care provider receiving Medicare reimbursements if the health care provider also holds a separate covered Federal contract or subcontract.  Potential covered contracts or subcontracts may include contracts related to Medicare Advantage (Part C) or Part D programs, contracts with another Federal Program, and/or contracts with prime contractors of other Federal programs.”

Should it ultimately be determined that participation through the Medicare Advantage Program creates a subcontract relationship with a government prime contractor, participating providers will incur the obligations set forth in the Federal Acquisition Regulations that flow down to subcontractors, whether or not providers are aware of them.  This is an additional regulatory burden, as well as an expense, and will increase the costs of providing care.


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