    [House Hearing, 113 Congress]
    [From the U.S. Government Publishing Office]

                          H.R. 3633, PROTECTING HEALTH
                         CARE PROVIDERS FROM INCREASED
                           ADMINISTRATIVE BURDENS ACT

    =======================================================================

                                    HEARING

                                   before the

                     SUBCOMMITTEE ON WORKFORCE PROTECTIONS

                             COMMITTEE ON EDUCATION
                               AND THE WORKFORCE

                         U.S. House of Representatives

                        ONE HUNDRED THIRTEENTH CONGRESS

                                 SECOND SESSION

                                   __________

                 HEARING HELD IN WASHINGTON, DC, MARCH 13, 2014

                                   __________

                               Serial No. 113-51

                                   __________

      Printed for the use of the Committee on Education and the Workforce

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                    COMMITTEE ON EDUCATION AND THE WORKFORCE

                        JOHN KLINE, Minnesota, Chairman

    Thomas E. Petri, Wisconsin           George Miller, California,
    Howard P. ``Buck'' McKeon,             Senior Democratic Member
        California                       Robert C. ``Bobby'' Scott,
    Joe Wilson, South Carolina               Virginia
    Virginia Foxx, North Carolina        Ruben Hinojosa, Texas
    Tom Price, Georgia                   Carolyn McCarthy, New York
    Kenny Marchant, Texas                John F. Tierney, Massachusetts
    Duncan Hunter, California            Rush Holt, New Jersey
    David P. Roe, Tennessee              Susan A. Davis, California
    Glenn Thompson, Pennsylvania         Raul M. Grijalva, Arizona
    Tim Walberg, Michigan                Timothy H. Bishop, New York
    Matt Salmon, Arizona                 David Loebsack, Iowa
    Brett Guthrie, Kentucky              Joe Courtney, Connecticut
    Scott DesJarlais, Tennessee          Marcia L. Fudge, Ohio
    Todd Rokita, Indiana                 Jared Polis, Colorado
    Larry Bucshon, Indiana               Gregorio Kilili Camacho Sablan,
    Trey Gowdy, South Carolina             Northern Mariana Islands
    Lou Barletta, Pennsylvania           Frederica S. Wilson, Florida
    Joseph J. Heck, Nevada               Suzanne Bonamici, Oregon
    Susan W. Brooks, Indiana             Mark Pocan, Wisconsin
    Richard Hudson, North Carolina
    Luke Messer, Indiana

                        Juliane Sullivan, Staff Director
                     Jody Calemine, Minority Staff Director
                                     ------

                     SUBCOMMITTEE ON WORKFORCE PROTECTIONS

                        TIM WALBERG, Michigan, Chairman

    John Kline, Minnesota                Joe Courtney, Connecticut,
    Tom Price, Georgia                     Ranking Member
    Duncan Hunter, California            Timothy H. Bishop, New York
    Scott DesJarlais, Tennessee          Marcia L. Fudge, Ohio
    Todd Rokita, Indiana                 Gregorio Kilili Camacho Sablan,
    Larry Bucshon, Indiana                 Northern Mariana Islands
    Richard Hudson, North Carolina       Mark Pocan, Wisconsin

                                C O N T E N T S

                                  ----------
                                                                       Page

    Hearing held on March 13, 2014...................................     1

    Statement of Members:
        Courtney, Hon. Joe, Ranking Member, Subcommittee on Workforce
          Protections................................................     8
            Prepared statement of....................................     8
        Walberg, Hon. Tim, Chairman, Subcommittee on Workforce
          Protections................................................     1
            Prepared statement of....................................     7

    Statement of Witnesses:
        Carrato, Thomas, President, Health Net Federal Services,
          Arlington, VA..............................................    19
            Prepared statement of....................................    21
        Goldstein, David, Shareholder, Littler Mendelson P.C.,
          Minneapolis, MN............................................    34
            Prepared statement of....................................    36
        Graves, Fatima, G., Vice President for Education and
          Employment, National Women's Law Center, Washington, DC....    27
            Prepared statement of....................................    29
        Kirschner, Curt, Partner, Jones Day, The American Hospital
          Association, San Francisco, CA.............................    10
            Prepared statement of....................................    13

    Additional Submissions:
        Mr. Courtney:
            United States Government Accountability Office (GAO),
              report TRICARE Multiyear Surveys Indicated Problems
              with Access to Care for Nonenrolled Beneficiaries......    50
        Ms. Graves:
            Prepared statement of....................................   158
        Chairman Walberg:
            Letter dated February 3, 2014, from Parkinson, Mark,
              President and CEO, American Health Care Association
              (AHCA).................................................    44
            Letter dated March 11, 2014, from Perez, Thomas, E.,
              Secretary of Labor.....................................     3
            Letter dated December 6, 2013, from Pollack, Rick,
              Executive Vice President, American Hospital Association    42
            Letter dated April 3, 2013, from Waligora, Larry,
              Chairman, Association of Federal Health Organizations..   166

                          H.R. 3633, PROTECTING HEALTH
                         CARE PROVIDERS FROM INCREASED
                          ADMINISTRATIVE BURDENS ACT

                                  ----------

                            Thursday, March 13, 2014

                           House of Representatives,

                     Subcommittee on Workforce Protections,

                   Committee on Education and the Workforce,

                                Washington, D.C.

                                  ----------

        The subcommittee met, pursuant to call, at 10:08 a.m., in
    Room 2175, Rayburn House Office Building, Hon. Tim Walberg
    [chairman of the subcommittee] presiding.
        Present: Representatives Walberg, Kline, DesJarlais,
    Rokita, Bucshon, Hudson, Courtney, Fudge, and Pocan.
        Staff present: Janelle Belland, Coalitions and Members
    Services Coordinator; Molly Conway, Professional Staff Member;
    Ed Gilroy, Director of Workforce Policy; Christie Herman,
    Professional Staff Member; Benjamin Hoog, Senior Legislative
    Assistant; Marvin Kaplan, Workforce Policy Counsel; Nancy
    Locke, Chief Clerk; James Martin, Professional Staff Member;
    Daniel Murner, Press Assistant; Brian Newell, Deputy
    Communications Director; Krisann Pearce, General Counsel;
    Alissa Strawcutter, Deputy Clerk; Alexa Turner, Legislative
    Assistant; Joseph Wheeler, Professional Staff Member; Tylease
    Alli, Minority Clerk/Intern and Fellow Coordinator; Jody
    Calemine, Minority Staff Director; Melissa Greenberg, Minority
    Staff Assistant; Eunice Ikene, Minority Staff Assistant; Brian
    Kennedy, Minority Senior Counsel; Brian Levin, Minority Deputy
    Press Secretary/New Media Coordinator; Richard Miller, Minority
    Senior Labor Policy Advisor; Megan O'Reilly, Minority General
    Counsel; Michael Zola, Minority Deputy Staff Director; and Mark
    Zuckerman, Minority Senior Economic Advisor.
        Chairman Walberg. A quorum being present, the subcommittee
    will come to order. Good morning. I would like to welcome our
    guests and thank our witnesses for being with us as we discuss
    H.R. 3633, the Protect Health Care Providers from Increased
    Administrative Burdens Act.
        The bill is a result of the Committee's continued oversight
    of the Department of Labor, which shed light on an
    unprecedented effort by the Office of Federal Contract
    Compliance Programs (OFCCP) to exert jurisdiction over health
    care providers who participate in certain federal programs.
    H.R. 3633 would rein in this executive overreach, prevent an
    administrative nightmare for health care providers, and help
    some of the nation's most vulnerable citizens maintain access
    to care.
        OFCCP is responsible for enforcing federal
    nondiscrimination and affirmative action requirements on
    federal contractors. Today's discussion isn't about whether we
    support the important policies that the agency enforces. No one
    should be denied because of their--denied employment because of
    their gender, their disability, race, or religion. All
    employers have a moral and legal obligation to provide a work
    environment free of discrimination, including those who receive
    taxpayer dollars. The goal of our oversight and the legislation
    is to ensure the agency does its job effectively and
    responsibly.
        In the past, we have encouraged OFCCP to streamline the
    myriad of requirements federal contractors must follow. As one
    witness from St. Jude Children's Hospital testified, the
    current regulatory scheme is, quote--``all stick and no
    carrot,'' end quote. Simplifying the process would strengthen
    the rights of workers by making it easier for employers to
    understand their responsibilities and comply with the law.
        Workers, employers, and taxpayers would be better served if
    OFCCP spent its time improving the current regulatory structure
    rather than unilaterally imposing a broken system on more
    workplaces. Yet that is precisely what the agency is trying to
    do, by exerting jurisdiction over hospitals and other health
    care providers who see patients covered by various federal
    programs, such as TRICARE and the Federal Employee Health
    Benefits Program.
        As a result of the bipartisan concerns addressed in this
    legislation, the Department of Labor proposed, earlier this
    week, a limited delay of its regulatory overreach. In a letter
    to the Committee leadership, Secretary Perez promised a five
    year moratorium of new OFCCP enforcement activities against
    TRICARE providers.
        [The information follows:]

        [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        Chairman Walberg. Without objection, this letter will be
    included in the hearing record. Hearing no objection, it will
    be included.
        While we welcome this development, it is ironic the
    Secretary's letter refers to a law that includes specific
    language stating health care providers in TRICARE are not
    subcontractors. This law was enacted after the department took
    action against a Florida hospital. Regardless of any statutory
    ambiguity the administration thinks exists, the will of
    Congress is clear: OFCCP interference in TRICARE must stop.
        While I appreciate the Secretary's response and attempt to
    address it with a workable solution--and I say that sincerely
    and have appreciated the conversations with Secretary Perez--I
    truly believe the Secretary's letter may have convinced some to
    withhold and even withdraw early support from the bill.
        But I have asked my colleagues, aren't you concerned about
    what happens five years from now? Does this letter offer
    TRICARE providers the long-term certainty they need? What about
    those who serve seniors through Medicare, or those who serve
    federal employees, both noticeably absent from this moratorium.
    If OFCCP intends to regulate TRICARE providers, it can just as
    easily impose its will on other federal programs, as well.
        At a recent hearing, the senior Democratic member of the
    subcommittee commended a witness for, and I quote--``raising
    some important issues about the impact on programs that help
    our TRICARE military retirees and active duty folks in terms of
    making sure that we maintain access for hospital services,''
    end quote.
        Our colleague then expressed the desire to, quote--``work
    out some of the kinks revealed during the hearing.'' And I must
    admit that my colleague has attempted to do that. But I am
    honestly disappointed to say the kinks we discussed in December
    still exist, despite the Secretary's letter.
        If the Secretary has accomplished anything he has signaled
    to our TRICARE providers the day of reckoning is only delayed.
    Any sensible provider will use these few years to decide
    whether it is in their best interest to continue operating in a
    TRICARE network. Many may decide the administrative burden
    looming on the horizon is simply too much to bear.
        As a result, veterans, servicemembers, and their families
    will lose access to care. Let me repeat that. As a result of
    the department's policy, veterans, servicemembers, and their
    families will lose access to care; maybe not now, but soon.
        As policymakers, we shouldn't accept political half-
    measures that merely kick the can down the road. The American
    people expect better.
        However, it is my hope we can continue working together,
    and we will, to provide a lasting solution to this problem not
    just for our active and retired military service personnel, but
    also for our seniors and the men and women who serve in the
    federal workforce. H.R. 3633 provides the long-term solution
    they, and their families, deserve.
        I will now yield to our distinguished colleague, the senior
    Democratic member of the subcommittee, Representative Courtney,
    for his opening remarks.
        [The statement of Chairman Walberg follows:]
        Good morning. I'd like to welcome our guests and thank our
    witnesses for being with us as we discuss H.R. 3633, the Protecting
    Health Care Providers from Increased Administrative Burdens Act.
        The bill is the result of the committee's continued oversight of
    the Department of Labor, which shed light on an unprecedented effort by
    the Office of Federal Contract Compliance Programs to assert
    jurisdiction over health care providers who participate in certain
    federal programs. H.R. 3633 would rein in this executive overreach,
    prevent an administrative nightmare for health care providers, and help
    some of the nation's most vulnerable citizens maintain access to care.
        OFCCP is responsible for enforcing federal nondiscrimination and
    affirmative action requirements on federal contractors. Today's
    discussion isn't about whether we support the important policies the
    agency enforces. No one should be denied employment because of their
    gender, disability, race, or religion. All employers have a moral and
    legal obligation to provide a work environment free of discrimination,
    including those who receive taxpayer dollars.
        The goal of our oversight and the legislation is to ensure the
    agency does its job effectively and responsibly. In the past we've
    encouraged OFCCP to streamline the myriad requirements federal
    contractors must follow. As one witness from St. Jude Children's
    Hospital testified, the current regulatory scheme is ``all stick and no
    carrot.'' Simplifying the process would strengthen the rights of
    workers by making it easier for employers to understand their
    responsibilities and comply with the law.
        Workers, employers, and taxpayers would be better served if OFCCP
    spent its time improving the current regulatory structure, rather than
    unilaterally imposing a broken system on more workplaces. Yet that is
    precisely what the agency is trying to do by asserting jurisdiction
    over hospitals and other health care providers who see patients covered
    by various federal programs, such as TRICARE and the Federal Employee
    Health Benefits Program.
        As a result of the bipartisan concerns addressed in this
    legislation, the Department of Labor announced earlier this week a
    limited delay of its misguided approach. In a letter to the committee,
    Secretary Perez promised a five year delay of new OFCCP enforcement
    activities against TRICARE providers.
        Without objection, the letter will be included in the hearing
    record.
        While we welcome this development, it's ironic the secretary's
    letter refers to a law that includes specific language stating health
    care providers in TRICARE are not subcontractors. This law was enacted
    after the department took action against a Florida hospital. Regardless
    of any statutory ambiguity the administration thinks exists, the will
    of Congress is clear: OFCCP interference in TRICARE must stop.
        The secretary's letter may have convinced some to withhold and even
    withdraw earlier support for the bill. But I have to ask my colleagues:
    Aren't you concerned about what happens five years from now? Does this
    letter offer TRICARE providers the longterm certainty they need? What
    about those who serve seniors through Medicare or those who serve
    federal employees, both noticeably absent from this so-called
    moratorium? If OFCCP intends to regulate TRICARE providers, it can just
    as easily impose its will on other federal programs as well. And can
    someone please explain how a letter from one administration can control
    the actions of another?
        At a recent hearing, the senior Democratic member of the
    subcommittee commended a witness for ``[raising] some important issues
    about the impact on programs that help our TRICARE military retirees
    and active duty folks, in terms of making sure that we maintain access
    for hospital services.'' Our colleague then expressed a desire to
    ``work out some of the kinks'' revealed during the hearing. I am
    disappointed to say the kinks we discussed in December still exist,
    despite the secretary's letter.
        If the secretary has accomplished anything, he has signaled to our
    TRICARE providers the day of reckoning is only delayed. Any sensible
    provider will use these few years to decide whether it's in their best
    interest to continue operating in a TRICARE network. Many may decide
    the administrative burden looming on the horizon is simply too much to
    bear. As a result, veterans, service members, and their families will
    lose access to care. Let me repeat that: As a result of the
    department's policy, veterans, service members, and their families will
    lose access to care. Maybe not now, but soon.
        As policymakers, we shouldn't accept political half-measures that
    merely kick the can down the road. The American people expect better. I
    am disappointed my friend and colleague, Representative Courtney, is no
    longer a cosponsor of this important legislation. However, it is my
    hope we continue working together to provide a lasting solution to this
    problem, not just for our active and retired military service
    personnel, but also for our seniors, and the men and women who serve in
    the federal workforce. H.R. 3633 provides the long-term solution they
    and their families deserve.
        I will now yield to our distinguished colleague, the senior
    Democratic member of the subcommittee, Representative Courtney, for his
    opening remarks.
                                     ______

        Mr. Courtney. Well, thank you, Mr. Chairman. And I thank
    you for your kind words. I have nowhere to go but downhill
    after those nice compliments. And I would just say that, you
    know, to me this is a situation of whether you want to look at
    it as a glass half full or half empty in terms of the movement
    that has occurred from the Department of Labor since the last
    hearing that took place.
        I think it is important, though, to sort of set the context
    for what happened in 2011, when the NDAA was enacted, with
    language which called for the department to withhold
    enforcement through OFCCP. Mr. Kline and I were conferees on
    that measure, and it was in response to real-life concrete
    issues out there with TRICARE access for veterans. Again, I
    have the honor of representing the largest military
    installation in New England, with the Groton sub base 8,000
    sailors. We hold veterans in active duty council meetings that
    my office organizes on a regular basis. And it has been a
    chronic issue in terms of finding providers who accept TRICARE
    coverage and, frankly, has absolutely nothing to do with OFCCP.
        The GAO has been studying this issue for years. And they,
    in fact, just issued an updated report in 2013, where they
    talked about provider acceptance for TRICARE where, again, it
    is lower than Medicare, far lower than Medicare, and lower than
    Medicaid in some instances, which is saying something in terms
    of the aversion that--whether it is--well, hospitals, by and
    large, because of their 501(c)(3) status, almost have to accept
    patients. But frankly, the provider community in an outpatient
    basis, it is a real problem. And I have talked to everyone from
    specialists to dentists, primary care docs who, in many
    instances, just provide free care because they just want to
    avoid the hassle of dealing with TRICARE.
        And, again, it has absolutely nothing to do with OFCCP.
    However, in the context of that chronic finding that has been
    going on here at the Armed Services Committee, in 2011 the
    Committee, through conference, included language which again
    said, you know, we are not gonna try and create another
    obstacle or another barrier for providers in TRICARE. And the
    language was enacted. By the way, you have to give credit. This
    was a Senate initiative, but the House did accept, in
    conference, the language. We acceded to that language.
        So fast forward, we had the hearing recently. And it is
    clear that the Florida case and other actions by the
    department, the department really was not reading the language
    in a way that I think was clear congressional intent. There was
    ``may'' language instead of ``shall'' language; there was some
    disparity they were pointing to in terms of report language
    that was attached to the NDAA. And the agency was still sort of
    chugging forward.
        We also, though, had an intervening event. Which is, we
    have a new Secretary of Labor, who was just confirmed in late
    December, who, in my opinion has really responded to the
    oversight function of this subcommittee, as the Chairman and I
    discussed the other day.
        They issued new rules on OSHA for the grain elevator issue
    that this subcommittee raised, and pulled back the department
    in terms of that complaint which we heard here. And I believe
    the letter which he submitted a couple days ago is, in fact,
    exactly the same type of approach that Secretary Perez has
    signaled in the short time that he has been in office. Again,
    the letter clearly states that they will issue a five year
    moratorium. Any enforcement actions or compliance actions will
    be suspended. And he has personally told me that the Florida
    case will be withdrawn. And I want to make sure that is
    absolutely crystal clear on the record.
        Again, this is a letter. This is not a stipulated judgment
    that, you know, is entered in front of a judge. But there is no
    question the good faith that the Secretary has exercised in the
    last couple of months--and frankly, I think it is time that,
    you know, he is a former legislator, by the way--he really
    respects the legislative branch. And he worked for Senator
    Kennedy. He has made it clear that he does not regard us as the
    enemy or as a, you know, entity that should just be sort of
    overlooked. And I frankly think we should approach this as a
    glass half-full. That, in fact, five years is a long time in
    terms of this administration will be long gone in five years.
        There will be who knows in the White House, in the
    Secretary of Labors. It is without prejudice, everybody retains
    all their rights in terms of whatever sort of view of the NDAA
    language that is on the books. And that we should, frankly,
    continue to engage him on whether or not there are issues
    regarding Medicare or FEHBP. This is not a person who is taking
    the attitude that, you know, he will not listen or talk or
    discuss with the Congress.
        So based on that, I am willing to reward good behavior. And
    I am willing to step back from this legislation and embrace the
    good faith that he has exercised. And also, at the same time,
    recognize that the OFCCP has done great work in terms of
    opening up opportunities for women, for minorities and for
    disabled veterans, which I am sure we are gonna hear from our
    witness today about the fact that is part of their charge--is
    not only to try and create obstacles. I mean, it is the
    complete opposite. If they have actually tried to create
    employment opportunities for disabled veterans and veterans and
    the recent initiative--which, again, is gonna try and sort of
    push contractors to get that unemployment rate for veterans
    down--is, in my opinion, something that we want federal
    taxpayer money to be accomplishing.
        So in any case, I want to thank the Chairman again. I do
    not regard, you know, the efforts of this subcommittee to be
    sort of a partisan, you know, witch hunt kind of thing. It was
    a sincere effort to move forward and try and fix a problem. In
    my opinion, the Secretary has met us halfway and I think we
    should, you know, take a bow, or you should take a bow, for
    your work on this issue. And that we should continue to build
    on that momentum to try and, again, get smarter policy that
    accomplishes the goals that we all want.
        And with that, I yield back.
        Chairman Walberg. I thank the gentleman. And I would concur
    that this subcommittee, our effort will be to move policy
    forward in the right direction. And part of that is pushing,
    where necessary, to get further. But also a reality of what is
    possible. And for that reason, we have the hearing today to
    give us more information.
        Pursuant to committee rule 7(c), all members will be
    permitted to submit written statements to be included in the
    permanent hearing record. And without objection, the hearing
    record will remain open for 14 days to allow statements,
    questions for the record and other extraneous material
    referenced during the hearing to be submitted in the official
    hearing record.
        It is now my pleasure to introduce our distinguished
    witnesses. Mr. Curt Kirschner is a partner at Jones Day in San
    Francisco, California. What is the weather out there? Never
    mind. And is testifying on behalf of the American Hospital
    Association.
        Mr. Thomas Carrato--did I get that close?
        Mr. Carrato. Yes, sir.
        Chairman Walberg. Is president of Health Net Federal
    Services in Arlington, Virginia. Mr. Carrato retired as a rear
    admiral in the Commissioned Corps of the United States Public
    Health Service. Ms. Fatima Goss Graves serves as the vice
    president for education and employment at the National Women's
    Law Center in Washington, D.C. Welcome. Mr. David Goldstein is
    a shareholder with the firm Littler Mendelson in--it is too
    cold to speak--Minneapolis, Minnesota. Mr. Chairman, help me
    with that Minnesota stuff.
        Mr. Kline. [Off mike.]
        Chairman Walberg. Thank you. Before I recognize each of you
    to provide your testimony, let me briefly explain our lighting
    system. And I think I will be brief on that. It is like a
    traffic light, as you know. You will have five minutes to give
    your testimony. We will try to keep as close to that as
    possible, and you will help me if you will. When the light
    turns yellow you have a minute left. When it is red, wrap up as
    quickly as possible. We will hold that policy for our
    subcommittee members, as well, under their questioning.
        That being said, Mr. Kirschner we welcome you and recognize
    you for five minutes of testimony.

       STATEMENT OF MR. CURT KIRSCHNER, PARTNER, JONES DAY, SAN
     FRANCISCO, CA (TESTIFYING ON BEHALF OF THE AMERICAN HOSPITAL
                              ASSOCIATION)

        Mr. Kirschner. Good morning, Chairman Walberg, Ranking
    Member Courtney, and distinguished members of the subcommittee.
    My name is Curt Kirschner, and I am a partner in the Jones Day
    law firm. Today, I am testifying on behalf of the American
    Hospital Association in support of H.R. 3633, the Protecting
    Health Care Providers from Increased Administrative Burdens
    Act. A more thorough discussion of the AHA's support of the
    bill is included in written testimony submitted to the
    subcommittee, which I request be introduced into the record.
        In my oral comments today, I wanted to explain why, from
    the AHA's perspective, H.R. 3633 remains an important bill to
    be introduced and why, in our view, the DOL's proposal is
    insufficient. H.R. 3633 will clarify that hospitals are not
    subject to the OFCCP's jurisdiction solely as a result of their
    participation in Medicare, TRICARE, or the Federal Employees
    Health Benefit Program, also known as FEHBP.
        Previously, OFCCP has acknowledged in its own internal
    directives that it does not have jurisdiction over hospitals
    that treat beneficiaries of these federally-funded plans. More
    recently, however, the OFCCP rescinded those directives and
    sought to expand its jurisdiction over health care providers
    based solely on their participation in these programs. I had
    the opportunity to appear before the subcommittee last
    December, where I offered testimony demonstrating that the
    OFCCP's assertion of jurisdiction over hospital providers in
    these circumstances is inconsistent with both federal law and
    regulations.
        Moreover, the OFCCP has not given any reasonable
    explanation for its shifting position. The only recent relevant
    legal change is the one cited by the Chairman, which is
    Congress' adoption, in 2011, of section 715 of the National
    Defense Authorization Act, which explicitly sought to preclude
    OFCCP jurisdiction over hospitals participating in TRICARE.
    Despite this statute, the OFCCP continues to assert
    jurisdiction over TRICARE providers. And that is true, despite
    the fact that the DOL has now said there may be a moratorium on
    enforcement. They are still asserting jurisdiction over the
    providers.
        The agency's continuing attempts to circumvent the NDAA
    confirm the need for legislation placing clear limits on the
    OFCCP's jurisdiction. The OFCCP proposes an alternative to H.R.
    3633, which is a vaguely-defined, case by case basis to
    determine jurisdiction. As best as the AHA can tell, the OFCCP,
    under this approach, attempts to distinguish between hospitals
    that participate in fee-for-service plans from those that
    participate in managed care plans under these federally-funded
    programs. From the perspective of America's hospitals, this is
    a distinction without a difference.
        Fee-for-service plans and managed care plans are simply
    different mechanisms for reimbursing health care providers for
    the care that they provide to their patients; in this case,
    servicemembers, federal employees, and their families. Under
    any of these plans, the role of the hospital is essentially the
    same. That is, to provide quality care for the plan
    participant. The OFCCP has provided no guidance regarding which
    of the nearly 300 FEHBP plans, and more than 10 TRICARE plan
    options, contain sufficient elements of managed care such that
    a hospital participating in that plan would be deemed to be a
    federal subcontractor.
        Already, Florida Hospital of Orlando and three hospitals
    affiliated with the University of Pittsburgh Medical Center
    have spent years in litigation after refusing to concede to the
    OFCCP's jurisdiction. The AHA urges Congress to clarify the law
    so that hospitals are not forced to choose between submitting
    to the OFCCP's burdensome regulations on the one hand, or
    spending years bogged down in costly legal proceedings on the
    other. The OFCCP's expansionist agenda is forcing hospitals to
    make another difficult choice: whether to provide care to
    family servicemembers and federal employees at all.
        Rather than risk a jurisdictional claim from the OFCCP,
    some hospitals may simply decide to opt out of federally-funded
    health plans, further straining the available provider
    networks. The DOL's proposal contained in this March 11 letter
    is not a solution, in our view. The proposal does not address
    at all the role of FEHBP and Medicare programs. Even for
    TRICARE, the letter assumes federal contractor status of
    hospital providers, despite NDAA 715, and merely delays the
    enforcement of the OFCCP's ambiguous standards, potentially
    asserting jurisdiction over conduct that occurs during that
    five year period.
        In sum, at a time when lowering health care costs is one of
    the nation's top policy concerns, H.R. 3633 would clarify, once
    and for all, that participation in a federally-funded health
    benefit program does not subject hospitals to the OFCCP's
    jurisdiction. The AHA urges Congress to pass this important
    bill.
        Thank you for the opportunity to provide these comments to
    the subcommittee.
        [The statement of Mr. Kirschner follows:]

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        Chairman Walberg. Thank you.
        And now we turn to Mr. Carrato for your five minutes of
    testimony. Thank you.

    STATEMENT OF MR. THOMAS CARRATO, PRESIDENT, HEALTH NET FEDERAL
                        SERVICES, ARLINGTON, VA

        Mr. Carrato. Great. Chairman Walberg, Ranking Member
    Courtney, distinguished members of the Committee, thank you for
    the opportunity to testify on efforts to expand the
    jurisdiction of the Office of Federal Contract Compliance
    Programs. Classifying TRICARE network providers as federal
    subcontractors poses significant issues for the TRICARE
    program, our network providers, and the beneficiaries we
    jointly serve. Appreciate the opportunity to address this issue
    today.
        Health Net Federal Services provides physical and
    behavioral health care services to the Department of Defense
    and the Department of Veterans Affairs, among others. These
    programs include TRICARE, the DOD's Military Family Life
    Counseling Program, and the VA's patient-centered Community
    Care Program. We have watched the legal action involving OFCCP
    with great concern. I don't want to focus on legal arguments or
    litigation. The issue I want to address is how will OFCCP's
    position affect TRICARE beneficiaries and our ability to
    provide military members and their families access to high-
    quality providers, especially in locations far from military
    treatment facilities. Our primary concern is not a legal point
    or an argument about the limits of an agency's jurisdiction,
    but how can we best serve our customer and our beneficiaries.
        OFCCP has asserted that providers of health care services
    in our managed care networks are federal subcontractors. We
    firmly believe that they are not subcontractors, and that any
    attempt to classify them as such will have significant negative
    impact on the ability of TRICARE beneficiaries to obtain high-
    quality accessible medical care. The risk for TRICARE is
    twofold. The first is that we will have difficulty getting
    providers to join our networks. Providers sign contracts with
    us and not the federal government. They may not be willing or
    able to shoulder the additional burdens of OFCCP compliance.
        The second risk is that if OFCCP is successful, instead of
    assuming the burden of compliance, providers will leave our
    networks. There are 55 sole community hospitals and 151
    critical access hospitals in our TRICARE network. If any of
    those left it would leave a significant gap in access that
    would impact military families and the military member. We
    require all of our providers, as part of their contract, to
    adhere to all state, federal and local laws, including any
    applicable affirmative action laws. We believe expanding
    OFCCP's jurisdiction over TRICARE will make it more difficult
    to build and retain provider networks.
        Ultimately, this will mean fewer options for the military
    members, families and retirees who rely on TRICARE, and will
    significantly limit their ability to obtain the level of care
    they need from a provider of their choice. Health Net believes
    that to ensure military beneficiaries have ready access to
    needed health care services providers in TRICARE networks must
    be exempted from the OFCCP regulation. The uncertainty that
    currently exists in the law continues to negatively affect our
    ability to provide high-quality, accessible health care for
    millions of our nation's most deserving citizens, the men and
    women of our uniform services, and their families.
        Thank you for your time. I am prepared to answer any
    questions you may have.
        [The statement of Mr. Carrato follows:]

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        Chairman Walberg. Thank you.
        Ms. Graves, we recognize you for your five minutes of
    testimony. Thank you for being here.

        STATEMENT OF MS. FATIMA GOSS GRAVES, VICE PRESIDENT FOR
        EDUCATION AND EMPLOYMENT, NATIONAL WOMEN'S LAW CENTER,
                  WASHINGTON, D.C. (MINORITY WITNESS)

        Ms. Graves. Thank you. Thank you, Chairman Walberg, Ranking
    Member Courtney and distinguished members of the subcommittee.
    Thank you for the opportunity to testify today on the important
    topic of civil rights obligations of federal contractors and
    subcontractors.
        Over the last 40 years, the National Women's Law Center has
    been involved in virtually every major effort to secure and
    defend women's legal rights and equal opportunity in the
    workplace. And I am pleased to continue that work today by
    speaking about the key role that civil rights enforcement plays
    in ensuring equal opportunity for American workers.
        I will begin with some background on the Office of Federal
    Contracts Compliance Programs enforcement. For nearly 50 years,
    the federal government has operated with the long-standing
    principle that companies that have the privilege of profiting
    from doing business with the federal government should not be
    permitted to discriminate in employment.
        And this is for good reason. The taxpayer dollars used to
    buy goods and services from companies simply should not support
    discrimination. And the many federal contractors that play by
    those rules should not have to compete at a disadvantage with
    those who do discriminate. So the important work done by OFCCP
    in enforcing these nondiscrimination obligations also helps
    employers tap into a diverse pool of talent that leaves them
    and the broader economy stronger. OFCCP's measures require that
    federal contractors take notice of race and gender and
    disability and protected veteran status in the course of
    formulating policies designed to foster equal opportunity.
        These measures require that contractors not discriminate,
    that they take affirmative steps to ensure a diverse workplace,
    and that they document these steps. And these steps are
    directly related to increasing employment opportunities and
    ensuring nondiscrimination. By requiring that contractors take
    appropriate steps to document employment practices, OFCCP is
    able to affirmatively assess whether there are indicators of
    discrimination. And in turn, through the process of record-
    keeping and data collection and analysis, an employer can
    engage in a self-evaluation that may prompt it to self-correct
    its own unfair practices.
        And at the very least, both OFCCP and federal contractors
    will have the data that they need to track progress in
    providing equal employment opportunities. It is worth noting
    that few contractors are actually subject to an OFCCP
    affirmative compliance review. Only about 4,000 compliance
    reviews are conducted each year out of about 170,000 contractor
    establishments, which amounts to around a 2 percent chance of
    being reviewed. And only federal contractors and subcontractors
    that have at least 50 employees and at least 50,000 in contract
    dollars are required to develop affirmative action plans. These
    are the plans that help contractors identify and analyze
    potential problems in the contractor's workforce.
        So the systematic approach to civil rights complaints that
    OFCCP takes, both historically and currently, helps to improve
    opportunities for a wide range of workers. Studies that have
    assessed the effective Executive Order 11246 have indicated
    that the makeup of federal contract workforces changed
    significantly in the years following the issuance of the
    executive order. One study of over 70,000 federal contractors
    found that female employment by federal contractors increased
    by over 15 percent between 1974 and 1980, while it rose by only
    2 percent in non-federal contractor settings.
        And throughout the years, OFCCP has implemented a number of
    initiatives that have aided in the integration of the workforce
    in industries such as construction, in higher education,
    mining, ensuring opportunity in sectors with long histories of
    unfair treatment in hiring, promotion, and compensation. For
    example, in 1975, pursuant to a legal settlement reached with
    the National Women's Law Center, OFCCP targeted hiring and
    employment practices for women in colleges and universities
    around the country, improving opportunities for women in higher
    education.
        And it is measures like these that have really strengthened
    American businesses considerably and made them more effective.
    Moreover, OFCCP's current strategic priorities, especially its
    focus on pay discrimination, its focus on opening opportunities
    in high-wage occupations like construction, the new regulations
    for veterans and for persons with disabilities, these all
    follow in that same tradition. In sum, the key role that OFCCP
    has played in improving economic security for workers and their
    families really cannot be overstated. The OFCCP process has
    expanded opportunities for workers over time, has made federal
    contracting more efficient, and has strengthened businesses.
        Thank you again for the opportunity to be here today, and I
    look forward to any questions.
        [The statement of Ms. Graves follows:]

        [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        Chairman Walberg. Thank you.
        Now, Mr. Goldstein, we recognize you for your testimony.

        STATEMENT OF MR. DAVID GOLDSTEIN, SHAREHOLDER, LITTLER
                    MENDELSON P.C., MINNEAPOLIS, MN

        Mr. Goldstein. Thank you, Chairman Walberg, Ranking Member
    Courtney, distinguished members of the Committee. Thank you for
    this opportunity to testify. I have a deep personal sense of
    the importance and the history of this Congress. And,
    accordingly, it is a great honor to be here today.
        I am a shareholder in the Minneapolis office of Littler
    Mendelson. I am speaking to you today on my own behalf and not
    on behalf of my firm. I have represented government contractors
    in connection with OFCCP compliance for over 25 years. Like
    most of my clients, I believe in the importance of equal
    employment opportunity and in the importance of diversity in
    our workplaces. I believe it is essential to the success of our
    businesses. Accordingly and, again, like most of my clients, I
    support the basic mission of the OFCCP.
        In recent years, there has been a significant controversy
    regarding OFCCP's efforts to assert jurisdiction over health
    care providers. One of the arguments that the OFCCP has
    asserted in support of jurisdiction over health care providers
    has been providers' participation in TRICARE, the program
    designed to provide health care benefits to members of the
    military and their families. Whether it is good policy to
    impose additional regulations on health care providers at this
    time is a question on which reasonable people can disagree.
    Indeed, it appears that there are differences of opinion
    regarding this issue between executive agencies within the
    current administration.
        The Department of Defense and the Office of Personnel
    Management have expressed a belief in the importance of being
    able to contract with providers to offer health care services
    for the military and federal employees without having to
    subject these providers to OFCCP's regulations. These agencies
    believe, correctly I think, that imposing such requirements
    limits the number of providers that are willing to offer such
    services. The OFCCP, on the other hand, believes that it needs
    to regulate such providers, arguing that it can do so without
    imposing unreasonable burdens.
        Other individuals are testifying today regarding the merits
    of this debate. I am here, though, because I understood this
    issue to have been resolved, at least with regard to TRICARE,
    when Congress passed the National Defense Authorization Act for
    fiscal year 2012. That measure included language that was
    widely and reasonably understood as putting an end to this
    debate by providing that the OFCCP could not exercise
    jurisdiction based on providers' participation in TRICARE. This
    was a very important outcome because it appeared to provide
    health care providers with certainty, and allowed them to
    decide what to do.
        I can tell you that during this period of uncertainty
    regarding OFCCP jurisdiction my colleagues and I spent a great
    deal of time discussing with health care clients the costs and
    burdens that come with OFCCP compliance. We see, we actually
    see, health care providers making decisions not to participate
    in TRICARE and in other programs and arrangements because the
    costs of compliance are simply greater than the benefits of
    participation. And we are talking not only about financial
    costs of compliance, but also how OFCCP regulations impact the
    ways in which providers deliver services to their patients.
        For now, OFCCP is continuing in its efforts to establish
    jurisdiction over TRICARE participants through litigation
    against a particular health care provider, Florida Hospital of
    Orlando, which has disputed OFCCP's assertion of jurisdiction
    based on TRICARE. To outside observers, the OFCCP's continued
    pursuit of TRICARE jurisdiction, even after Congress has acted,
    is shocking. The Florida hospital case is still working its way
    through administrative proceedings. We are likely years away
    from a final judicial decision. In the meantime, providers
    remain uncertain as to their obligations should they agree to
    participate in TRICARE.
        The interests of health care providers, their patients,
    including members of the military, federal employees and their
    families, as well as taxpayers would be best served by a final
    resolution--a final resolution--of the TRICARE issue. I believe
    that this final resolution came from Congress in December 2011.
    Ideally, the Department of Labor would accept this and stop
    fighting against the fact that Congress has already spoken.
    Absent that, the best option would be passage of the Protecting
    Health Care Providers from Increased Administrative Burdens
    Act.
        The third best option would be to let the courts finally
    resolve this issue by letting Florida Hospital go through to a
    resolution. By contrast, the proposal offered by the Department
    of Labor in its letter of March 11, 2014 represents neither a
    compromise nor a positive step. To the extent that the
    department's proposal would not end the Florida Hospital
    litigation and does not represent commitment by the OFCCP to
    relinquish its claims of jurisdiction over TRICARE participants
    in non-audit contexts such as complaint procedures, nothing is
    being resolved. On the other hand, the extent that the
    department's proposal would end the Florida Hospital litigation
    and, therefore, prevent a final resolution of the issue in the
    courts, I am personally concerned.
        It has taken more than five years for the Florida Hospital
    case to get to the point where it is now. A final determination
    may still be years away, but at least it is on the horizon. The
    Department of Labor's proposal, on the other hand, means at
    least five more years of uncertainty. And those are five more
    years during which health care providers are going to remain on
    the sidelines and not participate in programs that may subject
    them to OFCCP's jurisdiction. And finally, accepting this
    proposal would reinforce a very disturbing trend that
    contractors have seen at the OFCCP in the context of compliance
    reviews, and that is an indifference by the agency to the
    letter of the law when, in its judgment, the letter of the law
    is inconsistent with the agency's goals.
        Thank you, and I look forward to answering any questions
    you may have.
        [The statement of Mr. Goldstein follows:]

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        Chairman Walberg. Thank you. I thank each of the panelists
    for your testimony. Without objection, I would submit two
    letters from the American Hospital Association and the American
    Health Care Association for the record. Both of these
    organizations express their support for H.R. 3633.
        [The information follows:]

        [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        Chairman Walberg. Hearing none, they will be part of the
    record.
        Mr. Kirschner, as we have discussed, the Secretary of Labor
    has proposed limiting OFCCP's enforcement activities for five
    years by instructing OFCCP to not initiate compliance audits
    for TRICARE providers, though the letter calls them
    subcontractors, and closing any open or scheduled compliance
    audits. OFCCP will also provide information, materials and
    technical assistance training to TRICARE providers during this
    five year period. At the end of the five year delay, OFCCP will
    begin conducting compliance audits at TRICARE hospitals and
    health care providers.
        OFCCP will also continue taking the position in litigation
    that TRICARE providers are subcontractors. On the basis of
    that, in your opinion, does this proposal address the problems
    you have described and negate the need for the Protecting
    Health Care Providers from Increased Administrative Burdens
    Act?
        Mr. Kirschner. Not at all. While we appreciate Secretary
    Perez's efforts to try to address the situation, we believe
    that what the Secretary has outlined in his letter does not
    really address in any substantive way the concerns that the AHA
    has brought forward. First of all, the letter does not at all
    address the FEHBP or Medicare Part C and D. So those very
    significant programs would be left unaddressed. For example,
    the FEHBP has more than 8 million participants in it seeking
    care at hospitals all across the country. That would be
    unaddressed by this issue.
        Even with respect to TRICARE, section 715 of the NDAA, we
    believed, answered this question already by saying that there
    isn't contractor status for providers under TRICARE. Secretary
    Perez's letter assumes that they are contractors, and
    essentially just kicks the can down the road for enforcement.
    What America's hospitals need is greater clarity about whether
    they are or are not contractors. And in our view, under the
    regulations, under the statutes that are applicable,
    participants in TRICARE should not be considered to be federal
    contractors any more than participants in FEHBP or Medicare.
        Chairman Walberg. Thank you.
        Mr. Carrato, referencing the letter from the Secretary of
    Labor again, do you believe a five year moratorium will provide
    TRICARE providers needed relief and certainty? And secondly,
    how do you foresee the impact of this delay, And maybe more
    importantly, in enforcement affecting the decisions of TRICARE
    providers to remain in your network?
        Mr. Carrato. I concur with the comments from Mr. Kirschner.
    It doesn't solve the problem. It kicks the can down the road. I
    think the fundamental issue is one of the points made by Mr.
    Kirschner, and that is the classification of TRICARE providers.
    When you get into the area of classifying them as
    subcontractors, that brings on a host of additional burden. And
    the uncertainty that the five year moratorium would bring, it
    does leave providers on the sideline. And we are actually
    starting to see this present itself more as we are building the
    network to support the VA's new Patient-Centered Community Care
    program, where we are required to build networks of providers.
        And more and more of our hospital providers are delaying
    decisions or just flatly telling us no. And this is one of the
    reasons they cite.
        Chairman Walberg. Thank you.
        Mr. Goldstein, again going on that train of thought, for
    the record, will this delay of compliance audits specifically,
    while training hospitals in what they need to do for the
    future, will it alleviate the uncertainty hospitals? And
    secondly, will hospitals still have to make the tough decisions
    whether to sign up to care for TRICARE and federal employee
    health benefits patients and, ultimately, likely face OFCCP
    regulation?
        Mr. Goldstein. It does not help the problem, Mr. Chairman.
    There are hospitals that are sitting on the sidelines now,
    unwilling to participate in TRICARE pending a resolution of the
    Florida Hospital of Orlando litigation. The proposal from the
    Secretary of Labor merely says there is no resolution for at
    least five years down the road, and also makes it clear that
    OFCCP is continuing to take the position that the military
    authorization Act did not take away its jurisdiction. So it
    means at least five, and maybe 10, years more of uncertainty
    during which providers are not willing to provide services to
    our servicemen and women and their families.
        Chairman Walberg. Thank you.
        I now recognize, for five minutes of questioning, my
    ranking member and friend, Mr. Courtney.
        Mr. Courtney. Great. Thank you, Mr. Walberg.
        Mr. Goldstein, can you tell me who is gonna be taking the
    oath of office for President in January of 2017?
        Mr. Goldstein. I cannot.
        Mr. Courtney. And let me ask you this. Will it be Barack
    Obama?
        Mr. Goldstein. Not without a constitutional amendment.
        Mr. Courtney. Right. And the likelihood of that happening
    is zero between now and then.
        Mr. Goldstein. I would agree on that.
        Mr. Courtney. That is a really pretty safe assumption?
    Okay.
        And the proposal from the Secretary of Labor, Ms. Graves,
    was for a five year moratorium. Is that correct?
        Ms. Graves. That is right.
        Mr. Courtney. And if we do the math, okay, we are talking
    about 2019 is when this issue could be revisited in terms of
    any type of enforcement on it. Isn't that your understanding?
        Ms. Graves. That is correct.
        Mr. Courtney. And there will be a new President. And since
    the Secretary of Labor serves at the will of the President
    there will actually be a new Secretary of Labor in place at
    that point. Isn't that correct?
        Ms. Graves. That is right.
        Mr. Courtney. Okay. You know, I don't know, maybe it is my
    Irish-Catholic upbringing but, you know, our fatalism says that
    there is no such thing as perfect certainty in life. But a five
    year moratorium in terms of audit, given the fact that pushes
    this well beyond the end date of this administration, would
    seem to suggest that this issue really is being, I think,
    pretty dramatically dealt with by the Secretary in terms of any
    of the issues that people are concerned about. Isn't that
    correct, Ms. Graves?
        Ms. Graves. Yes, I think so. And I think it provides the
    Department of Labor an opportunity to provide training and
    outreach and additional clarity for contractors.
        Mr. Courtney. Thank you. Now, you know, you talked about
    some of the new initiatives by OFCCP in terms of trying to
    protect classes of the population that frankly have struggled
    in terms of employment opportunities. And one of the groups
    that you mentioned was veterans. Can you talk about that in
    terms of OFCCP's advocacy for veterans over the years, disabled
    veterans and certainly now, recently, all veterans?
        Ms. Graves. Well, really importantly, last year OFCCP put
    out new regulations around the administration of the statute
    that requires nondiscrimination and that contractors take
    affirmative steps with regard to protected veterans. So that
    requires contractors to establish hiring benchmarks, and
    conduct overreach and recruitment. And they have been engaged,
    not only just in putting out those regs, but taking the
    additional steps of providing training and outreach to make
    sure that people really understand them.
        Mr. Courtney. And again, that didn't happen out of context.
    I mean, it was because there actually is a real problem out
    there in terms of the nagging higher unemployment for veterans
    versus the rest of the population. And the OFCCP, I think, is
    responding to that in terms of using the contracting, you know,
    precedence as a way of trying to bring that unemployment rate
    down. I mean, isn't that the whole history that led up to the
    new rules?
        Ms. Graves. Absolutely. It is absolutely connected to the
    extraordinary high rates of veteran--high unemployment rates of
    veterans.
        Mr. Courtney. And so, you know, when we talk about this
    agency--which, you know, we have heard today that somehow it is
    sort of, you know, looking for a power grab or jurisdiction--I
    mean, in terms of its history as far as veterans are concerned,
    in fact it is really the opposite. I mean, they have actually
    been out there trying to, again, create opportunities for
    veterans, again, consistent with their history of advocating
    for diversity in the workforce. Isn't that correct?
        Ms. Graves. Right. And I think it is important to think
    about what jurisdiction means. What it means is that the
    contractor then has an obligation to really think about these
    protected categories of workers, and conduct outreach and
    recruitment. So this is absolutely tied to the employment
    opportunities for veterans and, you know, on the basis of race
    and sex and disability, as well.
        Mr. Courtney. Great. Thank you.
        So my time is almost up, Mr. Chairman. I want to enter into
    the record the GAO report which came out last April which,
    again, was on the question of TRICARE challenges in terms of--I
    will get it here somewhere, but--okay, the multiyear surveys
    indicate problems with access to care for non-enrolled
    beneficiaries. And I would actually like to point to, again,
    the section which talks about provider acceptance of TRICARE.
    And this goes back well before this administration. Forty-one
    percent, only 41 percent, of mental health providers in this
    report have expressed a willingness to take TRICARE.
        And it has absolutely nothing to do with OFCCP. There is a
    chronic issue of reimbursement and complexity in terms of
    interacting with--and, again, I have worked with Health Net and
    they have done good work with my caseworkers out there. But,
    you know, there are much bigger problems out there in terms of
    what I am hearing from providers than the fact that, again,
    there is a Florida case which will be withdrawn. Which, you
    know, in 25 years in practice I always thought a withdrawn case
    by the other side was actually a good thing. But I guess, you
    know, some people view it differently. But anyway, I have asked
    that be admitted to the record.
        [The information follows:]

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        Chairman Walberg. Without objection? Hearing none, it will
    be admitted. I thank the gentleman.
        Now I recognize my good friend and colleague, NASCAR
    colleague, from North Carolina, Mr. Hudson.
        Mr. Hudson. Thank you, Mr. Chairman. And I am a proud
    supporter of this bill. And, frankly, I am outraged by the
    arrogance and the overreach by this agency, OFCCP. Congress
    clearly signaled our intent. And to paraphrase one of my
    colleagues, Congress doesn't pass suggestions, Congress doesn't
    pass things that we hope will happen. Congress passes laws. And
    the law has to be followed, Mr. Chairman, and the law was made
    very clear in 2011.
        And the response from this agency was Congress has
    overstepped their bounds by telling us what we can do. That is
    outrageous. And now the response is, from the Secretary, well,
    we will do a moratorium for five years so we won't violate the
    intent of Congress for five years. But at the end of the five
    years, the heck with what Congress passed because we don't have
    to follow the law. And, frankly, that is outrageous, Mr.
    Chairman.
        But I will address my question to Mr. Kirschner. You know,
    I travel my district in North Carolina. We have got rural
    hospitals that are, frankly, dealing with a lot of costs due to
    compliance with regulations and laws from the state and federal
    level. And, frankly, these hospitals are struggling. And with
    the cost of Obamacare, the uncertainty created by the new
    health care law and, frankly, having this regulation hanging
    over their head is just one more burden.
        And what I guess my question to you, Mr. Kirschner, would
    be could you highlight what some of the burdens and the
    regulations that have to do with nondiscrimination, federal
    workforce compliance that hospitals have to deal with anyway?
    What are the costs in time and resources that are involved with
    complying with the law the way it exists now?
        Mr. Kirschner. The American Hospital Association is deeply
    concerned about the survival rate of hospitals, particularly
    those in rural areas. Hospitals, on average, spend
    approximately 20 percent of their revenues on administrative
    overhead already, separate from the OFCCP compliance. There are
    any number of laws that are applicable to them and will remain
    applicable: Title VII, state nondiscrimination laws, the
    Americans with Disabilities Act, FMLA, the NLRA. There is a
    whole alphabet soup of laws that will remain applicable.
        In addition, there is oversight provided by HHS and the
    Office of Civil Rights that is applicable specifically to
    hospitals that will remain. So there is a lot of oversight
    already and nondiscrimination obligations that exist for every
    hospital.
        To become a federal contractor then imposes a whole new
    scheme of obligations that non-federal contractors do not have
    to comply with. There may be some underlying similarities with
    respect to nondiscrimination compliance, but there is a
    reporting obligation for federal contractors that other
    employers do not have to do.
        There is a variance in terms of the estimate of hours per
    time that will take. There was a reference earlier to the St.
    Jude Medical Center's prior testimony that said that there is
    hundreds and hundreds of extra hours that are necessary just
    due to compliance with the recordkeeping obligations of the
    OFCCP.
        So the added burden is really the concern that we have,
    where hospitals may be unknowingly and unclearly becoming
    federal contractors despite what Congress has said in section
    715 of the NDAA and, in our view, the OFCCP's very vague and
    ambiguous standards for what makes you a federal contractor.
        Mr. Hudson. Well, I appreciate that. And it is stunning to
    think about 20 percent cost going towards just compliance. That
    is--you know, you think about any business--and a hospital is a
    business, whether it is a for-profit or not-for-profit
    hospital--in the business of taking care of their patients.
    And, frankly, we have a large TRICARE population, Mr. Chairman,
    in North Carolina in my district. And I want there to be
    incentives for people to provide- for more providers to engage
    in TRICARE.
        And so I appreciate the testimony of the witnesses today.
    And, Mr. Chairman, again, I am very supportive of this
    legislation. I thank you for your work.
        And I will yield back the balance of my time.
        Chairman Walberg. I thank the gentleman.
        And now I recognize my friend and colleague from the great
    state of Ohio, and sharer of the Great Lake Erie, for her five
    minutes.
        Ms. Fudge. Thank you very much, Mr. Chairman. I thank all
    of you for being here today.
        Ms. Graves, you cite in your testimony a study that found
    female employment by federal contractors increased seven times
    as much between 1974 and 1980. A period which includes the
    establishment of OFCCP in 1978. That increase is significantly
    higher than in periods where there was not federal contracting
    settings such as we have today. Do you think that the health
    care industry could benefit from the unique responsibilities
    and enforcement mechanisms of OFCCP, like the affirmative
    action plan?
        Ms. Graves. Well, certainly. You know, to begin with, there
    is clear, documented discrimination based on race and sex in
    the health care industry. There have been a number of studies
    that have talked about that, that have talked about the wage
    gap between male and female physicians, the race discrimination
    that occurs among physicians. But beyond that, diversity in the
    health care workforce is very much tied to the core purpose in
    providing quality patient care. There is evidence that
    diversity in the health care field absolutely improves patient
    care.
        The other thing is that OFCCP is slightly different from
    some of the other agencies because of its affirmative
    enforcement scheme. And this is especially important when we
    are talking about types of discrimination that is difficult to
    detect. So hiring discrimination, pay discrimination, these
    types discrimination the individuals are not as likely to know
    that they have experienced it.
        Ms. Fudge. Thank you very much.
        Mr. Kirschner, in your testimony from December 14, 2013 you
    cited the testimony of Ms. Dana Bottenfeld--Bottenfield. And
    she talked about the frustration she had with affirmative
    action plan procedures. Do you further agree with her testimony
    that she believes that these procedures, these affirmative
    action plans, are important?
        Mr. Kirschner. I am not familiar with the extent that--the
    specific quote that you are referring to from the December
    testimony.
        Ms. Fudge. I am quoting from you.
        Mr. Kirschner. I know that. I am generally familiar with
    her testimony. I would say that four hospitals that have
    knowingly agreed to become federal contractors--and they accept
    the obligations that flow with that--then it is important for
    those hospitals to comply with the law. Which would include
    having affirmative action programs and otherwise complying with
    the OFCCP.
        Ms. Fudge. Thank you very much. So you agree with her
    testimony.
        Mr. Carrato, in your testimony you indicate that you are
    proud to be the longest-serving managed care contractor. And,
    certainly, I know that is important, and I applaud you, as
    well, and congratulate you. Health Net is justified to feel
    this way and I agree, having served the Department of Defense
    and the Veterans Administration for 25 years or better. A high-
    quality product is provided by your company. Do you think that
    some of the pride that you feel may also be a result of meeting
    and exceeding the high standards that are embedded in any
    federal contract, including those requirements enforced by
    OFCCP?
        And I ask that because I think it is very important for us
    to understand we are using taxpayers' dollars, we are held to a
    higher standard and should be held to a higher standard. And
    that it is not an entitlement to do business with the federal
    government. And so I ask the question because since you have
    been so successful that means that you have at least met, and/
    or exceeded, the requirements of a contract.
        Mr. Carrato. Yes. You know, Health Net Federal Services is
    a federal contractor. And we are a federal contractor.
    Certainly, affirmative action and diversity in the workplace we
    have benefited from. We understand the issue of veterans'
    unemployment. We have joined with the White House supporting
    the joining forces effort. We are committed to, you know,
    employing veterans. And we are committed to diversity.
        The issue today is the hospitals and providers that are in
    our network. I think the issue is classification. As network
    providers, they are required, as Mr. Kirschner said, to comply
    with, and we enforce that in our contracts with all affirmative
    action state-local regulation. We just believe that OFCCP
    classifying them as contractors and subcontractors just brings
    additional regulatory burden. And as they are making a business
    decision whether to continue to support our men and women in
    uniform and our veterans, many are staying on the sidelines.
    And most, if not all, are very concerned. And this five year
    moratorium will not alleviate those concerns.
        Ms. Fudge. Well, certainly I disagree.
        But I yield back, Mr. Chairman. My time has expired.
        Chairman Walberg. I thank the gentlelady.
        And now I recognize the distinguished chairman of the
    Education and Workforce Committee, Mr. Kline.
        Mr. Kline. Thank you, Mr. Chairman. Thanks to the witnesses
    for being here today. Mr. Goldstein, real pleasure to see you.
    I know you hated to leave balmy Minnesota to come out here,
    but--
        Mr. Goldstein. To windy Washington.
        Mr. Kline. A sacrifice you are willing to make. Good to see
    you all, and thanks for the testimony.
        I hate that we are in this position. Because I can't speak
    for the Ranking Member, but I think that he and I both believed
    that we had addressed this in the National Defense
    Authorization Act. And, certainly, I believe that the will of
    Congress was made pretty clear in terms of OFCCP's jurisdiction
    here. And yet here we are. We have got a lawsuit in Florida, we
    have got you here, we have hospitals--I am going to get to you
    in just a minute, Mr. Kirschner. A lot of uncertainty out there
    about what they are supposed to do. And the Secretary has said
    he is going to have a moratorium on enforcement.
        The law doesn't go away, the interpretation doesn't go
    away, a subcontract is still a subcontract. But for five years,
    they are not going to enforce it. Although they are apparently
    going to have people helping hospitals to understand how they
    are going to have to comply in five years from now. So I was
    struck a little bit, that, apparently, the suggestion--at least
    it was implied, or I inferred, that the solution here would be
    to have a better President, a better Secretary of Labor and
    then this will go away.
        That is a terrible position for us to be in. It is a
    terrible position for the providers to be in. So it seems to me
    that Congress is going to have to speak again, hence this
    legislation to make it clearer that jurisdiction of OFCCP
    doesn't apply here. It matters--and we have had this discussion
    many times in this Committee and the full Committee--how we
    write laws. And the clearer we are and the more explicit we
    are, the less chance there is for misinterpretation. We have,
    oh, I think it is a couple of million people now employed by
    the federal government in the bureaucracies.
        We have tens of thousands of pages of regulations that come
    every year that individuals and businesses and unions and
    everybody has to read, understand, and try to deal with. But
    when we write law and we think we are being clear about it, and
    we still get in this position, I, and I think many of my
    colleagues, are fairly frustrated. So I want to get to the
    impact, and I am going to go to you, Mr. Kirschner, because you
    mentioned it earlier. This isn't a question of just deciding to
    be nondiscriminatory. This is a question of additional
    reporting, additional paperwork--a burden, if you will--added
    to everything that was already there, all those things you
    talked about earlier, state law and the ADA and all of those
    things, this is added on to that.
        And so you have got providers who, by a couple of testimony
    here, are actively considering or have already considered not
    providing the service for TRICARE, for example. And as somebody
    who had his health care provided by TRICARE and whose family
    did for many years, I would-----that would be very, very
    painful. That would be an awful thing to happen. So can you
    again talk about what this OFCCP jurisdiction is doing to that
    workload.
        And by the way, the moratorium, as I said, doesn't change
    the law. It just changes whether or not they are going to
    enforce the law. But could you address that for us one more
    time again, what happens here and why hospitals are saying we
    don't want to do this?
        Mr. Kirschner. Sure. If a hospital is a federal contractor,
    then there is a whole scheme of regulations that do apply to
    them, ranging from how they track intake of applicants and how
    they report that, how they create reports related to
    affirmative action and other items. And these are done in a
    very particular way, as required by the OFCCP, that is
    unrelated to the normal business operations of the hospital. So
    it is not as if the hospital has its reports that it just has
    to turn over to the OFCCP. Rather, the OFCCP requires the
    hospitals to maintain information and gather information in a
    way unrelated to anything else that they do.
        There are hundreds of hours that are required to be done by
    the hospital just to comply on a regular basis with the OFCCP
    regulations. And when there is an audit, those audits can last
    for years and they can be very time-consuming.
        Mr. Kline. So I see my time is about to expire. So there is
    a legitimate business decision that is going to have to be made
    based on cost in dollars and cost in time. And we are going to
    have people who will suffer. I see my time has expired.
        I yield back.
        Chairman Walberg. You--you may continue, Mr. Chairman. I
    just wanted to have that opportunity to say that to you, and
    recognize the next time I have that opportunity you would--
        Mr. Kline. No, let me be clear here. I yield back.
        [Laughter.]
        Chairman Walberg. I thank the Chairman.
        Now I recognize my friend and colleague from Indiana, Mr.
    Rokita.
        Mr. Rokita. I thank the Chair and I thank the witnesses,
    and good morning to each of you.
        I want to quickly go to Mr. Kirschner here, and just simply
    ask if you had anything to add about Ms. Graves' testimony. It
    was characterized that you agreed with what she was saying, at
    an early on question. Did you want anything else on the record?
        Mr. Kirschner. My statement is that to the extent that a
    hospital or other contractor has an obligation, as a bona fide
    contractor, to comply with an affirmative action program I
    think that is legitimate. But what I don't think is legitimate
    is that if a hospital signs up for a contract, and is told in
    that contract that they are not a federal contractor, has no
    clear knowledge that they are a contractor, and then after the
    fact the OFCCP comes in and says, ``Oh, by the way, for the
    last X number of years you may not have known this, but you
    were a federal contractor and you have been out of compliance
    with the law for years.''
        That is the situation we are trying to clarify and, with
    support of this bill, to make it clear that providers under
    these federally-funded health plans are not federal
    contractors.
        Mr. Rokita. Yes, that we are going to follow the rule of
    law, not the rule of man.
        Mr. Kirschner. Right.
        Mr. Rokita. Yes, thanks. I am getting that sense here at
    the hearing today. It is a shame, though, and I associate my
    comments with the full Committee Chairman, that we have to say
    again what we intended the first time.
        Mr. Goldstein, you note in your testimony, you talked
    about, the Florida Hospital of Orlando case. And, you know, one
    of the reasons we are here today is that the board took, what
    you say was, an unprecedented action. If I understand it right,
    the ALJ initially agreed with the hospital that they weren't
    going to be contractors or subcontractors. And then the full
    board, the review board, then kicked it back down, where it now
    sits at the ALJ level. Can you expand on that? Why is this so
    unprecedented?
        Mr. Goldstein. What happened is, the administrative review
    board originally agreed with Florida Hospital and found that
    OFCCP did not have jurisdiction because of the congressional
    action. It was done and it would have resolved the issue, and
    it would have been clear TRICARE does not create OFCCP
    jurisdiction.
        Mr. Rokita. Yes.
        Mr. Goldstein. OFCCP asked the administrative review board,
    which basically represents the judgment of the Department of
    Labor--asked it for reconsideration. Which, in my experience--
        Mr. Rokita. Which is not unusual. Oh, that is unusual.
        Mr. Goldstein. In my experience, that is very unusual.
        Mr. Rokita. Okay.
        Mr. Goldstein. If not unprecedented, and the ARB granted
    that reconsideration which, again, is very unusual if not
    unprecedented. And in a divided opinion, found that this act of
    Congress did not, in the judgment of three of the board
    members, divest OFCCP of jurisdiction. Sent the case back down
    to an administrative law judge for further proceedings,
    basically delaying the final day when a federal district court
    gets to determine what did Congress actually mean when it
    enacted section 715.
        Mr. Rokita. So when you say ``unprecedented,'' do you mean
    that it is unprecedented within the jurisdiction and
    precedential decisions of the Department of Labor's
    administrative review board? Or within federal government
    agencies, as a whole?
        Mr. Goldstein. To my knowledge, within the ARB; I don't
    know the answer with regard to federal agencies as a whole.
        Mr. Rokita. Okay, thank you.
        Mr. Carrato, thank you for your testimony today. The
    Department of Labor--of course, and the reason why we are
    here--stated TRICARE providers are subcontractors of the
    federal government. I guess what I am wondering, though--and I
    want you to expand on it--they seem to be the moose on the
    table, the Department of Labor. But do other federal agencies
    consider TRICARE providers to be federal contractors? I mean,
    that is to say are there broader issues associated with the
    OFCCP's--
        Mr. Carrato. Yes, there are much broader issues. And I
    think, historically, this question has come up as to how to
    classify providers. And in addition to OFCCP regulation, there
    are a host of flow-down provisions that would flow to federal
    contractors: you know, the FAR, the DFAR, which requires
    certain cost accounting systems, disclosure statements. So
    there would be--if TRICARE providers were, indeed, classified
    as contractors, there would be a host of additional burdens. So
    to my knowledge today, no other federal agency--to include the
    Department of Defense--considers them subcontractors.
        Mr. Rokita. Oh, and I am just thinking about this, I guess.
    That if they were considered ultimately, legally, contractor to
    subcontractors, now they would be subject to the President's
    new executive order on raising the minimum wage.
        Mr. Carrato. Correct.
        Mr. Rokita. Which would have costs as well.
        Mr. Carrato. All flow-down provisions.
        Mr. Rokita. Right. Mr. Kirschner?
        Mr. Kirschner. Yes. If I may just add to that, the
    Department of Defense actually has its own regulation
    classifying providers in TRICARE as not federal contractors. So
    it is not just that they haven't taken a position, but they
    have taken a position contrary to that taken by the OFCCP. And
    the Office of Personnel Management, similarly, has a regulation
    classifying participants in the FEHBP program as not federal
    contractors. And the OFCCP has disagreed with them, as well.
        Mr. Rokita. Rule of law versus rule of man.
        Mr. Chairman, I yield back.
        Chairman Walberg. I thank the gentleman.
        I recognize now a second distinguished representative from
    Indiana, the birthplace of my first two kids, Mr. Bucshon.
        Mr. Bucshon. Thank you very much. Thanks to the panel for
    being here today, and I will give you my background. I was a
    cardiovascular and thoracic surgeon prior to coming to Congress
    in 2010, and have been in the health care industry for 30 years
    since I went to medical school in the mid-1980s. And my wife is
    also a physician, an anesthesiologist, who currently continues
    to practice medicine.
        And, you know, I have recruited physicians, I have
    recruited all kinds of other health care employees as the
    president of my medical group. And so when, Ms. Graves, you
    commented and you made the allegation that the health care
    industry has purposefully continued to discriminate based on
    sex and race and other things I take offense to that. Because I
    think that I would like you to submit, for the record,
    evidence, which you have specifically on the health care
    industry, that there is discrimination. That is not a question.
    So I know you turned your mike on, but I am not asking for a
    response.
        Ms. Graves. Oh, it wasn't a question? Oh.
        Mr. Bucshon. But whatever hearing I go to, whatever
    subject, when I hear people make allegations that may or may
    not be substantiated I always ask witnesses, regardless of the
    subject, to submit their evidence and data to the subcommittee
    and to my personal office to back up those claims.
        Because my wife has been hired by multiple different
    hospitals and she gets paid the exact same amount as any other
    anesthesiologist that they hire. I have hired a female
    cardiovascular and thoracic surgeon for my practice, paid
    exactly the same as the male cardiovascular and thoracic
    surgeons, as are any of the other employees.
        So if you would, for the record, submit the evidence that
    you have that proves what your claim, that there is still
    discrimination.
        Ms. Graves. I would be pleased to do that.
        Mr. Bucshon. Thank you.
        Mr. Carrato, in your testimony your expressed concerns
    about Health Net's ability to provide military members and
    their families access to high-quality providers, especially in
    rural areas and areas far from military treatment facilities,
    where there are already shortages of providers. And I would
    just like to say, in Evansville, Indiana there is a VA clinic
    but there is no VA hospital, and patients have to go to St.
    Louis, which is about three hours away, for surgery if they
    needed that, for heart surgery.
        You mentioned that specialties are already in short
    supply--psychiatry, neurosurgery, and dermatology, for example.
    Could you elaborate on the extent of the shortages and the
    access issues already?
        Mr. Carrato. Certainly. And as you well know, there are
    certain specialties in short supply. You know, adolescent
    psychiatry, dermatology. And as a business decision, providers
    need to make a decision how to titrate their panel of patients.
    And the reimbursement rates, as Mr. Courtney mentioned, don't
    make TRICARE the most attractive payer to participate in. So
    any additional burden or regulation makes our ability to
    recruit and retain providers much more difficult. And it
    essentially is supply and demand.
        And in certain rural areas where we place our military
    installations--you know, Watertown, New York, Fayetteville,
    North Carolina, rural Indiana, as you said--there is not the
    abundance of providers, and they have to make a business
    decision. They have to decide what payers that they want to
    support.
        Mr. Bucshon. Thank you, very much. Because I do represent a
    very rural area. And not only for military veterans, but for
    everyone, access to health care providers, particularly
    specialists, is becoming a critical issue across our nation,
    not only for--again, for people in the military.
        And in my medical practice I had the opportunity to treat
    many veterans. And frequently, if they were requested by the VA
    to be transferred to another facility I did it for free, and
    wrote it off, and got my hospital to do the same. Because I
    didn't feel it was fair that their families and them had to
    travel three hours for heart surgery, when I could do it, you
    know, down the street.
        Mr. Carrato. Right.
        Mr. Bucshon. And so I am going to go on the record and say
    that since I have been in medical practice and in Congress I
    support the ability for military veterans to have a card in
    their pocket and get health care at their facility of choice,
    regardless of whether that is the VA system or private
    facilities, if there is not access to the appropriate VA care
    within a reasonable area around them.
        With that, Mr. Chairman, I yield back.
        Chairman Walberg. I thank the gentleman. I thank the panel
    for your response to our questions and, for our colleagues, the
    questions that you had, hoping leading to greater
    understanding.
        So now I recognize the Ranking Member, Mr. Courtney, for
    his closing remarks.
        Mr. Courtney. Thank you, Mr. Chairman. And, again, I want
    to again tip my hat to you and your staff in terms of, again,
    flushing this issue out. And, in my opinion, resulting in
    accomplishing real change in terms of what was clearly an issue
    about interpretation of a statute that Congress acted on and I
    think had clear intent. And a new Secretary of Labor who
    listened, and has really talked to people and interacted with
    people.
        You know, I think, in my sort of final thoughts here I just
    want to make the observation that if H.R. 3633 were to pass the
    House, pass the Senate and be signed into law by the
    President--which I frankly think there is a high level of
    skepticism in my mind that actually would happen--the fact of
    the matter is, is the next day we would still have a terrible
    challenge in terms of access to health care for TRICARE.
        I mean, the issues that have been identified by GAO, the
    issues that I have heard over and over again in the last seven
    years in terms of retirees and veterans who qualify for
    TRICARE, getting access to care is all about reimbursement and
    doctors and providers' willingness to basically lose their
    shirts every time they take on a new patient.
        And, again, the GAO study clearly demonstrates that. Again,
    I think every person on this subcommittee, if, you know, we
    were given the opportunity to really kind of, again, boost the
    financial support for that program there would be strong
    support for it. In fact, the Senate had a measure a couple days
    ago Senator Sanders proposed which, again, would have a
    historic new investment in terms of veterans health care
    services. In my opinion, that is clearly the best way to
    strengthen the network of access for veterans in this country.
        You know, the focus here today, obviously, though is on the
    question of OFCCP jurisdiction. Again, I think that the
    Secretary could have, you know, gone into the Washington, D.C.
    crouch and listened to the lawyers, maybe, and his agency and
    said I am not gonna extend myself to try and listen to people
    and do anything. But the fact is, is that, as in the case of
    OSHA recently, he has really shown a willingness to listen to
    Congress and to react.
        And to come out with something that--again, I am
    disappointed, frankly, that people have dismissed here today
    some of the witnesses about the value of it. A five year
    moratorium, again, takes this out of the scope of this
    administration. Nobody is stipulating to anything in terms of,
    you know, you are not being subject to a court order or
    relinquishing your legal position here in terms of the
    interpretation of the prior bill. Which, by the way, the
    language of that is different than H.R. 3633.
        It is not like we are just re-passing that language. I
    mean, there is ``shall'' language now in this as opposed to
    ``may'' language before. So, you know, again I have been around
    enough lawyers to know that people can fight over, you know, a
    couple words, or commas even sometimes in terms of the way
    statutes get written. But the fact is, is I think that this
    Secretary has shown a willingness to, in my opinion, give a
    very robust area of certainty on whether or not OFCCP
    jurisdiction is gonna, in fact, apply towards TRICARE
    providers.
        And, frankly, I don't think he is done in terms of that
    dialogue and that discussion. That, you know, we are, I think,
    gonna still see him in our Committee rooms and in our offices,
    and is willing and open to continue this discussion as far as
    other programs are concerned in terms of Medicare and FEHBP.
    This is not someone though, in my, you know, estimation has
    shown, you know, again, just a rigidity or unwillingness to
    talk and interact with people.
        So I practiced law for over 20 years. I was with a bunch of
    litigators who were fearless and loved, you know, the conflict
    and going into the courtroom. But we had a sign that hung in
    our office that was a quote from Abraham Lincoln, which said,
    ``Discourage litigation. Persuade your neighbors to compromise
    whenever you can. Point out to them how the nominal winner is
    often the real loser in fees, expenses and waste of time.''
    And, you know, I would remind you of that quote in order to
    what the Secretary did in terms of where we are today.
        Again, I respect the Chairman's passion on this issue. And
    it may be that this issue is gonna come to the floor. But,
    again, this is a Congress whose batting average isn't that
    great in terms of getting across the finish line. And I think
    it is gonna run into resistance maybe further along in the
    process. And I think, in the meantime, you can take credit for
    accomplishing something here in terms of having the department
    reevaluate its position.
        As the Secretary said, I did the forensics. He did the
    forensics to understand better what the Armed Services
    Committee did and he made an adjustment. And I think that is a
    great accomplishment, and something that you should be very
    proud of.
        And with that, I yield back.
        Chairman Walberg. I thank the gentleman. And I would concur
    with much of your sentiment there. And it is not a purpose of
    this hearing to necessarily push forward a piece of
    legislation. And you are right, we don't have a great record of
    getting our colleagues on the other side of the Capitol to take
    up legislation--good, bad or indifferent--and move it forward.
    However, it is important to have the discussion.
        I also certainly applaud the Secretary. This little note
    paper is my notes I took sitting in my red 2006 Hemi Dodge
    2500, three-quarter ton pickup truck outside of a town hall in
    Grand Ledge, Michigan, on the banks of the Grand River, when
    the Secretary was willing to call me and talk about this issue.
    So I appreciate that very much. And we have had open dialogue
    in my office and in my pickup truck. And wherever he was, I
    have no idea, at that point in time. But we discussed that.
        And we need to continue discussing it. I appreciated the
    letter that he sent. It didn't include every item that we
    discussed that afternoon. That would have been included in the
    letter. So there is certainly more discussions I will have with
    him, and ask why. We can assume things. But for the record, and
    in the reality, we want to make sure things are solid, buttoned
    up, and move forward. But I think it even goes beyond that. I
    am willing to give credit where credit is due, and enabling
    ability to help us work together is great.
        But in the end, we want to make sure we have a framework in
    place that not only encourages economic growth, the opportunity
    for health care to be there and available. Certainly, everyone
    in this subcommittee and on the full Committee would never,
    never countenance anything that denied employment because of an
    individual's gender or their disability, their race, or their
    religion, or the fact that they were military veterans. But on
    the other side of the ledger, we want to make sure that we
    don't put so much uncertainty in place, at the very least, that
    decisions are made that will take away opportunities for people
    to have the type of care that, in this country, they ought to
    have.
        That would have the opportunity to have employment in
    facilities that are viable and growing and moving forward and,
    in fact, expanding to meet the needs of this great citizenry we
    represent. I think, as well, this is an opportunity to make
    sure that the dialogue, the debate that we even had yesterday
    on the floor of the House, pushing back on our executive,
    making decisions and, in fact, rewriting laws without the
    authority that the Constitution gives, regardless of party, the
    issue of the separations of power. The authority that the
    people have. As Washington said, I believe it was, when asked
    about our government, ``Here, the people rule.''
        And we are the elected representatives of the people to
    represent them and, on their behalf, make laws. And expect
    those laws--good, bad or indifferent--until changed, to be the
    law of the land. And that is my concern. That we have not got
    to that point right now with OFCCP, and their description,
    definition of who a subcontractor is or a provider. And they
    are, in fact, as I believe, going against what was decided by
    law in the NDAA provision.
        So this is a worthy discussion to continue. We will go on.
    I am certain I will talk with the secretary. I am certain that
    we will push for adequate solution.
        But I also want to make sure that we don't have simply five
    years of uncertainty. And ultimately, decisions made on the
    basis of the fact that we can't just be uncertain for five
    years. We are gonna make decisions now that impact, sadly, in
    negative ways the people that we ought to be serving.
        So I appreciate this hearing today. We will certainly
    continue on in various ways. But we want to move forward for
    the good our country, for the good of our citizens and so that
    everybody has opportunity equal to all.
        There being no further business, the Committee stands
    adjourned.
        [Additional Submissions by Ms. Graves follow:]

       [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        [Additional Submissions by Chairman Walberg follow:]

        [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        [Whereupon, at 11:33 a.m., the subcommittee was adjourned.]

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