[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:]
    
    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
    
    
    
    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:]
    
    
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    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.
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    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.
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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:]
    
    
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    [Additional Submissions by Chairman Walberg follow:]
    
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    [Whereupon, at 11:33 a.m., the subcommittee was adjourned.]

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