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NACDS Supports Florida Hospital in Case against Department of Labor

By Gebhart, Fred | Drug Topics, May 2011 | Go to article overview

NACDS Supports Florida Hospital in Case against Department of Labor


Gebhart, Fred, Drug Topics


Are pharmacies that fill prescriptions for TRICARE, the federal health program for military personnel, subcontractors? Not according to the National Association of Chain Drugs Stores (NACDS), which filed an amicus curiae brief earlier this year to support its position.

The case pits Florida Hospital of Orlando, which provides medical care to military personnel, family members, and retirees under the TRICARE system, against the Department of Labor (DOL), A DOL administrative law judge (ALJ) ruled that the hospital is a federal subcontractor and must meet detailed new record-keeping and employment requirements for federal contractors.

A broad ruling

The ruling by the DOL judge is so broad that NACDS fears it could be applied to chain and independent pharmades around the country, said NACDS chief counsel Don Bell, Many NACDS member chains fill TRICARE prescriptions as part of a pharmacy network created by Express Scripts under a federal contract.

"Pharmacies are not party to this case," Bell told Drug Topics. "However, it is entirely possible that [DOL] could extend this wording well beyond hospitals. This ruling talks about 'providers/ not about 'hospitals.'"

A December 2010 directive from DOL dtes the Orlando case and notes that third parties providing services under Medicare Part D can be considered subcontractors and subject to DOL regulations.

The example dtes a pharmaceutical company that contracts with a healthcare plan to provide prescription medications under a Part D Medicare Advantage program. Pharmacists and pharmades are not mentioned specifically, but the directive outlines broad definitions of "provider" that indude "hospitals and medical facilities, doctors and medical professionals, and any other professional, company, or entity that provides medical services and supplies,"

Florida Hospital of Orlando provides medical services to TRICARE benefidaries under a contract with Humana Military Healthcare Services, a wholly owned subsidiary of health insurer Humana Inc. The hospital says that provision of medical services under a Humana contract does not make the hospital a federal subcontractor.

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