To crack down on price-cutting, proposed law in Missouri calling for felony prosecutions against health care staffing agencies that significantly inflated prices during a declared emergency .
A New York bill includes limits on the number of employees that agencies can charge health care facilities. And a Texas measure would allow civil penalties for such agencies.
Related: Squeezed by temporary nurse costs, hospital systems create their own staffing agencies
These proposed regulations – and others in at least 11 more states, according to the industry trade group of the American Human Resources Association – come after a need for travel nurses, who work Temporary work at various facilities, has increased to unprecedented levels during the worst of the covid-19 epidemic.
Hospitals have long used temporary staff, who are often employed by third-party agencies, to help meet their staffing needs. But by December 2021, the average weekly commuting nurse salary in the country has skyrocketed to $3,782, up from $1,896 in January 2020, according to Becker’s Hospital Review’s analysis of data from Vivian Health recruitment platform. That platform alone listed more than 645,000 active travel nurse jobs in the last three months of 2022.
Some ambulatory intensive care unit nurses made $10,000 a week during the worst of the pandemic, leaving exhausted nurses around the country out of hospital staff jobs. their own to take on more lucrative temporary assignments. Instead, hospitals desperate to afford it have offered to contract bonuses as high as $40,000 for nurses willing to make multi-year commitments to join their staff. .
The escalating costs have prompted hospitals and their allies around the country to regroup in what they see as staffing agencies’ price cuts. In February 2021, the American Hospital Association urged the Federal Trade Commission to investigate the agencies’ “anti-competitive pricing” practices, and a year later, hundreds of lawmakers urged the House White does the same thing.
No significant federal action has occurred, so states are trying to take the next step. The regulatory patchwork could pose another challenge for hospitals in states with rate caps or other restrictive measures, according to Hannah Neprash, a professor of healthcare economics at the University of Minnesota. . Such facilities, she said, may have difficulty hiring travel nurses or may face lower quality hiring during a national crisis than those in the states. Neighborhoods do not have such measures.
For example, Massachusetts and Minnesota had rate caps for temporary nurses before the pandemic but increased and even dropped their limits on some staffing agencies during the crisis.
And any new restrictions could face stiff resistance, like the one proposed in Missouri last year.
As the wave of covid omicron variants began to subside, Missouri lawmakers considered a proposal that could set a maximum rate that staffing agencies can charge as 150% of the average salary of three employees. previous year plus any necessary taxes.
Spokesman Dave Dillon said the Missouri Hospital Association, a trade group that represents 140 hospitals across the state, has supported the measure as a crackdown on understaffing companies. rather than nurses who can demand higher wages.
“During the pandemic, there are recruitment companies that promise a lot but don’t necessarily deliver,” says Dillon. “It gives both the profiteers and the bad guys an opportunity to play in that space.”
However, nurses have criticized what they call an abuse of power by the government and say the bill could make the state’s current nursing shortage worse.
Theresa Newbanks, a practicing nurse, asked lawmakers to imagine the government trying to dictate how much money a lawyer, electrician or plumber can make in Missouri. “This will never be allowed,” she testified before the committee that considered the bill. “However, this is exactly what is happening, right now, with nurses.”
Another of the nearly 30 people who testified against the bill was Michelle Hall, a longtime nurse and hospital nursing leader who founded her own staffing company in 2021. says, in part because she is tired of watching her colleagues leave the industry because of anxiety. on the rate of unsafe employees and low pay.
Later, Hall told KHN: “I felt like I had to protect my nurses. She said her nurses usually get about 80% of what she charges.
Typically, about 75% of the price a staffing agency charges a healthcare facility is expenses such as wages, payroll taxes, workers’ compensation programs, unemployment insurance, recruitment, training, certification and certification verification, said Toby Malara, deputy director. President at the American Human Resources Association trade group.
He said hospital executives “didn’t understand how a staffing company works,” having assumed the price cuts had happened the wrong way. In fact, he said many members of his trade team have reported falling profits during the pandemic because nurses can command high salaries.
Although Missouri lawmakers did not pass the rate limit, they did make changes to regulations governing staffing agencies, including requiring them to report the average amount charged to staffing agencies. per health worker for each type of staff and the average amount paid to those workers. Those reports will not be made public, although the state will use them to prepare its own aggregate reports without identifying individual agencies. The public comment period on the proposed regulations was scheduled to begin on March 15.
Hall isn’t concerned with the reporting requirements but said one of the other changes could force her to close shop or move her business out of state: Agencies would be barred from collecting employee compensation. their employees are recruited to work for the facility where they are temporarily.
“All the money I spent before that didn’t matter to get on board and train that person,” Hall said.
Dillon calls that complaint “quite prolific,” noting that agencies routinely recruit hospital staff by paying higher salaries. “Considering how high-profile agencies charge employees, I find it hard to believe that this risk is not built into their business model,” he said.
Of course, when the pandemic is over, the need for nursing travel will also decrease. But wages have yet to fall back to pre-pandemic levels. The average weekly commuter nurse salary was $3,077 in January, down 20% from the same period last year but still 62% higher in January 2020, according to Becker’s Vivian Health data report.
With the severe pandemic challenges behind hospitals, health system leaders are looking at proactive solutions to meet their ongoing workforce challenges, said Dillon. them, such as raising wages and investing in nursing workforce resources.
For example, one hospital in South Carolina is providing day care to its employees’ children to help retain them. California lawmakers are considering a $25-per-hour minimum wage for healthcare workers. And some hospitals have even created their own staffing agencies to reduce reliance on third-party agencies.
But the impetus to directly address the high rate of traveling nurses hasn’t disappeared, as evidenced by a legislative push in Missouri this year.
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The latest proposal would apply to some agencies if there is a “large disparity” between the price they charge in an emergency and the price they previously charged, or the price other agencies are currently charging for similar services. themselves and if their income is at least 15% higher than before the emergency.
Malara said he doesn’t have much of a problem with this year’s bill because it gives agencies the ability to protect their operations and prices.
Kentucky last year applied its existing price-cutting rules to health care staffing agencies. The rules set acceptable price criteria, allowing for increases due to higher labor costs. Malara said if the Missouri bill gains momentum, he’ll direct his sponsor to that language and ask her to clarify what constitutes the “big disparity” in price.
The bill’s sponsor, Missouri Senator Karla Eslinger, a Republican, did not respond to requests for comment on the legislation.
Hall said she’s opposed to any rate caps but is conflicted about Missouri’s new proposal. She says she has seen agencies increase their rates from $70 an hour to more than $300 while she worked as the hospital’s nursing team leader at the height of the pandemic. pandemic.
“All these agencies are cutting prices, all they do is put that money in their own pockets,” says Hall. They don’t do anything different or special for their nurses.”
Kaiser Health News is a national health policy news service. This is an editorially independent program of the Henry J. Kaiser Family Foundation not affiliated with Kaiser Permanente.
