To crack down on price gouging, proposed legislation in Missouri would allow for felony charges against healthcare staffing agencies that substantially inflate their prices during a declared emergency.
A New York bill includes limits on the amount staffing agencies can charge health facilities. And the Texas measure would allow civil penalties against such agencies.
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This proposed rule- and at least 11 more statesThe call came after demand for travel nurses, who perform temporary work at various facilities, has risen to unprecedented levels during the worst of the Covid-19 pandemic — according to the American Staffing Association industry trade group.
Hospitals have long used temporary workers, often employed by third-party agencies, to meet their staffing needs. But by December 2021, the average weekly travel nurse salary in the country had risen from $1,896 in January 2020 to $3,782, according to Baker’s Hospital Review’s analysis of data from the hiring platform Vivian Health. That platform listed over 645,000 active travel nurse jobs in the last three months of 2022 alone.
Some traveling intensive care unit nurses earned $10,000 a week during the worst of the pandemic, prompting burned-out nurses across the country to leave their hospital staff jobs for more lucrative temporary assignments. Desperate hospitals that could afford it were willing to make multi-year commitments for nurses to join their staff rather than offer signing bonuses as high as $40,000.
Rising costs have prompted hospitals and their allies across the country to rally against What they saw as price hikes by staffing agencies, In February 2021, the American Hospital Association urged the Federal Trade Commission to investigate “competitive pricing” by the agencies, and a year later, hundreds of lawmakers urged the White House to do the same.
There has been no concrete federal action, so states are trying to make the next move. The resulting regulatory patchwork could present a different challenge for hospitals in states with rate caps or other restrictive measures, according to University of Minnesota healthcare economics professor Hannah Naprash. Such facilities may find it difficult to hire travel nurses or may face a lower-quality hiring pool during a national crisis than neighboring states without such measures, she said.
For example, Massachusetts and Minnesota already had rate caps for temporary nurses before the pandemic, but raised and even waived their caps for some staffing agencies during the crisis.
And any new restrictions could meet stiff resistance, as did a proposed rate cap in Missouri last year.
As the Covid omicron variant wave begins to subside, Missouri legislators consider a proposal that would set the maximum rate staffing agencies can charge at 150% of the average wage rate for the prior three years plus required taxes Are.
Spokesman Dave Dillon said the Missouri Hospital Association, a trade group representing 140 hospitals across the state, supported the bill as a crackdown on underhanded staffing firms, not on being able to pay nurses higher wages.
“During the pandemic, there were staffing companies that were making a lot of promises and not necessarily delivering,” Dillon said. “It created an opportunity for both profiteering and bad actors to be able to play in that space.”
However, the nurses denounced what they called government overreach and argued that the bill could worsen the state’s existing nursing shortage.
Theresa Newbanks, a nurse practitioner, asked legislators to imagine how much a lawyer, electrician or plumber could earn in Missouri. “This will never be allowed,” she testified to the committee considering the bill. “Yet, that’s exactly what’s happening, right now, for nurses.”
One of about 30 people testifying against the bill was Michelle Hall, a longtime nurse and nursing leader of the hospital, who is starting her own staffing agency in 2021, she said, as she sees her peers leaving the industry. Tired of seeing About unsafe staffing ratios and low wages.
“I felt like I had to defend my nurses,” Hall later told KHN. She said that her nurses usually receive about 80% of what she charges.
Costs such as salaries, payroll taxes, workers’ compensation programs, unemployment insurance, recruiting, training, certification and credential verification typically cover about 75% of the price a staffing agency would charge a health facility, said Toby Malara, a vice president. goes into President of the American Staffing Association trade group.
He said hospital officials, “without understanding how a staffing firm works,” were pricing unfairly. In fact, he said that many members of his trade group reported a decrease in profits during the pandemic because of the higher-compensation nurses were able to command.
While Missouri lawmakers did not pass the rate cap, they did change the rules governing staffing agencies, requiring them to report the average amount charged per health worker for each personnel category and the average amount paid to those workers. involved doing Those reports will not be public, although the state will use them to prepare its overall reports that do not identify individual agencies. The public comment period on the proposed rules was scheduled to begin March 15.
Hall wasn’t concerned about the reporting requirements, but said other changes could prompt him to close up shop or move his business out of state: Agencies would be barred from collecting compensation when their employees die. will be admitted to the facility where they are temporary.
Hall said, “It doesn’t matter how much money I’ve put in before to get that person onboard and trained.”
Dillon called that complaint “very promiscuous,” noting that the agencies routinely recruit hospital workers by offering them high salaries. “With premium agencies charging a fee for staff, I find it hard to believe that this risk is not built into their business model,” he said.
Of course, as the pandemic has subsided, so has the demand for travel nursing. But payments have not yet returned to pre-pandemic levels. According to Baker’s report on Vivian Health data, the average weekly travel nurse pay was $3,077 in January, down 20% year over year, but still up 62% in January 2020.
With the acute challenges of the pandemic behind hospitals, Dillon said, health system leaders are looking at proactive solutions to address their current workforce challenges, such as raising salaries and investing in the nursing workforce pipeline.
For example, a hospital in South Carolina is offering day care to help keep up with employees’ children. California lawmakers are considering a $25 an hour minimum wage for healthcare workers. and some hospitals also have Create your own staffing agencies To reduce their dependence on third-party agencies.
But the momentum to directly address high traveling nurse rates hasn’t taken off, as evidenced by the legislative push in Missouri this year.
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The latest proposal will apply to some agencies if there exists a “gross disparity” between the prices they charge during an emergency and those charged earlier or what other agencies currently charge for similar services. and if their earnings are 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 defend their practices and pricing.
Kentucky implemented its current pricing rules for healthcare staffing agencies last year. The rules, which set benchmarks for acceptable prices, allowed for increases driven by higher labor costs. Malara said that if the Missouri bill gains momentum, he will point out that language to his sponsor and ask him to clarify what constitutes a “gross disparity” in prices.
The bill’s sponsor, Missouri State Sen. Carla Esslinger, a Republican, did not respond to requests for comment on the legislation.
Hall said she opposes any rate cap but was vague about Missouri’s new proposal. She said she saw agencies raise their prices from $70 an hour to more than $300 while she worked as a hospital nursing leader at the height of the pandemic.
“All these agencies that were raising prices,” Hall said, “all they were doing was putting that money in their own pockets.” They weren’t doing anything different or special for their nurses.”
Kaiser Health News is a national health policy news service. This is Henry J. is an editorially independent program of the Kaiser Family Foundation that is not affiliated with Kaiser Permanente.