(Edited from NALTO® newsletter; SIA Daily News, 6/2/2022 & 6/7/2022; Becker’s Hospital Review, Skilled Nursing News; the NCSL and Becker’s Hospital CFO Report)
Lately the National Association of Locum Tenens Organizations (NALTO)® has been asking you to contact your US House representative to urge him/her to support HR 7881, The Healthcare Provider Shortage Minimization Act of 2022.
This legislation addresses the growing healthcare staffing shortage affecting millions of Americans seeking healthcare services nationwide, particularly those in rural communities.
As introduced by US Rep. Earl “Buddy” Carter (R-GA), on May 27, 2022, the bill will allow some 52,000 locum tenens clinicians to continue providing healthcare services (as independent contractors) to more than 7.5 million Americans a year.
NALTO® has made it easy for you to send a message to your House member urging them to support this critical proposal. To send yours, click here.
New Nurse Staffing Law Takes Effect in Illinois
In other legislative news, a new law that took effect in Illinois on July 1 restricts ‘non-competes’ and conversion fees, while requiring nurse staffing firms to submit reports to the state on the average charges for nurse staffing.
In a May 31 news release the state’s labor department said the new law will:
- Prohibit nurse staffing agencies from entering into non-compete covenants with nurses and certified nurse aides.
- Prohibit nurse staffing agencies from requiring the payment of liquidated damages, conversion fees, employment fees, buy-out fees, placement fees and/or other compensation if a healthcare facility hires the agency’s contractor permanently.
- Require nurse staffing agencies to disclose new healthcare facility contracts to the Illinois Department of Labor (IDOL) within 5 business days of the effective date (protected from Freedom of Information Act).
- Pay wage rates that match those identified on the contract. Failure to do so allows the department to recover underpaid wages for the worker.
- Add quarterly reporting requirements to the IDOL on average charges to healthcare facilities.
NALTO® Weighs In
According to NALTO® President Matt Young via LinkedIn on Friday, July 22:
“We have received multiple inquiries into NALTO’s view on the recently passed bill in Illinois (HB 4666) which ‘amends and modernizes the Nurse Agency Licensing Act to bring transparency around fees charged, increase NURSE AGENCY reporting on their pay and labor practices, and expand protections for workers referred by nurse agencies.’
“While NALTO’s current bylaws state that our association focuses on issues surrounding physician locum tenens, we certainly understand a large number of our membership participates in the recruitment of NPs, PAs, and CRNAs. As a result, we also understand that this newly passed legislation raises many questions, and that other states have examined passing similar legislation.
“Rest assured that NALTO’s Legislative Committee will do its best to continue to monitor the landscape and keep our valued members informed.
“Legislation such as this also gives us even more motivation to push forward on our current efforts to pass the bill we have fought so hard to get introduced in Congress (HR 7881, The Health Care Provider Shortage Minimization Act of 2022) so we can eliminate any ambiguity on the federal level as to whether locum tenens providers will continue to be independent contractors.
“All these issues and strategies will be discussed at the upcoming Fall Fly-In (September 26th-28th in Denver) during our legislative session.”
Similarly Focused US Senate Bill Introduced
A June 6 news release announced the “Travel Nursing Agency Transparency Study Act” recently introduced by US Sen. Kevin Cramer (R-ND).
While the release indicates the bill was prompted by concern over nurse staffing agency ‘price-gouging’ [our term, not theirs], it also highlights the reported 2021 profitability of publicly traded healthcare staffing firms including AMN Healthcare and Cross Country Healthcare.
Co-sponsored by Sen. Chuck Grassley (R-IA), the legislation (S 4352), would require the Government Accountability Office to study and report to Congress on the business practices and effects of [staffing] agencies across the healthcare industry during the COVID-19 pandemic.
Assigned to the US Senate Committee on Health, Education, Labor, and Pensions, the bill is supported by the North Dakota Medical Association, North Dakota Hospital Association, and American Hospital Association.
FTC Considers Restricting Use of ‘Non-competes’
The Federal Trade Commission (FTC) is considering a new regulation to tighten employers’ use of non-compete clauses and plans to target their use in individual cases through enforcement, The Wall Street Journal reports.
The FTC’s movement comes as companies increasingly make use of non-compete clauses in the hiring of hourly workers. President Biden in 2021 urged FTC Chair Lina Khan to exercise the agency’s statutory rulemaking authority to curtail the use of non-compete clauses and other clauses that may unfairly curb worker mobility.
Read the report in full here (subscription required).
State Statutes Address Staffing Agency Practices
“Price gouging” typically refers to retailers taking advantage of spikes in demand by charging exorbitant prices, often after a state of emergency. Over the course of the pandemic, however, healthcare executives have found the practice isn’t limited to retailers.
Accused of jacking up wages and providing poor quality care with no accountability, staffing agencies continue to draw ire across the senior care sector. Some in the skilled nursing industry think it’s time for the states, of which 37 currently have laws or regulations to prevent price gouging, to intervene.
PA Could Join MA, MN in Rate-Capping
Last year alone, CNAs, LPNs, and RNs saw a wage increase of about 80% across the board in the state, but those markups ballooned in 2021 with some agencies offering wage hikes sometimes two to four times the market average.
“We’re big believers in the free market,” Quality Life Services Chief Administrative Officer Susie Tack Beardsley told Skilled Nursing News. “Unfortunately, we’re not in an industry where that works because we can’t change our pricing to our customers. That’s predetermined by CMS.”
Timing is part of the reason frustration toward staffing agencies is building.
As ProMedica Vice President for Government Relations and Advocacy Brian Perry put it, “Staffing agencies seemingly couldn’t let a good crisis go to waste.
“We are in the middle of a nationally declared state of emergency. If this was a hurricane and I was a gas station charging $25 a gallon, I’d go straight to jail,” Perry explained. “[Staffing agencies] see a ripe workforce pandemic, they realize they can jack up prices and the provider community has no choice.”
With facilities in 28 states including Pennsylvania, ProMedica is working with state officials across the country to address the issue alongside a national push to limit price gouging.
Legislation proposed in the state seeks to establish new requirements for contract healthcare service agencies providing temporary employees for nursing homes, assisted living residences, and personal care homes.
“This proposed legislation would establish maximum rates on agency health care personnel to end the practice of ‘gouging’ the Medicaid program and Pennsylvania taxpayers, which was already exacerbated by the COVID-19 pandemic,” Pennsylvania Rep. Timothy R. Bonner wrote in a memorandum sent to all members of the state’s House of Representatives in November 2021.
It would also require a system for reporting and establishing penalties. The measure is supported by the Pennsylvania Health Care Association (PHCA). PHCA President and CEO Zach Shamberg said he’s working with lawmakers in the state to cap the rates that agencies can charge at 150% of the median wage rate average over the last three years.
“Two states already have wage rate caps in place: Minnesota and Massachusetts. Other states are taking steps to do this already, like Illinois and Missouri, and we worked closely with the Missouri Health Care Association that also used that 150% number,” he said. “We thought that was a fair representation and number.”
The Illinois Health Care Association, on the other hand, focused on eliminating the non-compete clauses that agencies offer along with also establishing wage rate caps.
Concerns Prompted by Pandemic Experiences
According to a late-2021 Skilled Nursing News article, some of the concerns expressed by the nursing home companies and state healthcare association executives include:
- Agencies charging $175/hour or more for an RN.
- Agencies forcing facilities to sign contracts longer than needed to secure temporary workers at all.
- Reports that staffing agencies are taking 40% of wage surcharges for themselves.
- Nurses leaving full-time jobs and showing up 48 hours later as agency workers “at five times the price.”
- Agencies negotiating company-wide contracts at prices almost 30% higher than were charged previously on a facility-by-facility basis.
- Promised fill-in workers showing up late or not at all: high rates and little control.
According to the National Conference of State Legislatures (NCSL), 37 states, Guam, Puerto Rico, the US Virgin Islands, and the District of Columbia have statutes or regulations that define price gouging during a time of disaster or emergency.
In most of those jurisdictions, price gouging is set as a violation of unfair or deceptive trade practices law. Most of these laws provide for civil penalties, as enforced by the state attorney general, while some state laws also enforce criminal penalties for price gouging violations.
For a searchable list of state statutes related to price-gouging, click here.
According to Becker’s Hospital CFO Report on March 9, seven states (including Pennsylvania) were considering legislation to prevent price gouging by staffing agencies: Idaho, Indiana, Kansas, Maryland, New York, Oregon, and Pennsylvania.
As of March 10, the states with no price-gouging laws or regulations on the books were Alaska, Arizona, Maryland, Montana, Nebraska, Nevada, New Hampshire, New Mexico, North Dakota, South Dakota, Washington, and Wyoming.
Reuters recently reported that the US Supreme Court last month declined to take up a challenge to California’s law known as AB5. Backers say AB5 helps clamp down on labor abuses by companies that use freelance or other so-called “gig” workers. The trucking industry warns that it would devastate the nation’s fragile supply chain.
PLEASE NOTE: The statutes and summaries should not be used as a legal reference. NCSL is unable to answer questions or provide guidance to citizens or businesses regarding price gouging laws and practices. If you have questions regarding price gouging or a retailer’s practices, please contact your local law enforcement or your state attorney general’s office.
