Nine months after skilled nursing leaders first asked the federal government to address anti-competitive behaviors in the temporary staffing market, new legislation aims to shed light on agencies’ business and hiring practices.
The Travel Nursing Agency Transparency Study Act, introduced this week, would require the Government Accountability Office to study potential price gouging and “taking of excessive profits”; the difference between the rates contracted nurses were paid and how much facilities were charged; and to what extent federal funds, including Provider Relief dollars, were used by providers to pay agencies during pandemic-era workforce shortages.
“Hiring agencies are reportedly taking advantage of the demand created by workforce shortages, charging inflated rates, and keeping a significant percentage for their own profits,” Sen. Kevin Cramer (R-ND) said in announcing the bill. “Such business operations of these agencies could have far-reaching effects on the quality of our healthcare system in rural America and must be reviewed.”
The bill follows requests by several major healthcare provider groups for the Federal Trade Commission to investigate agencies for price-gouging during a public health crisis and for routinely poaching permanent staff in a move that effectively has shrunk the recruitment pool.
In October, LeadingAge and the American Health Care Association / National Center for Assisted Living formally asked for an FTC investigation. But there has been little public movement on that front. Instead, more states — but not all — have taken it upon themselves to investigate setting caps on the rates agencies are allowed to pay.
In conversations his organization has had with officials at the FTC, AHCA senior vice president Clif Porter said the agency was hesitant to act because it was challenged in proving “some element of collusion.”
“There is no real line of sight as to what the outcome will be there,” Porter told McKnight’s Long-Term Care News last week. “I think the state [level] is fundamentally where the action will be.”
Pressure on providers, owners
Cramer’s proposed GAO study could unearth more details and increase pressure on federal officials or elected officials to intervene. For instance, it would look at how healthcare providers in states that imposed caps on travel nurses were affected by any specific market reactions.
The question is whether the study, which would not be due for completion until a year after the bill’s passage, could lead to relief in a timely manner.
Prices have started to moderate in some markets, but Bureau of Labor statistics show skilled nursing and assisted living are still down 406,000 workers since the pandemic’s start. Most other sectors have recovered, and some have rebounded. As lowest on the totem pole, that means skilled nursing is even more vulnerable to exorbitant pricing.
Cramer said exorbitantly high prices paid to agencies lead to probable consequences for providers, patients and taxpayers, “including inflated prices for care, further nursing shortages, and continued strain on the entire healthcare system.”
As with other recent healthcare reform approaches, ownership would once again be in the spotlight under Cramer’s bill. As proposed, it calls for examining how to bring more transparency into providers’ agency payment. He also wants GAO to create a better understanding of how many travel nurse agencies have been acquired by private equity firms and the impact of those acquisitions.
On Wednesday, AHCA endorsed the bill, which was filed while the organization’s membership was in Washington for two days of lobbying. While AHCA didn’t necessarily make agency regulation a top priority this trip, complaints about ongoing rate escalation and the pirating of employees were constant refrains in conversations with providers.
