As the bidding war over frontline workers escalates, provider organizations across the country are seeking government intervention to force temporary staffing agencies to play by similar rules as nursing homes attempting to hire.

In a letter to the Federal Trade Commission last week, LeadingAge asked the federal agency to use its “resources and expertise” to address the “anticompetitive practices and pricing gouging of nurse-staffing agencies.”

In several states, local associations are lining up in support of legislative fixes that would prevent agencies from paying direct care staff rates that providers say are two to possibly four times as much as what operators offer.

But the battle may take precious time to lower labor costs, and agency caps are not a permanent fix.

Massachusetts and Minnesota currently are the only two states with existing pricing limits on staffing agencies. That wasn’t enough to fully insulate providers in Massachusetts, where demand is so great that the caps were recently raised by an average of 23.5%.

In Connecticut, Gov. Ned Lamont’s (D) March 2020 public health emergency declaration triggered a statute prohibiting profiteering during emergencies. Violations are considered an unfair or deceptive practice and violators can be fined by the state Department of Consumer Protection and the Office of the Attorney General.

The New York State Health Care Facilities Association took the issue of inflated agency pricing to state lawmakers even before vaccine mandates drove a new round of staffing losses, but leaders there are still watching costs mount.

“We’ve seen significant price-gouging for CNAs and LPNs,” President and CEO Stephen Hanse told McKnight’s Long-Term Care News Wednesday. “Whether or not the Legislature will do something on that for providers remains to be seen.”

Other state officials are also now seeking guidance and help from elected officials and their attorneys general, as well as backing a national strategy.

‘Vultures pecking’

Getting some kind of protection from highly inflated staffing rates remains essential as providers in many states are limiting admissions for want of workers. Others are blowing through their workforce budgets and operating in deficits.

Brendan Williams, president and CEO of the New Hampshire Health Care Association, said providers in his state are offering $17 an hour, plus shift differentials, for licensed nursing assistants. But staffing agencies are paying rates as high as $69 an hour, and charging agency fees on top of that.

“We’ve got to staff to be able to serve the needs of our residents,” Williams told McKnight’s at the AHCA/NCAL convention earlier this week. “So you’ve got to pay whatever ransom the staffing agencies are demanding of you.”

After dealing with this crisis throughout the pandemic, Williams likens the rates he’s seen lately to “vultures pecking at us.”

(Listen in as Wiliams shares more about staffing shortages and finding a fix for agency hiring woes in his McKnight’s Long-Term Care News Newsmakers podcast.)

A federal fix?

The crisis is compounded by both a lack of workers and acts of worker-“poaching” being reported across the country. In some anecdotes offered by providers, frontline staff resign and then return the next day as agency help, though now making substantially more than their former colleagues.

Other times, agency staffers don’t show up, despite the agreed-upon pay rate, leaving operators and their staff struggling to fill rosters for a given shift.

And it’s not just a battle for CNAs.

“If you need an RN, you may as well turn over a blank check. The bidding is not unlike eBay, where desperate providers are actually bidding against one another and bidding up the price of that RN,” Williams said. “We really do feel like it’s predatory at this point.”

Williams noted that New Hampshire, the Live Free or Die state, would be unlikely to put in place a regulatory fix. He also questioned whether state regulations could cover agencies that hire and place nursing staff across state lines.

LeadingAge played the federal card in its Oct. 8 letter to FTC chairwoman Lina M. Khan.

In it, President and CEO Katie Smith Sloan outlined “incredible hardships, including crippling workforce and staffing challenges,” that “have been exacerbated and exploited by the actions of nurse-staffing agencies.”

“Most long-term care is paid by taxpayers through the Medicare and Medicaid programs; neither program is structured to respond to excessive costs and so monies that should go to caring for residents are diverted to paying private agencies,” she wrote. “We request the FTC use its authority to protect consumers and taxpayers from anticompetitive and unfair practices to investigate these activities and take appropriate action to protect long-term care providers and the seniors they serve.”

Williams said there is a strong argument to be made at the FTC.

“Under a Democratic administration, it might be an easier case to make, arguably, than it would have been under a Republican administration,” he said. “I think there’s a lot of antitrust issues that are worth exploring.”