An Arizona nurse-staffing agency hopes to prove that the state hospital association is violating antitrust laws by the way it negotiates temporary nurse fees for its hospital members.
The staffing agency, Healthcare Enterprises, Mesa, Ariz., which does business as Health Temp, filed a private antitrust lawsuit in U.S. District Court in Phoenix against the Arizona Hospital and Healthcare Association; its staffing subsidiary, the Arizona Hospital and Healthcare Association Service Corp.; and 12 of its member health systems.
The lawsuit alleges that the AHHA and the hospitals conspired to fix the wage rates they would pay for both per diem and traveler temp nurses in Arizona hospitals. Health Temp, Arizona's largest nurse registry, alleges that the AHHA and the hospitals formed a buyers' cartel and illegally colluded to maintain low prices for temp nurse services in violation of Section I of the Sherman Antitrust Act. Beginning in 1998, the complaint alleges, the hospitals acted through the association to avoid competing.
Health Temp also alleges that some of the defendants agreed to boycott Health Temp in an attempt to put the firm out of business and further depress temp nurse wages. Most nongovernmental hospitals in Arizona honor the rates and all of the temp agencies are aware of it, increasing the power the hospitals have over the agencies, which fear retaliation and exclusion if they don't accede to the AHHA wage rates, the lawsuit contends.
The lawsuit said AHHA Service Corp. imposes monthly fees equal to 2% of "the gross dollar volume" reported by nurse-staffing programs, fees that account for 50% of the AHHA's annual revenue and constitute the reason for expanding the registry program, according to the complaint.
AHHA General Counsel Andy Gordon said the association denies the allegations and will fight them in court. Gordon confirmed that the U.S. Justice Department's Antitrust Division has sent investigative information requests to the association and some of the hospitals relating to its group purchasing organization. He would neither confirm nor deny any investigation by the state attorney general.
As to Health Temp, Gordon said: "The purpose of a GPO, and that's what this is, is to get a discount on what your members pay. We operate a GPO to obtain temp nursing services for our hospital members. This nurse registry program has been in place for at least 10 years. This agency wants more (money), but other nurse registries are willing to offer the services at a lower price. That's what this is about."
Gordon said a large percentage of temp nurses are travelers, nurses generally from colder climates who contract in advance for extended stints with hospitals in winter-friendly climes such as Arizona. "To suggest that hospitals have control over a nationwide market is just silly," he said.