The nursing home industry is launching a lobbying offensive in several states to limit what healthcare staffing agencies can charge providers, but the efforts are facing fierce headwinds from agencies, lawmakers, nurses and, in some cases, hospitals.
The wave of legislation in states like Ohio and Pennsylvania comes amid a pandemic that saw rates for traveling nurses soar, due to increased demand for their services. That means higher staffing costs for hospitals and nursing homes, who accused agencies of "price gouging" and taking advantage of a pandemic.
Providers argue something needs to be done to rein in staffing agencies, and with action unlikely at the federal level, nursing homes are turning to state legislatures.
"The conduct by some staffing agencies across the country, it's just been despicable," said Mark Parkinson, CEO and president of the American Health Care Association, which represents 14,000 skilled nursing facilities and assisted living centers. "We've encouraged the federal government to look at it, but we really think our best chance is getting some regulation in some of the states."
Staffing agencies argue their rates are fair and competitive and driven by rising demand. The American Staffing Association, which represents staffing companies like AMN Healthcare, has been lobbying against rate caps in several states.
"Any state that enacts a nurse rate cap system will actually be harming their own healthcare system because nurses will leave the state and want to work elsewhere," said Toby Malara, vice president of government relations for ASA.
Legislation introduced in Ohio and Pennsylvania would permanently cap what healthcare staffing agencies can charge providers. The bill in Ohio would cap charges to all healthcare facilities, while the legislation in Pennsylvania would only apply to nursing homes and assisted living facilities. Both bills would require staffing agencies register with the state, something that is currently not required in many other states.
The nursing home industry, including AHCA's and LeadingAge's state affiliates, appear to be the primary force behind the legislation. While nursing homes and hospitals both rely on traveling nurses, nursing homes typically have a payer mix that heavily relies on Medicaid rates and are less able to offset higher staffing costs. In 2020, 62% of nursing home residents used Medicaid to pay for services; 12% used Medicare and 26% paid privately, according to the Kaiser Family Foundation.