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New legislation aimed at exposing the business and hiring practices of temporary staffing agencies follows long-term care industry complaints about price gouging and anti-competitive behaviors during the pandemic.

U.S. Sen. Kevin Cramer (R-ND) on Monday introduced the Travel Nursing Agency Transparency Study Act. The bill would require the Government Accountability Office to report to Congress on the business practices and effects of hiring agencies across the healthcare industry during the COVID-19 pandemic.

The American Health Care Association / National Center for Assisted Living said it supports the bill. The organization said it heard from members across the country that nursing and direct care staffing agencies are “charging exorbitant prices to healthcare facilities that need workers.”

“These agencies are charging more than double and, in some cases, as much as quadruple pre-pandemic rates,” AHCA / NCAL said in a statement. “AHCA / NCAL has done extensive outreach and been very vocal on the Hill and to the administration on this matter and the negative impact it is having in long-term care.”

In October, LeadingAge and AHCA / NCAL formally asked for an Federal Trade Commission investigation into agency practices. In January, the associations joined 10 other organizations in asking the White House COVID-19 Response Team for “assistance with an anticompetitive practice with certain nurse-staffing agencies.”

Almost 200 U.S. House lawmakers, led by Reps. Peter Welch (D-VT) and Morgan Griffith (R-VA), earlier this year also sent a letter to the White House COVID-19 Response Team calling on federal agencies with competition and consumer protection authority to investigate staffing firms’ conduct and practices.

Some states have begun to consider setting agency rate caps. 

Pennsylvania earlier this year introduced legislation to establish oversight of healthcare staffing agencies accused of price gouging at assisted living communities, personal care homes and nursing homes. The bill also would cap rates at no higher than 150% of the average rate and assess fines for violations.

Massachusetts and Minnesota implemented new wage caps, and in January, Illinois amended the state’s Freedom to Work Act to remove noncompete and nonsolicit clauses that were used by staffing agencies. 

Cramer’s bill specifically calls for a study of business and payment practices, including potential “price gouging and taking of excessive profits”; the difference between rates contracted nurses were paid and how much facilities were charged; to what extend federal funds, including Provider Relief Fund dollars, were used by providers to pay agencies during pandemic-era workforce shortages; and to what extent travel nurse agency practices contributed to workforce shortages.

Long-term care communities facing exacerbated staffing shortages were forced to turn to temporary staffing agencies to fill shifts. But in announcing the bill, Cramer said that the hiring agencies took advantage of the demand and charged inflated rates, keeping a significant percentage for their own profits. The bill, he said, ensures that “critical sunshine” is shone on agency business practices.

Read more on this issue in sister publication McKnight’s Long-Term Care News.