Pennsylvania state capitol government building in Harrisburg, PA, USA, front view in sunlight.

Pennsylvania State Capitol. (Credit: catnap72 / Getty Images)

While senior living and other long-term care leaders are being joined by other healthcare groups, and even members of Congress, to call for federal action against price-gouging by temporary staffing agencies, some states are making their own moves to cap rates and increase oversight.

In Pennsylvania, Rep. Tim Bonner has introduced HB 2293 to establish oversight of healthcare staffing agencies accused of price gouging 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.

If passed, Pennsylvania would become the third state to implement wage caps, along with Massachusetts and Minnesota. Jan. 1, Illinois amended the Illinois Freedom to Work Act to remove non-compete and non-solicit clauses used by staffing agencies. Most state legislatures have taken action against price gouging on supplies during states of emergency. 

According to a recent Pennsylvania Health Care Association member survey, 70% of facility respondents said that they use agency staff to fill open positions. Those agencies are “poaching” workers and leasing them back to providers at “exorbitant rates — in some cases, rates are inflated as much as 400%,” the association said.

PHCA President and CEO Zach Shamberg told McKnight’s Senior Living that there are reports that staffing agencies also are taking 40% or more of an individual’s hourly wage, “which means wages are going right into the pockets of agency executives rather than the healthcare heroes themselves.”

Pennsylvania Assisted Living Association Executive Director Margie Zelenak told McKnight’s Senior Living that personal care and assisted living communities need to rely on staffing agencies due to the pandemic-related workforce crisis. Members, however, continually lose out on obtaining staff from these agencies because they are outbid by another health system, she said.

“It is so bad that the temporary agency staff will call off 15 minutes before their scheduled shift because there was a better offer down the road,” Zelenak said.

“This is simply unsustainable for providers caring for seniors who are either on a fixed income or rely heavily on Pennsylvania’s Medicaid program, which doesn’t come close to reimbursing for the true cost of care,” PHCA’s Shamberg said. Bonner’s legislation, he added, offers better protections for long-term care residents by establishing processes, procedures and accountability, and it “will shine a bright and much-needed light on staffing agencies by providing more transparency.”

LeadingAge Pennsylvania Interim President and CEO Bob Bertolette told McKnight’s Senior Living that exploiting an industry that serves the vulnerable through a global pandemic is “unacceptable.”

“Communities are facing difficult decisions right now as the devastating financial impact of COVID-19 continues — personal protective equipment, testing, staffing shortages; and our elected officials must not ignore their responsibility to support older adults and senior care services across the commonwealth,” he said.

Bonner said that rising agency costs are draining the state Medicaid program. And although assisted living and personal care providers are not eligible for Medicaid reimbursement in Pennsylvania, the expenses could force senior living providers to raise their monthly rates, which, in turn, would exhaust the assets of private-pay residents more quickly and send more older adults into the state’s Medicaid program.

Recognizing the increased role that supplemental healthcare service agencies play in the day-to-day operations of almost 1,200 Keystone State assisted living residences and personal care homes, as well as in the 700 nursing homes in the state, Bonner said that Pennsylvania must have oversight of the agencies to “ensure they are opening in a matter that supports the long-term care sector and high-quality resident care.”

The bill, he said, places registration requirements on healthcare service agencies operating in long-term care facilities and establishes a system for reporting and establishing penalties.

Federal pressures

On a national level, the American Health Care Association / National Center for Assisted Living and the American Hospital Association sent a joint letter to the White House COVID-19 Response Team on Thursday to raise concerns about direct care staffing agencies “exploiting the severe shortage of healthcare personnel” during the pandemic, suggesting “widespread coordination and abuse of market position.”

AHCA / NCAL also joined LeadingAge and 10 other healthcare organizations Tuesday in asking the federal government to look into anticompetitive practices and price gouging by temporary staffing agencies. AHCA / NCAL also sent a letter to the Federal Trade Commission in October, asking the agency to investigate the practice.

Almost 200 U.S. House lawmakers, led by Reps. Peter Welch (D-VT) and Morgan Griffith (R-VA), 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.