A bill recently introduced in Oregon would make temporary staffing agencies more transparent and affordable, senior living advocates say.
House Bill 2665 takes policy recommendations from a state workgroup led by the Oregon Health Authority to establish maximum annual rates a temporary staffing agency can charge a healthcare provider.
Providers “are simply experiencing unsustainable financial distress” due to the pandemic and skyrocketing agency costs, according to LeadingAge Oregon CEO Kristin Milligan.
Other states are also experiencing extreme stress, with many seeking to lighten the burden either regulatorily or legislatively.
Massachusetts and Minnesota have laws setting maximum rates that temporary staffing agencies can charge. During the pandemic, Massachusetts increased the maximum allowed rates, and Minnesota allowed temporary waivers of the maximum rates.
Several other states have passed laws requiring healthcare staffing agencies to register with their states and pay annual fees, including Iowa, Louisiana and Pennsylvania. Ohio similarly introduced a bill requiring agency registration and annual fees.
During an Oregon Senate Health, Education, Labor and Pensions Committee hearing held earlier this month, aging services providers groups testified that long-term care workforce shortages are the worst in all of healthcare.
“Providers always expect to pay a premium for agencies, but the costs are out of hand and completely unsustainable,” Milligan told McKnight’s Senior Living. “All efforts made by providers — increasing wages, offering more flexible shifts/scheduling, hiring recruitment specialists — haven’t been enough to close the gap because the rates agencies are charging destabilize the market.”
She said long-term care facilities have not rebounded from the staffing losses created by the pandemic, and agencies “continue taking advantage of providers at their most vulnerable time.”
“HB 2665 will help make the temporary healthcare staffing industry more transparent and affordable, allowing for better care overall for residents in all settings from assisted living communities to skilled nursing facilities,” Milligan said.
The Oregon Health Care Association similarly supports HB 2665, saying the bill would “reduce unsustainable costs from temporary healthcare staffing agencies and improve care outcomes.”
The bill would establish maximum annual rates agencies can charge healthcare providers. Rates would be based on average wage data and other factors, including licensed setting, job position and geographic region.
“We must ensure better quality and business practices from temporary staffing agencies, as well as address out-of-control costs to the healthcare system that have resulted from many of these contracts,” according to the OHCA. “HB 2665 will help make the temporary healthcare staff industry more transparent and affordable, allowing for better care overall for residents.”
Report questions impact of rate caps
Last year, Oregon lawmakers passed a bill requiring healthcare staffing agencies to be authorized by the state — which goes into effect July 1. That bill also directed the Oregon Health Authority to produce a report on rate caps. That report came out in December and raised doubts on whether capping rates would actually solve the state’s healthcare workforce crisis.
The report concluded that rate caps can provide cost relief to facilities, but it does not prioritize compensation of personnel.
“In addition, staff, when faced with the potential of limited compensation, may leave the industry or move to another state in search of higher wages,” the report reads. “Implementing a rate cap in Oregon might result in similar issues to those states’ open positions and the additional turnover and staffing shortages would not improve quality care outcomes for the residents of those facilities.”
State and national efforts against price gouging
US Sen. Kevin Cramer (R-ND) last fall introduced the Travel Nursing Agency Transparency Study Act, requiring 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.
Last year, LeadingAge and the American Health Care Association / National Center for Assisted Living formally asked for an Federal Trade Commission investigation into agency practices. Tennessee released a report earlier this year on the effects of the use of temporary staffing agencies by assisted living communities and nursing homes on state costs. Recommendations from that report included policies requiring healthcare staffing agencies to register with the state, as well as expanding the state’s law against price-gouging to include direct care services provided by those agencies.
