As healthcare staffing shortages persist across the U.S., hospitals, their lobbies and elected officials are pushing for greater scrutiny into travel nurse staffing agencies and the elevated rates they've charged hospitals for temporary staff throughout the pandemic.
At the same time, legislators in some states are even looking to cap the rate hospitals can pay agencies for temporary nursing staff.
But staffing firms are crying foul, defending the rates as reasonable due to the toll the job takes on nurses as they work through the pandemic.
Demand for travel nurses has soared over the past two years as systems grapple with COVID-19 surges and people return for medical care they put off during the earlier months of the pandemic. Meanwhile, school closures, staff calling in sick and turnover related to burnout has caused the supply of available nurses to dwindle.
From January 2020 to this January, advertised pay rates for travel nurses jumped 67%, with staffing firms billing hospitals an additional 28% to 32% over those pay rates, according to Proculent Health, a workforce data and technology company.
Hospital lobby the American Hospital Association is renewing its push for the Federal Trade Commission to investigate travel nurse staffing rates after writing to the FTC on the issue last year, though AHA said it still hasn't received a response.
In a letter sent to White House officials on Friday, AHA, along with the nursing home lobby, said staffing agencies are "exploiting" the staffing shortages by charging "uniformly high prices" in a coordinated way.
Members of Congress sent a similar letter to Jeff Zients, who is leading the White House's COVID-19 response, on Jan. 24.
"We urge you to enlist one or more of the federal agencies with competition and consumer protection authority to investigate this conduct to determine if it is the product of anticompetitive activity and/or violates consumer protection laws," they wrote to Zients.
While no federal legislation has been introduced pushing for nurse rate caps, a handful of states — Oregon, Illinois, Pennsylvania, Kansas and Kentucky — have introduced legislation seeking to do so, said Toby Malara, vice president of government relations for the American Staffing Association, a trade association for the staffing industry.
Massachusetts and Minnesota are the only two states with nurse rate caps, though during the pandemic both were forced to either increase or waive their restrictions, the ASA wrote in a January memo.
The memo argues that capping the amount of money a staffing agency can charge a hospital or long-term care facility would worsen local shortages, driving nurses to work in other states or leave the profession entirely.
The group also argues that while travel nurse pay has risen exponentially, so have the demands of the job. Over the past two years staff have dealt with stress, burnout, overwork, stark physical danger and animosity from short-fused and frustrated coworkers, patients and hospital visitors.
Numerous surveys show healthcare workers are grappling with widespread stress and burnout, spurring many to consider leaving their roles, further reducing the supply of available workers.
"These folks that are getting paid two or three times more than what they may have been paid before deserve to be paid this amount," Malara said. "They're putting out a price for what they think they're worth."
Travel staffing firms often send nurses to other crisis situations like areas experiencing hurricanes or other natural disasters. Those assignments historically also have been difficult to fill, commanding higher rates for staff willing to take the jobs, said Lauren Pasquale Bartlett, senior vice president of marketing at Ingenovis Health, a nurse staffing agency.
"The market has always set the rates on travel nursing, and the same way that the pandemic is probably one of the worst health crisis situations that most of us have seen in our generation, the rates are higher than we've ever seen in our generation because that's what the market demands," Pasquale Bartlett said.
In their letters, the AHA and members of Congress both allege the staffing firms are seizing the pandemic as an opportunity to inflate rates and increase their bottom lines. However, the agencies refute those claims, saying that despite dramatic increases in revenue, their profits have remained relatively stable throughout the pandemic.
Still, that hasn't been the case for some staffing firms that publicly report their financials. In the third quarter of 2021, staffing agency AMN Healthcare reported $74 million in net income, almost triple its net income in the third quarter of 2020.
Another staffing company, Cross Country Healthcare, posted a profit of $23.4 million in the third quarter, significantly up from a loss of $1.3 million in the third quarter of 2020, according to earnings reports.