WASHINGTON — U.S. Sen. Kevin Cramer (R-ND) introduced the Travel Nursing Agency Transparency Study Act. The legislation requires the Government Accountability Office (GAO) to conduct a study and report to Congress on the business practices and effects of recruitment agencies in the healthcare industry during the COVID-19 pandemic.
The healthcare industry was already experiencing a shortage of professionals before the pandemic, but COVID-19 has exacerbated this problem across the country, especially in rural communities. Traveling nurses have been hired to help meet the growing demands. In recent years, there have been anecdotal reports of recruiting agencies inflating prices and monopolizing the nursing workforce, which could have a number of concerning consequences for providers, patients and taxpayers, including inflated prices for care, further shortages of nurses and pressure on the entire healthcare system.
“Nurses are on the front lines providing an essential service to our communities, especially during the COVID-19 pandemic. However, recruitment agencies would take advantage of the demand created by labor shortages, charging inflated rates and retaining a large percentage for their own profit. Such business operations by these agencies could have far-reaching effects on the quality of our health care system in rural America and need to be reviewed. When health care providers pay traveling nurse agencies, providers and contract nurses need to know how much the agencies are keeping for themselves. The Travel Nursing Agencies Transparency Study Act ensures that the business practices of these agencies receive the critical sunshine they need. The American people and the entire healthcare industry deserve a better understanding,” said Senator Cramer.
The Travel Nursing Agency Transparency Study Act is supported by the North Dakota Medical Association (NDMA), the North Dakota Hospital Association (NDHA), and the American Hospital Association (AHA).
“The North Dakota Medical Association supports efforts to reduce health care costs and supports Senator Cramer’s efforts to analyze travel nursing agency practices and their impact on health care and costs. “This is a complex issue that warrants further investigation. The NDMA is grateful to Senator Cramer for acknowledging the situation and raising the issue,” said Courtney Koebele, executive director of the North Dakota Medical Association.
“Hospitals in North Dakota were already having labor issues before COVID-19 arrived and made them worse. The skyrocketing wages and wage disparity for agency nurses and licensed practical nurses over the past two years have reached crisis levels. The high fees paid to these recruitment agencies are simply unsustainable. We support Senator Cramer’s proposal to study the business and payment practices of nurse recruitment agencies to better understand how these extreme prices negatively affect patients and hospitals and to find solutions that prevent behaviors that do not worsen the shortage of nurses”, said North Dakota Hospital Association President Tim Blasl.
“Travel nurse recruitment agencies are charging hospitals and health systems unsustainable rates during the pandemic. The resulting financial burden makes it more difficult to retain the clinical staff needed to care for patients, especially in rural communities. We thank Senator Cramer for his leadership in calling for an in-depth study of the problematic practices of these agencies,” said Stacey Hughes, executive vice president of the American Hospital Association.
These claims are of particular concern given the increased demand we are seeing for rural healthcare workers as we continue to emerge from the COVID-19 pandemic. Like many issues facing remote and rural areas, labor shortages ultimately have an outsized influence on rural and underserved areas like North Dakota. According to the New York Times Magazine, “As intensive care beds in city hospitals filled up and staff nurses began to leave in droves, another story of a precariously overstretched health care system was unfolding in smaller hospitals across the country. Rural hospitals, which have long referred their most acute cases to larger hospitals, found themselves with patients they were ill-equipped to care for. Many of these hospitals, with lower profits and salaries, have struggled to retain nurses.
A November 2021 letter from Senators Mark Kelly (D-AZ) and Bill Cassidy, MD (R-LA) to COVID-19 Response Team Coordinator Jeffrey Zients said: “We are writing to inquire about the extreme prices reported for nurse recruitment agencies in our states’ hospitals, and the concern that some recruitment agencies are taking advantage of these difficult circumstances to increase their profits at the expense of patients and hospitals that treat them. We have received anecdotal reports that nurse recruitment agencies dramatically inflate prices, by two, three or more times pre-pandemic rates, and then take 40% or more of the amount billed to hospitals for themselves in profits.
The benefits of travel nursing agencies during the COVID-19 pandemic have been reported by the media. According to Kaiser Health News and NBC, “Last year was particularly good for staffing agencies. Cross Country Healthcare, one of the few publicly traded companies that employs traveling nurses and other healthcare workers, has recorded a profit of $132 million in 2021, compared to a loss of $13 million the previous year and even larger losses in 2019.” According to the time, “AMN Healthcare Services reported gross profit of $434 million in the fourth quarter of 2021, up 109% from a year earlier, according to an annual earnings report. His net income, which takes into account all business-related expenses and the taxes he had to pay, was $116 million, an increase of 1100%. Another healthcare staffing agency, Cross Country Healthcare, saw its revenue increase by 93% between the third quarters of 2020 and 2021. It also reached $1 billion in annual revenue for the first time in history. of the company in 2021.”
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