Minnesota and Massachusetts are the only two states that have statutory caps on travel nurse rates.
Minnesota law, passed in 2001, prohibits an agency from charging more than 150 percent of an employee’s average hourly wage in that role. During the pandemic, the state allowed agencies to request wage cap waivers. Massachusetts has an overarching anti-price gouging law that applies to services like nursing agencies, but in May 2020 the cap agencies could charge was raised by 35 percent.
Several other states, including Pennsylvania, Illinois and Connecticut, are considering similar legislation. And hospital and nursing home associations are putting pressure on lawmakers.
In February, the AHA and 200 others urged the US Congress to use its federal powers to investigate travel nursing agencies for “price gouging” and other anticompetitive practices.
“The conduct of some of these recruitment agencies bears all the hallmarks of widespread collusion and perhaps other abuses,” the letter said. “Preventing staffing agencies from exploiting hospitals and healthcare systems’ need for providers would help alleviate some of the financial and operational strains hospitals are currently facing and allow them to remain focused on the critical care of patients. “
The Michigan Health and Hospital Association supports the proposed Michigan legislation.
“The MHA supports HB 6364 because it would help address exorbitant contract labor costs that threaten the financial sustainability of hospitals,” reads a statement on its website.
According to a recent report by McKinsey & Co., healthcare systems believe the financial viability of their entire industry is at stake amid a projected shortage of 450,000 registered nurses in the next three years alone. We do not want or cannot compete with travel nursing agencies. There are fears of too many patients, too few nursing staff and ultimately a reduction in the quality of care.
“We’re seeing double-digit increases in costs in long-term care facilities, and wages are the primary reason for that,” Samuel said. “Recruitment agencies are just part of that picture, but it’s just not sustainable. We must do everything we can to attract workers back to the sector and we cannot do that at this cost.”