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Sen. Cramer Introduces Bill to Increase Transparency of Travel Nursing Agencies

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WASHINGTON
– U.S. Senator 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 the effects of hiring agencies across the health care
industry during the COVID-19 pandemic.

The
health care industry was already experiencing a shortage of professionals prior
to the pandemic, but COVID-19 exacerbated this issue throughout the country,
especially in rural communities. Travel nurses were employed to
help meet the rising demands. Over the past few years, there have been
anecdotal reports of hiring agencies inflating prices and monopolizing the
nursing workforce, potentially leading to a number of concerning consequences
for providers, patients, and taxpayers, including inflated prices for care,
further nursing shortages, and continued strain on the entire health care
system.

“Nurses serve
on the front line and provide an essential service to our communities,
especially during the COVID-19 pandemic. However, hiring agencies are
reportedly taking advantage of the demand created by workforce shortages,
charging inflated rates, and keeping a significant percentage for their own
profits. Such business operations of these agencies could have far-reaching
effects on the quality of our health care system in rural America and must be
reviewed. When health care providers pay travel nurse agencies, both
the providers and the contracted nurses should know how much the
agencies keep for themselves. The Travel Nursing Agency Transparency
Study Act ensures the business practices of these agencies get the critical
sunshine they need. The American people and the entire health care industry
deserve a better understanding,” said Senator Cramer.

The
Travel Nursing Agency Transparency Study Act is supported by the North Dakota Medical
Association (NDMA), North Dakota Hospital Association (NDHA), and American
Hospital Association
(AHA).

“The
North Dakota Medical Association supports efforts to reduce health care costs
and supports Senator Cramer’s efforts to analyze the practices of travel
nursing agencies and how it impacts health care and costs. This is a complex issue
and deserves a closer look. NDMA is grateful to Senator Cramer for recognizing
the situation and bringing the issue forward,” said North Dakota
Medical Association Executive Director Courtney Koebele. 

“Hospitals
in North Dakota were already experiencing workforce challenges before COVID-19
came along and made them worse. Ballooning wages and the disparity in agency
nurse and staff nurse wages over the past two years have grown to a crisis
level. The high fees paid to these staffing agencies are simply unsustainable.
We support Sen. Cramer’s proposal to study the business and payment practices
of nurse staffing agencies to better understand how such extreme prices
negatively affect patients and hospitals and to find solutions that prevent
conduct that only makes the nurse shortage worse,” said North Dakota
Hospital Association President Tim Blasl.

“Travel
nurse staffing agencies are charging hospitals and health systems unsustainable
rates during the pandemic. The resulting financial burden makes it harder to
maintain the clinical staff needed to care for patients, especially in rural
communities. We thank Senator Cramer for his leadership in calling for a
thorough study of these agencies’ problematic practices,” said American
Hospital Association Executive Vice President Stacey Hughes. 

These
allegations are particularly concerning given the increased demand we are
seeing for health care workers in rural settings as we continue to transition
out of the COVID-19 pandemic. Like many issues facing remote and rural areas,
the workforce shortages ultimately have an outsized influence on rural and
underserved areas like North Dakota. According to the New
York Times Magazine
, “As I.C.U. beds in city hospitals filled up and
staff nurses started leaving in droves, another story of a
precariously overextended health care system was unfolding in smaller hospitals
across the country. Rural hospitals, which have long sent their most acute
cases to larger hospitals, were left with patients they were ill-equipped to
handle. Many of these hospitals, with lower profits and wages, struggled to
retain nurses.”

A
November 2021 letter from
Senators Mark Kelly (D-AZ) and Bill Cassidy, M.D. (R-LA) to COVID-19 Response
Team Coordinator Jeffrey Zients said, “We are writing to inquire about
the extreme prices being reported for nurse staffing agencies from hospitals in
our states, and the concern that certain staffing agencies may be taking
advantage of these difficult circumstances to increase their profits at the
expense of patients and the hospitals that treat them. We have received
anecdotal reports that the nurse staffing agencies are vastly inflating price,
by two, three or more times pre-pandemic rates, and then taking 40% or more of
the amount being charged to the hospitals for themselves in profits.”

The
profits of travel nurse agencies during the COVID-19 pandemic have
been reported by media. According to Kaiser
Health News
and NBC, “Last
year was particularly profitable for staffing agencies. Cross Country
Healthcare, one of the few publicly traded companies that
staff travel nurses and other health care workers, posted a
profit of $132 million in 2021, compared with a loss of $13 million the
previous year and even bigger losses in 2019.” According to Time“AMN
Healthcare Services reported its gross profits were $434 million in the fourth
quarter of 2021, up 109% from a year prior, according to an annual earnings
report. Its net income, which takes into account all business related expenses and
taxes it had to pay, was $116 million, an 1100% increase. Another healthcare
staffing agency, Cross Country Healthcare, saw its revenue increase 93% between
the third quarters of 2020 and 2021. It also reached $1 billion in annual
revenue for the first time in the company’s history in 2021.”

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for bill text.



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