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Congress deliberates bill to probe business practices of travel nurse agencies

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Many hospices rely heavily on traveling nurse agencies to bolster their clinical teams during the pandemic. Now, two bills currently before Congress would require federal investigation into the impact of these agencies on health care.

The Travel Nursing Agencies Transparency Investigation Act directs the U.S. Government Accountability Office (GAO) to investigate how contract nursing companies have conducted business over the past two years, including allegations of price increases. will be

Senator Kevin Cramer (RN.D.) introduced the bill to the Senate (S.4352), and Congressman Greg Murphy (RN.C.) sponsored the House version (HR 8576).

“Unfortunately, there have been reports of travel nursing agencies taking advantage of the pandemic to take advantage of questionable business practices, increasing costs and severely impacting both health care providers and patients,” said Dr. Murphy. said in a statement. “Our bill will explore the impact of these practices on the healthcare industry and ensure transparency going forward.”

If enacted, GAO will examine travel nursing agency pricing and attempt to determine whether these companies are contributing to labor shortages. The federal government also looks closely at their interests compared to the wages they pay nurses.The GAO is a bipartisan agency that investigates and investigates on behalf of Congress.

Health care providers and industry groups have questioned the justification of the escalating costs, which some say are exorbitant. The American Hospital Association has been vocal on this issue.

Hospice organizations support legislation to study the practices of travel nursing companies, including the National Hospice and Palliative Care Organization (NHPCO) and its advocacy group, the Hospice Action Network (HAN).

“Hospices cannot compete with the expensive contracts and excessive fees demanded by travel nursing agencies. These agencies appear to have taken advantage of the public health emergency by charging exorbitant fees,” NHPCO said. Ben Marcantonio, interim president and CEO and president of HAN, said in a statement. “To ensure access to quality end-of-life care, we will continue to work with Senators Cramer and Rep. Murphy to obtain additional support and prioritize finding workforce solutions quickly. looking forward to it.”

Over the past two years, the cost of recruiting workers has been a problem for hospices and other healthcare providers.

Generally, travel nurses receive higher wages than full-time staff in healthcare companies, and some have seen their salaries double or even triple as more providers seek their services. increase. This further complicates the recruitment and retention of hospice operators who compete with these companies for job seekers.

Hospice and home health care provider LHC Group (NASDAQ: LHCG) said on its earnings call last year that it could save $1.4 million per quarter for every 100 basis points of reduction in contract nurse utilization.

Amedisys (NASDAQ: AMED), a leading home care and hospice company, reported a $2 million decline in hospice revenues in the third quarter of 2021. This was largely due to higher-than-usual utilization of contract nurses, the company said in its earnings call. Hospice segment revenues totaled $198 million in the third quarter.

Those are last year’s numbers, and both companies report reduced involvement of travel nurses (among other things), especially as Omnicron’s surge subsided and fewer employees entered quarantine.

Labor shortages existed before the pandemic and will arguably extend beyond, leading some industry observers to conclude that capacity utilization is likely to decline in the long term. but will not drop to pre-COVID levels.

Now, demand for travel nurses is seesaw as healthcare companies implement strategies to reduce utilization and COVID infections rise and fall.

Demand for temporary staffing agencies has fluctuated between a 5.8% increase and a 3.3% decline in recent months, with prices slightly down, according to research by Jefferies Financial Group equity analyst Brian Tankilute. is falling.

The price hike accusations are flying around, but have yet to be proven. Some stakeholders and analysts speculate that the rising rate reflects changes in supply and demand rather than fraud.

Bruce Greenstein, LHC Group Chief Strategy and Innovation Officer, previously told Hospice News: “Maybe the market is just functioning efficiently in that there is a lot of excess demand for a limited supply. I long for it.”