AHA Supports Bill to Increase Oversight of Travel Nursing Agencies

The American Hospital Association (AHA) has expressed support for a new bill that would direct the Government Accountability Office (GAO) to increase surveillance of travel nursing agencies and their impact on workforce shortages.

US Senator Kevin Cramer (R-ND) recently introduced the Travel Nursing Agency Transparency Study Act to help address the travel nursing industry’s business and payment practices that are hurting hospitals and health systems.

“Nurses serve on the front line and provide an essential service to our communities, especially during the COVID-19 pandemic,” Cramer said in a press release. “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 healthcare system in rural America and must be reviewed.”

The legislation would require GAO to study travel nurse staffing agency practices, including potential price gouging, excessive profits, and high margins the agencies retain for themselves. In addition, GAO would review the impact of the increased reliance on travel nurses in rural areas and how their business practices have exacerbated workforce shortages.

In a letter to the senator, AHA supported the legislation and noted that hospitals and health systems are facing financial and operational challenges due to the high rates that travel nurse staffing agencies charge.

As hospital employment fell and patient demand increased during the pandemic, healthcare facilities frequently turned to travel nurse staffing agencies to fill staffing gaps.

Between January 2019 and January 2022, the hours worked by travel nurses as a percentage of total nurse hours rose from 4 percent to 23 percent, according to data from Syntellis Performance Solutions AHA referenced in the letter.

Additionally, data from AMN Healthcare revealed that 96 percent of healthcare facilities hired temporary staff in 2021.

Employing travel nurses was also costly for hospitals, as facilities spent a median of almost 40 percent of their total nurse labor expenses on these workers in January 2022.

AHA voiced concern that the agencies have been inflating prices to increase their own profit margins. For example, travel nurse staffing agencies increase their hourly rates by 213 percent between January 2019 and January 2022.

But instead of passing along wage increases to travel nurses, the agencies are retaining profits for themselves, AHA asserted.

In January 2022, almost 200 members of Congress urged the White House COVID-19 Response Team to investigate travel nurse staffing agencies amid reports of alleged price gouging. The lawmakers said they received reports of agencies inflating costs by twice their pre-pandemic rates.

In addition to receiving support from AHA, the Travel Nursing Agency Transparency Study Act is backed by the North Dakota Medical Association (NDMA) and North Dakota Hospital Association (NDHA).

“Hospitals in North Dakota were already experiencing workforce challenges before COVID-19 came along and made them worse,” said Tim Blasl, president of NDHA. “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,” Blasl continued. “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.”