(C) Iowa Capital Dispatch
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Bill would cap payments from nursing homes and hospitals to temp agencies [1]

['Clark Kauffman', 'More From Author', '- February']

Date: 2024-02-06

A bill that’s intended to cap the fees Iowa’s medical providers pay to temporary-staffing agencies was approved by a committee Tuesday and sent to the House floor for consideration.

The bill, House File 2199, is intended to provide financial relief for nursing homes, hospitals and other health care facilities that rely heavily on temporary-staffing agencies in the midst of the current workforce shortage.

In recent years, many Iowa health care providers who work directly for hospitals and nursing homes have complained that they are forced to work alongside agency workers who are paid twice as much.

The bill establishes maximum allowable charges that agencies may impose on any health care entity for the nursing services provided by agency-employed workers.

The bill would require the Iowa Department of Health and Human Services to annually establish a schedule of statewide maximum allowable charges for nursing services provided by agency workers. The maximum charges must be no greater than 150% of the statewide average wage paid by specific types of health care facilities to various nursing services professionals.

Supporters of the bill have argued that although it will cap what agencies can charge for individual workers’ services and will result in a more “level playing field” in all health care workers’ pay, it won’t suppress the wages of temp workers.

In fact, the bill prohibits any temp agency from using the schedule of maximum-charges as a basis for either “prohibiting or otherwise interfering with a wage increase for any agency worker” – although it’s unclear how the state might enforce that provision.

The only entities registered with the Legislature as being in support of the bill are the groups representing Iowa’s nursing home industry: the Iowa Health Care Association and the Leading Age Iowa.

‘To me, that seems like highway robbery.’

At Tuesday’s meeting of the House Committee on Health and Human Services, Rep. John Forbes, a Democrat from Urbandale, asked the bill’s sponsor, Republican Rep. Joel Fry of Osceola, how he arrived at the 150% cap.

“It was a conversation amongst all the parties involved to get to that 150%,” Fry said. “But if you want the exact science behind that, I will have to get that for you at a later time.”

“Well, I agree with the intent of the bill,” Forbes said. “My only concern is how we came up with the 150% cap… To me, 150% seems a little on the low side when you’re looking at reimbursement of some of these services. Most of these agencies that do this type of work, you know, they have a lot of other extra overhead costs.

“I know there are cases where you’ve got a nurse who is making $30 an hour for a facility and the person that’s working right next to them is making $90 an hour. To me, that seems like highway robbery,” Forbes said. “I mean, there shouldn’t be that big of a discrepancy. But I just want to make sure we have a (percentage) in place that makes it feasible for these agencies to be able to still work in the marketplace but not take advantage of nursing homes and hospitals.”

Rep. Timi Brown-Powers, a Democrat from Waterloo, said she feels that by capping the compensation temp agencies can collect, the state will improve the staff morale in health care facilities, which will lure back those Iowa nurses now working in other states for significantly more pay.

“I support this bill right now at this juncture,” she said. “I am hoping that this legislation encourages some of the nurses that we lost over the last few years to come back and work for the hospitals and nursing homes.”

Fry also cited staff morale in health care facilities as a reason to support the bill, adding that he believes it will result in improved health care. He said that as long as there is a major disparity in the pay collected by Iowa’s health care workers, the state’s hospital patients and long-term care residents will suffer.

“The goal, really, in my mind, with this legislation is about quality of care for some of our most vulnerable Iowans,” he said. “If we’re not looking at this issue surrounding staffing agencies and the fact that there is this huge discrepancy between what I get paid as a someone who is employed by the organization versus someone who is traveling into the facility, we’re going to continue to see quality of care as a point of contention in this state.”

‘Millions of taxpayer dollars’ pay for temporary workers

John Hale, a consultant and advocate for Iowa seniors, said Tuesday the way to improve care and address the pay disparity is to raise the pay of nursing home employees, not suppress the fees paid to staffing agencies.

“Nursing homes in Iowa pay their permanent certified nurse aides an average wage of around $16 hourly,” he said. “Because of low wages, the industry has for years been unable to recruit and retain the staff needed, leading to the all-too-frequent reports of abuse and neglect of residents.”

Hale said that while care facilities say they can’t afford to pay their staff more, they still manage to pay staffing agencies $40 an hour — more than double the rate collected by the “regular” employees who are on staff.

“Something doesn’t add up, and it’s well past time for the Legislature to be asking questions and taking action,” Hale said. “Rather than allowing millions of taxpayer dollars to continue to pay for temporary workers who don’t know the residents they are serving, the Legislature should be insisting that these dollars be used to increase the pay and benefits for permanent staff members.”

Should be the bill be signed into law, agencies that violate it would be subject to an initial penalty of $5,000 and given 30 days to come into compliance with the law. Temp agencies that fail to come into compliance would be fined $25,000 and could have their staffing-agency registration revoked.

The Iowa Department of Inspections Appeals and Licensing would be required to submit an annual report to the Legislature summarizing the number of registered agencies, the violations that have occurred and the penalties collected.

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