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Bill to help Iowa’s nursing homes manage costs advances
But staffing agencies warn it might worsen effects of worker shortage
Erin Murphy
Mar. 11, 2024 5:53 pm, Updated: Mar. 12, 2024 8:26 am
DES MOINES — A proposal to cap what staffing agencies can charge for the help of temporary health care workers — which Iowa’s nursing homes turn to as a means of addressing employee shortages — is being considered by state lawmakers.
The proposal’s supporters say staffing agencies charge so much for temporary nurses that it places a financial burden on nursing homes and other health care facilities.
But the proposal also has been met with caution from staffing agencies, which insist that billing rates that spiked during the COVID-19 pandemic have been gradually returning to pre-pandemic levels — and warn that capping rates would only make the health care worker shortage even worse.
Under the proposal, payment rates for nursing services provided by staffing agencies could be no more than 150 percent of the statewide average paid the previous year. The proposal was introduced by majority Republicans in the Iowa House and passed out of that chamber with strong bipartisan support.
It is now being considered in the Iowa Senate, where the proposal went through its first legislative hearing in that chamber Monday at the Iowa Capitol.
“The stress in the long term care industry is very real. I think everybody understands that,” Sen. Jason Schultz, a Republican from Schleswig who ran the subcommittee hearing Monday, told reporters after the meeting. “I do believe we are going to have a very robust exchange of ideas on this one. But that indicates just how much money is at stake on one hand and how difficult the long-term care industry is on the other.”
Iowa’s nursing homes are losing money. Had it already been in place, the proposed legislation would save the industry $22 million this year, according to the testimony of Brent Willett, president and chief executive officer of the Iowa Health Care Association.
“Those dollars could be reinvested in increasing wages for permanent direct care staff, hiring more people, and not directed predominantly to out of state staffing agency profit margins,” Willett said during the meeting.
But the proposal could have the opposite of its intended impact, argued Bob Livonius, chair of the American Staffing Association and board member of GrapeTree Medical Staffing based in Milford.
Livonius said nearly two-thirds of nurses who work through staffing agencies have other full-time jobs, and that those nurses could be driven out of staffing positions if the proposed legislation becomes law. He said that would create even more strain on nursing homes when they look to staffing agencies when in need of temporary workers.
The organization that represents Iowa nurses shared that concern during the hearing.
“I will say nurses feel very targeted by this. There was a very negative reaction to this legislation,” said Amy Campbell, a lobbyist for the Iowa Nurses Association. “There are other traveling professions that have similar (profit) margins that are not included in this. So they felt very pulled out and targeted, and they have deep concerns that this is actually going to have an opposite effect.”
Sen. Todd Taylor, a Democrat from Cedar Rapids, said his viewpoint on the proposed legislation has gone back-and-forth.
“I spoke with a lot of people last week. I was for the bill. I was against the bill,” Taylor said. “And this is not with any snark at all, but many of the bills that I’ve seen in this Legislature, there’s not really a problem that we’re fixing. Here, I see there is a problem. I am concerned — is this the right fix?”
The bill, House File 2391, previously passed the Iowa House on an 80-17 vote. Schultz and fellow Republican Sen. Dawn Driscoll, from Williamsburg, advanced it out of subcommittee Monday, making it eligible for consideration by the full Senate Workforce Committee.
Schultz said the goal is to at least pass the bill out of that committee in order for it to qualify for this week’s legislative deadline and remain eligible for consideration.
Comments: (515) 355-1300, erin.murphy@thegazette.com