Lawmakers ask White House to clamp down on staff price gouging as hospitals face increased expenses

Several bipartisan lawmakers are imploring the White House to investigate reports of major price hikes for temporary hospital staff as systems report increased worker expenses to fight the latest surge of COVID-19 cases.

The lawmakers wrote to Jeffrey Zients, White House COVID-19 coordinator, on Monday over anecdotal reports they have received on exorbitant prices from nurse staffing agencies. The group wants the Biden administration to explore whether the moves by staffing agencies violate any consumer protection laws and what impact this price hike is having on rural and underserved areas.

“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 letter said. “We have heard the amounts charged to hospitals rose precipitously when the most recent wave of the COVID-19 crisis swept the nation.”

The lawmakers specifically asked for federal agencies to weigh whether the increase in rates for temporary staff violates consumer protection laws as well as whether it is anti-competitive.

They also want to investigate the ownership structure of several staffing agencies and whether there is “evidence of price collusion or other anti-competitive pricing patterns.”

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The federal government should also explore how much COVID-19 relief funds are directly or indirectly going to pay for the high-cost contracts.

The letter comes as hospital systems have reported increased strain from staffing expenses in their latest earnings report.

Providence Health, for example, posted a $311 million operating loss for the third quarter due to an 8% increase in its expenses needed to combat a surge of COVID-19. Providence reported a 10% hike in salaries and benefits due in part to increased costs for temporary staff and overtime.

The letter was led by Sens. Mark Kelly, D-Arizona, and Bill Cassidy, R-Louisiana. Reps. Doris Matsui, D-California, and David McKinley, R-West Virginia, also signed onto the letter.

Providers have been imploring federal agencies to look into the issue for months. The American Hospital Association wrote to the Federal Trade Commission back in February asking it to investigate reports of anti-competitive practices by nurse staffing agencies.