Congress denounces rising prices for contract nurses as hospice industry faces rising costs

Reps. Peter Welch (D-Vt.) and Morgan Griffith (R-Va.) this week led a bipartisan coalition of more than 200 members of Congress urging the Biden administration to investigate allegations of price hikes by agencies recruitment of nurses. The demand for contract nurses has risen sharply over the past two years due to the pandemic.

The lawmakers wrote a letter to Jeffrey Zients, coordinator of the COVID-19 response team at the White House. Although the letter focuses primarily on the needs of hospitals, healthcare providers on all sides have suffered from labor pressure and rising costs, including palliative care providers and palliative care.

“We write because we are concerned that some nurse recruitment agencies are taking advantage of these difficult circumstances to increase their profits at the expense of the patients and the hospitals that treat them,” the signatories wrote. “We urge you to call on one or more of the federal competition and consumer protection agencies to investigate this conduct to determine whether it is the product of anticompetitive activity and/or violates antitrust laws. consumer protection.”

The signatories argue that contract nursing costs have “significantly inflated the price(s)” by two to three times pre-pandemic rates, generating profits of up to 40% for some companies. Rates increased further during the Delta and Omicron variant surges that began last fall, according to the letter.

Although to date hospice providers have not publicly accused staffing services of price gouging, many have acknowledged the impact of rising costs.

Amedisys (NASDAQ: AMED) reported a $2 million decline in palliative care segment revenue during the third quarter of 2021 due to a $7.14 increase in cost per visit, partially attributed to usage increase in subcontractors. Other factors included expected salary increases, rising health insurance costs, hiring and retention bonuses and increases, and increased business done by hourly employees, the company said in a statement. call on the results. Hospice segment revenue in the third quarter totaled $198 million.

Amedisys is not alone.

LHC Group (NASDAQ: LHCG) Chairman Joshua Proffitt said the company will save $1.4 million per quarter for every 100 basis points it can reduce its reliance on hand -contract nursing work. Proffitt made the remarks at Bank of America Securities’ virtual home care conference.

“When you have more than 3% or 4% of your entire frontline workforce in quarantine, you now have to supplement that with contract labor and with sources of labor. much more expensive work,” Proffitt said.

Amid calls for federal action from providers, industry groups and now members of Congress, some state governments are beginning to look at the issue of contract nursing, Hospice News sister site Skilled Nursing reported. News. These include Minnesota, Massachusetts, Illinois, Missouri, and Pennsylvania.

The reality of the rising costs of these services is undeniable. However, some in the palliative care space question the assumption that the increases represent price gouging.

“To some degree, maybe it’s just a market that works efficiently in that we have massive excess demand for limited supply,” said Bruce Greenstein, LHC Group’s Chief Strategy and Innovation Officer, at Hospice News in December. “It’s not a common commodity; it’s a work. As a market we are so desperate for this. Those who hold this in-demand asset, which are the nurses themselves, can really set the price.

Richard L. Militello