Members of Congress Call for Investigation into Pricing of Nurse Recruitment Agencies

Nearly 200 members of Congress have asked the White House to launch an investigation into whether nursing recruiting agencies are profiting illegally from the pandemic.

Representatives Peter Welch (D-Vt.) and Morgan Griffith (R-Va.) led their colleagues in letter to COVID-19 coordinator Jeffrey Zients on Monday, who is calling on the White House to direct federal agencies to scrutinize recruiting agencies for potential “anti-competitive activities” and violations of consumer protection laws.

“We are writing because we are concerned that some nursing recruiting agencies are taking advantage of these difficult circumstances to increase their profits at the expense of patients and the hospitals that treat them,” the lawmakers wrote. “Hospitals have no choice but to pay these exorbitant rates due to the dire labor needs that hospitals across the country are facing.”

The American Hospital Association has asked the Federal Trade Commission to investigate nurse-hiring companies that fill talent gaps in hospitals, nursing homes and other service providers.

However, throughout the pandemic, hospitals and the AHA have argued that these agencies are unfairly inflating rates as providers struggle to maintain adequate staffing levels amid a pandemic that has forced many healthcare workers out of hospitals, nursing homes and other facilities.

Neither lawmakers nor the AHA have named any specific recruitment agencies that are allegedly cashing in on the pandemic.

Employment agencies claim that prices are determined by demand. Working for a staffing agency also gives nurses the opportunity to earn more money and better control over how many hours they work.

There is not enough public information about the rates set by recruitment agencies for nurses, but the AHA said its members report they are being charged two to three times what they were before the pandemic.

According to AHA General Counsel Mindy Hutton, some recruiting agencies appear to be coordinating their rate hikes. “It’s fair to at least find out if these companies were inflating prices,” she told reporters on Tuesday.

AHA sent letter to the FTC in February 2021 requesting an investigation but received no response, according to the trade group. An FTC spokesperson did not respond to a request for comment.

President Joe Biden has signaled that he will fight anti-competitive healthcare consolidation, especially among hospitals, but his administration has not made any statements about its stance on recruitment agencies.

The need for more staff during the pandemic and greater reliance on recruitment agencies has meant that labor costs are eating up a large share of hospital budgets.

Also on Tuesday, the AHA called on Congress to allocate an additional $25 billion in pandemic relief to hospitals.