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ICYMI: Long Term Care Providers Ask Federal Trade Commission for Help on Staffing Agency Price Gouging

Cost hikes at direct care staffing agencies worsen financial challenges for Florida nursing centers

TALLAHASSEE, FLLong term care providers, including Florida Health Care Association members, last week urged the Federal Trade Commission (FTC) for assistance with the burdens imposed by anticompetitive practices by direct care staffing agencies.

In a letter to FTC Chairwoman Lina Khan, American Health Care Association and National Center for Assisted Living (AHCA/NCAL) Chief Executive Officer & President Mark Parkinson said there are countless examples of direct care staffing agencies charging supercompetitive prices to desperate long term care centers that simply need workers, and called on the FTC to step in.

“We are requesting that the FTC use its authority to protect consumers from anticompetitive and unfair practices to investigate this activity and take appropriate action to protect LTC centers — and ensure that our nation’s elderly and those individuals with disabilities receive the quality care they deserve,” he wrote.

The vast majority of Florida nursing centers are facing workforce challenges that existed before the pandemic but have worsened significantly over the past year and a half. Tracy Greene, chief operating officer of Southern Healthcare Management and chair of FHCA’s Emergency Preparedness Committee, told members of the Florida House Health and Human Services Committee last week that nursing centers’ use of costly employment agencies to cover gaps in staffing is up by 250% over the past year.

“Our state’s aging population is only growing. I worry about the future of long term care if we can’t rebuild our workforce and recover financially from the impacts of the pandemic,” Greene said.

In her testimony, Greene noted that many of these direct care staffing agencies are seeking to take advantage of the long term care labor crisis by charging exorbitant prices to care centers, which desperately need workers to maintain levels of resident care.

“Unsustainable agency staffing costs are further exacerbating pre-existing financial problems that nursing centers have experienced throughout the COVID-19 pandemic,” said Greene. “Costs per patient day are up almost $42 compared to before the pandemic, resulting in an additional cost of $660 million each year for the profession statewide.”

According to a July member survey conducted by FHCA, almost two-thirds of the association’s members (63%) say their facility’s budget cannot sustain current efforts to meet staffing needs for more than six months. The study also found that 59% of facilities are operating at a loss or negative total margin.

FHCA is the state affiliate of AHCA/NCAL, the nation’s largest association representing skilled nursing care centers. The call for federal intervention in alleged price gouging by direct care staffing agencies comes amid labor shortages exacerbated by the COVID-19 pandemic.

The U.S. Bureau of Labor Statistics in late August reported that nursing homes and other residential care facilities have lost about 380,000 jobs since February 2020 when the pandemic first became prevalent.

“Our providers have little choice but to pay the exorbitant prices, and hope that the agency does not poach their staff once in the building,” Parkinson wrote to FTC Chairwoman Khan. “This price gouging is simply not sustainable for our providers and the current reimbursement system structure. This money being spent should instead be going towards other needed resources that are resident care focused.”

To read the full letter to the FTC, please click here.


October 25, 2021

Kristen Knapp, APR
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