congress capping travel nurse pay

This Legislation Could Cap Travel Nurse Pay, Staffing Agencies Accused of "Price Gouging"

State and federal moves.

• What the Legislation Says

What Nurses Think

Updated 2/3/2022

It’s no secret that there has been a disparity in agency nurse and staff nurse wages over the past year and a half. And the disparity is becoming increasingly bigger as the weeks pass by. Travel nurse pay has never been higher since the pandemic started, with August numbers showing a weekly average rate of over $2.5K, compared to a December 2019 average weekly pay of just over $1K. And as staffing issues continue to plague the entire country, they show no signs of slowing down. 

However, in an attempt to stop the ballooning wages—and perhaps better balance the gap between staff and travel nurse pay—some states have introduced legislation to cap agency nurse pay. As you can imagine, the idea has a lot of people talking, so here’s more on what the legislation is proposing, and how nurses are responding. 

During the pandemic, there have been both state and federal moves towards enacting legislation specifically aimed towards more regulation for staffing agencies and limiting travel nurse pay rates. Most recently, the American Health Care Association/National Center for Assisted Living, LeadingAge and a coalition of long-term care and senior living organizations sent a letter to White House officials warning against the “price gouging” happening in staffing agencies and how the practice is harmful to both patients and providers, who receive fixed reimbursement primarily through Medicare and Medicaid. 

That letter was followed by another one , signed by 200 supporters, urging Congress to enlist federal agencies with competition and consumer protection authority to investigate the conduct of nurse staffing agencies to determine if it is the product of anticompetitive activity and/or violates consumer protection laws. The letter cited that nursing staffing agencies are sometimes taking as much as 40% of the fee collected from hospitals, adding that continuing to pay the high fees to staffing agencies is “ simply unsustainable.”

Supporters behind the movement to cap travel nurses’ pay say that the pandemic has thrust the need for more requirements for staffing agencies into a major spotlight and that ignoring the financial and regulatory issues brought on could lead to long-term impacts. 

Nationally, the American Health Care Association (AHCA) sent a letter to the Federal Trade Commission (FTC), urging the FTC to use its authority to protect consumers from anti-competitive and unfair practices regarding agency staffing. Statewide, Massachusetts and Minnesota are the only two states to already have agency wage caps in place, but some states did make initial moves to address high wages during the pandemic. (Although, notably, Massachusetts raised its caps by 35% for the amount agency staff for nursing homes could be paid during the pandemic.) In Minnesota, wages were also raised , but only slightly: agency RNs can make a max of $58.08/hour at regular pay and up to $99.90/hour for holiday pay. 

Other states have tried to make some kind of moves towards regulating staffing agencies. For instance, with the advent of the pandemic, Connecticut prohibited profiteering during emergencies, with violators subject to fines by the state Department of Consumer Protection and the Office of the Attorney General. The New York State Health Care Facilities Association has also tried to introduce legislation but has not been successful yet. So far, Pennsylvania is the only state that appears to have the most concrete plan in place for moving forward with legislation specifically aimed at regulating staffing agencies. 

What the Legislation Says 

Although the legislation in Pennsylvania hasn’t been formally introduced yet, Pennsylvania Representative Timothy R. Bonner wrote a memorandum on November 5, 2021, that he plans to introduce Pennsylvania Health Care Association (PHCA)-supported legislation that will “require Contract Health Care Service Agencies who provide temporary employment in nursing homes, assisted living residences and personal care homes to register with the Department of Human Services (DHS) as a condition of their operations in Pennsylvania.”

As part of the requirements, the proposed legislation would establish maximum rates on agency health care personnel. Bonner noted that nursing homes in Pennsylvania lost 18% of their workforce, with 68% of the state’s facilities struggling to meet minimum staffing requirements. As a result—like many other healthcare facilities in the nation—agency staff filled those needs. However, in his memo, Bonner cited a statistic that 39% of the surveyed facilities said that they would not be able to afford to keep their facilities open for more than one year. 

Part of that, he added, was the added cost of paying staffing agencies. In some cases, wages have ballooned to over 400% above the median wage rate for long-term care facility staff. Additionally, some of the facilities themselves have lost their own staff to travel agencies. And because long-term care facilities are funded primarily through Medicare (70% of all care in the state’s facilities are through the Medicare program), paying high agency staff wages has significantly drained Medicare funds as well.  

Although the legislation would incorporate a cap on agency pay, it also aims to allow state agencies oversight of supplemental health care service agencies, which they currently do not have. That would include everything from registration requirements to an established system for reporting and penalties. 

“Recognizing the increased role that these agencies play in the day-to-day operations of nearly 700 nursing homes and 1200 assisted living residences and personal care homes, we must ensure they are operating in a manner that supports the long-term care sector and high-quality resident care,” Bonner wrote. 

As you can imagine, travel nurses have something to say about this legislation. In a travel nursing group on Facebook , over 270 comments poured in during a discussion on travel nurse wage caps. 

Some nurses hinted that they would strike if legislation capping pay came to pass, while others warned that there would be no need for a formal strike--travel nurses could simply not pick up new assignments, making staffing shortages even worse. 

“I have just had my best year ever. I could easily sit out for 6 months or change careers,” wrote one nurse. “They do not want to screw around with nurses right now. It is curious that people making legal policy don't possess the professional credentials to do our jobs but believe that they know better than us anyway,” this nurse added. 

Other nurses pointed out that a wage cap could potentially put both patients and healthcare facilities at risk amidst another COVID-19 surge or even another health emergency. “If they try to cap RN pay, what will happen if there’s another COVID surge,” commented another nurse. “Let’s say they cap our rate at 5K, if there’s another surge they will most likely not get much RN’s wanting to help. So they better tread lightly otherwise they will have bigger problems in their hands. A severe nursing shortage.” 

Another commenter chimed in to agree with Celne: “Right?” wrote a nurse. “If they cap, why would anyone want to go help with surges. I’m not going into a hot mess doing more work when I can stay capped right where I am for less work.” 

There is also a Change.org petition circulating online as a result of the letter to Congress that aims to stop the efforts to cap travel nurses pay. “We all know that wage caps are going to have a detrimental effect on staffing, forcing even more nurses to give up working at the bedside and further worsening the problem at hand,” the petition reads. “What about encouraging legislation to protect the safety and rights of nurses? What about legislation to nationalize safe nurse-to-patient ratios? What about legislation to set a fair, competitive minimum pay for nursing? Reach out to your elected officials and voice your concerns. There are many solutions out there, but this isn't one of them.”  

It’s left to be determined exactly if the legislation will pass and what the possible ramifications could be for both the travel nursing industry as well as the ongoing nursing shortage.  

Chaunie Brusie , BSN, RN is a nurse-turned-writer with experience in critical care, long-term care, and labor and delivery. Her work has appeared everywhere from Glamor to The New York Times to The Washington Post. Chaunie lives with her husband and five kids in the middle of a hay field in Michigan and you can find more of her work here . 

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Registered traveling nurse Patricia Carrete, of El Paso, Texas, reads a book during a quiet moment on a night shift at a field hospital set up to handle a surge of COVID-19 patients, Wednesday, Feb. 10, 2021, in Cranston, R.I. (AP)

Congress hasn't proposed traveling nurse pay cap, but asked for staffing agencies probe

If your time is short.

There has been no legislation proposed in Congress to cap pay for traveling nurses.

A letter signed by nearly 200 legislators called for an investigation into high pricing by staffing agencies, but its authors insist they do not want to cap wages for traveling nurses.

Some states are considering capping how much staffing agencies can charge healthcare facilities. This could lead to lower salaries for traveling nurses, one expert said.

A letter sent to a White House official and signed by nearly 200 members of Congress from both parties has sparked concern among traveling nurses that legislators want to cap their pay.

"According to Congress, travel nurses need a pay cap," read a Feb.  7 Facebook post from one nurse, who added, "Staff nurses aren’t paid enough, and the ones who left to travel and help are now being told they make too much. We were once heroic and now it’s back to reality."

The post was flagged as part of Facebook’s efforts to combat false news and misinformation on its News Feed. (Read more about our partnership with Facebook .)

There’s no evidence that these lawmakers are advocating a cap on nursing pay. But a group of lawmakers did ask federal officials to inspect the way staffing agencies charge healthcare facilities. And some states are considering capping what staffing agencies charge hospitals, which one industry expert said could lead to reductions in nursing pay.

Traveling nurses have been in high demand during the COVID-19 pandemic. The job often comes with higher than average pay — sometimes two to three times higher — as an incentive to attract nurses to temporarily live and work in areas where there aren’t enough qualified nurses. 

Two congressmen, Reps. Peter Welch, a Democrat from Vermont and Morgan Griffith, a Republican from Virginia, spearheaded the Jan. 24 letter to Jeff Zients, the White House’s COVID-19 response team coordinator, expressing concern that some staffing agencies are taking advantage of the pandemic to inflate their prices for profit. The lawmakers called for a federal investigation into the agencies’ pricing practices.

The American Hospital Association, American Health Care Association and the National Center for Assisted Living sent a similar letter to Zients on Jan. 27, saying the staffing agencies are "exploiting" the facilities’ "desperate" needs for personnel. 

" The AHA and AHCA/NCAL have each urged the Federal Trade Commission to investigate this conduct as a violation of our antitrust or consumer protection laws but we have not yet received any response," the letter said, urging Zients to see that the matter "gets the attention it merits from the federal government."

While both letters complained of the high rates staffing agencies are charging health care facilities to supply workers, neither mentioned capping pay for nurses or proposed any federal legislation that would cap pay.

Griffith issued a statement on Feb. 5 to address what he called "disinformation" about the letter, saying that he has not introduced legislation to cap nurses’ pay, nor would he support any.

"The bipartisan letter I sent to the White House asks about potential illegal practices by staffing agencies that charge high rates and then keep that money for themselves, not nurses. Rumors are that middleman staffing agencies keep as much as 40% of the money they charge for nurses instead of giving more of the money to the nurses," he said. "I do not and will not support legislation to cap nurses’ pay. Anything to the contrary is fake news."

Emily Becker, a spokesperson for Welch, said the congressman also is "categorically opposed to pay caps for nurses, including travel nurses." His office is "not aware" of any federal legislation proposed or in the works that would cap nurse pay and he "would oppose such legislation," she said.

Welch wants an investigation "to determine whether there has been any improper behavior on the part of staffing agencies and the private equity firms that own them," said Becker, who pointed to an article by the health news publication STAT, with a headline about private equity firms cashing in on the traveling nursing business. An analysis by STAT showed that since early 2021, "at least eight private equity firms have bought at least seven staffing agencies."

Welch has not heard back from the White House about the letter, Becker said.

Featured Fact-check

The American Health Care Association/National Center for Assisted Living said in a statement to PolitiFact that it also was not advocating for a pay cap for traveling nurses, but rather an investigation into "potential anticompetitive practices" by staffing agencies, who may be taking advantage of the pandemic and labor shortages, while only giving the nurses "a fraction of what the agency is charging the facility."

The American Nurses Association, meanwhile, earlier this month issued a statement calling on Congress to address the root causes of nurse shortages. It applauded efforts to address any price gouging, as long as "travel nurses are not negatively impacted in the process."

The median pay for registered nurses in 2020, the last year data was available, was about $75,000 per year, according to the U.S. Bureau of Labor Statistics. Salaries have risen for staff nurses as hospitals tried to attract workers and compete with staffing agencies, The Wall Street Journal reported .

High demand has translated into higher pay from staffing agencies, which in turn pass their higher costs on to hospitals and nursing homes, said Toby Malara, the vice president of government relations for the American Staffing Association , a trade group for the U.S. staffing and recruiting industry.

Malara said the higher prices are simply "a matter of supply and demand driving the rates up." Staffing agencies trying to attract nurses to high-demand areas must factor in higher costs of living in big cities and the risk for nurses working in COVID-19 hot spots, which he called "akin to hazard pay."

He said that 75% of the rates staffing agencies charge hospitals help cover expenses like nurses’ wages, federal and state taxes, workers compensation and unemployment insurance, and benefits. 

Malara said the ASA has not heard from the White House or the FTC about an investigation. An FTC spokesperson told PolitiFact that the agency does not comment on or confirm the existence of investigations.

Malara said that he does not expect to see any federal legislation as a result of the letter from the legislators.

But some states are considering rate caps on what staffing agencies can charge hospitals, which is in essence "a salary cap on nurses because you're limiting what nurses can be paid," Malara said. 

In Pennsylvania, Rep. Timothy Bonner introduced legislation in January that he said in a November memo "would establish maximum rates on agency health care personnel to end the practice of ‘gouging’ the Medicaid program and Pennsylvania taxpayers."

Currently, only Massachusetts and Minnesota have state caps on what staffing agencies can charge healthcare facilities for nurses or other professionals, MedPage Today reported . Malara said staffing agencies struggle to recruit nurses in those states because they can go elsewhere for higher pay if the market demands it.

A Facebook post said that "according to Congress, travel nurses need a pay cap."

A group of nearly 200 legislators sent a letter to the White House asking for a federal investigation into what it called "inflated" prices that staffing agencies are charging hospitals to supply nurses. A similar letter was sent by hospital and nursing home groups. No investigation has been announced by the White House or FTC.

However, the letters did not call for pay caps on what travel nurses make, nor has any legislation been proposed in Congress. The two main authors of the letter said they do not want to see lower pay for travel nurses as a result and would not support any legislation that proposes that.

Some states are considering rate caps on what staffing agencies can charge hospitals and that could ultimately result in lowered salaries for nurses, an industry expert said. But that’s not what the Facebook post is claiming.

We rate this claim False.

CORRECTION, Feb. 17, 2022: U.S. Rep. Peter Welch is a Democrat. An earlier version of this post listed the wrong party affiliation. 

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Facebook post ; Archived: here

Statement from ​​the American Health Care Association/National Center for Assisted Living, Feb. 14, 2022

Email exchange with Emily Becker, spokesperson for Vermont U.S. Rep. Peter Welch, Feb. 15, 2022

Interview with Toby Malara, vice president, government relations, for the American Staffing Association, Feb. 15, 2022

Rep. Morgan Griffith, " Griffith statement on disinformation about nurses’ pay ," Feb. 5, 2022

Letter from U.S. Reps. Peter Welch and Morgan Griffith, to Jeffrey Zients, White House COVID-19 response coordinator," Jan. 27, 2022

Letter from the American Hospital Association, the American Health Care Association and the National Center for Assisted Living to Jeffrey Zients, Jan. 27, 2022 

Associated Press, " AG looks at high rates nursing home staffing agencies charge, " Jan. 13, 2022

American Nurses Association, " ANA Calls on Congress and the Administration to Investigate and Mitigate the Root Causes of Nurse Shortages ," Feb. 1, 2022

American Staffing Association, " What's Really Driving the Cost of Temporary Nurses ," February 2022 

First Coast News, " No, Congress is not considering a salary cap for nurses ," Feb. 14, 2022

Nurse.org, " This Legislation Could Cap Travel Nurse Pay, Staffing Agencies Accused of "Price Gouging ," Feb. 3, 2022

The Wall Street Journal, " Travel Nurses Make Twice as Much as They Did Pre-Covid-19 ," Feb. 8, 2022

The Wall Street Journal, " Nurse Salaries Rise as Demand for Their Services Soars During Covid-19 Pandemic ," Nov. 22, 2021

The New York Times, " ‘Nursing Is in Crisis’: Staff Shortages Put Patients at Risk ," Aug. 21, 2021

NPR, " For travel nurses, jobs at home can't come close to pay they get on the road ," Feb. 11, 2022

U.S. Bureau of Labor Statistics, " Registered Nurses, 2020 " 

MedPage Today, " Will States Rein in Nurse Staffing Agencies? " Feb. 5, 2022

Massachusetts Executive Office of Health and Human Services, " Rates for temporary nurses ," May 8, 2020

Massachusetts Executive Office of Health and Human Services, " Addendum to Massachusetts Secretary of State Regulation Filing Form 940 CMR 3:18, Price Gouging ," 

Massachusetts Executive Office of Health and Human Services, " Memo to temporary nursing agencies executive officers ," Feb. 16, 2021

Minnesota Department of Human Services, " SNSA Maximum charges

Minnesota Department of Human Services, " Application Process for Waiver of SNSA Maximum Charges Request Form for MN Medicaid Certified Nursing Facilities ," Oct. 16, 2020

Minnesota Department of Health, " Supplemental Nursing Services Agency, Minnesota statute 2000, section 144.057 - 144A.74 ," July 2001

Pennsylvania Rep. Timothy Bonner, " Registration and Oversight of Contract Health Care Service ," Nov. 5, 2021

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Congress hasn't proposed traveling nurse pay cap, but asked for staffing agencies probe

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Health Care

Hospitals ask biden administration to help lower the soaring cost of travel nurses.

Shalina Chatlani

It's now been a year since the American Hospital Association alleged price gouging and asked the White House to investigate and act. Bidding wars among states have only escalated.

ARI SHAPIRO, HOST:

The American Hospital Association says health care staffing agencies are exploiting the pandemic, forcing them to pay astronomical wages for temporary nurses and other staff. Nurses who sign on with the agencies and who are willing to travel can more than double their salaries. That's because of the large sums of federal COVID relief money given to states. Shalina Chatlani, with the Gulf States Newsroom, reports hospitals are asking the White House to do something.

SHALINA CHATLANI, BYLINE: Last year, Kimberly Carson got tired of the nursing job she'd had for eight years at a hospital in Illinois. She didn't think she was being paid well enough to compensate for the pandemic workload.

KIMBERLY CARSON: I feel like you should be able to afford to pay your staff more money and better wages.

CHATLANI: Carson says, by the time the hospital started offering bonuses, it was too late.

CARSON: Like, where were you at, at the beginning when we really needed you? Where were you?

CHATLANI: So she quit and since December has worked as a traveling nurse, making twice her old salary on a temporary contract with a Mississippi hospital.

Demand for travel nurses has soared. Before the pandemic, hospitals sought to hire about 7,000 traveling nurses at any one time. By 2021, they were looking for 28,000. That's in part because of COVID relief money Congress sent states. Most are using it to hire travel nurses. Texas alone has spent $7 billion on temporary medical staff.

ROBYN BEGLEY: It's just not sustainable.

CHATLANI: Robyn Begley is with the American Hospital Association.

BEGLEY: Some hospitals that really struggle to break even at - year after year, we are really in a crisis.

CHATLANI: Nurse wages have also gone up because there are now far fewer nurses than before the pandemic. The 100,000 open positions then has now doubled.

BEGLEY: Some nurse staffing agencies, we believe, are exploiting the severe workforce shortages and charging exorbitant fees.

CHATLANI: Toby Malara of the American Staffing Association, a trade group, says staffing companies are just responding to the current labor market.

TOBY MALARA: And their prices are being driven by the wages and the cost of labor that have come about by the pandemic.

CHATLANI: He says some hospitals and governments are actually making things worse by not being good stewards of COVID relief money.

MALARA: If the federal money is used to pay and retain nurses and pay them bonuses, that could be helpful. But also, it gives them a chance to push out money and pay those higher rates without thinking about it as much.

CHATLANI: Some states, like Massachusetts, are trying to create rate caps, but Malara says that could drive nurses away. Better, he says, would be increasing nurse numbers overall and Medicaid payments to hospitals.

MALARA: Increase federal funding for nursing schools. You have to increase the Medicaid reimbursements.

CHATLANI: The hospital association asked the Federal Trade Commission to investigate staffing agencies a year ago. The FTC won't confirm whether it's doing so. The association has sent multiple letters to the White House, too.

A Biden administration official declined to speak publicly about a complaint to the FTC, an independent agency, but said that the White House has deployed federal search teams, and it's helped cover costs for National Guard deployments to hospitals with staffing shortages. It's also trying to accelerate visa processing for 5,000 foreign health care workers.

JAMIE HEARD: It all boils down to, I'm doing this for my family. It boils down to money.

CHATLANI: Jamie Heard, an ICU manager in Mississippi, says for now, nurses know the labor market has changed, and there's a lot less incentive to stay at a given hospital.

HEARD: I can bounce within my career and make more money. Staying long at places is, I think, a thing of the past.

CHATLANI: Last week, nearly 200 members of Congress signed on to a letter to the White House, urging quick action to rein in high travel nurse costs.

For NPR News, I'm Shalina Chatlani in Jackson, Miss.

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Contract Nurse Agencies Are Making Big Money in the Age of COVID-19. Are They ‘Exploiting’ the Pandemic?

I n the 40 years that Jennie Kahn has worked as a registered nurse, the last two have been by far the most grueling.

A lot of that is due to COVID-19, which transformed health care facilities, including Thomas Health’s hospital system in Charleston, West Virginia, where Kahn works, into triage centers and forced nurses to take on an extraordinary amount of personal risk and heartache. It’s no mystery why some 18% of health care workers quit their jobs between Feb 2020 and Sept 2021, according to a Morning Consult poll.

But another reason these past two years have been so punishing, Kahn says, is that hospital nursing staffs have been subject to extraordinary churn as thousands of nurses have quit their staff positions to become contract travel nurses, where the pay is often two to four times higher. This rapid turnover has triggered a costly feedback loop: hospital administrators, facing shortages in staff nurses, spend a mint hiring contract nurses, which makes them less able or willing to increase their staff nurses’ pay. So more staff nurses quit to become contract nurses, thus further lowering nurse supply and driving demand for contract nurses. “It is a vicious cycle,” says Kahn, the hospital system’s chief nursing officer.

Meanwhile, contract nursing agencies have increased their prices. The advertised pay rate for travel nurses has surged 67% from January 2020 to January 2022, according to Prolucent Health, a workforce management tool for healthcare companies, while some staffing agencies such as AMN Healthcare, told TIME that pay rates for travel nurses at facilities they work with rose by 164% from the fourth quarter of 2019 to the fourth quarter of 2021. Some of these agencies’ profit margins top 20%.

Some hospital administrators, many of which saw their facilities’ profits shrivel during COVID, say they’ve reached a crisis point and are calling on Congress and the Biden Administration to step in. They argue that contract nursing agencies are exploiting circumstances resulting from COVID-19 to pad their own pockets. The agencies say their prices are merely a reflection of growing demand. Nurses, meanwhile, argue that hospital administrators, who are somehow finding a way to pay premium rates for contract nurses, could have avoided the mass nurse exodus by paying their staff nurses better and improving working conditions from the start, and that a fragmented nursing force with quick turnover is bad for patients’ health.

The solution is not straight-forward. Health care facilities, desperate to keep nurses on staff, may have to improve salaries and working conditions, but at many facilities, that’s easier said than done. At long-term care centers, bottom lines are dictated by Medicare and Medicaid reimbursement, and at many small and medium-sized hospitals, the cost of personal protective equipment and patient loads have fluctuated dramatically since March 2020.

“This is not anything that any health system can sustain for a long period of time,” says Kahn. “If the rates do not decrease or if travel nursing is not reduced somewhat, hospital systems are going to have to find alternative ways to provide patient care.”

An explosion of temporary staffing

Travel nurses have been around for decades and became more widespread in the 1980s, as nursing shortages grew, but it’s really the pandemic that changed the landscape of the profession. In some healthcare settings, contract nurses are now almost as prevalent as staff nurses.

Jeffrey Tieman, president and CEO of Vermont Association of Hospitals and Health Systems (VAHHS), says that prior to COVID-19, his system used travel nurses “as a stop gap”; now he says they’re “in every department of the hospital every day of the week.” The same is true of Thomas Health, Kahn says. When she first became the hospital system’s chief nursing officer in 2019, the acute care team didn’t rely on traveling nurses at all; these days, about 40% of her acute care nurses are on temporary contracts.

The financial fallout of this trend for hospitals’ and nursing homes is staggering. Due largely to the increase in contract nurses, Thomas Health is now roughly 100% over its previous staffing budget, the hospital system tells TIME. Between Fiscal Years 2020 and 2021, VAHHS’s outlay for contract nurses increased $29 million, or 35%, the group says. “As the pandemic picked up and dragged on, the need for nurses intensified when the supply of nurses diminished,” Tieman says.

Depending on contract nurses also creates logistical problems, says Deb Snell, a registered nurse and the president of the Vermont Federation of Nurses & Health Professionals. “It is difficult when you have new people coming in every 12-13 weeks, and orienting them to your floor, making sure they know where equipment is, where meds are, who to call for a problem,” she says. “It’s constant turnover.”

Struggling to fill empty roles and way over budget on staffing, VAHHS reached out to Vermont Congressman Peter Welch for help coming up with a solution, and on Jan. 24, Welch and Morgan Griffith of Virginia wrote a letter to the White House, cosigned by nearly 200 other members of Congress. The letter urges the Biden Administration to investigate the extent to which contract nursing agencies are exploiting the pandemic to drive their profits by engaging in anticompetitive activity. “We are writing because of our concerns that certain nurse-staffing agencies are taking advantage of these difficult circumstances to increase their profits at the expense of patients and the hospitals that treat them,” the letter says.

Days later, the American Hospital Association and the American Health Care Association/National Center for Assisted Living, the major nursing home trade group, threw their support behind Welch and Griffith, calling on the Administration to help prevent the travel agencies “from exploiting our organizations’ desperate need for health care personnel.”

Travel nurses, meanwhile, were incensed. On social media and message boards, they begged supporters to call their members of Congress to defend them and their pay schedules. “Wait, what? They want to cap travel nurse pay but they won’t cap CEO and executive pay? Well… I guess they know who their true masters are, and it sure as hell ain’t the voters,” wrote one Reddit user.

“It’s just because they can get away with it”

Welch says capping contract nurses’ take-home pay was never the intention of his letter. “I never have and never would propose a cap on nursing pay,” he says. “Nurses are the frontline, and they’re overworked, they’re underpaid, and they legitimately point out how the executives get fat salaries while they have to do all this work.”

Instead, he says, one big reason for the financial burden on hospitals is the fees that nurse staffing agencies charge to assign travel nurses to health care settings that need them. Proculent Health, the workforce management tool used by healthcare companies, estimates that hospitals and other healthcare facilities are billed an additional 28% to 32% above the wages the agencies pay contract nurses.

Welch argues these agencies may be exploiting the pandemic’s circumstances at the expense of hospitals, health centers, and the patients who seek care at them. “The fee that the agency charges is not related to any additional work they do, or any value added,” Welch tells TIME. “It’s just because they can get away with it.”

AMN Healthcare Services reported its gross profits were $434 million in the fourth quarter of 2021, up 109% from a year prior, according to an annual earnings report . Its net income, which takes into account all business related expenses and taxes it had to pay, was $116 million, an 1100% increase. Another healthcare staffing agency, Cross Country Healthcare, saw its revenue increase 93% between the third quarters of 2020 and 2021. It also reached $1 billion in annual revenue for the first time in the company’s history in 2021.

In recent months, private equity firms have begun acquiring contract healthcare staff agencies at a rapid clip, signaling to Welch that investors believe there is even more money to be made off the travel nurse industry in years to come—which would put hospitals under even greater strain. One of the largest healthcare staffing agencies, Medical Solutions, was purchased by two private investment firms in August. Favorite Healthcare, another large staffing group, was bought by a private equity-owned staffing firm in January.

“Three of the 10 largest staffing agencies—and probably more—were purchased by private equity right around the time that the pandemic began,” Welch says.

Staffing agencies argue that the higher prices health care facilities are paying are driven primarily by the higher wages the agencies pay nurses to meet the demand. In 2020, 75% of revenue nurse staffing agencies made went to wages and the costs of employing nurses, including payroll taxes, worker’s compensation and unemployment insurance payments, and other benefits, says Toby Malara, vice president of government relations for the American Staffing Association (ASA), a trade group for the staffing industry. He adds that most of the association’s nurse staffing agencies have seen their profits remain “relatively stable” during the pandemic.

Nurses worry about pay cuts — for good reason

Many nurses are worried that heightened government scrutiny will result in lower take-home pay for them — and that anxiety is not necessarily unfounded. Some states already cap nurse pay under certain situations, or are considering legislative action to do so. Minnesota, for example, caps contract nurses who work in nursing homes. The most that an RN can earn per hour during non-holidays is $62.36, according to documentation provided by the state’s Department of Health. Massachusetts caps pay for RNs at hospitals around $120 per hour. At nursing home facilities, the state caps an RN’s pay around $79 per hour, the state’s Executive Office of Health and Human Services says .

Other states including Kansas, Ohio, Oregon, Illinois and Pennsylvania are now considering legislation to cap nurse pay in some cases. Pennsylvania state Rep. Timothy Bonner has introduced a bill to establish maximum rates for employees of travel nursing agencies in his state that would be no higher than 150% of the average statewide pay rate for similar jobs. “[Staffing] agencies have seized on the pandemic and the critical need for workers,” he wrote in a letter to his statehouse colleagues, according to the Lewistown Sentinel , “and have raised their hourly rates to 100 percent, 200 percent or even 400 percent above the current median wage rate.”

The White House referred TIME’s questions about how regulatory action against the contract nursing industry would work to the Federal Trade Commission, which did not return a request for comment.

Many nurses say arbitrary pay caps are unfair. The problem is not high pay, they say; it is that there aren’t enough nurses to do an increasingly challenging job for relatively low wages. And while the pandemic exacerbated nurse shortages nationwide, the problem long preceded COVID-19’s added pressures. “Things were already getting tight even prior to the pandemic,” says Snell in Vermont. “Nurses have known and seen this coming for a while. We just couldn’t get people to listen.”

Part of the issue is demographics. The median age of RNs in 2020 was 52, according to a recent survey from the National Council of State Boards of Nursing, and with baby boomers retiring, more nurses will need replacing. But there’s no lack of interest. Enrollment in baccalaureate and higher-degree nursing programs increased in 2020, according to the American Association of Colleges of Nursing, and nurse practitioner graduates have swelled in recent years too. Nursing schools could be training even more graduates, experts say, but the cost of nursing school can be a barrier for students, and schools are also experiencing a shortage of nursing instructors.

But the largest factor, according to nurses unions and professional groups, is how low the pay is compared to how difficult the work environment is. “There is no nursing shortage in the United States. There is a shortage of nurses who are willing to work in these conditions,” says Michelle Mahon, a registered nurse who is assistant director of nursing practice at National Nurses United (NNU), the largest nurses union in the country. “This is something that’s been created by health care employers over a very long period of time.”

NNU has frequently criticized hospitals for adopting what it says are policies of chronic understaffing in order to help their bottom line. High patient-to-nurse ratios deteriorated patient care and put nurses at increased risk of workplace injuries and infections before COVID-19, Mahon says. Then when the pandemic swept in, hospitals that had prioritized cutting costs were unprepared.

Health care doesn’t operate like a free market

While some nurse unions have been able to demand raises from large hospital systems during the pandemic, health facilities that see primarily patients who have government health insurance are often more limited in what they can pay. Nursing homes are overwhelmingly paid by Medicaid and Medicare, so they say the rates they can pay nursing staff are largely determined by how much the government programs reimburse per patient, and hospitals in low-income areas can face similar situations.

About 70% of the costs of operating a nursing home are related to labor, according to Clif Porter, senior vice president of government relations at AHCA/NCAL. But even as facilities have had to pay two to three times normal wages to hire temporary nurses during the pandemic, their reimbursement rates have not kept pace. “I can’t pass on inflation to my customer,” he says. “This creates a situation where our expenses exceed our revenue. It’s just that simple. And that’s just not sustainable.”

Porter says that he doesn’t want maximums for what nurses can make, but floats the idea of a cap on agency profits or regulations that stipulate how much of what a staffing agency charges it must pass on to its workers.

“If the legislation were to directly impact the [agency] overhead, we don’t believe that nurses salaries would be impacted,” says Ernest Grant, president of the American Nurses Association. But the ANA does not support any effort to lower nurse wages, and Grant added that the concern over price gouging has “become quite a distraction.”

Mahon agrees, saying the idea of investigating these staffing agencies will not solve the staffing crisis. Even if the health care facilities are not happy about the rates these staffing agencies are charging, she notes, they have found the money to pay them. “If there was serious reflection and introspection and desire to solve [the nursing shortage], it would be focused inward by this industry,” Mahon says.

More nurses, better treatment

Nurses groups’ say there are other solutions that could retain and attract a larger workforce. NNU would like to see minimum staffing ratios, enhanced workplace safety measures, and increased funding for nursing education, for example. The ANA has also promoted ideas including improving nurse hours and mental health support, adjusting the Centers for Medicare and Medicaid Services payment methods, and removing barriers that make it difficult for nurses to practice. “We really need to address it once and for all, and not just cap it off at this particular time,” Grant says.

Desperate to retain staff, Thomas Health, where Jennie Kahn works, has increased bonus pay, instituted recruitment bonuses, expanded its tuition repayment programs and started offering its staff free meals at hospital cafeterias.

The University of Vermont Medical Center, meanwhile, just agreed to raise its nurse’s wages by 20% over two years, with 10% being implemented now and an additional 5% coming in October 2022 and an additional 5% coming in October 2023.

Though Snell says the raises are a positive step toward retaining staff, she’s not certain it is sufficient to stop the bleeding. A study released in October by the American Nurses Foundation reports 21% of nurses nationwide said they planned to resign from their jobs within the next six months. Another 29% said they were considering leaving. University of Vermont Medical Center is not immune.

“We have a lot of nurses leaving our hospital to go travel,” she says. “I’m hoping the 10% right now will be enough to maybe keep some of them in place.”

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How some states are trying to tackle 'exorbitant' travel nurse costs

During the pandemic, many hospitals faced "exorbitant" contract labor costs as they struggled with widespread staffing shortages, further exacerbating their financial troubles. Now, lawmakers in several states have proposed legislation to help combat high contract labor rates going forward, including wage caps and potential penalties for staffing agencies.

States propose new legislation to cap travel nurse costs

Widespread labor shortages during the pandemic led many hospitals and health systems to turn to staffing agencies to fill their workforce gaps, and as a result, contract labor expenses jumped significantly.

According to the   American Hospital Association , hourly rates charged by staffing agencies increased by 213% between January 2019 and January 2022. In December 2021, data from   Vivian Health   showed that the average weekly pay for travel nurses had reached $3,782, up from $1,896 in January 2020.

In response to these "exorbitant price increases," lawmakers in more than 10 states have proposed new legislation to either cap what healthcare staffing agencies can charge hospitals or penalize staffing agencies for price gouging tactics during emergency situations, Modern Healthcare reports.

In New York, a bill introduced in February would establish guidelines for healthcare staffing agencies. It includes a provision that prohibits them from charging more than 30% above what an organization would typically pay a staff employee with the same qualifications during a state of emergency.

In Missouri, a similar bill capping the rate staffing agencies could charge at 150% of the average wage rate from the past three years, plus taxes, was considered, but did not ultimately pass. Instead, legislators approved changes to staffing agency regulations, including new wage reporting requirements.

"During the pandemic there were staffing companies who were making a lot of promises and not necessarily delivering," said Dave Dillon, a spokesperson for the   Missouri Hospital Association , who noted that the group supported the bill as a way to address problems with staffing agencies, not nurses who were seeking higher wages. "It created an opportunity for both profiteering and for bad actors to be able to play in that space."

"All these agencies that were price gouging all they were doing was putting that money in their own pockets," said Michelle Hall, a hospital nursing leader who started her own staffing agency in 2021. "They weren't doing anything different or special for their nurses."

Other states are also considering potential penalties against staffing agencies for price gouging during emergencies. In Texas, a recently proposed bill would allow the state's attorney general to penalize staffing agencies up to $10,000 if they price gouge during public health disasters.

Staffing agencies respond

According to Toby Malara, VP of government relations at the American Staffing Association (ASA), staffing agencies don't actually make as much profit as providers believe they do. Typically, around 75% of an agency's pay rate is used to cover salaries, taxes, workers' compensation coverage, unemployment contributions, recruitment, and training and background checks.

Hospital leaders have, "without understanding how a staffing firm works," wrongly assumed that price gouging had occurred, Malara said. In fact, he noted that many of ASA's members reported lower profits during the pandemic.

"We try to sit down with the proponents of the bill and find out what they're really trying to accomplish," Malara said. "The hourly billing rate has dropped drastically since the beginning of 2022, when we were still in that pinch of omicron. We have seen bill rates drop as much as 30% across the country. I think the issue that the facilities are having is the pay rates and the bill rates are still above pre-pandemic levels."

According to Malara, he does not believe rate caps will be effective since they could limit nurses' pay and worsen staffing shortages in certain areas if travel nurses choose to look for contracts with higher wages elsewhere. Nurses may also be unwilling to return to their pre-pandemic wage levels.

"If the nurses aren't willing to go back to what they were being paid beforehand, then [providers'] prices aren't going to go back," Malara said.

In addition, Hannah Neprash, a healthcare economics professor at the   University of Minnesota , said that hospitals in states with caps on travel nurse wages or other restrictions on staffing agencies could have a more difficult time hiring travel nurses during a national health crisis compared to states without such limits.

In general, hospitals and health systems will likely continue to struggle with staffing issues and labor costs for the foreseeable future, even with potential new legislation in the works in many states.

"Whether legislation is the answer, I'm not sure," said Steve Filton, CFO at   Universal Health Services . "I'm a free market sort of person, so I always worry about the unintended consequences of the government trying to fix prices, whether it's pay for nurses or for anything else. But I certainly acknowledge that this is a continuing issue for the hospital industry." (Hudson, Modern Healthcare , 4/3; Sable-Smith, Kaiser Health News , 3/17)

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Hospitals desperately need staff. But capping travel nurses’ pay won’t help.

The travel nursing boom is just a symptom of a much larger, self-inflicted problem.

An earlier version of this article stated that a letter by Rep. Peter Welch (D-Vt.) and Rep. H. Morgan Griffith (R-Va.) called for regulating the pay of travel nurses. In fact, the letter calls for federal agencies to investigate the prices charged by nurse staffing agencies. This article has been corrected.

Across the country, travel nursing has been making headlines , most of them focusing on how much money these short-term contract workers can make — double or triple what their staff counterparts earn. But compensation, while important, is often not the main reason nurses leave hospitals for these contracts.

In interviews, nurses from across the country have told me many variations of a shared story: Working conditions, which had never been ideal in the first place — due to lack of support staff and high patient-to-staff ratios, among other factors — have dramatically deteriorated. Nurses have been asked to work to the edge of their abilities; they fear for patient safety. For many, travel contracts present a way out they never thought they’d have to take. Some nurses say that a travel contract limited to 8- or 13-week bursts protects their physical and mental health. They know that no matter how bad conditions get, for them the situation is finite. Others are using the money as a bridge to get out of nursing altogether.

Nearly 1 in 5 health-care workers has quit since the pandemic began. A recent survey by the American Association of Critical-Care Nurses found that 92 percent felt that the pandemic had “depleted nurses in their hospital, and that their career would be shorter than they had intended as a result.”

Their capacities stretched to the breaking point, hospitals have turned to the temporary fix of hiring short-term travel nurses, further alienating staff nurses, who are then incentivized to quit and take a travel contract themselves. Demand for travel nursing grew by at least 35 percent in 2020 and has driven up salaries: Travel nurses can command an average of about $3,500 per week and sometimes even more. By the end of 2020, average weekly pay for travel nurses was more than double what it had been the year before. Nurses report being bombarded with recruiting offers; unfilled travel nurse openings hover around 40,000 .

Five myths about nurses

Yet the problematic explosion of traveling nursing is only a symptom of a longer-running, self-inflicted disaster: Over the long-term , hospitals have failed to hire and support enough nurses to weather crises.

Hospitals often say there simply aren’t enough nurses to hire. It’s true that in some parts of the country, particularly in low-income rural areas , there aren’t always enough nurses to go around. And because the majority of nurses are older than age 50, as the baby boomer generation ages into needing more medical care, there has been a surge in demand for nursing alongside a surge in retirements from nursing. Still, this is a deceptively narrow assessment of a complex problem — and it lets hospitals themselves off the hook.

The devaluing of nurses starts early in the pipeline. Though nursing schools are graduating an increasing number of nurses, they are also rejecting tens of thousands of qualified candidates because there aren’t enough instructors to teach them. Nurse educators are paid a fraction of what they could make working clinically. For those that do graduate, hospitals rarely provide the support that would allow new nurses to grow into veterans. “Some of the new grads get culture shock when they first come, and they quit because of the lack of training, preceptorship and mentorship that these hospitals are offering,” said Zenei Triunfo-Cortez, a nurse and president of National Nurses United, the country’s largest nurse labor organization. Newly graduated nurses quit their jobs in their first and second years of work by rates of 30 to 57 percent.

Hospitals also contribute to the problem by keeping their nursing staff as lean as possible, treating the nursing workforce like a tap they can turn on and off to maximize profits. At the beginning of the coronavirus pandemic , hospitals furloughed or laid off nurses when lucrative elective procedures were suspended, only to frantically try to hire them back as covid-19 hospitalizations rose. Ping-ponging from furloughs and layoffs to cutting hours and then to mandatory overtime is not a recipe for retention. The understaffing crisis is a circular problem: Not hiring enough nurses makes working conditions unbearable, leading to more nurses leaving their jobs.

The undervaluing of nursing has deep roots. From the dawn of modern American hospitals in the 19th century, hospitals have treated nursing care like something they should get for free. The first American training schools of nursing were located inside hospitals. There, students lived on-site to provide free care and received little formal education and support. When they graduated and expected salaries, their training hospitals generally didn’t hire them. Many graduates turned to private nursing, hired by individuals who could afford them. After World War I, despite a surplus of graduate nurses, hospitals nevertheless complained of a “shortage,” which was really a shortage of nurses who would work for free.

By the 1940s, as hospital care became more complex and labor-intensive, hospitals finally started to hire and pay graduate nurses in large numbers. But administrators never changed the way they thought about nursing, argues nurse historian Jean C. Whelan — that is, as a line item to be cut, not a resource to invest in. “Hospitals failed to question whether improving the working lives of nurses could make a positive impact on nurses’ decisions to enter and stay in the workforce,” Whelan wrote in her book “Nursing the Nation.”

Social workers are the unsung heroes of the pandemic

The way today’s hospitals make money reinforces this notion. Revenue mainly flows into hospitals through physicians, who perform billable services. Meanwhile, the costs of nursing care are wrapped up into the fee for room and board. If you were admitted to the general medical floor of a hospital, your nurse could have eight patients, or she might have four patients. Either way, the room and board bill the hospital sends to your insurance company will usually be the same. From a hospital administrator’s point of view, fewer nurses taking care of more patients is much more profitable. But from a patient’s perspective, this might mean you don’t see your nurse for hours.

In the end, this is not only inhumane but extremely ineffective in terms of health outcomes. Numerous studies over decades have shown that assigning nurses too many patients is associated with all kinds of bad outcomes for patients, from more hospital-acquired infections to more deaths. A 2018 meta-analysis found that the higher the level of nurse staffing in a hospital, the fewer patient deaths there were.

Employing more nurses per patient is safer for patients, and it makes nurses less likely to burn-out and quit . But hiring and supporting a large nursing staff is expensive, and many hospitals have been unwilling to do it. Travel nurses are expensive, too, but they are a short-term expense; they don’t get benefits or job security.

Amid this ongoing disaster, that rarest of things has emerged: bipartisan action. Earlier this year, Rep. Peter Welch (D-Vt.) and Rep. H. Morgan Griffith (R-Va.) proposed that federal agencies investigate the prices charged by nurse staffing agencies, citing concern that the high rates for travelers amounted to price gouging, and was contributing to the destabilization of the health system. The proposal , sent to the White House covid-19 response team, was signed by 200 members of Congress, an ideologically disparate group including Ilhan Omar (D-Minn.) and Nicole Malliotakis (R-NY). Pennsylvania and Oregon , among other states, are considering similar proposals. Meanwhile, the American Health Care Association and the American Hospital Association have asked the Federal Trade Commission to curb what they call “price-gouging” by agencies. Though the AHA denies it has advocated for nurse pay caps, some nurses reasonably fear that caps are the logical end result.

Incredibly, given Congress’s inability to come together to curb prescription drug costs or pass paid family leave, they have found common ground on one issue: cracking down on nurses’ pay. Meanwhile, rising hospital administrator pay has escaped political scrutiny — though there is no correlation between those salaries and hospital mortality or readmission rates. This is not only deeply unfair and shortsighted, it may make the problem worse. Capping the relatively high wages currently commanded by nurses willing to leave home and provide crisis care could decrease the number of nurses willing to work in those environments.

As historian Susan M. Reverby has observed , American nursing’s central problem is “the order to care in a society that refuses to value caring”: In this context, care is often impossible. In my conversations with nurses, this painful reality comes up again and again. It is a nightmare to know that your patients need the best care you can provide and to also know that your working conditions prevent you from providing it. Can anyone blame nurses for turning the tables, for working within the system’s own flawed, profit-driven logic, for charging what the market will bear? Can we really look at the state of our health-care system and conclude that travel nurse salaries are the problem? Isn’t it telling that the industry has only asked the government to step in now, when nurses are the ones wielding their market power?

If the industry — and our lawmakers — truly want to address the staffing crises, they will need to start at the root of the problem: our collective failure to value caring.

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Pandemic price gouging complaints raise staff tensions with traveling nurses

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Like most traveling nurses right now, Pamela McNairy of Mississippi says she’s making more money than she ever thought possible. She’s working in a Southern California COVID unit, getting $10,000 a week before taxes.

But that’s working 13-hour shifts, overnight, five nights a week. 

“We’re the ones who are actually doing the real patient care and keeping these people alive,” she said. “I’m telling you, it’s hard.”

So it doesn’t sit well with McNairy that the American Hospital Association is calling for price gouging inquiries into staffing agencies, citing reports of pay rates tripling from before the pandemic.  Nearly 200 members of Congress have signed on in support.

Hospitals are crying foul over the high prices they have to pay traveling nurses during an escalating staff shortage. 

“When you see price increases that are two or three or more times what they were before the pandemic, it’s fair to at least investigate about whether or not these companies are price gouging,” AHA general counsel Mindy Hatton said on a media conference call.

Some legislators have proposed pay caps . A Pennsylvania lawmaker is even trying to cap travel pay in nursing homes; nurses report health systems are trying to set limits, too.

The corporate claims of financial stress are not helping strained staff relations.

“The ones who make the decisions, they don’t walk into a COVID patient’s room,” McNairy said. “They’re not risking their lives. They’re not away from home.”

McNairy has four kids and a husband in Mississippi, and she’s been away from her family for much of the pandemic.

Traveling nurses have always been paid more for their flexibility and experience. But hospitals say the going rate, which is often above $120 an hour , has ballooned beyond what they can afford. In the first quarter of this year, the Henry Ford Health System in Michigan plans to spend $50 million on what CEO Wright Lassiter calls “crisis labor.”

“That is the exorbitant labor cost related to the recent inflation in travel and contract nursing to supplement our staffing,” he said.

Of its 9,000 nursing jobs, Lassiter said 1,000 positions were open in January. Many nurses have left bedside roles during the pandemic to travel to COVID hotspots, given the much higher pay, creating a vicious cycle where their replacement will likely have to be a pricey traveler rather than a lower-paid permanent staffer.

Rural hospitals have had particular trouble holding on to their bedside staff, and not just nurses. West Tennessee Healthcare’s hospitals in the small communities of Camden and Bolivar lost half of their respiratory therapists who specialize in ventilating COVID patients to staffing agencies, according to CEO Ruby Kirby .

“We cannot compete with the salaries that they are offering to recruit additional staffing,” she said. 

CEOs have been careful to focus their criticism on staffing agencies — not nurses themselves — especially since many executives still make considerably more money. For example, Lassiter made $5.2 million in 2019 or roughly $100,000 a week, according to the most recent tax filings .

Hospital CEOs point out that traveling nurse agencies tack on an extra 30% or more for overhead and profits. Toby Malara, the American Staffing Association’s vice president of government relations, said an agency’s cut is paying for real expenses like recruiters and nurse training, not just profits.

And staffing firms are providing a way for nurses to work hard for three-month periods with high pay and then take a break.

“We know that if nurse staffing agencies weren’t around, we’ve heard from these nurses, that they might be out of the business altogether,” Malara said.

The American Nurses Association  predicts another 500,000 nurses will be retiring  this year and projects the need for 1.1 million new nurses to avoid a nursing shortage.

Nurses are organizing what’s being billed by some as a “million nurse march” in Washington, D.C. on May 12. McNairy said she’s hoping to fly across the country to be there so nurses can be heard.

“I can tell you this,” she said. “If they mess with our money, we’ll walk out.”

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Travel nurses fear wage caps after bipartisan group of lawmakers ask White House to investigate

With COVID-19 hospitalizations still extremely elevated due to the spread of the highly contagious omicron variant, the need for nurses has never been higher.

Already facing a major nursing shortage caused by high levels of stress and burnout from the pandemic, hospitals have increasingly turned to third-party agencies to find traveling nurses to fill their staffing needs.

But according to a letter to the White House COVID-19 response team coordinator, which was signed by dozens of federal lawmakers, those third-party agencies are "taking advantage" to profit from the pandemic.

Hospitals have turned to staffing agencies to contract traveling nurses for years. But as the workforce thins and demand for health care workers surges with every new wave of COVID-19, networks have become increasingly reliant on traveling nurses to staff their hospitals.

The travel model is more lucrative for health care workers. The Dallas Morning News reports that traveling nurses in Texas make about $40,000 more per year — not including overtime — than nurses who work full time for a single hospital.

According to The Morning News, staffing agencies are able to pay travel nurses a higher wage because they charge a premium to hospitals, which have few options to fill workers during shortages amid COVID-19 surges. Every time a new wave spreads in a community, hospitals pay more to staffing agencies to hire health care professionals.

That's why Rep. Peter Welch, D-Vermont, and Rep. Morgan Griffith, R-Virginia, led a bipartisan group of dozens of lawmakers in urging White House officials to crack down on the use of traveling nurses.

"We have received 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, dated Jan. 24, reads.

However, the letter has prompted criticism from travel nurses accustomed to higher pay. They say flying across the country to a new city to work with sick COVID-19 patients justifies extra income.

"I have a family, I have a life, I have a home. That's why I want these funds. I want to take care of the patients, I want the increased pay because I'm sacrificing at the end of the day," Danielle Swenson, a traveling nurse from Bradenton, Florida, told Scripps station WFTS . "I don't think that's something that's unfair to think or act, and I think in any other profession, I think that's something that we would expect."

NPR reports that some states, like Massachusetts, could install rate caps for traveling nurses. While such caps would likely lower health care costs for patients, some nurses fear that they could drive down wages and send more workers away from the industry.

Toby Malara of the American Staffing Association trade group told NPR that a better solution would be to increase Medicaid payments to hospitals to bridge the wage gap between traveling nurses and full-time nurses.

"If the federal money is used to pay and retain nurses and pay them bonuses, that could be helpful. But also, it gives them a chance to push out money and pay those higher rates without thinking about it as much," he said.

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The 2022 Wage-Gap Spiral: State and Federal action to Cap Nurses’ Pay

Feb 15, 2022 | Economic Policy

Economic Policy Brief #135 | By: Alexandra Ellis | February 15, 202

Header photo taken from: nurse.org.

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Photo taken from: Dallas Morning News

Policy Summary

As the pandemic comes to its third year, state legislatures across the US are looking to cap nurses’ pay. States are calling for local and federal regulation of nursing agencies who employ nursing home nurses and travel nurses. Proponents of capping agency nurses pay suggest there has been a significant increase of hourly wage for agency nurses. 

They claim the agencies are “price gouging.” However, they ignore the fact that (1) inflation plays a role and demand is created by (2) regular staff at hospitals being overworked and underpaid for their time. Yet, regular staff are expected to work overtime during surges in unsafe conditions. During the pandemic, regular nurses are subjected to a very high staff to patient ratio.

Policy Analysis

Currently two states cap nurses’ pay: Massachusetts and Minnesota. During the pandemic, both states addressed inflation and demands by increasing their caps by 35 percent. For example, in Minnesota, legislators increased the cap to a max of 58.08/hour per hour and 99.90/hour for holiday pay.

Other state legislatures are advocating for limiting travel nurses’ wages. Connecticut, New York, and Pennsylvania are among these states. During the pandemic, Connecticut forbid profiteering off the COVID-19 emergency. A joint conglomerate in New York state including, New York State Health Care Facilities Association (NYSHFA) and New York State Center for Assisted Living (NYSCAL), tried to introduce legislation to limit state budget expenses available to pay nurse staffing agencies but failed.

In November of 2021, Pennsylvania Representative Timothy R. Bonner wrote in an open letter to the public showing intent to introduce legislation that caps travel nurses pay. This legislation proposal has the support of Pennsylvania Health Care Association (PHCA). The memorandum cites concern that nursing homes are struggling to afford agency personnel, such as travel nurses.

Nursing homes have lost many of their regular staff due to the demand from the COVID-19 pandemic. Regular staff cite unsafe working conditions for both patients and nurses as their main concern. Nursing homes and hospitals have had to additionally rely on agency health personnel because of employee burnout.

Representative Boomer asserts that nursing homes and hospitals were charged substantially more for agency personnel during the pandemic, taking advantage of Medicaid and Medicare reimbursements. 

Photo taken from: WBFO, an NPR member station

(click or tap to enlargen)

As wages mushroomed, Representative Boomer argues that staffing agencies have depleted the Medicaid budget. Instead of addressing unsafe conditions for both patients and nurses, Representative Boomer thinks the best way to solve the problem is to cap wages. This argument ignores public health needs and inflation.

On the federal level, many individuals and health care groups are soliciting White House intervention. One letter sent to the White House had over 200 individuals demanding regulation of health personnel staffing agencies. Another letter involved groups like the American Health Care Association (AHCA), National Center for Assisted Living, LeadingAge and a coalition of long-term care and senior living organizations. Their letter to White House officials seeking Congressional reform to cap travel nurses’ pay. Like Representative Boomer, they cite price gouging as their main concern. Most recently, the AHCA contacted the Federal Trade Commission to help regulate and cap travel nurses’ pay.

Engagement Resources​

Click or tap on resource URL to visit links where available 

A petition on Change.org has been circulating social media and nursing blogs. This petition was created by Nurse Jane and Impact in Healthcare. It currently has over half-a million signatures with the goal of a million. The petition calls for safe staffing for patients and healthcare workers. They plan to send this letter to the Joint Commission. See link:

https://www.change.org/p/safe-staffing-for-patients-and-healthcare-workers?source_location=discover_feed . 

Impact in Healthcare, a nonprofit group, also has a GoFund me to help support educating people about what patients and nurses are experiencing during COVID-19: 

https://www.gofundme.com/f/donate-impact-in-healthcare-to-keep-up-the-fight .

To learn more about the current wage-gap spiral from the Wall Street Journal Podcast:

https://www.wsj.com/podcasts/whats-news/is-the-us-hurtling-toward-a-70s-style-wage-price-spiral/1f4541e4-6396-4c9f-b88e-5a9f90b0e327

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What You Need to Know About a Travel Nurse Pay Cap

August 15, 2022

Fusion Medical Staffing

Here’s what you need to know about what travel nurse pay caps are, the legislation on them, and what happens next.

What is the travel nurse pay cap?

• Why cap travel nurse pay?
• Is Congress trying to cap travel nurses pay?

What states are trying to cap travel nurse pay?

What happens next with the cap on travel nurse pay.

Note: The following information was up to date at the time of publication, but changes after the time of publication may impact the accuracy of the information.   What You Need to Know About a Travel Nurse Pay Cap

There are some healthcare facilities, hospital lobbies, and legislators that want to limit how much travel nurse agencies can charge hospitals and healthcare facilities, or in other words, put a cap on their bill rate. A bill rate is the total amount a healthcare staffing agency charges a hospital or healthcare facility for each traveler they place.

The bill rate goes toward paying the traveler as well as travel nursing agency costs like recruiting, HR, benefits, travel reimbursements, payroll taxes, worker’s compensation, unemployment insurance payments, and more. Additionally, Toby Malara , vice president of government relations for the American Staffing Association (ASA), a trade group for the staffing industry, maintains most of the association’s nursing staffing agencies have seen their profits remain “relatively stable” during the pandemic.

It's important to note that a lot of the legislation or calls to investigate agencies doesn’t explicitly call for travel nurse pay caps. However, it’s understandable why some healthcare professionals are nervous caps on agencies’ rates could translate to caps on what travel nurses and agency health care personnel who travel can earn. Hence, the worry about travel nurse pay caps.

Why cap travel nurses pay?

But why do these organizations want to put a max on bill rates? Well, travel nurse agencies are being accused of price gouging during COVID-19 or requesting higher rates for travel nurses than needed. So, let’s take a step back and investigate what was going on in the market at the time.

Why were travel nurse staffing agencies' pay rates higher during COVID?

At the highest end of the spectrum, crisis pay rates reached $10,000 a week during the peak of the pandemic. Compare that to today’s rates of about $3,000 a week and it seems steep. However, there are a lot of factors that go into why rates got that high.

For starters, a healthcare staffing shortage, particularly a nursing shortage, existed well before COVID arrived, and the pandemic has only exacerbated it. When hospitals are short-staffed due to an inability to find or hire talent, staff-to-patient ratios become dangerous. Existing staff must work harder and face burnout, all while likely being underpaid. Add COVID to the mix and the situation became much worse.

One solution is to fill this shortage by hiring more nurses. Employing more nurses is safer for patients and makes it less likely for staff to burn out and quit. However, hiring more staff nurses isn’t always an expense a hospital wants to take on, especially during an uncertain time like COVID. Enter travel nurses. While bringing on travel nurses is expensive too, it’s a short-term expense that hospitals are more comfortable making.

So, hospitals utilized travel nurses to meet the demands of COVID. However, for travelers to drop everything and travel to remote areas, work long, grueling hours, and constantly risk COVID infection, they needed higher pay, meaning agencies needed to charge higher bill rates.

The American Staffing Association also points out that while travel nurse pay has increased, so have the demands of the job. Over the past two years, healthcare workers have dealt with stress, burnout, overwork, physical danger, and animosity from coworkers, patients, and hospital visitors.

Is Congress trying to cap travel nurse pay?

Yes and no. Price gouging accusations have stirred up heightened government scrutiny and action taken by legislators and hospital lobbyists, but they haven’t explicitly called for a cap on traveler pay. Here’s a timeline of what’s been happening:

Feb. 4, 2021: The American Health Association (AHA) sent a letter to Acting Chairwoman Rebecca Slaughter

• Asked Slaughter to employ the Federal Trade Commission (FTC) to “investigate reports of anticompetitive pricing by nurse-staffing agencies.”

Oct. 8, 2021: LeadingAge, a network of non-profit aging services, sent a letter to the Chairwoman of the FTC, Lina Khan

• Asked the FTC to “protect consumers and taxpayers from anti-competitive and unfair practices to investigate these activities and take appropriate action to protect long-term care providers and the seniors they serve.”

Nov. 15, 2021: Sen. Mark Kelly, Sen. Bill Cassidy, Rep. Doris Matsui, and Rep. David McKinley sent a letter to COVID-19 Response Team Coordinator Jeffrey Zients

• Asked Zients to enlist a federal agency to investigate "the extreme prices being reported for nurse staffing agencies from hospitals in our states, and the concern that certain staffing agencies may be taking advantage of these difficult circumstances to increase their profits at the expense of patients and the hospitals that treat them."

Jan. 24, 2022: 200 members of Congress sent a similar letter to Zients

• Asked Zients to ask the FTC to determine if the rates agencies were charging are “the product of anticompetitive activity and/or violates consumer protection laws.”

Jan. 27, 2022: The AHA, along with the American Health Care Association (AHCA) and the National Center for Assisted Living (NCAL) sent another letter to Zients

• Reiterated the same concerns but added that their “concerns focus directly on the agencies and not the personnel they represent.”

Feb. 2, 2022: The AHA made a statement

• Continued to “urge the FTC to investigate these reports of anticompetitive conduct from staffing agencies that are exacerbating workforce shortages and straining the health care system,” and “ask that Congress look into this pressing matter and coordinate with the FTC and other agencies where appropriate.”

Feb. 10, 2022: U.S. Senate Committee on Health, Education, Labor & Pensions held a hearing on Pandemic-Related Workforce Shortage in Health Care

• Discussed healthcare staffing shortages and agencies potentially "taking advantage of a very dangerous situation." 

Jun. 6, 2022: U.S. Sen. Kevin Cramer of North Dakota introduced the Travel Nursing Agency Transparency Study Act

• If passed, this bill would require the Government Accountability Office (GAO) to conduct a study on the business practices of staffing agencies, including potential price gouging, and taking of excessive profits. It would also look at the difference between how much agencies charged health care institutions and how much they paid contracted nurses as well as investigate how states that imposed caps to contract nurse pay were affected by such caps.

The FTC has not responded to whether they’re investigating this issue.

While the matter is slow moving at the federal level, states have been passing legislation restricting healthcare staffing agencies and the rates they can charge while trying to establish maximum rates, even before the pandemic. Here’s what legislation has been introduced and the status of that legislation by state. Some legislation may be deemed as a “grey area” because the language of the bill is vague and/or it’s not clear if the legislation will affect travel registered nurse salaries.

California - bill failed, grey area

Requires healthcare staffing agencies to report billing information to the state and makes increasing "nonlabor costs, as defined, for health care personnel by more than 10%" during a state of emergency.

Colorado - law, grey area

Calls for a task force to discuss “recommendations for determining caps and other limitations on service rates and the amount that supplemental health care staffing agencies may charge for each category of health care workers providing services to health care facilities."

Connecticut - law

Requires Department of Social Services to set maximum rates healthcare staffing agencies can charge in nursing home settings.

Idaho - bill failed

Doesn’t allow a healthcare staffing agency to charge an “exorbitant or excessive increased price” during a declared emergency.

Illinois - law, grey area

Healthcare staffing agencies must report rates and fees they charge and restricts non-competes.

Indiana - bill failed

A healthcare staffing agency commits price gouging if an agency's charge is more than three times the fair market value of the healthcare services of a healthcare employee or temporary worker. 

Iowa - law, grey area

Requires healthcare staffing agencies to register, report bill rates and travel pay rates, and limits non-competes.

Kansas - bill failed

A healthcare staffing agency can’t bill or receive payments from an adult care home or a hospital long-term care unit at a rate higher than 200% of the sum of the weighted average wage rate, plus a factor determined by the secretary to incorporate payroll taxes for the applicable employee classification for the geographic group.

Kentucky - law

Healthcare staffing agencies can’t solicit or recruit current staff, must report pay rates, limit non-competes, and can’t charge more than 10% of what prices were before during a declared emergency unless they can prove an additional cost is related as imposed by a supplier or additional cost of labor.

Louisiana - law, grey area

Provides for licensure and regulation of healthcare staffing agencies including limiting non-competes and the ability to investigate as necessary.

Maryland - bill failed

HB 800 & SB 565

Prohibits healthcare staffing agencies from charging 10% more of the price charged prior to the state of emergency during a state of emergency and for the 90 days following the end of an emergency.

Massachusetts - law

101 CMR 345

Travel nurse rates are capped based on area, day of the week, and type of nurse.

Note: During the pandemic, Massachusetts raised its caps by  35 percent .

Minnesota - law

Statute 144A

The most that a travel RN in a nursing home can earn per hour during non-holidays is $62.36, according to the documentation provided by the state’s Department of Health.

Note: They allowed changes to the max rates on a case-by-case basis during the pandemic.

Missouri - bill failed

A healthcare staffing agency can’t bill or receive two payments from a health care facility at a rate higher than 150 percent of the sum of the average wage rate, plus a factor to incorporate payroll taxes for the applicable employee, if necessary.

There can’t be a “gross disparity” between the price charged or offered for the services and either the price at which the same service was sold or offered by the agency in its usual course of business immediately prior to the onset of a declared emergency, or the price at which the same or similar service is readily obtainable from other health care staffing agencies.

New York - bill failed

Imposes criminal penalties for price gouging of an unconscionably excessive price during periods of “abnormal disruption” including medical services.

A price will be deemed excessive if the price exceeds, by at least 10%, the price at which the service was sold immediately prior to the state of emergency unless the price charged is because of additional costs imposed by the supplier or other costs of providing the good. In such situations, the price will be excessive if it represents a 10% increase in the amount of markup from cost, compared to the markup customarily applied by the seller in the usual course of business immediately prior to the state of emergency.

Ohio - in progress

HB 466  

Healthcare staffing agencies are prohibited from billing or receiving payments from health care providers for any category of health care personnel listed in the Medicaid cost reports submitted under existing law at a rate that is higher than 150% of the statewide direct care median hourly wage for that category of personnel. The agency may charge the provider an additional hourly amount of not more than 10% of the maximum rate for the individual if providing care to patients with an infectious disease for which a declared public health emergency is in effect.

Oregon - law

Requires temporary staffing agencies to apply for a license to operate in the state, as well as annually evaluate and implement maximum rates agencies may charge.

Pennsylvania - in progress

A healthcare staffing agency can’t bill or receive payments from a healthcare facility at a rate higher than 150 percent of the sum of the average rate…determined by the department and reported on an annual basis. The maximum rate includes all administrative fees, contract fees, or other special charges, in addition to the hourly rate for the healthcare personnel supplied to a healthcare facility.

Rhode Island - bill failed

Prohibits healthcare staffing agencies from charging more than "two hundred percent (200%) of the regional average hourly wage of each position" and requires them to report to the department of health. Also prohibits agencies from charging conversion fees or recruiting permanent staff who work for their clients.

Tennessee - law, grey area

A study of the use of temporary staffing provided by healthcare staffing agencies in long-term care facilities. Investigates costs paid by nursing homes for temporary staff provided by healthcare staffing agencies, the effect those costs may have on the TennCare program, the impact any increases in charges for temporary healthcare staffing have on assisted care living facilities, and practices that would improve the quality of long-term care facility resident care while reducing costs to the TennCare program.

When it comes to this legislation, there may be unintentional consequences or consequences that may not seem obvious. For instance, any time legislation limits travel nurse agencies' bill rates, that may in turn limit a traveler's pay rate, as that’s part of the total bill rate. Additionally, limits on what agencies can charge during a declared emergency may seem logical, but in cases like the pandemic, higher rates were necessary to supply the demand hospitals needed.

Capping the amount of money a travel nursing staffing agency can charge a hospital or healthcare facility could worsen healthcare shortages, driving registered nurses to work in other states or leave the profession entirely. States that have passed such legislation may feel the impact of greater nursing shortages in their hospitals if travelers decide to take assignments in areas with better pay.

This change and heightened scrutiny may cause you to worry, but travelers don’t need to panic. One of the ways you can take back control as a healthcare traveler is to work with a trusted recruiter at Fusion Medical Staffing. On our platform, you can keep tabs on the market and observe how different states are being affected. We work hard to ensure our rates are accurate and transparent, so you know what’s going on and can make the best choice for yourself.

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Houston Democrats Want White House to Investigate if Nurses Are Paid Too Much

Jef Rouner February 3, 2022 4:00AM

Hey #Congress , maybe instead of capping travel nurse salaries, you 1) pass mandatory safe staffing ratios or 2) limit the amount of profit insurance companies can pay on every dollar collected or maybe 3) pass f*cking election reforms so we don't have a dictator in 2024. — Becky with the average hair (@MileHighBecky) January 31, 2022

Seeing travel nurses at my facility causes a variety of emotions. 1) Jealous that it isn’t really an option for me. 2) Glad that we are getting some help. 3) Fucking pissed that the facility that hasn’t offered us any retention incentives and keeps trying to pull incentives for — Ratched, RN 🏳️‍🌈 (@RN_Atheist) January 31, 2022

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The TRUTH Behind The Congressional Pay-Cap For Traveling Nurses

Category: Career Best Practices

Time to read: 4 minutes. 

• Rumors are speculating that congress proposed a pay cap for traveling nurses
• This misinformation stemmed from a letter written by congress, wanting to ensure staffing agencies aren’t unfairly profiting by inflating rates they charge hospitals during the pandemic.
• Congress does not want to impose a pay cap for traveling nurses.

A Story Of Misinformation

Two congressmen, Reps. Peter Welch (D-VT) and Morgan Griffith (R-VA), wrote a letter to the White House’s COVID-19 response team coordinator on January 24, 2022.

They were worried about rumors of staffing agencies taking advantage of the nursing shortage by increasing their rates to provide hospitals with desperately needed traveling nurses during the pandemic.

200 senators from both sides of the aisle signed the letter.

Then confusion hit. Facebook posts started to emerge and cause quite a stir. One post read:

“As of March 2020 the NFL’ s minimum salary was $660,000.

The man who tattooed four letters on my wrist charged $80 for 15 minutes of time.

But according to Congress travel nurses need a pay cap .”

The post continued:

“ If you support the cap, we probably can’t be friends.”

Comments like “according to Congress travel nurses need a pay cap” and “If you support the cap” imply a congressional pay cap is on the table, when in reality, it isn’t.

Misinformation is created when someone wrongly interprets what’s happening. A letter from 200 senators asking for a government official to look into rumors of illegal activity is very different from proposed legislation.

What Was Congress Really Asking About?

To fully answer that question we have to understand how staffing agencies make money.

When a hospital or healthcare facility doesn’t have enough nurses to care for patients, they turn to staffing agencies. 

Staffing agencies find and hire nurses who are willing to travel usually for at least 13 weeks at a time. 

The traveling nurses’ pay comes from an “hourly bill rate”, which is how much the hospital or facility pays the staffing agency for every hour worked by a traveling nurse.

The nurse’s pay isn’t the only thing that comes out of the bill rate. The staffing agency incurs additional costs, including:

• Recruiting the traveling nurse
• Orientation (which is sometimes unpaid by the facility or paid at a fraction of the bill rate)
• Liability and insurance coverage
• Credentialing
• Your licensure reimbursement
• The VMS/MSPs
• Medical malpractice lawsuits (which are often fought by the staffing agency, not the hospital)
• A Nurses Week or Christmas gift from your agency.
• Your stipends and travel expenses to get to your contract.

Bill rate ≠ Nurse’s Pay

The Bill rate is a combination of three factors: 1) The nurse’s pay 2) The staffing agency’s expenses 3) The staffing agency’s profit.

Are Staffing Agencies Unfairly Profiting From The Pandemic?

Now we can address the real question congress was asking in their original letter:

Should there be a cap on how much profit a staffing agency can make on traveling nurses during the pandemic?

Commenting on the confusion from his letter, Congressman Griffith said:

“The bipartisan letter I sent to the White House asks about potential illegal practices by staffing agencies that charge high rates and then keep that money for themselves, not nurses. Rumors are that middleman staffing agencies keep as much as 40% of the money they charge for nurses instead of giving more of the money to the nurses, “

His next remarks are critically important:

“I do not and will not support legislation to cap nurses’ pay. Anything to the contrary is fake news.”

Do you see the twist? 

Congress does NOT want to cap nurses’ pay. They want to make sure staffing agencies aren’t illegally lining their pockets off the risks taken by traveling nurses to provide care for patients during a pandemic.

Do Traveling Nurses Need To Worry About A Pay Cap?

In a word: no.

The demand for traveling nurses is not likely going away anytime soon. Some nurses have even commented that a pay cap would cause them to strike, or change careers. 

Nobody wants there to be less traveling nurses. 

What Congress wants is to ensure traveling nurses aren’t being taken advantage of. At MSG Staffing, we think that’s a good thing! 

If you know of a traveling nurse worried about a pay cap, please reassure them not to worry, and share this article with them.

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Will States Rein in Nurse Staffing Agencies?

— congress members asked for an inquiry, but some states are already considering new restrictions.

by Sophie Putka , Enterprise & Investigative Writer, MedPage Today February 4, 2022

A letter about staffing agency price gouging that members of Congress sent to the White House has some corners of the nursing community abuzz over possible implications, particularly whether the growing scrutiny could lead to state-level restrictions.

The letter asked the COVID-19 Response Team to investigate nurse staffing agencies for allegedly "artificially inflating" prices during a crisis by charging hospitals exorbitantly for the services of their nurses, citing reports representatives say they've received.

For nurses, alarm bells began to ring. An investigation into staffing agency prices could mean more legislation to cap what staffing agencies can charge hospitals and other facilities in some states, and in the process, some noted online, limit wages for nurses themselves.

The American Nursing Association (ANA) wrote in an email to MedPage Today that it supports an effort like this only if it targets agencies themselves while protecting nurse pay. "If legislation were to directly impact [staffing agency] overhead, then we believe nurses' pay would not be impacted," the organization wrote. "However, if staffing agencies were capped at a certain percentage of pre-pandemic rates, then nurses could potentially see a decrease in wages."

Travel nurses, though a small percentage of total nurses, have been afforded a chance to choose better compensation and work more flexible hours during a time when they may have felt overworked and undervalued, ANA wrote in a separate statement . The association reiterated to MedPage Today that travel nurses should not be negatively impacted in the process of reigning in price gouging.

ANA suggested instead that Congress should enact policies that would help retain and attract nurses, adjust the Medicare area wage index, and restrict mandatory overtime. It also backed enacting laws like the Dr. Lorna Breen Health Care Provider Protection bill, which would establish grants for workplaces that promote healthcare worker mental health, and the Future Advancement of Academic Nursing bill, which would provide support for nursing schools in underserved areas.

The letter itself said nothing about capping wages, although a widely viewed Reddit post characterized it as "large attempts in Congress right now to cap nurse (especially travel nurse) pay." The letter-writers framed their concerns as a problem with the agencies themselves and their cut of the ballooning prices, citing reports of agencies "taking 40% or more of the amount being charged to the hospitals for themselves in profits." Nurses themselves, they imply, aren't reaping most of the benefits.

Meanwhile, some nursing home associations and hospitals said lower costs for temporary staffing would allow them to hire more nurses and relieve short-staffed facilities, thereby improving the nurse-to-patient ratio. But on a Facebook group for travel nurses, a post about striking if states attempt to cap travel nurse wages garnered a thousand likes and over 300 comments. "If anyone is foolish enough to try to cap RN pay, it is going to make an already bad staffing problem much worse. Critically worse," one comment read. "How about we cap the pay of all the fat-cat CEOs and administrators?"

Landry Seedig, group president and chief operating officer of nursing and allied solutions at AMN Healthcare, a leading staffing agency, told MedPage Today in an email that they're charging more to attract limited nurses in a shortage. "Hospitals set bill rates for all travel nurses," Seedig said. "Many hospitals throughout the country would be overwhelmed if not for travel nurses and other travel healthcare professionals."

Although 42 states have existing "price gouging" laws that go into effect in an emergency, few have had laws specifically regulating staffing agency services until the pandemic exacerbated frustrations with the delivery of healthcare.

Minnesota enacted a law in 2001 requiring nursing service agencies to register with the state and to not charge nursing homes a rate more than 150% of the average wage rate for their specific employee role and designated geographic area. In December 2020, the state published new hourly rates effective Jan. 1, 2021, to accommodate pandemic staffing needs. They also allowed agencies to apply for wage cap waivers in an emergency.

Massachusetts in March 2020 adopted an emergency amendment to expand an existing law from prohibiting price gouging for petroleum to now cover goods and services too. The state already had existing caps on rates staffing agencies can charge both hospitals and nursing homes for nurses and other healthcare staff, including travel nurses. In May 2020, the state raised the cap by 35% for nursing facilities for the COVID-19 emergency. It also sent a memo in February 2021 reminding staffing agencies that they could be disciplined for going over the rates.

Other states are considering similar laws.

In Pennsylvania, state Rep. Timothy Bonner (R) introduced a bill that, he wrote in a November 2021 memo , "would establish maximum rates on agency health care personnel to end the practice of 'gouging' the Medicaid program and Pennsylvania taxpayers, which was already exacerbated by the COVID-19 pandemic." Like Minnesota, staffing agencies would have to register with the state's Department of Human Services.

In Connecticut, the AP reports , state nursing home associations hoping for legislative action on staffing agency pricing have met with the governor to discuss caps on agencies.

Illinois recently amended its Freedom to Work Act , protecting some workers from non-compete and non-solicit clauses, potentially reducing the power of staffing agencies and making it easier for temporary healthcare workers to be hired as permanent staff.

Sophie Putka is an enterprise and investigative writer for MedPage Today. Her work has appeared in the Wall Street Journal, Discover, Business Insider, Inverse, Cannabis Wire, and more. She joined MedPage Today in August of 2021. Follow

Truth About The Travel Nurse Pay Cap Proposal- What's The Status?

At the beginning of 2022, you may have heard some buzz about a ‘travel nurse pay cap.’ This angered travel nurses who undoubtedly have strong feelings about such a greedy and insulting proposition. But let's not get ahead of ourselves. What are the facts surrounding a travel nurse pay cap and how would nurses be affected?

What is the Travel Nurse Pay Cap?

First of all, there is no travel nurse pay cap. You can thank social media for exaggerating and spreading misinformation as it often does. Here are the facts of how this thought even came into existence:

In January 2022, a proposal was sent to the White House Covid-19 Response Team Coordinator, signed by 200 members of Congress. The proposal specifically requests an investigation into nurse-staffing agencies as it is believed they have inflated their costs and may be in violation of consumer protection laws.  

The letter states staffing agencies have more than tripled their rates from what they were pre-pandemic and then kept 40% of profits for themselves.  

A year prior in 2021, the American Hospital Association also sent a letter urging the FTC (Federal Trade Commission) to investigate reports of anti-competitive pricing by nurse-staffing agencies. They claim these “outrageous rate hikes'' are exploiting the pandemic and negatively affecting hospital costs and patient care.

The 2022 Bill to Cap Travel Nurse Pay

More recently, in July 2022, the American Hospital Association voiced support for the Travel Nursing Agency Transparency Study Act . The following are some of the study points introduced in the bill to Congress :

• Investigate payment practices of travel nurse agencies including price gouging and taking excessive profits
• The difference between how much agencies charge health care systems versus how much nurses receive
• If agencies can provide more transparency regarding their profit and their payments made to nurses
• How rural areas in the United States have been affected by the rise of travel nursing and labor shortages
• How states that have imposed travel nurse pay caps were affected by the market reaction

States Capping Travel Nurse Pay

Massachusetts.

Massachusetts’ Executive Office of Health and Human Services has instituted a travel nurse pay cap for “temporary nursing services.”

Minnesota also calculates the annual wages of nurses and nursing assistants and places limits on the amount that Supplemental Nursing Services Agencies can charge. The maximum rate for RNs effective through 2021 was $58.08 per hour, a less than 1% increase from 2020. In response to the pandemic, a memo was released from the Minnesota Department of Human Services offering an application to waive the maximum charge amounts for agencies that provide staff in Medicaid-certified nursing facilities specifically affected by Covid-19.  

As a result of these states capping travel nurse pay, agencies struggle to recruit nurses in these locations as they can find higher pay elsewhere.

Reasons for the Increase in Travel Nurse Pay

All of the memos and letters acknowledge that travel nurses were necessary to cover staffing gaps and the high demand for care due to Covid-19 . Details in the Travel Nursing Agency Transparency Study Act provide interesting statistics regarding travel nurses and associated costs in response to the pandemic:

• Hours worked by travel nurses in hospitals grew from 4% in 2019 to over 23% in 2022
• Hospitals spent a median of 40% of their total nurse labor expenses on travel nurses in 2022, compared to under 5% in 2019
• Travel nurse agencies increased their rates in that timeframe by 213%

It's an easy equation. A shortage of nurses + A skyrocketing demand = Exponential rate hikes

Staffing Shortages

The pandemic highlighted a problem that has plagued the nursing profession for years. The American Nurses Association points to increased costs as being part of a larger systemic problem. If you want to truly solve the problem that led to rate increases in the first place, you have to get to the root of the nursing shortage. Better work environments, appropriate compensation and benefits, and patient safety are required to attract and retain nurses.  

Supply and Demand

It’s not hard to understand that when the demand for a product or service goes up yet the availability of that product or service remains the same or decreases, prices rise.  

A spokesperson for the American Staffing Association believes this is the reason for higher rates. Essentially, nurses responded to a crisis. They were placed suddenly into overburdened work environments without proper support, often in large cities that come with a higher cost of living. This merits hazard pay .  

The Potential Effect of a Travel Nurse Pay Cap

Lawmakers claim to vehemently oppose the idea of a capping travel nurse pay and are strictly targeting travel nurse agencies. None of the letters mention capping the pay of nurses. But if these investigations do find that travel nurse agencies are charging unnecessarily high rates for their own profit, new policies would likely affect the pay of nurses, even if unintentionally.  

The institution of a travel nurse pay cap has the potential to have grave outcomes for an already weakened healthcare workforce. In an attempt to control costs , the outcome may further reduce supply (i.e. nurses).

On the other hand, a potential positive effect of an investigation into the practices of travel nurse agencies is fair and equal pay across the board.

Travel nurses know better than anyone how agencies' pay rates can vary, even for the same job at the same hospital. Is it possible that a mandate could prevent price gouging, allowing hospitals to pay permanent staff higher wages, improving retention and overall staffing?

For now, there is no response to Congress’ letter or information on the progress of the Travel Nursing Agency Transparency Study Act. Regardless of the outcomes, nurses must simply continue to negotiate and pursue compensation packages that meet their needs.

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Some States Are Trying to Cap Travel Nurses’ Pay

This is why that is a bad idea.

Kirsten Newcomb  worked  in Virginia as a nurse for ten years. Her job was grueling. She’d work four 10 hour shifts each week. In 2020, she decided to make a change and start travel nursing—an arrangement where hospitals and other healthcare providers hire nurses for short-term contracts. As part of the arrangement, nurses are not only paid much higher wages, they also are usually given generous stipends for food and housing.

“Once I start looking for a new contract, it typically takes about a week,” says Newcomb. “I can pretty much pick wherever I want to go next.” Lately, Newcomb has been spending her time in Hawaii. Not a bad place to ride out a pandemic, even for healthcare workers.

Kirsten’s experience is one shared by a growing number of nurses who are participating in the booming travel nursing industry. As you are probably aware, there is a healthcare provider shortage in the US. The shortage existed even before the pandemic (and largely  stems from government , which creates barriers to entry in the field), but the pinch has really been felt since COVID-19 hit our shores.

Due to that, the pay for travel nurses has ballooned, as one might expect when demand surges and supply is constricted. August numbers show a weekly average rate of over $2,500, compared to a December 2019 average weekly pay of just over $1,000.

But some lawmakers have decided that they want to make the situation worse and are considering  legislation that would cap travel nurses’ pay.

In Pennsylvania, for instance, Representative Timothy R. Bonner wrote a  memorandum  on November 5, 2021 where he stated his intention to introduce a bill that would “establish maximum rates on agency health care personnel,” specifically in “nursing homes, assisted living residences and personal care homes.” So basically, he wants to set price caps for the agencies that act as middlemen between travel nurses and healthcare facilities.

In his memo, Bonner also referred to some efforts to the same effect at the national level. “…the American Health Care Association recently sent a letter to the Federal Trade Commission (FTC), requesting that the FTC use its authority to protect consumers from anti-competitive and unfair practices regarding agency staffing.”

As news of this broke in online nursing channels, some nurses, nurse.org  reported , hinted they would strike if price control legislation came to pass. Others pointed out the price caps would almost certainly make the shortages worse since travel nurses would simply not pick up new assignments.

“I sure as heck won’t take any assignments in any states that cap my wages,” one nurse  commented on a Facebook page for travel nurses. “I leave my family and home to go into hot zones to help out. I have marketable skills … you want my skills in your [hospital], then compete for me.”

Why This Is Misguided

Travel nursing is actually a beautiful example of the free market at work (it still manages to find a way, even in fields overrun with regulations and cronyism like our healthcare industry). This structure ensures demand is still met despite shortages—and in this case, shortages can be deadly.

Travel nurses are paid more for a reason. The higher wage incentivizes them to leave their families and their homes to live in unfamiliar locations for extended periods of time. The higher pay ensures that demand is met when the need is urgent. Leaving family and traveling for long periods of time reflects the fact that traveling nurses experience high opportunity costs. So, in order to incentivize nurses to supply more, they must be compensated with higher wages to make up for large opportunity costs. Economists call this the law of supply.

We don’t have to wonder or even rely on economic theory alone to know what would happen should politicians implement price caps on travel nursing. The  online  nursing community is making it known loud and clear—they’ll stop showing up.

“There are some professions you can play with, nursing is not one of them!” one nurse responded,noting the economy’s high demand for nurses.

Price caps would ultimately spell disaster for patients, who would not be able to get healthcare when they need it, particularly those who live on the margins or live in rural areas.

The Economic Theory

Price is merely a signal that represents the amount of resources available. Those who wish to implement price caps really just wish to ignore the reality of  scarcity . But while they may wish to bury their head in the sand, it won’t shield them from the results of the policy. Price caps  cause shortages , it’s basic supply and demand.

As economist Thomas Sowell has  said , “Why do price controls cause shortages? There are basically two reasons: supply and demand. People will not supply as much at a lower price as they will at a higher price.”

We don’t have to look very far back in history to find numerous examples of price caps causing shortages. It’s time we learn from past mistakes. What politicians really need to do is remove barriers to entry in the healthcare field so we can increase the number of providers. Allowing markets to function freely is the only thing that will actually bring the price of healthcare down.

This piece was originally published on FEE.org under the title, Some States Are Trying to Cap Travel Nurses’ Pay. Here’s Why That’s a Bad Idea

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Travel Nurse Pay Cap: Why Pay Is Getting Cut

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What is the travel nurse pay cap? What is going on with travel nurse agencies, and why pay is getting cut?

Travel nursing has been quite lucrative over the past few years ( How Much Money Do Travel Nurses Make ).

If you haven’t heard, recently there has a been a huge push to cut travel nurse pay. Well, more specifically the travel nurse agencies pay. Later, we’ll go into detail a bit more, but it’s a big topic right now. In addition, nurses are marching for equal pay, no more pay cuts, and workplace safety ( read more ).

So, with that being said, let’s get into why they want to cap travel nurse pay, what it means for the industry, and why staffing agencies are not happy about it!

What is the Travel Nurse Pay Cap?

Why do hospitals want to cap nurse pay, how are hospitals responding, how are travel agencies responding, final thoughts.

A travel nurse pay cap would effectively put a ceiling on the amount of money a staffing agency could bill for a nurse. Or, put a limit how much money a nurse could make.

While it might not be directed towards the nurse, they are directly effected. Staffing agencies are supposed to cover the differences when a hospital changes a contracts terms. However, this has not been the case recently.

For example, if a hospital changed a travel nurses pay from $3,500/wk to $3,000/wk, the agency should make up the different. But, again, this is not happening and is causing nurses to lose out.

While hospitals aren’t directly trying to cap nurse pay ( or at least not yet ), they are trying to cut out staffing agency markups. Because, travel nurse agencies bill a lot more than what the nurses are actually paid, hospitals are forced to pay ( in some cases double ) higher costs for nurses. Additionally, hospitals also lost a lot of the government funding provided during the pandemic.

For example, a travel nurse might have a pay rate of $75 an hour, while the actual bill rate to the hospital for that nurse can be as high as $150-180 an hour. Even though agencies have to pay for things like housing stipends and insurance they still can make a hefty profit.

The agency is basically a brokerage for travel nurses and hospitals don’t want to pay the premiums. According to an article by Nurse.org , Cross Country Healthcare who specializes primarily in travel nursing, made $132 million in profit in 2021.

In addition to the pay, travel nursing has significantly impacted hospital retention rates. A lot of nurses have either retired earlier or left their respective hospitals in order to take a travel nursing assignment ( for more money ).

Hospitals are attempting to improve retention and avoid costs by creating their own internal travel agencies. Basically the concept is instead of paying $150-180 an hour for the same travel nurse in the example before, they only pay the nurses $75 an hour ( no markup from a travel agency ).

In addition, some hospitals are even creating certain bonuses for existing staff. These bonuses might include an extra $100 per hour for any additional 12-hour shift taken. While these are welcome bonuses for existing staff, there is still a call to increase nurse pay.

Nursing staffing agencies are attempting to respond the best they can to pay cuts. Unfortunately for travel nurses, it is a tough and unprecedented situation. Travel agencies are going to have to figure out creative ways to keep nursing pay up!

In conclusion, while there are massive highs and lows for travel nurses, there should be more focus on the greater issue. The great issue being the staffing problems at a lot of hospital systems ( and medical field in general ). There most likely will be a call for change, not only for the patient’s safety, but the staff’s safety as well.

Striving to help nurses and nursing students succeed.

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Capping Travel Nurses Pay?

February 24, 2022 by LORIE A BROWN, R.N., M.N., J.D. 2 Comments

The American Hospital Association (AHA) and the National Center for Assisted Living recently asked Congress to investigate the fees that agencies are charging for the services of travel nurses.

The two entities say that fees for travel nurses have doubled, and they believe that the travel nurse agencies are engaging in “price gouging.”

I found it interesting that the AHA spent over $24,000,000.00 for lobbying efforts and have made significant contributions to Politicians totaling almost $2,000,000.00.

Recently, a TIME magazine article reported that hospital and nursing agencies are exploiting the financial burden resulting from the pandemic.

Travel nurses are concerned that there are efforts to cap their pay, but the investigation is into what the agencies can charge the hospitals.  But this really does affect how much the travel nurse is paid.

Unfortunately, the pandemic, coupled with reportedly 18% of the nurses quitting the profession, has made this a recipe for disaster.

Looking at the high demand for nurses, nurses leaving and others choosing to travel, makes this situation one that is seemingly never ending.

The bottom line is that hospitals need to better treat nurses and offer increased pay for their work.  This is a free market and I always say, “Charge what the market will bear.” I see no legal basis for Congress to limit the amount that a nurse agency can charge.

The hospitals are responsible for this situation and now … the hospitals must fix it!

I do not blame any nurse wanting to travel as it provides more money for them.  Many are making double what they did prior to becoming travel nurses.  Of course, from that pay, they must pay for their travel, lodging, expenses and even health insurance.

Travel nursing is risky!  They go into places that are short staffed to begin with that can’t attract or keep their own staff.

Sometimes travel nurses can be treated differently than staff because those on staff resent the traveler nurse making much more per hour than they despite the fact that travel nurses are providing help to the existing staffs.

I have heard too many horror stories such as travel nurses going great distances only to find, upon arriving at their destination, that their contact had been cancelled.  Be sure to have your contract reviewed by an attorney prior to signing so that this does not happen to you or at least you are aware of the risks.

It is unfortunate that travel nurses are working on blind faith but it’s caveat emptor , and you should always know what you are signing.

Now, that I have wandered off topic, let me return to the fact that Congress is not planning to enact legislation restricting travel nurses’ pay.  Yet they are investigating whether nurse travel agencies are price gouging the health care facilities which, I believe, will be a difficult claim to prove.

Again, hospitals have put themselves in this situation by not caring for the nurses they already have on staff, thereby, causing dissatisfied nurses to leave for higher paying opportunities.

COVID certain has the exposed the “cracks” in our health care system.

Jill O’Hara says

February 25, 2022 at 3:09 pm

Thanks for your input. You’ve hit every point. Throughout history nurses many times have been treated like second hand citizens. Without nurses doctors would not be able to do their job. And without Nurses CEOs couldn’t be making the big bucks.

Mike Carter says

March 7, 2022 at 11:34 am

Very well stated and I have been a traveler my entire career. I would love to correspond and provide an “insider view”. I appreciate your enthusiasm and foresight!

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