November 7, 2022

New law creates oversight of staffing agencies but doesn’t protect against ‘price-gouging’

McKnight Senior Living

A bill signed into law on Thursday will create oversight and accountability for staffing agencies operating in Pennsylvania’s assisted living communities and other long-term care facilities, but it does not address the rates charged by the agencies.

Gov. Tom Wolf (D) signed House Bill 2293, which took effect immediately, requiring staffing agencies that provide temporary employment in assisted living communities, personal care homes and nursing homes to register with the state, validate the healthcare credentials of contracted employees and carry medical malpractice insurance. The new law also bans non-compete clauses in agency contracts and requires agencies to pay workers’ compensation coverage for all employees. 

The bill also creates a system for reporting complaints and allows the state Department of Health to issue penalties and sanctions.

“With the stroke of the governor’s pen and the backing of the General Assembly, Pennsylvania will now implement regulations and guidelines for staffing agencies that have never existed before,” Pennsylvania Health Care Association CEO Zach Shamberg said in a statement. “This law will protect residents, workers and long-term care providers by creating oversight, accountability and strict operating procedures.”

Margie Zelenak, executive director of the Pennsylvania Assisted Living Association, told McKnight’s Senior Living that PALA advocated for the bill and that it is a good first step in the state’s effort to recognize issues with agencies that benefited from the workforce shortages  in Keystone State personal care and assisted living communities. 

Zelenak said the long-term care sector experiences severe staffing shortages that were exacerbated by the pandemic, forcing many PALA members to rely on contract healthcare agencies to complement and meet their staffing needs. But it does not address the rates charged by the agencies, she noted.

“While HB 2293 provides needed state oversight of temporary healthcare agencies, PALA is disappointed that the key provisions related to the rates these companies charge were stripped from the legislation,” Zelenak said. “Unfortunately, some contract healthcare agencies have capitalized on staffing shortages and have charged exorbitant rates to provide staff to long-term living facilities. The state requirements included in the original bill would have provided needed protections against price-gouging.”

Zelenak said she is awaiting the results of a study commissioned under SR 2888 to review the rates for staff and staffing agencies during the pandemic. 

“This study should reflect the inflated rates charged by staffing agencies to communities that struggled to provide care to the seniors of Pennsylvania during the pandemic,” she said.

Garry Pezzano, LeadingAge Pennsylvania president and CEO, told McKnight’s Senior Living that he, too, is hopeful the oversight will be taken a step further under SR 288, as members “cannot continue to pay the exorbitant rates the agencies are charging. 

But he said he was encouraged by the steps taken in the bill toward ensuring a standard of transparency and quality for temporary staffing agencies.

“Long-term care providers have increasingly had to rely on agency staffing throughout the pandemic and the current workforce crisis, so we appreciate that this bill sets up some safeguards to make sure the workers being assigned to care for older adults are properly trained and qualified for these critical roles,” Pezzano said.

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