LTC Sector in ‘Grave Danger’ Due to Price Gouging Staffing says Collaborative

As more operators report admission holds and occupancy recovery delays due to rising labor costs, health care groups continue to target direct care staffing agencies as part of the problem as legislation is already being worked on in states like Pennsylvania, and nationally, to end the practice of gouging the Medicaid program and taxpayers.

With contract labor costs expected to increase by 106% on average in 2022 for operators, according to a recent survey from the American Health Care Association and National Center for Assisted Living, in addition to double digit in-house labor cost increases, there’s a growing concern the path to recovery cannot start without first by establishing rate caps on agency health care personnel.

Some operators have reported up to a 24% increase in skilled nursing workforce pay as more continue to see “rampant price gouging by direct care staffing agencies” as exacerbating what has become a critical problem for the sector.

Following the American Health Care Association’s lead, the Advancing Excellence in Long-Term Care Collaborative, a membership-based, not-for-profit organization committed to improving long-term care, called on the Federal Trade Commission to end anticompetitive and unfair practices exhibited by staffing agencies over the course of the pandemic

“The LTC industry is in the midst of the perfect storm and will be on the verge of collapse if the workforce decline is not properly addressed by the federal government,” a letter sent to the FTC reads. “We have countless examples direct care staffing agencies charging supercompetitive prices to desperate LTC centers that simply need workers.”

The organization worries that due to a confluence of circumstances, like COVID variants and vaccine mandates, the long-term care sector remains in grave danger and staffing agencies are only making matters worse.

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