To crack down on price gouging, proposed legislation in Missouri calls for allowing felony charges against health care staffing agencies that substantially raise their prices during a declared emergency.

A New York bill includes a cap on the amount staffing agencies can charge health care facilities. And a Texas measure would allow civil penalties against such agencies.

These proposed regulations — and others in at least 11 more states, according to the American Staffing Association industry trade group — come after demand for travel nurses, who work temporary assignments at different facilities, surged to unprecedented levels during the worst of the covid-19 pandemic.

Hospitals have long used temporary workers, who are often employed by third-party agencies, to help fill their staffing needs. But by December 2021, the average weekly travel nurse pay in the country had soared to $3,782, up from $1,896 in January 2020, according to a Becker’s Hospital Review analysis of data from hiring platform Vivian Health. That platform alone listed over 645,000 active travel nurse jobs in the final three months of 2022.

Some traveling intensive care unit nurses commanded $10,000 a week during the worst of the pandemic, prompting burned-out nurses across the country to leave their hospital staff jobs for more lucrative temporary assignments. Desperate hospitals that could afford it offered signing bonuses as high as $40,000 for nurses willing to make multiyear commitments to join their staff instead.

The escalating costs led hospitals and their allies around the country to rally against what they saw as price gouging by staffing agencies. In February 2021, the American Hospital Association urged the Federal Trade Commission to investigate “anticompetitive pricing” by agencies, and, a year later, hundreds of lawmakers urged the White House to do the same.

No substantial federal action has occurred, so states are trying to take the next step. But the resulting regulatory patchwork could pose a different challenge to hospitals in states with rate caps or other restrictive measures, according to Hannah Neprash, a University of Minnesota health care economics professor. Such facilities could find it difficult to hire travel nurses or could face a lower-quality hiring pool during a national crisis than those in neighboring states without such measures, she said.

For example, Massachusetts and Minnesota already had rate caps for temporary nurses before the pandemic but raised and even waived their caps for some staffing agencies during the crisis.

And any new restrictions may meet stiff resistance, as proposed rate caps did in Missouri last year.

As the covid omicron variant wave began to subside, Missouri legislators considered a proposal that would have set the maximum rate staffing agencies could charge at 150% of the average wage rate of the prior three years plus necessary taxes.

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