Pennsylvania Joins Other States in Regulating Health Care Staffing Agencies

Posted by Joe Stefansky on January 23, 2023 in Pennsylvania,

On November 3, 2022, Gov. Tom Wolf (D) signed into law House Bill 2293 which created new oversight of and accountability for temporary health care staffing agencies operating in Pennsylvania’s assisted living communities, personal care homes and nursing homes. This bill took effect immediately and was passed almost unanimously by the state’s General Assembly.

“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 recent statement. “This law will protect residents, workers and long-term care providers by creating oversight, accountability and strict operating procedures. The bill will provide much-needed oversight for staffing agencies in long-term care, which are currently completely unregulated in Pennsylvania.”

Because the bill took effect immediately, subject temporary staffing agencies must take action promptly to be in compliance. Staffing agencies that were operating on November 3, 2022 have 180 days to register with the state’s Department of Health. Those staffing agencies created on or after November 4 and beyond have 90 days to register.

HB 2293 Highlights

The impact of the new law is far-reaching. Key components include:

  • Initial and ongoing registration with the state. A requirement for staffing agencies that provide temporary employment in nursing homes, assisted living residences and personal care homes to register with the Commonwealth of Pennsylvania as a condition of their operations in the state. As noted above, initial registration by current temporary staffing agencies must be completed within 180 days of enactment. A person that owns or operates a temporary health care services agency shall register annually thereafter with the Department of Health and provide a list of each separate agency location.
  • Registration is non-transferable. A person that owns or operates a temporary health care services agency shall register annually with the Department of Health and provide a list of each separate agency location. A registration shall be effective for a period of one year from the date of its issuance unless the temporary health care services agency is sold or ownership is transferred, in which case the registration shall be voided. The new owner or operator of the temporary health care services agency shall apply and receive approval for a new registration before operating the temporary health care services agency.
  • Staff credentials and background screening transparency. A temporary health care services agency shall provide to the health care facility to which any temporary health care personnel are supplied documentation that each temporary employee meets all licensing or certification, training and continuing education standards for the position in which the temporary employee will be working and shall comply with all pertinent requirements relating to the health and other qualifications of personnel employed in health care facilities. Agencies shall also provide health care facilities with proof of applicable criminal records checks for each temporary employee consistent with their regulatory requirements.
  • Department of Health oversight of staffing agencies. The department shall provide oversight of temporary health care services agencies through complaint investigations and other actions necessary to ensure compliance.  The complaint process shall establish a system for reporting complaints against a temporary health care services agency or its employees. Complaints may be made by any member of the public.
  • Required policies and procedures. The agency application shall specify the policies and procedures regarding how the temporary health care services agency’s records shall be immediately available at all times to the Department upon request, except for those records subject to confidentiality protection under federal and state law.
  • Insurance requirements. Agencies are required to carry medical malpractice insurance of not less than $500,000 to insure against loss, damages or expenses incident to a claim arising out of the death or injury of any individual as the result of negligence or malpractice in the provision of health care services by the temporary health care services agency or an employee, agent or contractor of the temporary health care services agency. Agencies are also required to carry a dishonesty bond in the amount of $10,000 for each employee.
  • Correcting employee misclassification. To address misclassification of health care personnel as contract employees, the new law requires agencies to pay workers’ compensation coverage for all health care personnel under their control, “personnel provided or procured by the temporary health care services agency.” The new law also specifically called out the requirement that agencies shall comply with all Pennsylvania employer withholding requirements.
  • Contracting restrictions banned.  Restrictive covenants or non-compete clauses in agency contracts are prohibited.
  • Sanctions. The law grants the state broad authority both in imposing sanctions and the extent of those sanctions.  The basis for imposing sanctions, or refusing to renew an agency’s annual application include:
    • Violating the provisions of this law or regulations issued related to this law; 
    • Failing to take immediate action to remedy a noted violation or to submit a plan of correction;
    • Engaging in fraud or deceit in obtaining or attempting to obtain a registration;
    • Attempting to skirt registration limitations by lending the agency’s registration to another person, enabling another person to manage or operate the temporary health care services agency who is not subject to the temporary health care services agency’s registration or using the registration of another person or in any way knowingly aiding or abetting the improper granting of a registration.

The Department of Health may impose any of the following sanctions:  

  • Deny the application for registration or renewal of the registration.
  • Revoke, suspend, limit or otherwise restrict the registration.
  • Impose a civil penalty of no more than $5,000 for each incident in which the agency engages in prohibited conduct.  Each day on which the agency engages in conduct prohibited under subsection shall constitute a separate and distinct incident. 
  • Stay enforcement of any revocation, suspension, limitation or other restriction under paragraph (2) or any other discipline and place the temporary health care services agency on probation with the right to vacate the probationary order for noncompliance with the provisions of this chapter.

Pandemic-Driven Challenges to Long-Term Care Staffing 

Health care professional staffing shortages, including in the long-term care sector, during the pandemic forced a significant increase in reliance on temporary health care professional staffing. These staffing shortages and reliance on temporary staffing agencies drove increased scrutiny to assure that the workers being assigned to care for older adults are properly trained and qualified for these roles. Some contract healthcare agencies unfortunately capitalized on staffing shortages and charged very high rates to provide staff to long-term living facilities. These factors have all contributed to recent legislative actions across the nation.

Pennsylvania joins a number of other states that have recently taken action to increase temporary staffing agency regulatory oversight and control of employment practices.  The Pennsylvania bill incorporated aspects of oversight and accountability found in other states, such as Massachusetts, Minnesota, Ohio and Iowa, that have moved in a similar direction. Both Oregon and Kentucky had legislation go into effect earlier this year. Colorado is also closely examining agency dependency and practices, with a regulatory body expected to issue results of a study shortly.

What the new Pennsylvania Law does not Address

The new Pennsylvania requirements, once implemented, significantly regulates temporary health care staffing agencies operating in the state, as noted above. However, HB 2233 does not address the payment rates charged by agencies, although payment caps were included in an early version of the bill.

There is, however, another 2022 state resolution, Pennsylvania SR 288, which may address this industry concern. SR 288 commissioned a study to review the payment rates for staff and staffing agencies during the pandemic. This study may reveal payment rates by staffing agencies that require further legislative action. 

Conclusion

Pennsylvania has joined the states that are taking a much closer look at the practices of health care temporary staffing agencies. The enhanced requirements may drive agencies that engaged in questionable screening or contracting out of the state. If SR 288 reveals a pattern of price-gouging by some temporary staffing agencies, further legislative action may ensue. However, the actions taken in 2022 represent a significant step forward to both protecting long-term care residents and holding staffing agencies accountable. 

About Joe Stefansky

About Joe Stefansky

Joe Stefansky has a keen sense of business opportunities in complex problems, using technology to transform difficulty into efficiency. The CEO and founder of Streamline Verify specializes in solving compliance, legal and administrative issues through intuitively designed software that reduces costs and saves time.

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