Nursing CE Central
On February 8th, a new payment limit cap was introduced for temporary travel nurses in Iowa. The staffing agencies that represent these nurses often charge more than double, or even triple, the average nursing wage in the state for temporary nurse contracts.
Administrators hope that by implementing this payment limit cap, morale for nurses working permanently in hospitals and nursing homes will rise, encouraging them to stay in their full-time positions rather than pursuing temporary positions. It will also force staffing agencies to register with the Department of Inspections, Appeals, and Licensing (DIAL), which will help standardize expectations of quality care from temporary nurses.
This article will detail the specifics of Iowa’s proposed pay limit cap, the opposition it faces, and how this may affect pay for nurses across the state.
Currently, there is no maximum payment limit on what staffing agencies can charge hospitals and nursing homes for temporary travel nurse contracts. These nurses are essential to healthcare facilities in need of support during protests or ongoing worker shortages.
By limiting what staffing agencies can charge, hospitals will have more financial resources that can be diverted into recruiting and retaining permanent nursing staff.
House File 2319’s payment limit will include the hourly rate for temporary nurses, the agency’s administrative fees, contract fees, transportation/travel stipends for temporary nurses, per diems, and any additional costs charged by the agency, such as taxes or overtime. By including all fees in the limit, legislators hope that staffing agencies will not simply cut the wages of temporary nurses to meet the payment limit.
If the law is passed, temporary nurse staffing agencies would only be allowed to charge 150% of the state’s average nursing wage in their contracts. Violating this limit would result in a $5,000 fine and a 30-day notice to comply. If violations continued, the agency would be fined $25,000 and lose its staffing agency registration.
The bill will also require an annual allowable charge schedule from the State Department of Health and Human Services. This will standardize the cost of hiring temporary nurses across all agencies and set the standard for judging any potential violations.
Rather than allowing millions of taxpayer dollars to continue to pay for temporary workers who don’t know the residents they are serving, the Legislature should be insisting that these dollars be used to increase the pay and benefits for permanent staff members.
– John Hale
In 2022, the average travel nurse in Iowa made 254% more than the average nurse. This discrepancy does not solely fall on the high charges from staffing agencies. According to the U.S. Bureau of Labor Statistics, Iowa ranks 47th in average pay for RNs at $33 an hour (compared to the top five states, which each average over $50 an hour).
It is critical that healthcare facilities in Iowa use the savings from this legislation to invest in their permanent working force, as they otherwise risk nurses traveling to other states offering more benefits and financial security.
While this new bill passed in the state House on February 27th, a new coalition is forming to stop it in the state Senate. So far, the coalition has 18 members working to stop the legislation from progressing.Â
Opposition to limiting pay for temporary nursing staff comes from a belief that nursing homes and hospitals will no longer be able to incentivize nurses to travel and fill in vacancies. This fear is especially pronounced in rural areas, where healthcare facilities may need temporary nursing staff to sustain operations.
House File 2391 will also incentivize permanent nurses in hospitals and nursing homes to stay in full-time care, as taking on travel contracts may be less lucrative in the future.
During its vote in the House, this new legislation passed with 80 votes for and 17 votes against. Now that it has been passed, House File 2391 will move to the state senate for more hearings and a final vote before the governor can sign it into effect.
If signed into law, the Department of Health and Human Services will have until September 30th to decide the maximum allowable charge, which will then go into effect on January 1st, 2025.
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