Licensing and Certification asks exemption to allow personnel-to-operating transfers for contract nurses

The Department of Health and Welfare's licensing and certification division asked the Joint Finance and Appropriations Committee for an exemption from a transfer restriction enacted in 2024 so it can continue hiring contract surveyors when needed to meet inspection obligations.

Alex Williamson, Legislative Services Office budget analyst, told the committee licensing and certification has historically used contract nurses to perform facility surveys and inspections. "Rather than asking for a dollar amount to be transferred from personnel to operating, the division has asked for an exemption allowing them to transfer personnel dollars to operating as needed," Williamson said, referencing the transfer limitation in section 8 of Senate Bill 1268 from 2024.

The division's supplemental asked for relief from the law that prevents personnel cost (PC) expense class from being transferred to other expense classes for the Department of Health and Welfare. Williamson said the division previously requested and used a transfer of roughly $400,000 in fiscal year 2024 to hire contract nurses; the director later said about $300,000 of that was spent and about $100,000 reverted.

Director Alex Adams explained the operational need: for long-term care surveys and inspections the department is required to reach facilities on a statutory cadence (the director noted a 15.9-month survey requirement for certain facilities). The division's staffing has fluctuated; Adams said long-term care team vacancy rates peaked during the pandemic and remain higher than other units. "For staff employees who do this, we pay about $35 an hour. For contract employees, we pay about $90 to $95 an hour," Adams said, explaining the cost difference that motivates use of contract labor when vacancies spike.

Senators and representatives pressed for more detail about how much was spent on contractors in previous years and whether the division could instead hire permanent staff. Williamson and Adams said they would provide follow-up numbers and that the governor recommended both the fiscal year 2025 supplemental and the 2026 enhancement as requested.

The committee did not make a final decision on the request during the session's overview hearing; analysts and agency staff were asked to provide additional documentation on prior transfers, current vacancy levels, and the contracting cost breakdown for committee review during upcoming budget work sessions.