Committee advances bill to register and regulate health-care staffing agencies, citing transparency and price-gouging concerns

The Senate Health and Welfare Committee advanced a committee substitute to House Bill 282 on Wednesday that would require health-care staffing agencies (health-care services agencies) to register with the Cabinet for Health and Family Services and comply with basic standards for contracted direct-care staff.

Representative Steve Riley, sponsor of the measure, said the COVID-19 pandemic exposed and worsened staffing shortages in long-term care, assisted living and hospitals. The substitute requires registration with the cabinet, basic standards for direct-care staff, professional liability insurance, employee-dishonesty bonding, and workers’ compensation for contracted staff. The cabinet would maintain a complaint-reporting system for agencies and direct-care workers.

Representative Riley and Betsy Johnson of the Kentucky Association of Healthcare Facilities said the substitute does not prohibit staffing agencies from operating in Kentucky, does not set prices for agencies’ services, and narrows financial-disclosure requirements so certain private financial data would be provided only to the attorney general in a price-gouging investigation and would not be subject to open-records release.

Committee members and witnesses described allegations during the pandemic that some staffing agencies charged facilities dramatically higher rates and then supplied the same nurses back to those facilities at steep markups. Betsy Johnson said agencies and providers worked together on language to narrow the bill’s scope and to add hospitals to the covered provider list.

Janie Moores, who said she owns a Lexington staffing company, testified she supports regulation in principle and raised longer-term concerns about insurance costs, workforce training and care complexity that she said underlie market pressures. Moores urged investment in education and equipment and credited the substitute with including many required protections but said the sector needs broader systemic fixes.

Chairman Alvarado and senators commended stakeholder negotiations and passed the substitute by recorded vote, 9-0. Members placed the bill on consent for further action on the floor. The committee discussion noted the need to consider fees the cabinet may require for registration and enforcement and the possibility of a floor amendment to authorize fee regulations.