Health-Care Staffing Agencies See Tightened Rules in Covid Era

The Covid-19 pandemic has increased the workload placed on nurses and other health-care professionals, leading to an increased rate of burnout and turnover. As a result, hospitals and health-care providers are increasingly turning to health-care staffing agencies to address staffing shortages.

Health-care staffing agencies recruit and place nurses, technicians, and other health-care professionals at health facilities. The recent growth in such agencies has led many state legislatures to enact new licensure or registration requirements.

New Legislation

In the last few years, a number of states passed or updated laws requiring health-care staffing agencies and temporary health-care staffing agencies to obtain registration or licensure. In 2022 alone, Colorado, Connecticut, Illinois, Iowa, Kentucky, Louisiana, Missouri, Oregon, and Pennsylvania all enacted such legislation.

Looking Ahead

Health-care staffing agencies should review these new state licensing requirements and apply for any required licenses and registrations. Agencies may also need to update their contracts and policies regarding non-competes, solicitation, and conversion of health-care professionals. Failure to follow state licensing requirements may result in fines or civil penalties, or injunctions.

Meanwhile, hospitals and health-care facilities in states where new licensing requirements have taken effect should confirm that they are contracting only with appropriately licensed agencies. This will prevent staffing shortages and mitigate any additional costs that may result from having to terminate contracts with unlicensed agencies.

This article does not necessarily reflect the opinion of Bloomberg Industry Group, Inc., the publisher of Bloomberg Law and Bloomberg Tax, or its owners.

Author Information

Lindsay Borgeson is a corporate partner in the New York office of Kirkland & Ellis, focusing on healthcare regulatory and transactional matters for health care investors, lenders and providers.

Eric Tang is a corporate associate in the Boston office of Kirkland & Ellis, focusing on healthcare regulatory and transactional matters.

Jamie Feyko is a corporate associate in the Chicago office of Kirkland & Ellis, focusing on healthcare regulatory and transactional matters.

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