House File 2391 - Introduced HOUSE FILE 2391 BY COMMITTEE ON HEALTH AND HUMAN SERVICES (SUCCESSOR TO HF 2199) A BILL FOR An Act relating to health care employment agencies, including 1 the statewide maximum allowable charges schedule applicable 2 to nursing services provided by health care employment 3 agency workers, providing penalties, and including effective 4 date provisions. 5 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 6 TLSB 5265HV (3) 90 pf/ko

H.F. 2391 Section 1. Section 135Q.1, Code 2024, is amended to read as 1 follows: 2 135Q.1 Definitions. 3 As used in this chapter , unless the context otherwise 4 requires: 5 1. “Department” means the department of inspections, 6 appeals, and licensing. 7 2. “Health care employment agency” or “agency” means an any 8 of the following: 9 a. An agency that contracts with a health care entity 10 in this state to provide agency workers for temporary or 11 temporary-to-hire employee placements. 12 b. A health care technology platform. 13 3. “Health care employment agency worker” or “agency worker” 14 means an individual who contracts with or is employed by a 15 health care employment agency to provide nursing services to 16 health care entity consumers. 17 4. “Health care entity” means a facility, agency, or program 18 licensed or certified by the department or by the centers for 19 Medicare and Medicaid services of the United States department 20 of health and human services. 21 5. “Health care technology platform” or “platform” includes 22 an individual, a trust, a partnership, a corporation, a limited 23 liability partnership or company, or any other business entity 24 that develops and operates, offers, or maintains a system or 25 technology that provides an internet-based or application-based 26 marketplace through which an individual as an independent 27 contractor, and in the individual’s sole discretion, chooses 28 when and how often to utilize the platform to bid on or select 29 open shifts posted by a health care entity to provide nursing 30 services to a health care entity. 31 6. “Individual agency worker category” includes registered 32 nurses, licensed practical nurses, certified nurse aides, 33 certified medication aides, home health aides, medication 34 managers, and noncertified or nonlicensed staff providing 35 -1- LSB 5265HV (3) 90 pf/ko 1/ 11

H.F. 2391 personal care as defined in section 231C.2 who are health care 1 employment agency workers. 2 5. 7. “Managing entity” means a business entity, 3 owner, ownership group, chief executive officer, program 4 administrator, director, or other decision maker whose 5 responsibilities include directing the management or policies 6 of a health care employment agency. “Managing entity” includes 7 an individual who, directly or indirectly, holds a beneficial 8 interest in a corporation, partnership, or other business 9 entity that constitutes a managing entity. 10 6. 8. “Nursing services” means those services which may be 11 provided only by or under the supervision of a nurse. “Nursing 12 services” includes services performed by a registered nurse, a 13 licensed practical nurse, a certified nurse aide, a certified 14 medication aide, a home health aide, a medication manager, or 15 by noncertified or nonlicensed staff providing personal care 16 as defined in section 231C.2 . “Nursing services” does not 17 include the practice of nursing by an advanced registered nurse 18 practitioner or an advanced practice registered nurse licensed 19 under chapter 152 or 152E . 20 9. “Nursing services professionals” includes registered 21 nurses, licensed practical nurses, certified nurse aides, 22 certified medication aides, home health aides, medication 23 managers, and noncertified or nonlicensed staff providing 24 personal care as defined in section 231C.2 who are not health 25 care employment agency workers but instead are employed 26 directly by or contract directly with a health care entity. 27 Sec. 2. Section 135Q.2, Code 2024, is amended to read as 28 follows: 29 135Q.2 Health care employment agency requirements —— 30 registration —— liability —— penalties . 31 1. a. A health care employment agency operating in the 32 state shall register annually with the department. Each 33 separate location of a health care employment agency shall 34 register annually with and pay an annual registration fee of 35 -2- LSB 5265HV (3) 90 pf/ko 2/ 11

H.F. 2391 five hundred dollars to the department. The department shall 1 issue each location a separate certification of registration 2 upon approval of registration and payment of the fee. The 3 annual registration fees shall be retained by the department as 4 repayment receipts as defined in section 8.2 . 5 b. A health care employment agency that fails to register 6 with the department as required under this section is 7 prohibited from contracting with a health care entity in this 8 state. 9 2. A health care employment agency shall do all of the 10 following: 11 a. Ensure that agency workers comply with all applicable 12 requirements relating to the health requirements and 13 qualifications of personnel in health care entity settings. 14 b. Document that each agency worker meets the minimum 15 licensing, certification, training, and health requirements 16 and the continuing education standards for the agency worker’s 17 position in the health care entity setting. 18 c. Maintain records for each agency worker and report, 19 file, or otherwise provide any required documentation to 20 external parties or regulators which would otherwise be the 21 responsibility of the health care entity if the agency worker 22 was employed by the health care entity. 23 d. Maintain professional and general liability insurance 24 coverage with minimum per occurrence coverage of one million 25 dollars and aggregate coverage of three million dollars to 26 insure against loss, damage, or expense incident to a claim 27 arising out of the death or injury of any person as the result 28 of negligence or malpractice in the provision of services by 29 the agency or an agency worker. 30 3. a. A health care employment agency shall not do any of 31 the following: 32 (1) Restrict in any manner the employment opportunities 33 of an agency worker by including a non-compete clause in any 34 contract with an agency worker or health care entity. 35 -3- LSB 5265HV (3) 90 pf/ko 3/ 11

H.F. 2391 (2) In any contract with an agency worker or health care 1 entity, require payment of liquidated damages, employment fees, 2 or other compensation if the agency worker is subsequently 3 hired as a permanent employee of the health care entity. 4 (3) Use the establishment of, or the required applicability 5 of, the statewide maximum allowable charges schedule as a basis 6 for prohibiting or otherwise interfering with a wage increase 7 for any agency worker. 8 b. This subsection shall not apply to a contract between 9 a health care employment agency and an agency worker or a 10 health care entity if the contract meets all of the following 11 criteria: 12 (1) The contract is entered into for the purpose of placing 13 an agency worker the health care employment agency assisted in 14 obtaining authorization to work in the United States. 15 (2) The contract contains an initial duration term of 16 not less than twenty-four months and a total duration term, 17 including any renewals or extensions, of not more than 18 thirty-six months. 19 (3) The contract requires the agency worker to work for 20 a single health care entity for the entire duration of the 21 contract. 22 c. Any contract that violates this subsection shall be 23 unenforceable in court. 24 4. A health care employment agency shall submit a report to 25 the department on a quarterly basis for each health care entity 26 participating in Medicare or Medicaid with whom the agency 27 contracts that includes all of the following by provider type: 28 a. A detailed list of the average amount charged to the 29 health care entity for each individual agency worker category. 30 b. A detailed list of the average amount paid by the agency 31 to agency workers in each individual agency worker category. 32 5. a. A health care employment agency that violates 33 subsection 1 or subsection 2 is subject to denial or revocation 34 of registration for a period of one year and a monetary penalty 35 -4- LSB 5265HV (3) 90 pf/ko 4/ 11

H.F. 2391 of five hundred dollars for a first offense and five thousand 1 dollars for each offense thereafter. 2 b. A health care employment agency that violates subsection 3 3 or that knowingly provides an agency worker who has an 4 illegally or fraudulently obtained or issued diploma, 5 registration, license, certification, or background check to 6 a health care entity is subject to immediate revocation of 7 registration. The department shall notify the agency thirty 8 days in advance of the date of such revocation. 9 c. (1) The managing entity of an agency for which 10 registration has been denied or revoked under this subsection 11 shall not be eligible to apply for or be granted registration 12 for another agency during the two-year period following the 13 date of the denial or revocation. 14 (2) The department shall not approve a new registration 15 or renew an existing registration for any agency for which 16 the managing entity is also the managing entity of an agency 17 for which registration has been denied or revoked during the 18 two-year period in which registration of the violating agency 19 is denied or revoked. 20 6. 5. The department shall establish a system for members 21 of the public to report complaints against an agency or 22 agency worker. The department shall investigate any complaint 23 received and shall report the department’s findings to the 24 complaining party and the agency involved. 25 Sec. 3. NEW SECTION . 135Q.3 Statewide maximum allowable 26 charges schedule —— establishment and annual revision —— required 27 utilization and compliance —— rules. 28 1. The department of health and human services shall 29 annually establish and publish by September 30, a statewide 30 maximum allowable charges schedule that shall be applicable 31 January 1 of the immediately following calendar year to nursing 32 services provided by a health care employment agency worker. 33 The department of health and human services shall utilize the 34 most recently preceding nursing facility cost report schedule 35 -5- LSB 5265HV (3) 90 pf/ko 5/ 11

H.F. 2391 H to calculate the statewide maximum allowable charges. The 1 department of health and human services, in collaboration 2 with stakeholders, shall develop a process to periodically 3 obtain wage information from provider types other than nursing 4 facilities. 5 2. The amounts established in the statewide maximum 6 allowable charges schedule shall meet all of the following 7 requirements: 8 a. The amounts shall be no greater than one hundred fifty 9 percent of the statewide average wage paid in the most recently 10 preceding cost report year by a specific type of health care 11 entity to a nursing services professional, within a specific 12 nursing services professional category, and within the 13 applicable core-based statistical area of the state. 14 b. The amounts shall be inclusive of the hourly rate, 15 administrative fees, contract fees, transportation or travel 16 stipends, per diems, and any other costs a health care 17 employment agency is authorized to include in the charge to a 18 health care entity for nursing services provided by an agency 19 worker within an individual agency worker category. 20 3. Each separate location of a health care employment agency 21 registered under section 135Q.2 shall utilize and comply with 22 the statewide maximum allowable charges schedule established 23 under this section. 24 4. The department of health and human services, in 25 cooperation with the department, shall adopt rules pursuant to 26 chapter 17A to administer this section. 27 Sec. 4. NEW SECTION . 135Q.4 Penalties —— enforcement. 28 1. a. A health care employment agency that violates 29 section 135Q.2, subsection 1 or 4, is subject to an initial 30 monetary penalty of five thousand dollars and shall be provided 31 notification and given a thirty-day grace period in which to 32 comply. 33 b. A health care employment agency that fails to comply 34 following the notification and within the thirty-day grace 35 -6- LSB 5265HV (3) 90 pf/ko 6/ 11

H.F. 2391 period under paragraph “a” , shall be subject to a monetary 1 penalty of twenty-five thousand dollars. 2 c. If a health care employment agency fails to comply 3 with paragraph “b” , the health care employment agency shall 4 be subject to an additional monetary penalty of twenty-five 5 thousand dollars, revocation of registration, and denial of 6 subsequent registration for up to three years. 7 2. a. A health care employment agency that violates section 8 135Q.2, subsection 2, or that knowingly provides an agency 9 worker who has an illegally or fraudulently obtained or issued 10 diploma, registration, license, certification, or background 11 check to a health care entity is subject to a monetary penalty 12 of five thousand dollars for each violation. 13 b. If a health care employment agency commits a second or 14 subsequent violation of section 135Q.2, subsection 2, within 15 any three-year period, the health care employment agency shall 16 be subject to immediate revocation of registration. The 17 department shall notify the agency thirty days in advance of 18 the date of such revocation. 19 3. A health care employment agency that violates section 20 135Q.2, subsection 3, is subject to a monetary penalty of 21 twenty-five thousand dollars for the first violation. If 22 a health care employment agency violates section 135Q.2, 23 subsection 3, a second or subsequent time, the health care 24 employment agency shall be subject to immediate revocation of 25 registration, and shall not be eligible to apply for or be 26 granted registration for the three-year period immediately 27 following the date of revocation. 28 4. A health care employment agency that violates section 29 135Q.3 shall be subject to a monetary penalty of five thousand 30 dollars for the first violation, and a monetary penalty of 31 twenty-five thousand dollars for each subsequent violation. 32 5. a. The managing entity of an agency for which 33 registration has been denied or revoked under this section 34 shall not be eligible to apply for or be granted registration 35 -7- LSB 5265HV (3) 90 pf/ko 7/ 11

H.F. 2391 for another agency during the three-year period following the 1 date of the denial or revocation. 2 b. The department shall not approve a new registration 3 or renew an existing registration for any agency for which 4 the managing entity is also the managing entity of an agency 5 for which registration has been denied or revoked during the 6 three-year period in which registration of the violating agency 7 is denied or revoked. 8 6. Any monetary penalties collected under this section 9 shall be retained by the department as repayment receipts as 10 defined in section 8.2. 11 7. The attorney general shall enforce the provisions of this 12 chapter. 13 Sec. 5. NEW SECTION . 135Q.5 Department annual report. 14 The department shall submit an annual report to the general 15 assembly by January 15, for the immediately preceding fiscal 16 year, that includes a summary of the number of registrations 17 issued and the amount of registration fees collected, the 18 violations of this chapter, the amount of monetary penalties 19 collected, the number of health care employment agencies and 20 managing entities for whom a registration was revoked or 21 denied, the statewide maximum allowable charges schedule, and 22 any recommendations for changes to the chapter. 23 Sec. 6. EFFECTIVE DATE. This Act, being deemed of immediate 24 importance, takes effect upon enactment. 25 EXPLANATION 26 The inclusion of this explanation does not constitute agreement with 27 the explanation’s substance by the members of the general assembly. 28 This bill relates to health care employment agencies 29 (agency), including the maximum allowable charges an agency may 30 charge a health care entity for nursing services provided by a 31 health care employment agency worker (agency worker). 32 The bill defines terms used in the bill, including “health 33 care employment agency” which includes a “health care 34 technology platform” as defined in the bill; “individual agency 35 -8- LSB 5265HV (3) 90 pf/ko 8/ 11

H.F. 2391 worker category” which includes specified health professionals 1 who are agency workers, and “nursing services professionals” 2 which includes the same specified health professionals who are 3 not agency workers but are instead employed directly by, or 4 contract directly with, a health care entity. 5 The bill requires the department of health and human 6 services (HHS) to annually establish and publish by September 7 30, a statewide maximum allowable charges schedule (charges 8 schedule) applicable January 1 of the following calendar year 9 to nursing services provided by agency workers. The amounts 10 established in the charges schedule must be no greater than 11 150 percent of the statewide average wage paid in the most 12 recently preceding cost report year by a specific type of 13 health care entity to a nursing services professional, within 14 a specific nursing services professional category, and within 15 the applicable core-based statistical area of the state; and 16 must be inclusive of the hourly rate, administrative fees, 17 contract fees, transportation or travel stipends, per diems, 18 and any other costs an agency is authorized to include in the 19 charge to a health care entity for nursing services provided by 20 an agency worker within an individual agency worker category. 21 The bill requires each separate location of an agency 22 registered in the state to utilize and comply with the charges 23 schedule established under the bill. The bill directs HHS in 24 cooperation with the department of inspections, appeals, and 25 licensing (DIAL) to adopt administrative rules to administer 26 these provisions of the bill. The bill prohibits an agency 27 from using the establishment of, or the required applicability 28 of, the charges schedule as a basis for prohibiting or 29 otherwise interfering with a wage increase for any agency 30 worker. 31 The bill amends current penalties under Code chapter 32 135Q and includes new penalties for violations of provisions 33 included in the bill. 34 The bill provides that an agency that violates Code 35 -9- LSB 5265HV (3) 90 pf/ko 9/ 11

H.F. 2391 section 135Q.2(1) (relating to required registration and the 1 prohibition against contracting with a health care entity in 2 the state if the agency is not registered), or Code section 3 135Q.2(4) (relating to submitting quarterly reports to DIAL), 4 is subject to an initial monetary penalty of $5,000 and shall 5 be provided notification and given a 30-day grace period in 6 which to comply. If the agency fails to comply following the 7 notification and within the 30-day grace period, the agency 8 shall be subject to a monetary penalty of $25,000. If the 9 agency continues the noncompliance, the agency shall be subject 10 to an additional monetary penalty of $25,000, revocation of 11 registration, and denial of subsequent registration for up 12 to three years. The bill also provides that an agency that 13 violates Code section 135Q.2(2) (relating to certain prohibited 14 restrictions on agency workers or health care entities and 15 contracting prohibitions), or that knowingly provides an agency 16 worker who has an illegally or fraudulently obtained or issued 17 diploma, registration, license, certification, or background 18 check to a health care entity is subject to a monetary penalty 19 of $5,000 for each violation, and to immediate revocation of 20 registration. If the agency commits a second or subsequent 21 violation within any three-year period, the health care 22 employment agency shall be subject to immediate revocation of 23 registration. Under the bill, an agency that violates Code 24 section 135Q.2(3) (relating to contracting with agency workers 25 and health care entities) is subject to a monetary penalty of 26 $25,000 for a first offense, and to immediate revocation of 27 registration and denial of registration for the three-year 28 period following revocation for a second or subsequent 29 violation. 30 An agency that violates Code section 135Q.3 (relating 31 to requirements regarding the statewide allowable charges 32 schedule), shall be subject to a monetary penalty of $5,000 for 33 the first violation and a monetary penalty of $25,000 for each 34 subsequent violation. 35 -10- LSB 5265HV (3) 90 pf/ko 10/ 11

H.F. 2391 The bill also provides that the managing entity of an agency 1 for which registration has been denied or revoked shall not be 2 eligible to apply for or be granted registration for another 3 agency during the three-year period following the date of 4 the denial or revocation; and DIAL shall not approve a new 5 registration or renew an existing registration for any agency 6 for which the managing entity is also the managing entity of 7 an agency for which registration has been denied or revoked 8 during the three-year period in which registration of the 9 violating agency is denied or revoked. The bill provides that 10 any monetary penalties collected shall be retained by DIAL as 11 repayment receipts as defined in Code section 8.2. The bill 12 provides that the attorney general shall enforce the provisions 13 of the bill. 14 The bill requires DIAL to submit an annual report to 15 the general assembly by January 15, for the immediately 16 preceding fiscal year, that includes a summary of the number 17 of registrations issued and the amount of registration 18 fees collected, the violations of the chapter, the amount 19 of monetary penalties collected, the number of health 20 care employment agencies and managing entities for whom a 21 registration was revoked or denied, the charges schedule, and 22 any recommendations for changes to the Code chapter. The bill 23 takes effect upon enactment. 24 -11- LSB 5265HV (3) 90 pf/ko 11/ 11