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Travel Nursing Companies: The MSP Debate Heats Up

The debate over Managed Service Providers in travel nursing and healthcare staffing heated up in June of 2013 when opposing sides exchanged barbs on The Staffing Stream. Colleen Mills, a Senior VP for National Healthcare Staffing Alliance wrote a piece urging small and mid-sized travel nursing companies and healthcare staffing companies to “Take a stand on VMS/MSP”. Days later, Bob Livonius, President of Workforce Solutions at AMN Healthcare, took exception and urged travel nursing companies and healthcare staffing companies to “Work Together to Embrace Best Practices with MSPs.”

This is an important topic with major implications for travel nurses, travel allied professionals, and Locum Tenens. We’ve described the differences between Vendor Management Systems (VMS) and Managed Service Providers (MSP) and discussed some of the basic ways they can impact travel nurses in a previous blog post. However, this debate on The Staffing Stream has exposed some of the more contentious issues from the travel nursing company perspective. These issues also have implications for travel healthcare professionals and we’ll elaborate on them here.

Bob Livonius of American Mobile offered a very basic reply to Colleen Mills’ lengthy list of grievances. Mr. Livonius contends that the move toward greater adoption of the VMS/MSP model is inevitable in healthcare staffing because it delivers on the “metrics”, which means it gets the jobs filled quickly and at a good price for the client. The bottom line is that it’s better for clients which are healthcare employers in this case. He goes on to urge healthcare staffing companies to join the American Staffing Association and participate in developing a set of best practices for staffing firm and VMS/MSP relationships.

Meanwhile, Colleen Mills offered a laundry list of issues that she described as “unhealthy realities for staffing firms.” We’ll elaborate on each of them below paying special attention to their possible effects on travel nurses, travel allied professionals, and Locum Tenens.

1) “Restrictions from working and communicating directly with the end users.”

Colleen is referring to the idea that VMS/MSPs insert a middle-man between the hospital or healthcare employer and the travel nursing company. In most if not all cases, direct communication between the hospital and travel nursing company is forbidden. This is great for hospitals because they don’t have travel nursing companies calling them off the hook. However, this can result in delays in the interview process for the travel nurse and a lack of information regarding a particular travel nursing job’s availability. It can also make it very complicated for travel nursing agencies to address their travel nurses’ problems while on assignment at the hospital.

2) “Onerous and one-sided terms and conditions, not the least of which includes allowing facilities to hire your staff with no or very little compensation to you for the conversion.”

Colleen is no doubt referring to many issues when she points to “onerous and one-sided terms and conditions”. However, the specific issue she offers is actually a good thing for travel nurses. When hospitals are able to hire travel nurses with little or no compensation to the travel nursing agency, then they maybe more apt to do so. In theory, this would give travel nurses more opportunities to land permanent jobs with the hospitals they contract with.

3) “Reduced margins: bill rates are reduced by $8 to $10 per hour, and the VMS/MSP charges you 3 to 4 percent of sales and other incidental fees.”

Bill rates are the hourly rates that travel nursing companies bill their client hospitals for a travel nurse’s time. Therefore, bill rates are the fundamental factor upon which travel nursing pay rates are based. Lower bill rates result in lower pay rates for travel nurses. My experience confirms Colleen’s contention that MSPs lead to reduced bill rates. I have yet to see any new MSP relationship result in increased bill rates. Morevover, MSPs do indeed charge a 3 to 4 percent fee for services which serves to further reduce the amount of money that sub-vending agencies have to pay their travel nurses.

4) “In many cases you must provide an unreasonable amount of unbillable orientation.”

Most travel nurses are unaware that travel nursing agencies are often unable to bill hospitals for a certain number of “orientation hours.” For example, the travel nursing agency may be unable to bill a hospital for 4 to 12 hours of the travel nurse’s “orientation time.” This is another issue that puts downward pressure on travel nursing pay rates. More unbillable hours means more cost for the agency and less money for them to pay travel nurses. My experience confirms Colleen’s contention that MSP relationships often lead to higher levels of unbillable orientation. For example, when American Mobile took over from Nursefinders as the MSP for Kaiser Permanente, they tacked on some online on-boarding modules that could easily take 12 hours to complete on top of the 4 hours of unbillable orientation that previously existed.

5) “Significant penalties for failure to complete a contract, even if for a legitimate reason, such as death.”

Travel nursing agencies are charged penalty fees when one of their contracted travel nurses fails to complete a contract. MSPs often negotiate very favorable terms for hospitals in an effort to win the hospital’s business. This represents another cost for travel nursing agencies which can in turn put downward pressure on travel nursing pay rates. However, I’m not sure that this would be any different with or without MSPs.

6) “Documentation requirements that may run afoul of federal laws.”

As we’ve mentioned previously, the documentation requirements for travel nurses has shot through the roof in recent years. Many hospitals require extensive background checks, education verification and credit checks in addition to the mountains of paperwork that travel nurses routinely have to complete. Some of these requirements may indeed violate federal laws.

7) “The risk of private and critical information being accessed by strangers.”

All documentation must be run through the MSP or VMS. This increases the potential for a travel nurse’s private information to be compromised.

8) “Your staff must learn yet another staffing software program.”

On the surface, this issue may not appear to impact the travel nurse directly. However, if a travel nursing agency’s staff is unfamiliar with the software system used to submit submission profiles, report time, bill the hospital, and submit documentation, then there could be major ramifications for the travel nurse. The travel nurse may miss out on job opportunities, may not get paid correctly, or may have their travel nursing assignment pushed back or cancelled due to a documentation oversight. Some of these software systems are complicated and a healthcare staffing agency’s internal staff turnover makes it difficult to develop the kind of expertise necessary to operate efficiently.

9) “Contingents become exposed to covert efforts to “poach” them from their home agency.”

“Contingents” are travel nurses, travel allied professionals, and locum tenens. The concern is that the healthcare staffing agency is turning over all documentation for their travel nurse to a competing healthcare staffing agency, the MSP. There are clauses in the contract between the MSP and the sub-vending agency designed to prohibit the MSP from soliciting the sub-vending agency’s travel nurses. However, these clauses are almost impossible to enforce. And given the number of touch points between the sub-vending agency’s travel nurses and the MSP, the concern is understandable.

Let’s use American Mobile’s MSP relationship with Kaiser Permanente as an example again. When a travel nurse signs a travel nursing contract to work at Kaiser, they must complete the online on-boarding modules through RN.com. The travel nurse must create an RN.com account to complete the modules. If the travel nurse forgets to uncheck the contact box in the process of signing up for an RN.com account, then they have just authorized RN.com’s parent company, you guessed it, American Mobile, to contact the travel nurse. Moreover, when the travel nurse shows up at the American Mobile onboarding orientation, the American Mobile representatives will pitch them on American Mobile’s Agency PRN staffing services. Below is RN.com’s contact approval clause. I think you can see the cause for concern.

“I wish to receive the RN.com newsletter and updates from RN.com.
By completing this form, you also acknowledge that you may also receive other correspondence via email or U.S. mail from our parent company, AMN Healthcare Inc. Your privacy is important to us. Our email and mail list is used only for distribution of our own materials. We do not sell or rent our email list to third parties.”

This is clearly a debate with implications for travel nurses, travel allied professionals and locum tenens. It will play a huge role in the future of travel nursing. Travel nurses should be aware of these issues in order to better navigate the system and get the most out of their time as travel nurses.

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