12 Types of Travel Nursing Bill Rates

What are travel nursing bill rates and why are they important?

A travel nursing bill rate is the hourly rate that a hospital agrees to pay a travel nursing agency for an hour of a travel nurse’s time at work. Bill rates are important to travel nurses because they’re the foundation of the travel nursing pay package. They determine how much money the travel nursing agency has to work with for a particular assignment. Therefore, higher bill rates typically mean higher pay rates.

Bill rates can vary from hospital to hospital. Sometimes, they even vary within the same hospital.  Meanwhile, there are several different types and categories of bill rates. In this article, we’ll define and discuss the most common types and categories of bill rates so you can approach this topic with confidence.

Different Types of Travel Nursing Bill Rates

As we mentioned above, we view bill rates as having different “types” and different “categories”. We define types of bill rates by characteristics that define how bill rates get determined. We define categories of bill rates by their specific use cases.

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We’ll define four types of bill rates here. Please note that there may be more than four types if you wanted to get more granular. These are just the ones we’ve chosen to define here.

More importantly, some people will disagree with our terminology. That’s most likely because we define bill rates from the travel nurse’s perspective. Those who disagree with our terminology are most likely defining bill rates from the agency or hospital perspective. We’ll describe how this perspective matters after we define the different types of bill rates. Let’s start with “standardized bill rates.”

Standardized Bill Rates

If every agency, or vendor, receives the same exact net value for an hour of their travel nurses’ time, then we define the bill rate as “standardized”.  We mean this in the strictest sense. For example, if the regime subjects some agencies to fees while not subjecting other agencies to the same fees, then we do not view the rate as “standardized”. The system must offer every agency the same exact net amount for us to define a bill rate as “standardized”.

Negotiated Bill Rates

When a hospital, or other end-user, negotiates different rates with different agencies, then we refer to the bill rates as “negotiated”. In some cases, hospitals and agencies include those bill rates in their master service agreement. In this case, the hospital will have different agreements with different agencies. Each agreement could potentially have different bill rates.

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In rare cases, the hospital might have one general master agreement that does not include the bill rates. Instead, the parties agree to bill rates on a case-by-case basis and include the bill rates in an addendum to the master agreement.

Bid Bill Rates

Some hospitals utilize systems that require agencies to submit bids on bill rates. We refer to these bill rates as “bid bill rates”.

Similar to negotiated bill rates, some systems require the parties to set the bill rate in the contract. Other systems allow the parties to set the bill rates on a job-by-job basis.

Many, if not most, federal, state and local government entities use a bidding system. Their systems typically require the parties to set bill rates in the contract.

For example, the California Department of Corrections and Rehabilitation (CDCR) periodically accepts bids from suppliers of healthcare professionals. Each agency submits a bid. CDCR reviews all bids and accepts all bids that meet their criteria. When agencies submit candidates for open jobs, the CDCR is supposed to review candidates from the lowest bidding agency first and then work their way up the list until they secure a candidate.

By contrast, Medefis, a popular Vendor Management System, allows agencies to submit bids for bill rates on a job-by-job basis. Hospitals open a job on Medefis and agencies submit candidates with a bid for the bill rate. This way, agencies can base their bids on varying criteria like the candidate’s experience level for example.

It’s clear that the intent of bidding systems is to get the best price for the purchaser, the hospital in this case. However, hospitals maybe willing to spend a little more money on the right candidate in some cases.

Tiered Bill Rates

When the hospital pays the same rate no matter which agency supplies the travel nurse, but different agencies receive different rates, we refer to it as a “tiered bill rate”. You might be wondering how it’s possible that the hospital could pay the same amount but agencies receive different amounts. Well, it’s because there is a middleman.

For example, many hospital systems sign an exclusive staffing agreement with one single agency. This means that the hospital system must work with this single agency to fill all their supplemental staffing needs that the exclusive agreement defines. Then, that single agency contracts with other agencies to help them staff all the needs. We commonly refer to that single agency with the exclusive contract as the “Managed Service Provider”.

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Managed Service Providers (MSP) often put their subcontracting agencies into tiers. Each tier gets a different bill rate among other things. And yes, the middleman keeps the difference. To be fair, the middleman does take on certain risks and provides additional services to the hospital system that the subcontractors do not. It’s highly debatable whether those risks and services are worth the MSP’s take rates.

Why Perspective Matters

As we mentioned above, we define the different “types” of bill rates from the travel nurse’s perspective. The industry commonly defines them from the hospital’s perspective. For example, the industry would say that standardized bill rates are when the hospital always pays the same rate.

So, why do we define it differently? Well, we do it because it’s better for all stakeholders. For example, it’s good for travel nurses to know when agencies are getting different rates. Knowing that helps explain why different agencies might have different pay rates. Similarly, we’re certain hospitals would like to know when they’re paying 10% to 20% of the bill rate to a middleman. Knowing that can help them better evaluate MSP agreements.

Different Categories of Travel Nursing Bill Rates

Now that we defined the types of bill rates, let’s take a look at the many different categories of bill rates. Below is a list of some of the more common bill rate categories:

Standard Rate

The “standard rate” category typically refers to the bill rates for a select set of healthcare modalities. For example, the “Standard Rate” might apply to Medical-Surgical, Telemetry, PEDS, PostPartum, Mother/Bay, and PSYCH Registered Nurses.

Specialty Rate

The “specialty rate” category also refers to the bill rates for a select set of healthcare modalities. For example, the “Specialty Rate” might apply to ICU, OR, ER, PICU, NICU, and L&D Registered Nurses.

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Specialty Rates are higher than Standard Rates. It’s important to note that some hospitals also have “Mid Rates” that fall between Standard and Specialty Rates. Continuing with our examples above, Mid Rates might cover SDU, DOU, PCU, Telemetry and similar units.

Regular Time and Overtime Rates

A regular time rate is the rate that the agency can charge for the regular hours that their travelers work. Of course, the overtime rate is the rate that the agency can charge for the overtime hours that their travelers work.

There are two very important factors to understand about these rates. First, the overtime rate is rarely 1.5 times the regular rate even though the agency must pay their travelers 1.5 times their base rate. In fact, the overtime rate is typically between $5-$10 higher per hour than the regular time rate. We’ll discuss why in a later blog post. Second, the rules governing when the agency can bill the overtime rate don’t always follow the overtime rules and regulations governing when the agency must pay an overtime rate.

Blended Bill Rates

Some agency/hospital contracts utilize Blended Bill Rates in lieu of Regular Time and Overtime Rates. A blended bill rate is one bill rate for all hours worked. That means the agency charges the same rate whether the hours are regular or overtime. Essentially, it’s an average of what might otherwise be the regular and overtime rates. So it’s higher than the regular hour rate would have been and lower than the overtime rate would have been. On a side note, please do not confuse blended bill rates with blended pay rates.

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When blended bill rates are in play, it’s typically financially advantageous to work 8 hour shifts and 40 hour work weeks. Not only would you get an extra 4 hours per week, but you’d get the advantage of a regular hour rate that’s most likely higher than what you’d expect at other hospitals in the same area.

Be careful though, there are some hospitals that use blended rates for their 12-hour shifts and a separate 8-hour rate for their 8-hour shifts. This is usually really bad for the travel nurse. Of course, the only way to know is to do a pay comparison with other offers.

On Call Rates

An “On Call Rate” is the rate the agency can charge the hospital for the time that the travel nurse is on call. Being on call is typically for OR and Cath Lab nurses, but others can be on call too. The rates are typically pretty low. I’ve seen them as low as $3 per hour to as high as $10 per hour. Remember, that’s the rate the agency is able to charge, not the rate the agency pays.

Call Back Rates

A “Call Back Rate” is the rate that the agency is able to charge when the hospital actually calls the travel nurse in for work while on call. Typically, the call back rate is equal to the overtime rate. Travelers should therefore expect to get paid time and a half. However, it’s also important to consider that call back hours are often “extra hours”. It’s always important to know how agencies will pay you for extra hours.

Holiday Rates

A “Holiday Rate” is the rate that the agency is able to charge the hospital for travel nurses working on holidays. Like the call back rate, holiday rates are typically equal to the overtime rate. The important thing to know is that different hospitals recognize different holidays. Therefore, agencies aren’t always able to pay overtime just because it’s a holiday. However, they will typically pay overtime when the holiday is defined as a billable holiday in their contract with the hospital.

Crisis Rates

A crisis rate is a special rate that hospitals will approve when they determine they have a dire need for travelers. These rates can be anywhere from $10 to $100 per hour higher than the standard or specialty rates in the contract. When hospitals invoke these rates, they commonly require that travelers start on specific dates and they might include other stringent requirements.

Bonuses

Finally, it’s also important to consider bonuses as a bill rate of sorts. After all, the agency is going to bill the hospital for it. We’ve discussed bonuses in detail previously. In any case, if you’re concerned about how your contract might treat On Call, Call Back, Holiday, and Bonuses, then you should request that they be included in the contract between you and the agency.

We hope that knowing this information will help you better understand how agencies determine travel nursing pay packages so you can negotiate better pay!