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View All NewsApril 14, 2021
Fees for temporary healthcare workers are at the heart of a dispute between a hospital system and a staffing firm in a contentious lawsuit filed in Massachusetts Superior Court.
Hospital system Steward Health Care System LLC filed a lawsuit against travel nurse staffing firm Aya Healthcare claiming it exploited the Covid-19 pandemic and attempted to profit from illegal price gouging, according to a court filing by Steward. Aya Healthcare said in its own court filing that the hospital system had agreed to pay the rates. It said the increased rates were driven by the market for travel nurse compensation rising during Covid. Moreover, Aya said profit margins, on a whole, have been substantially less during the pandemic than they were before it.
Research indicates volume growth in healthcare workers and crisis bill rates across the industry amid the pandemic.
Aya noted in the filing that Steward has withheld more than $40 million in payments though Steward had accepted more than $400 million in loans from the government under the Coronavirus Relief and Economic Security Act precisely to pay costs such as these. Aya also wrote in its court filing that it spent months seeking a viable solution to Stewards’ debt and contends the hospital group manufactured a bad faith dispute to coerce the company to accepting roughly half of what is owed.
Aya’s filing said the $40 million is being held hostage while the hospital is using tactics to force Aya to accept an across-the-board discount of nearly half of that debt.
Steward in its filing said rather than resolving an invoicing dispute, Aya is halting services and cancelling the deployment of pre-scheduled medical staffing at Steward’s hospitals and facilities. Steward wrote the average hourly contracted rate for temporary medical staff such as nurses was approximately $75 per hour before the pandemic but rates had gone up to as much as $160 per hour.
Steward also said in the lawsuit the high rates were in contravention of Massachusetts law.
Aya said in its filing the rates were not in contravention of the law and 90% of the disputed invoices are for services provided outside Massachusetts. Aya also said Steward in early 2021 acknowledged that it owed the entire amount. Aya said at one point Steward proposed paying Aya $1 million per week while at the time Aya was providing roughly $2.5 million in services; Aya did not accept the proposed deal. Aya also said in its filing that Steward sent Aya a letter one business day before the lawsuit was filed that disputed more than 3,300 invoices issued by Aya as far back as 2019.
Aya is a San Diego-based healthcare staffing firm. Steward is based in Dallas, Texas. It’s a privately owned, physician-led healthcare services organization that operates 37 hospitals in nine US states. It employs approximately 42,000 people. Ten of its hospitals are in Massachusetts.
The conflict was also covered in detail by The Wall Street Journal last week.
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Dispute between hospital group and healthcare staffing firm; healthcare worker fees at center of lawsuit - Staffing Industry Analysts
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