MINNEAPOLIS (AP) -- Temporary agencies that supply help to Minnesota nursing homes fear a new law that limits their fees will put them out of business by Sept. 1.
The new law says temporary agencies may charge nursing homes up to 150 percent of normal nursing home wages. But it doesn't allow them to include Social Security, Medicare, worker's comp, liability insurance or other costs in their charges.
The result, the agencies say, will be a critical shortage of help in many of the state's 422 worker-strapped nursing homes.
"I think we will close," said Jerry Havon, who has owned First Choice Nursing Services in the Twin Cities for seven years. "Some places may switch to hospitals, but most of us will close. Our employees will not accept a pay cut. They'll go do something else."
The probably could hit the Twin Cities especially hard. About 77 percent of homes there said they used temp agencies.
Besides the new limitations, agencies say Minnesota is using year-old wage scales instead of current nursing home pay to determine price caps.
Nursing home associations, nursing home unions and resident advocates are showing strong support for the law. They argue that with nursing home workers already in short supply, the highly regulated industry was being battered financially by unregulated agencies demanding rates that were double or triple nursing home wages.
Nursing home officials predicted last week that care will improve when temp agencies close because many of their workers will return to the homes as permanent employees.
"Yes, many of the agencies may go out of business, and that's not bad. That's what the law was meant to do," said Patti Cullen, of Care Providers of Minnesota, one of two nursing home trade groups. "They have enticed our workers away with higher pay and then turned around and gouged us because we needed those nurses and aides."
Yet, some officials are still wary the law will shrink the number of available workers and have an adverse effect on frail residents.
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