January 31, 2023


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New Iowa Law Will Affect Well being Care Staffing Agencies and Contracts with Wellbeing Treatment Entities | Dorsey & Whitney LLP

4 min read

On March 17, 2022, Iowa Governor Kim Reynolds signed into regulation Dwelling File 2521, “Relating to Health and fitness Treatment Work Companies, and Furnishing Penalties,” which will have its household in Chapter 135Q of the Iowa Code.  In general, the regulation does 3 factors.  Just one, it demands well being care employment companies to on a yearly basis sign up with the point out Department of Inspections and Appeals (DIA) and fork out a $500 registration price.  Two, it specifics recordkeeping and other requirements linked to agency staff, and prohibits the inclusion of sure phrases in contracts with wellness care entities.  3, it imposes penalties for non-compliance.

The regulation broadly defines a “health treatment employment agency” as “an agency that contracts with a wellness care entity in this condition to give agency employees for non permanent, short-term-to-use, immediate employ, or other agreement or personnel placements.”  In the same way, a “health treatment entity” is outlined as “a licensed or certified facility, business, or agency operated to give products and services and supports to fulfill the health and fitness or private treatment requires of buyers.”

Underneath the new law, health and fitness treatment work agencies need to do the pursuing:

  • Register every locale of the wellbeing care work agency on an annual basis with DIA, and pay a $500 registration price
  • Make sure that company workers comply with all relevant necessities relating to the overall health needs and qualifications of staff in health and fitness care entity settings (i.e. licensing, certification, coaching, and wellness needs and continuing education specifications), and doc that agency personnel satisfy these demands
  • Keep information for each agency employee and report, file, or normally deliver any required documentation to external parties or regulators which would in any other case be the responsibility of the health treatment entity if the agency worker labored straight for the wellbeing treatment entity
  • Sustain skilled and basic liability insurance coverage coverage with minimum for every event coverage of $1 million and mixture protection of $3 million to insure in opposition to reduction, hurt, or price incident to a assert arising out of demise or harm as the outcome of negligence or malpractice by health and fitness treatment employment agency or company employee and
  • Submit quarterly fiscal reports to DIA concerning amounts billed to overall health treatment entities.

As earlier discussed, the CMS Interim Final Rule necessitating employees vaccination in opposition to COVID-19 extends to agency personnel not directly employed by Medicare or Medicaid providers and suppliers (“Covered Health care Employers”).  Property File 2521 appears to codify these types of a vaccination requirement in mandating that health and fitness treatment work businesses assure that company personnel comply with all relevant necessities relating to the overall health requirements of personnel in wellbeing treatment entity and documenting that compliance.

Also less than the new regulation, health care employment organizations are prohibited from placing any limitations on “employment chances of an company worker by such as a non-contend clause in any deal with an company employee or wellbeing care entity.”  In addition, contracts involving companies and well being care entities may well not “require payment of liquidated damages, employment costs, or other payment if the company worker is subsequently employed as a long-lasting employee of the overall health care entity.”  In other words and phrases, overall health treatment work organizations may well not have to have their staff members to sign non-compete agreements as a affliction of work, and health and fitness care employment companies may not require wellbeing treatment entities to shell out any type of “finder’s fee” for directly using the services of an agency employee.  Any contracts that violate new Iowa Code Chapter 135Q are unenforceable.

Several queries remained right away just after Governor Reynolds signed Property File 2521, specifically relating to its scope of protection.  On May well 24, 2022, the Iowa legislature tried to handle one particular of those issues in Home File 2589 by clarifying that Iowa Code Chapter 135Q applies retroactively to any contracts entered into on or soon after January 1, 2019.  Although Governor Reynolds is yet to indicator Property File 2589, her signature is expected.

From a lawful standpoint, we possible have not heard the previous of Iowa Code Chapter 135Q and Household File 2589.  The DIA is tasked with applying administrative procedures to carry out the new law, and all those rules may perhaps provide even more clarification relating to scope of coverage, grace durations for penalties, and other clarifications.

For now, Iowa Code Chapter 135Q turns into effective July 1, 2022.  At that place, any contracts concerning wellbeing care employment businesses and wellness treatment entities, entered into on or after January 1, 2019, that consist of any of the prohibited provisions described above, are unenforceable.  From a practical standpoint, that indicates health and fitness care entities must renegotiate their contracts with health treatment employment agencies.  We endorse that in addition to making sure compliance with Iowa Code Chapter 135Q, wellbeing treatment entities ought to assure that the re-negotiated contracts consist of language requiring agency compliance with the CMS Interim Last Rule necessitating staff vaccination in opposition to COVID-19.

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