February 8, 2023


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Updates Pertaining to New Iowa Law That Impacts Health and fitness Treatment Staffing Businesses and Contracts with Wellness Treatment Entities | Dorsey & Whitney LLP

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On March 17, 2022, Iowa Governor Kim Reynolds signed Household File 2521, “Relating to Health and fitness Care Work Agencies, and Offering Penalties” into law.  We formerly reviewed the new legislation on a June 10, 2022 website article.  At that time, a looming problem was how Iowa’s administrative companies would draft regulations to make clear and put into practice the regulation.  On November 30, 2022, the Iowa Section of Inspections and Appeals (DIA) submitted the final administrative regulations to employ Property File 2521 to ultimate publication.

By way of transient qualifications, administrative guidelines are the laws that help to employ guidelines handed by the Iowa Legislature.  Immediately after a bill is signed by the Governor, state businesses may well suggest principles to put into action the statute the organizations are tasked with implementing.  Rules are very first drafted inside an agency, then reviewed by the company head, and then published in the Iowa Administrative Bulletin.  At that time, the general public is authorized to comment on the proposed procedures for a particular period of time of time.  Immediately after the community comment period, the company head adopts the regulations (with additions as ideal) and sends them for remaining publication.  Even right after ultimate publication, the guidelines are subject matter to legislative review by the Administrative Rules Evaluation Committee (ARRC).  That committee can object to policies and delay effective dates.

So, what do the remaining guidelines for House File 2521 say?   

1st, the rules clarify the definition of a “health care work agency” for the purpose of this law.  Residence File 2521 broadly defined “health care work agency” to signify “an agency that contracts with a wellness care entity in this state to give agency staff for non permanent, momentary-to-use, direct seek the services of, or other agreement or employee placements.” The policies expressly supply that “a recruitment organization that contracts with a health treatment entity to establish and display possible candidates for retain the services of and does not provide company personnel for short-term, temporary-to-hire, immediate employ the service of, or other contract personnel placements” are not lined by the statute.

The rules also carve out an exception for “physical therapists accredited less than Iowa Code chapter 148A, occupational therapists accredited underneath chapter 148B, or speech pathologists or audiologists accredited underneath Iowa Code chapter 154F,” which means those people professions are not regarded as “health care work agencies” under this legislation.  Less than these regulations, it is position quo for people professions: employers could nonetheless contain specific covenants not to compete, finder’s costs, and other deal provisions that the law normally prohibits.

Second, the guidelines also verify the language of Home File 2521 in defining “direct services” to exclude the practice of “medicine and medical procedures or osteopathic medicine and operation by an personal accredited below Iowa Code chapter 148 or 148C or the practice of nursing by an innovative registered nurse practitioner or an advanced observe registered nurse licensee underneath Iowa Code chapter 152 or 152E.”  Yet again, for these positions, the pre-Property File 2521 position quo appears to be the regulation heading forward.

At last, the policies supply some exceptions to the general prohibition against non-competes and other contract provisions in health care work company contracts.  Especially, these contracts can incorporate non-competes and finder’s charges when: (1) the wellbeing treatment worker has been sponsored by or is usually assisted in getting perform authorization in the United States by the employment agency, (2) the contract includes an first time period of “no less than 24 months and has a total duration, which includes any renewals or extensions, of no lengthier than 36 months,” and (3) the agreement calls for the agency worker to function at a one overall health treatment entity for the duration of the contract.

At first look, the principles seem to narrow the scope of the statute noticeably.  It remains to be seen how the ARRC will reply (e.g. regardless of whether the procedures change the Dwelling File way too drastically).  The subsequent conference of the ARRC on December 12, 2022 may perhaps provide some insight into what worries, if any, legislators have with the ultimate rule.  As usually, we will be closely checking the upcoming 2023 session of the Iowa General Assembly for more action on health and fitness care staffing difficulties.

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