On October 5, 2022, the Iowa Department of Inspections and Appeals (DIA) published a notice of proposed rulemaking related to health care employment agencies. This is to implement the 2022 Iowa Acts, House File 2521 (Iowa Code Chapter 135Q), which imposed certain content restrictions on contracts between “health care employment agencies” and “health care entities,” among other things. The proposed regulations will appear in Chapter 55 of the Iowa Administrative Code. As indicated by HF2521, the restrictions apply retroactively to any contract between a health care employment agency and an agency worker or health care entity that was entered into or executed on or after January 1, 2019.

Public comments may be submitted to the DIA until 4:30 p.m. on October 25, 2022.

While these proposed regulations provide some clarity on the law, questions still remain. For example, the regulations do not address physician assistants, which likely means they would be considered employees subject to the new requirements, unlike physicians and nurse practitioners who are specifically exempt.

In addition, the regulations do not exempt health care providers who lease employees to other providers, making it unclear whether providers who share employees in a leased employee arrangement must register and comply with these requirements. Notable highlights from the proposed regulations are included below.

Definition of Terms

Proposed subrule 55.1 incorporates the definitions specified in Iowa Code § 135Q.1 and further defines the terms “direct services,” “health care employment agency,” and “health care entity.”

1. Direct Services

Current Iowa Code § 135Q.1 excludes from the definition of “direct services” services provided by physicians or surgeons (under Iowa Code Chapter 148) or advanced registered nurse practitioners or advanced practice registered nurse licensed (under Iowa Code Chapter 152 or 152E).

The proposed subrule specifically adds janitorial, housekeeping, laundry, and meal preparation services to the services excluded from that definition, while specifically including services performed by registered nurses, licensed practical nurses, certified nurse aides, certified medication aides, and medication managers.

2. Health Care Employment Agency

Currently, Iowa code defines a “health care employment agency” as an agency that contracts with a health care entity in this state to provide agency workers for temporary, temporary-to-hire, direct hire, or other contract or employee placements.

The proposed subrule attempts to clarify that this definition excludes agencies that contract with Iowa health care entities to identify and screen potential candidates for hire only if the agency does not also provide agency workers for temporary, temporary-to-hire, direct hire, or other contract or employee placements in Iowa. Furthermore, the subrule specifically excludes from this definition a group of physical therapists licensed under Iowa Code Chapter 148A, occupational therapists licensed under Iowa Code Chapter 148B, or speech pathologists or audiologists licensed under Iowa Code Chapter 154F providing services to a health care entity.

3. Health Care Entity

The current code defines “health care entity” very broadly to include a licensed or certified facility, organization, or agency operated to provide services and support to meet the health or personal care needs of consumers.

The proposed subrule provides slightly more clarity, while still not limiting the definition to the following: any entities licensed or certified under Iowa Code Chapters:

• 135B - hospitals
• 135C - health care facilities
• 135G - subacute mental health care facilities
• 135H - psychiatric medical institutions for children
• 135J - licensed hospice programs
• 231C - assisted living programs
• 231D - adult day services
• Any ambulatory surgical center, home health agency, hospice, end-stage renal disease center, rural health clinic, or federally qualified health care center certified by the Centers for Medicare and Medicaid Services

Registration

Proposed subrule 55.2 provides further instruction for health care employment agency registration including how/where to register, the minimum information required on the statement of registration, and the deadline for registration. For agencies operating before July 1, 2022, the deadline is January 4, 2023; those operating after July 1, 2022, must register within 30 days before commencing operation.

Mandatory Reporting

Proposed subrule 55.3 creates mandatory reporting obligations for health care employment agencies upon allegations of dependent adult abuse against an agency worker to the facility where the alleged abuse occurred, designated state/federal agencies, and to any prospective health care entity with which the agency worker will be placed.

Employment Opportunities

As mentioned in Iowa Code § 135Q.2(3), health care employment agencies are prohibited from restricting the employment opportunities of an agency worker by including a:

1. Non-compete clause in any contract with an agency worker or health care entity or
2. Clause requiring payment of liquidated damages, employment fees, or other compensation if the agency worker is subsequently hired as a permanent employee of the health care entity.

However, proposed subrule 55.4 makes an exception for contracts between a health care employment agency and a health care entity or a health care employment agency worker if a contract meets the following three requirements. The contract:

1. Places an agency worker that the health care employment agency assisted in obtaining authorization to work in the United States;
2. Contains an initial term of no less than 24 months and has a total duration of no longer than 36 months (including renewals or extensions); and
3. Requires the agency worker to work at a single health care entity for the duration of the contract.

Other Additions

Other notable additions in the proposed regulations include further details on health care employment agencies’ quarterly reporting requirements including report data ranges and submission deadlines, the process for filing a complaint against a health care employment agency, and clarification regarding what information is publicly available for inspection versus confidential information. 

Public comments may be submitted to the DIA until 4:30 p.m. on October 25, 2022.