The emergency department at Dr. Georges-L.-Dumont University Hospital Centre in Moncton.Daniel St Louis/Supplied
The New Brunswick government says it is seeking to end current contracts with private nursing agencies after the release Tuesday of a report by the province’s Auditor-General about the exorbitant fees, questionable billing and lack of oversight associated with those arrangements.
Much of Auditor-General Paul Martin’s report focused on contracts between the Vitalité Health Network, which runs the province’s francophone public medical services, and the Toronto-based agency Canadian Health Labs. CHL supplies temporary health care personnel, also known as travel nurses, from other parts of Canada to places that are short-handed, a booming industry because of the pandemic.
The audit found that Vitalité so far has paid CHL more than $98-million, the largest share of the more than $173-million New Brunswick spent on temporary nurses between February, 2022, and February, 2024. The sum is more than one-tenth of Vitalité's $899.5-million budget for the fiscal year ending in March. The network has blamed travel nursing expenses as the cause of its $100-million budget overrun this year.
It also found that Vitalité's three contracts with the Toronto agency weren’t reviewed by lawyers and lacked documentation to support its selection of CHL as a provider of temporary nurses and orderlies.
Mr. Martin said he is considering seeking a court order to force Vitalité to turn over three internal audits of its contracts with CHL, the first time he has sought such a step in his 2½ years in the job because of resistance from a government body.
In a statement, Vitalité said that it is in a legal dispute with a nursing agency and that the three documents are covered by attorney-client confidentiality. “Sharing those documents could harm certain ongoing negotiations,” it said. (The statement didn’t identify the agency, but according to Mr. Martin, the three documents deal with CHL contracts.)
During Question Period in the legislature, Social Development Minister Jill Green said the government is trying to end the current private nursing deals. “We are working with our partners at the Attorney-General’s office to look at how these contracts can be severed in a legal way.”
Ms. Green, Vitalité and CHL did not provide more details.
In presenting his report before a legislature committee on Tuesday, Mr. Martin said Vitalité failed to acknowledge the problems he identified. “I find it very difficult to understand why Vitalité is not saying, ‘Oh my goodness, we need to fix this,’” he said, adding that he was met instead with an “aggressive response.”
CHL was the subject of a Globe and Mail investigation published in February. The audit confirmed many of The Globe’s findings, including the fact that the company charged much higher rates than those of its competitors.
Vitalité's deals with CHL have features that are “quite scary,” Mr. Martin told the committee, alluding to a clause that allows CHL to invoice for staff who weren’t needed, and an auto-renewal clause if bilingualism and overall staffing targets were met.
“I bet a lot of people would love to get a contract like this, and I would challenge government to do better – way better. This is not good,” Mr. Martin said.
CHL has said in past statements that its contracts are “fair and transparent” and reflect the “extraordinary logistical challenges” of recruiting and retaining health care workers in rural Canada. The company did not respond to a request for comment Tuesday.
But committee members expressed outrage at the audit’s findings. “This is scandalous that the taxpayers are on the hook for such large sums,” Liberal MLA Richard Losier said.
“Canadian Health Labs is laughing all the way to the bank. They have had quite a lucrative time in New Brunswick so far,” said Megan Mitton of the Green Party.
Vitalité has said that it retained CHL because it could supply bilingual nurses. In fact, auditors found that, while CHL accounted for 80 per cent of Vitalité's travel nursing costs, the ability to speak French was only required at two facilities and “there were concerns with the level of French language services provided.”
Furthermore, CHL didn’t pay for the agency’s liability insurance, requesting instead that Vitalité supply coverage under a government-sponsored plan. However, that plan excludes third-party contractors, the audit found.
CHL charged for nursing services in 12-hour increments, but the report found cases where Vitalité paid more than $18,000 for a 12-hour period when some of the nurses only worked 3½ hours.
The Globe investigation found that CHL billed Vitalité for meal allowances for its personnel, even though the company told the nurses that they had to pay for their own food. The audit found that “meal allowances were often paid for double or triple what the support provided would have allowed for.”
The report also looked at the fact that CHL charged Vitalité for the rental of electric vehicles from a firm called Canadian EV Labs, which was linked to the agency’s CEO, Bill Hennessey.
Vitalité paid Canadian EV Labs up to $345 a day even though the province had prearranged daily rates with other rental firms at less than $83, the audit found.
Mr. Martin told The Globe he may investigate travel nursing further, including whether agencies overcharged for accommodations.
The audit also looked at $2.7-million that CHL invoiced the Department of Social Development to staff nursing homes in 2022. Nearly half of CHL’s travel-related invoices were not properly supported, the report said. This included a hotel room billed twice, rooms booked for the same person at different hotels on the same day, flights to Newfoundland with no evidence of work done in New Brunswick and $6,405 in gift cards.
CHL signed similar contracts with authorities in Newfoundland and Labrador. Those are part of a continuing review being conducted by Newfoundland Auditor-General Denise Hanrahan. Mr. Martin said his office has been in contact with their counterparts in Newfoundland.
Paula Doucet, president of the New Brunswick Nurses Union, said she was “appalled” by the lack of oversight. “New Brunswick had never utilized private, for-profit travel agencies before 2022 and now we’re spending $173-million in a two-year period?” she said. “That’s mind-blowing.”