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Canceled travel nursing contract

 

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Today I wanted to go over a not so fun topic in the travel nursing industry…contract cancellations! (queue the “dun dun dun” music).

Although contract cancellations aren’t much fun to talk or think about, they are even less fun to go through.  Especially when you aren’t prepared!  How often can you expect these cancellations to happen?  Somewhere between 2%-10% of the time contracts get canceled depending on who you ask.  Assuming a travel nurse works 3-5 years on average which is roughly 10-20 rotations at 13 weeks which means that nearly 100% of experience at least 1 cancellation in their career!

Let’s start off with a quick review of how a contract is supposed to go, then we will get into some scenarios.

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Hospital needs nurses, brings in an agency to find travel nurses, you sign up for a contract.

That’s how it’s supposed to go, pretty simple, but there are a lot of humans involved in this whole process so naturally there are communication breakdowns, someone’s plans change and contracts get canceled.

Since there are 3 entities involved in this process (1. hospital, 2. agency and 3. nurse for those keeping track at home), we are going to go over a few different scenarios as to why each of these 3 entities might cause a contract to canceled.

Hospital (Scenario 1)

Keep in mind the hospitals hold the most power because they are paying all parties involved.  They are businesses and like all businesses run into issues with regulations, budget cuts, and people.

In this scenario we talk about the hospital cancelling the contract which I’ve found to be the case between 5%-15% of the time.

Scenario 1.1

Census – Most of the time a hospital cancels a contract is because their census and patient population has dropped so they no longer need extra staff.  Unfortunately, travel nurses are first to go since they are already considered temporary and expensive.

Scenario 1.2

Budget Cuts – Travel nurses are expensive and that’s why they get paid the big bucks.  Often times a hospital’s budget (or a specific department’s budget) can change or get taken away completely by the “powers that be” at the hospital.  Here again, since travel nurses are expensive and are considered to be temporary anyways, they are often the first to go.

Scenario 1.3

Drama – Think back to high-school for a second and the social cliques that naturally occurred (have you seen the movie “Mean Girls”)?  Yeah, me neither, but I hear it’s all about how certain popular girls at a high school unfairly exclude the “new girl” from their group and make the new girl’s life not so fun.  Now of course, most hospitals have nurses that are adults so there isn’t as much drama during lunch break. But, don’t underestimate how important it is for a nurse to show up at a hospital, make a good first impression, and not ruffle anyone’s feathers.

  • Example: I have personally had travel nurses get on the bad side of a charge nurse or a doctor while on assignment and all of the sudden the hospital is canceling the contract because the travel nurse “can’t keep up” or is “struggling”.

Remember how the hospital has the most power?  Unfortunately, they can come up with many/any reasons why a contract isn’t working out and if they want a nurse gone, the hospital is going to win 99/100 times.  We will talk about repercussions in a bit.

Hospital Timing

Cancellations typically happen either the week before the contract is set to begin or the first few weeks of the contract.  As mentioned above, if the census drops, there are budget cuts at the hospital, or a nurse doesn’t have all of his/her requirements met, the hospital will cancel the contract just before a nurse is set to begin.  The other time you need to watch out for a cancellation is the first 3-4 weeks of a contract.  These cancellations will happen if the hospital feels the nurse can’t cut it after the first few weeks. Remember to make a good first impression!

Hospital Repercussions

There aren’t many negative consequences for the hospital when a contract is canceled, even if they are the ones that decide to cancel.  The main two that come to mind are lost time/opportunity cost they could have spent better elsewhere in the hospital on patient care or staffing.  Over time a hospital can also develop a negative reputation in the travel nursing community so eventually that has a negative impact on a facility.  However, as far as the relationship with the agency goes, it typically isn’t affected until there is a trend of cancellations.  The agency doesn’t want to sever the relationship with the hospital over one nurse.  I once heard the analogy that to an agency, the hospital is an apple tree, and the nurses are the apples.  The agency doesn’t want to cut down the whole apple tree (end the relationship with the hospital) over a couple bad apples (nurses with canceled contracts).  I know that’s a crude metaphor, but you get the picture.

Agency (Scenario 2)

The agency makes money by keeping the hospitals happy by providing qualified nurses to fill roles so it is rare (1%-5%) of the time that the agency cancels the contract.

They also don’t have as much risk or “skin in the game”.  They aren’t fronting the big bill like the hospital to hire a travel nurse, and they aren’t traveling away from home waiting on a paycheck each week like the travel nurse is.  The major risk they have in a contract is if they are on the hook for a lease or rental because the traveler took the agency’s housing.

Either way, agencies do cancel contracts from time to time so it is still important to cover. Let’s look at the main reason they would cancel a contract.

Scenario 2.1

Requirements – For each travel assignment, there are going to be a number of requirements that a nurse has to meet in order to work there.  The hospital creates these requirements for each job and passes them on to the agency.  It’s the agencies job to let all of the potential travel nurses know what these requirements are as well as assist the nurse in meeting the requirements prior to a contract starting.  Typical requirements a hospital could include are certifications, licenses, drug screens, health screens and sometimes tests or exams. These requirements (especially licenses and drug screens) can also take several days or even weeks to complete.  A contract getting canceled due to requirements can almost always be avoided if the agency and travel nurse are well prepared and plan ahead in meeting these requirements.

Agency Timing

These cancellations typically take place right before the start date of an assignment.  When I was a recruiter, I often remember scrambling the days before a start date to put the final touches on the paperwork and requirements to make sure a nurse is eligible to start on time.  If the final audit of a nurse’s complete profile for these requirements is not complete the day or two before a start date, then the contract is usually canceled.  There is a small chance that the hospital doesn’t cancel the contract assuming the missing requirements will come through in the next couple days.  There is even a smaller chance that the hospital will push back the start date a week or two to the next orientation date, but I wouldn’t count on either of these.

Agency Repercussions

I also don’t want to make agencies sound like they are terrible and only look out for themselves.  If there are enough cancellations at a hospital, eventually the agency will cut ties with the hospital.  But, this rarely happens.  As a past recruiter there were certain hospitals that I would never send one of my nurses to because I either knew their experience wouldn’t be great, or there was a decent chance of a cancellation.  So the nurse and the agency do have common interests and wants successful assignments to take place.

There are some financial repercussions the agency must face if a contract is canceled.  The first is lost funds on housing and furniture. This is of course assuming that the nurse that was canceled ended up having the agency find their housing for them.  If the nurse finds their own housing, then this cost would be incurred by the nurse. More on that in the next section…

The second financial expense the agency could incur is a “cancellation fee” billed by the hospital.  This fee is typically in place to discourage cancellations via the agency.  If there is a cancellation fee, the agency will often times try and recoup some of these costs by withholding some of the nurses pay after a cancellation.  An agency can of course only do this if the nurse has worked some hours at the hospital and the agency still hasn’t either billed the hospital or paid the nurse.  Technically, after a canceled contract, the agency only owes a nurse whatever your hourly wage is in the contract.

Nurse (Scenario 3)

If you remember from above, it would not be uncommon for agencies and recruiters to say that travel nurses themselves are the reason most contracts get canceled.  But, those nurses are not prepared.  I am confident that if you are the type of nurse to make it this far into a blog and are educating yourself about contract cancellations, you probably have a good head on your shoulders and will be prepared.  So let’s dive into some details that will help you to avoid having to cancel a contract and becoming the topic of discussion at your recruiter’s next happy hour.

There are basically two types of cancellations that the agency and hospital is going to group a nurse in when a contract gets canceled, Valid vs. Invalid Cancellations. If a contract is being canceled for a valid reason, the nurse doesn’t have a lot to worry about unless cancellations become a trend.  If there are multiple cancellations by a nurse (even for valid reasons) an agency might choose to no longer work with that nurse.  Let’s talk about a few valid cancellations first.

Valid Cancellations

There is no way to outline all of the possible reasons a nurse would cancel a contract, but there are some very logical reasons for a nurse to cancel a contract.

Scenario 3.1

Nurse’s Health – If the health of the nurse isn’t up to par and his/her ability to complete normal tasks of a nurse is impaired, then that’s a legitimate reason not to work a contract. These typically need to be serious enough injuries that would require an examination and even a note from a doctor explaining the injury.  Getting a doctor’s note may sound like you are being micromanaged or babied, but if you plan to be a successful travel nurse, I would make sure to get a note.  Unfortunately, most companies and recruiters have been lied to by nurses faking injuries and illnesses trying to get out of a contract.  So even if your recruiter believes you about an impending health ailment, I would still recommend getting a note.

Scenario 3.2

Family Health – This is another one that gets up brought a lot when a nurse needs to cancel a contract.  Unfortunately, family members do get sick.  So here again if you need to cancel a contract, I would try very hard to provide your agency with a note from a doctor so you can stay in the best possible standing with the agency.  One thing I would certainly avoid is being vague and using the term “family emergency” AND not providing any other detail.  If a nurse says they have a “family emergency”, can’t go to a contract and can’t provide any other details, there is a good chance the agency will deem the nurse as DNR (Do Not Rehire).

Invalid Cancellations

Scenario 3.3

A better offer came up – This is typically the reason a nurse wants to cancel a contract.  Maybe you were submitted to several jobs and after you already accepted a contract you got another offer at a better destination or for more money.  Once you sign that dotted line on a contract you have committed to that contract and the agency is going to expect you to fulfil your commitment. (Some agencies will even try to hold you to a contract if you verbally accept an offer).  However, this is still the land of the free last I checked, so if you want to break a contract for a better offer you certainly can, however you can expect to not work with that hospital, company or recruiter again because that bridge will be burned (or torched).

Scenario 3.4

Pets – I have to start by telling you not to shoot the messenger (yes, that’s me!)  I am a dog person myself, but unfortunately, most travel agencies are not going to have very much sympathy when your goldfish has a stomach ache and you want to cancel the contract.  Anything short of your cat or dog dying the day you are supposed to leave for a contract, the agency and hospital will still expect you to show up for orientation and fulfill your contract since there are thousands of dollars on the line.

Scenario 3.5

You can’t find housing – If you are having trouble finding housing at a certain location, there is no reason to freak out (unless you are with a company that doesn’t offer housing).  As we have explained before there are pros and cons when deciding if you should take the company housing or not.  I would at least always recommend asking if the company offers housing in an area and what the pay would be if you took the agency housing.  That way there are no surprises and you have a plan B to take the agency’s housing if you realize finding housing in a particular area is a little harder than you initially thought.

Scenario 3.6

No money to get there – Please please please don’t fall into the category of someone who doesn’t have enough money to even get to a job to make money.  Accept where you are currently at financially and plan ahead if need be.  You would be surprised at how many people don’t plan ahead, particularly in travel nursing.  One of my favorite tips at the end of this article is to realize that you are going to need reliable transportation and some funds for the first few days of your travel assignment.  The company will not give you an advance or any money, until you get to your assignment and work some hours.  Keep in mind that your first pay check usually isn’t until the second week of your assignment.  Plan ahead!

There are many more reasons that travel nurses want to cancel contracts, but I don’t want to write a book on it and these are some of the major reasons.  Bottom line, this is your career so if you are thinking about canceling a contract, make sure it’s for a good reason and you know what the repercussions will be (keep reading…).  You can of course always email me and I will give you my honest two pennies on your situation.

Travel Nurse Timing

Nurse cancellations due to the wide array or reasons both valid and invalid mean there is no typical time that these happen.  That said in my experience you typically see cancellations in the beginning 3-4 weeks.

Travel Nurse Repercussions

Unfortunately, many times a nurse gets the raw end of a deal when a contract gets canceled if it wasn’t the nurses doing.  Whenever a cancellation happens, the nurse will be able to give her side of the story but the hospital will also have a reason if they made the decision to end the contract.  If things like attendance, skill set and attitude are not up to par as far as the hospital is concerned, a nurse could become DNR (Do Not Rehire) to a particular agency.  This typically doesn’t happen if 1 or even 2 contracts get canceled, but if a trend emerges, the nurse will be under the microscope and expected to perform well.

The nurse’s resume and references can also be affected.  Many hospitals and agencies don’t like gaps in employment which can obviously result when there is a canceled contract.  Bad references or not being able to provide references from an assignment for a nurse can also be a red flag to future hospitals and agencies.

Perhaps one of the biggest and most immediate repercussions of a canceled contract is financially.  There are so many questions that get asked around this subject so let’s answer the major questions most nurses have when a contract gets canceled.

    • Is the nurse reimbursed anything?
      • 95% of the time, no.  Once a contract is canceled the flow of money stops immediately.
    • Does the nurse owe any money?
      • No. But, every company has different rules, so as always read the fine print of the contract.  Some companies will try to bully a nurse and say the nurse owes them money for housing or furniture, but unless it’s huge amount and thousands of dollars, the agency typically won’t waste a ton of time or resources chasing that money down.
    • Will the nurse get paid for hours that were already worked?
      • Yes and No.  The hospital should at minimum always get paid the hourly wage agreed upon in the contract.  But, as mentioned above, many times if the agency is charged a cancellation fee or lost money on housing related items on behalf of the nurse, the agency will hold some of the nurse’s tax free money that the nurse might feel is owed
    • Will the hospital or agency owe he nurse any money past the hours she/he worked?  
      • No.  As mentioned above, once a cancellation happens, the flow of money stops immediately.  So even if there is a cancellation in the middle of a work week, the hospital will almost never pay guaranteed hours or anything past the hours that the nurse has already worked.

Tips For Travel Nurse Cancellations

  • Guaranteed hours – Every single contract should have “guaranteed hours”.  These hours are very important for the nurse.  It’s a commitment from the hospital to the nurse that guarantees the nurse will continue to work and earn money a certain number of hours per week while on a contract even if the census drops at a hospital.
  • Get a clause in the contract – This one is a little tougher, but I have heard of nurses adding a bit of their own language into the contract.  The goal of this clause should basically protect you from owing any money to the agency if a contract is canceled as well as reimbursing you for money that you were counting on should the contract been completed successfully.  A good example of this would be travel expenses.
  • Take the agency housing – If you are concerned about a contract getting canceled or want to minimize your risk, I would recommend getting your housing set up through the agency, rather than on your own.  As we have explained before, there are pros and cons you need to consider when evaluating your housing options, but setting housing up on your own is a bit more risky.
  • Multiple licenses – An obvious way to reduce your risk when dealing with cancellations is to increase the number of options you have when you need a job.  An easy way to do this is to simply get more nursing licenses!  This way if you do have a contract that gets canceled, you will still have plenty of job options coming your way.  Do you know about a compact nursing license?  Here is more information on compact nursing licenses!
  • Multiple companies – Just like my previous point, it’s not rocket science to understand that the more options you have, the better spot you will be in if/when you experience a canceled nursing contract and need a job fast. Don’t be afraid to work with 2-4 different companies and recruiters at any given time.
  • Strike Nursing – Have you ever considered strike nursing?  This may not be a bad option if you suddenly find yourself in need of a job fast.  You can make quite a bit of money in a short period of time if you are open to working these strikes.  I would recommend talking with some recruiters and ask to be notified when strikes come up.
  • Previous jobs – Here is another tip that certainly isn’t a brain buster, but I just have to bring it up.  If you need a job after a cancellation, consider reaching back out to old managers and hospitals to see if they are hiring.  These could be old travel nursing contracts that you had or even old permanent jobs.  I wouldn’t solely rely on your recruiter, be proactive!
  • File for unemployment – This isn’t many people’s favorite option, but sometimes desperate times call for desperate measures.  If you find yourself in a situation where a contract was canceled and you are actively looking for work but can’t find any, consider filing for unemployment until you get back on track.
  • Back up funds – This is of course easier said than done, but if you want to be a successful travel nurse, you are going to need an emergency fund for situations that arise when you are away from home on the road.  A cancellation is a perfect example of when things don’t go to plan, why you need some emergency backup funds to get you through your tough times.
  • Stay calm – As we have talked about contract cancellations are an unfortunate part of travel nursing that occasionally happen. All you can do is educate yourself to be prepared and realize that at the end of the day you will get through it.

So although this is a complicated topic and there are thousands of different scenarios that could take place around canceled contracts, hopefully you are now more prepared and will know the rules and what to expect if you ever run into the unfortunate event of a contract cancellation.

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