Every state in the U.S. has a state hospital association that includes most of the hospitals throughout the state. Traditionally, these associations have been formed for hospitals to share information about issues including patient outcome data, safety measures, compliance issues with Department of Health regulations, and Joint Commission accreditation changes.

Some state hospital associations function like Managed Service Programs/Providers; they have a specific department with independent staff charged with staffing nurses, allied staff, and administrative staff.  This department sends medical staffing agencies proposal requests every two-to-three years; the staffing agencies can bid on separate requests including travel, local contract, and permanent placement assignments. Additionally, some of the hospitals in the association own Medicare Certified home-care agencies.

Contracts are awarded to multiple vendors based on their capabilities to fill orders, and the strength of their credentialing process. Bill rates are set by the hospital association and are non-negotiable. Each facility who participates in this staffing contract area pays a fee ranging from 2.5%-6% of the billing fee to the vendor management system. Similarly, each medical staffing company who services the association pays the same percentage of billing fee to the association.

Medical staffing companies that are awarded contracts have access to open job orders and assignments which are sent daily to them through one of the VMS software products. It is a race between medical staffing companies to fill orders by submitting fully compliant nurses and other staff through the VMS software. In some states, the hospital associations may have over 200 facilities who participate in the medical staffing venture. Medical staffing agencies that have not been awarded a contract with the association, can potentially be locked out from providing services to most of the facilities participating in that association until a new contract award period is announced; this applies only to associations that participate in the medical staffing agency ventures. In some cases, these facilities contract out through one of the larger MSPs to handle the management of their staffing needs because of their experience in managing staff for large hospital systems.