The Surprising Risks to Healthcare Facilities That Utilize 1099 Independent Contractors

Jul 25, 2023

Many healthcare communities rely on PRN staffing agencies to provide qualified nurses to meet patient needs. The choice between 1099 independent contractors and  W-2 employees can significantly impact patient safety, quality of care, and legal liabilities for healthcare communities. 

Let’s take a second to uncover some of the risks communities face when partnering with 1099 agencies, and show how leveraging W-2 PRN staff can save your community from the pitfalls of “gig agencies”

What Are The Risks to Healthcare Communities Using 1099 Independent Contractors?

There are many things to consider when partnering with healthcare staffing agencies. Unfortunately, when healthcare organizations are looking for quick help, it is easy to overlook some of the pitfalls with 1099 staff. 

Limited Control and Oversite

One of the biggest risks for healthcare organizations that use 1099 independent contractors is how limited oversight there is. Independent contractors don’t report to any managers within the marketplace apps. Granted, some have no problems managing themselves. However, the staff with issues face no repercussions so they’re less worried. 

Healthcare organizations that use 1099 independent contractors are breaking the rules set by the Department of Labor. Healthcare workers are in all ways managed. They are told when to show up, what their duties are, and report to someone while on shift. Unfortunately for healthcare communities, this misclassification doesn’t fall on the marketplace apps or the 1099 independent contractor. It falls on the community using the worker. 

Since the final rule was implemented there have already been lawsuits brought on by 1099 independent contractors. And it’s costing facilities. The Department of Labor implemented a ruling outlining 6 questions to ask yourself when deciding if the position needs to be filled with a 1099 contractor or W2 employee. Every healthcare community must review these questions when deciding who to partner with.

Poor Communication

Since 1099 independent contractors don’t report to anyone there’s very little they can do to help you. Besides technical issues within the app, they don’t offer a lot of communication besides automated messages and answering machines. 

Healthcare is an unpredictable industry, and sometimes a robot can’t fix your issues. Partnering with a W-2 agency like Cascade Health Services gives you a better opportunity to explain your unique needs, and have a full team of people to help problem-solve for you. A staffing agency’s job is to find what you need, not just plug a hole.  

Inconsistent Care

1099 staffing agencies have no vetting process. If you can fill out an application, and pass a background check you’re hired. This can lead to low-quality 1099 independent contractors. Without a standardized approach to hiring, oversight, and performance evaluations, independent contractors may not adhere to the policies within your community.

And since there are no management teams to deal with this issue, more needs to be done.

Quote from COO about the risks of 1099 independent contractor

What is the best Healthcare Staffing Model?

W-2 agencies reign supreme when it comes to staffing models. Since they employ every nurse who works for them, they offer a lot more control and oversight. Agencies like Cascade Health Services go above and beyond when it comes to staffing. Instead of filling holes in schedules, they help provide solutions to staffing shortages.

Staffing managers and Human Resource (HR) departments are the backbone of a W-2 agency and they provide incredible benefits to healthcare organizations of all sizes. 

Here are some of the benefits staff managers and HR professionals bring that set W-2 employees apart from 1099 independent contractors.

Enhanced communication

Cascade Health Services employs 24/7 staff managers. They’re here to help bridge the gap between healthcare communities and agency staff. They are also here to help problem-solve for communities so they can focus on providing patient care.

This also helps ensure all our employees are updated on facility-specific requirements and policies. 


HR teams are obsessed with compliance they ensure all credentials are up-to-date and valid. Cascade Health Services is Joint Commission Certified. This means we hold our employees to a higher standard than an app with 1099 independent contractors. 

Enhances Control and Oversight

By utilizing W-2 staffing agencies, healthcare organizations have increased control and oversight over PRN staff. W-2 employees can be closely monitored and trained by agencies to ensure they adhere to each organization’s protocols and standards.  

 “I believe if healthcare management truly understood the risks they are exposing their facilities to by using 1099 independent contractors through marketplace apps, they would consider them entirely untenable and cease using them outright.” – Kellen Weissenbach, COO at Cascade Health Services.

While utilizing 1099 independent contractors through a marketplace app may appear advantageous, healthcare organizations must carefully consider the risks involved. Limited control and oversight, compliance and legal liabilities, fragmented communication, and inconsistent quality of care pose significant dangers to the facilities and the patients they serve.

What we do

Allied Healthcare & Nurse Staffing Services

Founded in 1988, Cascade Health Services is a leading healthcare and nurse staffing agency in the United States. More than 2,500 nurses, nurse aides and allied health professionals work with Cascade across the nation. We are hiring RN, LPN, LVN, CNA, CMA, CMT and other healthcare professionals for immediate Travel, Contract and PRN jobs in Nursing Homes, Long Term Care Centers, Skilled Nursing Facilities, Assisted Living, Rehabilitation Centers and Hospitals.