Providers file motion to intervene after union bosses and their allied AGs filed a lawsuit seeking to block the Center for Medicaid Services’ rule to end illegal skim

San Francisco, CA (June 21, 2019) – A group of 10 Medicaid providers have moved to intervene in a recently filed federal lawsuit challenging a rule adopted by the U.S. Centers for Medicare & Medicaid Services (CMS) that would stop union officials from skimming union dues directly out of taxpayer-funded Medicaid payments. AFSCME and SEIU union officials, and the pro-Big Labor Attorneys General of California, Connecticut, Massachusetts, Oregon and Washington State, recently filed the challenge to the rule, which was adopted in May.

The providers filed their motion with free legal representation from staff attorneys at the National Right to Work Legal Defense Foundation and the Washington State-based Freedom Foundation. The providers support the Trump Administration’s rule because it helps ensure their right not to fund union activities in violation of their First Amendment rights. They argue that the blanket prohibition in the Medicaid statute against assigning payments to third parties has no exemption for assignments to unions and their PACs, and thus the new rule simply puts the Medicaid regulations back into alignment with the law.

The Obama Administration attempted in 2014 to provide union officials with legal cover to siphon over $100 million every year in Medicaid funds into union political and lobbying activities by a special exemption for union officials to the Medicaid regulations. All told, union officials siphoned off a total of more than $1 billion in Medicaid funds over the past 15 years.

In 2014, the U.S. Supreme Court held in the National Right to Work Foundation-won Harris v. Quinn case that it is unconstitutional for states to force homecare providers receiving Medicaid funds to pay union fees. However, citing the Obama rule, union officials continued siphoning the money from hundreds of thousands of providers, including many who attempted to stop the union dues seizures and others who were unaware they could not be required to make the payments. Some, while attempting to stop the payments, found that union agents had forged their signatures to authorize the payments.

In August 2018, the Foundation submitted formal comments to CMS supporting the agency’s proposal that would clarify that the diversion of Medicaid payments from providers to third parties, including unions, violates federal law. Those recommendations were finally adopted in early May, and are set to go into effect on July 5, 2019.

“Providers are right to oppose this lawsuit’s blatant attempt to enable union bosses to skim union dues in violation of federal law,” said National Right to Work Foundation President Mark Mix. “Contrary to the wishes of union bosses and their political allies, union officials are not entitled to a special exemption from federal law.”

“Nothing in this rule stops union officials from collecting voluntary dues from voluntary union members, it just says that taxpayers and government shouldn’t act as the bagman for such dues payments,” added Mix. “The hysterical response by Big Labor and its political allies to this simple clarification of what is longstanding federal law suggests they are worried that many members union officials claim to represent won’t pay dues once they realize they have a choice.”

The National Right to Work Legal Defense Foundation is a nonprofit, charitable organization providing free legal aid to employees whose human or civil rights have been violated by compulsory unionism abuses. The Foundation, which can be contacted toll-free at 1-800-336-3600, assists thousands of employees in about 200 cases nationwide per year.