The following article is from the National Right to Work Legal Defense Foundation’s bi-monthly Foundation Action Newsletter, November/December 2021 edition. To view other editions of Foundation Action or to sign up for a free subscription, click here.

Comments: Federal law prohibits diverting Medicaid funds away from homecare providers

Harris v. Quinn plaintiff Susie Watts (left) said her victory against forced dues for homecare providers was really a win for her disabled daughter Libby: “It’s not even about me as a homecare provider…They’re her benefits that are being siphoned off.”

WASHINGTON, DC – The National Right to Work Foundation filed formal comments with the Centers for Medicaid and Medicare Services (CMS), a division of the Department of Health and Human Services, asking the agency to reject an attempt to authorize state officials to redirect Medicaid funds into union coffers.

The Biden Administration’s pending proposal would overturn a 2018 Foundation-backed rule that confirmed that federal law prohibits union officials from skimming union dues payments from Medicaid funds intended for those who provide home-based assistance to people with disabilities. The Foundation’s comments argue that the Trump-era rule simply ensured that Medicaid regulations conformed to long-standing statutory law, and that the federal statute governing Medicaid prohibits diverting payments to any third parties, including unions and union PACs.

Under Obama, Union Bosses Cashed Out at Expense of Medicaid Recipients

The comments also detail the Obama Administration’s role in permitting union officials to violate the law, explaining that a special exemption created in 2014 by the Administration gave union officials legal cover to siphon upwards of $1 billion from Medicaid payments.

Union officials, especially at the Service Employees International Union (SEIU), have long used deceptive and even unconstitutional tactics to divert taxpayer-funded Medicaid payments into union coffers. Before the Supreme Court’s ruling in the Foundation-won 2014 Harris v. Quinn decision, homecare providers in over a dozen states were required to fund union activities. State governments automatically deducted fees from providers’ Medicaid payments even though such union dues diversions violated federal law regarding Medicaid funds. In Harris, the court held that mandatory union payments violate the First Amendment rights of homecare workers who do not wish to support union activities. Even after the Harris decision was issued, union officials continued seizing money from hundreds of thousands of providers across the country under cover of the Obama-era rule creating an exception to the prohibition against skimming Medicaid funds. Union officials used numerous underhanded tactics to keep the dues skim going, including, according to providers’ reports, claiming the dues payments were mandatory, blocking or ignoring requests to stop the deductions, and even forging signatures to authorize them.

Unlawful System Exists to Subsidize Union Politics

“[Home and Community Based Service] Medicaid payments are supposed to pay for care for the severely disabled,” the Foundation’s comments state. “Diverting these payments to third-party special interests to subsidize their political agendas, lobbying and recruitment campaigns is as unconscionable as it is unlawful” under the federal law governing Medicaid.

“What you’re seeing is a misuse of Medicaid funds being steered away from paying for care to disabled people and being used for politics,” Foundation staff attorney William Messenger, who argued Harris, told The Washington Free Beacon in its report about the Foundation’s comments. “They set up an entire system to pressure Medicaid providers to assign a portion of their Medicaid funds over to” union officials and their political action committees.

Under the 2018 rule, union officials may still collect payments from caregivers who voluntarily support union activities, but cannot use taxpayer-funded government payment systems to deduct the dues from Medicaid payouts. Voluntary union supporters could still personally make payments just as millions of Americans make regular payments to private businesses or other organizations.

“The Biden Administration’s plan to reauthorize the Medicaid union dues skim is a cynical ploy to allow their political allies to divert funds that federal law makes clear should be going to help those who are homebound or have significant disabilities,” observed National Right to Work Foundation Vice President Patrick Semmens. “Homecare providers’ own free choice should determine whether union bosses receive their support, not politically motivated, federally imposed special exemptions.”