Worker Advocate: Biden Dues Skim Rule Proposal Violates Federal Law by Funneling Medicaid Funds to Union Officials

medicaid funds

Comments: Federal law specifically prohibits diverting financial assistance for homecare providers to third parties such as unions

Washington, DC (September 28, 2021) – The National Right to Work Legal Defense Foundation, a nonprofit organization dedicated to protecting America’s working men and women from the abuses of compulsory unionism, filed comments today urging the Centers for Medicaid Services (CMS) not to rescind a 2018 Trump Administration rule that made clear that federal law prohibits union officials from skimming union dues payments from Medicaid funds intended for those who provide home-based assistance to disabled people.

Foundation attorneys argue in the comments that the Medicaid statute’s blanket prohibition on assigning payments to third parties has no exemption for assignments to unions and their PACs, and that the Trump-era rule simply ensured that Medicaid regulations conformed to longstanding law. Prior to the rule, union officials had siphoned upwards of $1 billion from Medicaid payments, an effort which had been aided by the Obama Administration’s 2014 creation of a special exemption for union officials from Medicaid regulations.

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, which found that mandatory union payments violate the First Amendment rights of homecare workers who do not wish to support union activities, homecare providers in over a dozen states were required to fund union activities. States automatically deducted fees from Medicaid payments even though such union dues diversions violated federal law regarding Medicaid funds.

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. Many providers attempted to stop the union dues seizures, while others were unaware they could not be required to make the payments. Some, while attempting to stop the payments, even found that union agents had forged their signatures to authorize the deductions.

“[Home and Community Based Service] Medicaid payments are supposed to pay for care for the severely disabled. 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 Subsection (a)(32)’s unambiguous direct payment requirement,” the comments state. “CMS’s opposite intent in its 2021 [Notice of Proposed Rulemaking] to condone this corrupt practice by inventing a new regulatory exception to the statute is inconsistent with Subsection (a)(32) and is arbitrary and capricious.”

Under the Trump-era rule, union officials may 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 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 bald attempt 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 President Mark Mix. “Homecare providers’ own free choice should determine whether union bosses receive their support, not politically-motivated, federally-imposed special exemptions.”


This article was originally published on the National Right to Work Legal Defense Foundation website. If you have questions about whether union officials are violating your rights, contact the Foundation for free help. To take action by supporting The National Right to Work Committee and fueling the fight against Forced Unionism, click here to donate now.


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