Biden Administration Proposal Would Renew Union Skimming From Medicaid Payments

Home base primary care pharmacist Erin Emonds fills syringes with the allotted number of doses for the at home visits for the day at the US Department of Veterans Affairs' VA Boston Healthcare System's Jamaica Plain Medical Center in Boston, on March 4, 2021. (Joseph Prezioso/AFP via Getty Images)

Biden administration officials at the Department of Health and Human Services (HHS) want to renew an Obama-era regulation that allowed labor unions to skim an estimated $1 billion from Medicaid payments to home health care providers.

The proposal “will place a federal stamp of approval on abusive state and union practices to pressure, mislead, and ultimately lock home-care providers into assigning portions of their Medicaid payments to union special interest groups and associated funds,” the National Right to Work Legal Defense Foundation (NRTWLDF) said in a comment on the plan.

“Such assignments are generally irrevocable for a year or more, resulting in the diversion of Medicaid payments to third parties for political advocacy and other purposes over the express objections of home-care providers,” the NRTWLDF said.

The Biden proposal from HHS’s Centers for Medicare and Medicaid (CMS) would rescind a 2018 Trump administration rule that upheld the intent of Congress to deny third parties, including unions, access to Medicaid payments to providers of home-based health care for disabled persons.

Despite a federal law—Section 1902(a)(32) of the Social Security Act—that specifically prohibited assignment of payments to third parties, the Obama administration adopted a special exemption in 2014 that permitted them for labor unions. The only exceptions recognized by the law cover court orders for wage garnishments, child support orders, and judgments for debts owed to states.

The U.S. Supreme Court also ruled in 2014 that compulsory union payments violate the First Amendment rights of home health care workers who prefer not to support union activities.

Home health care providers in more than a dozen non-right-to-work states faced the requirement that a portion of their payments be provided to fund union activities, according to NRTWLDF. Those states were able to enforce such requirements by automatically deducting such fees from Medicaid payments, even though doing so violated federal law regarding Medicaid funds.

The skimming equaled an estimated $200 million annually prior to the Trump rule taking effect, according to the State Policy Network. There are more than 400,000 home health care providers in the U.S.

“Prior to the [Trump] 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,” the NRTWLDF said in a statement announcing the filing of its comments on the HHS proposal earlier this week.

“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,” the NRTWLDF said.

A spokesman for the SEIU didn’t respond to a request for comment by The Epoch Times. When the Trump administration proposed its rule in 2018, however, the SEIU issued a statement opposing the proposal.

In that statement, SEIU described the proposal as “a transparent attempt to interfere with workers’ freedom to choose to join together in a union and advocate for higher wages, better training, and basic benefits like affordable healthcare and paid sick time that are crucial to ensure quality home care for our parents, grandparents, and children.”

The SEIU includes among its membership hospital and nursing home workers, particularly in the state of California.

The NRTWLDF said in its comment that “the proposed rule will undermine the purposes of Home and Community Based Service (HCBS) programs and facilitate abuses of home-care providers’ rights. HCBS programs exist to provide services to persons with disabilities so that they can live in their homes and avoid institutionalization.”

“The proposed rule will divert Medicaid monies from this noble cause to fund union political advocacy, both by union political action committees and by exclusive union representatives (whose conduct is inherently political),” it wrote.

“It is a gross misuse of federal Medicaid funds, as well as morally appalling, for CMS deliberately to funnel millions in federal funds, meant to pay for care for disabled persons, to political organizations for partisan political purposes.”

Unless Congress acts to prevent it or the issuing department changes course, the proposed HHS rule will become effective by the end of 2021.