The Trump administration’s crackdown on Medicare and Medicaid fraud is generating headlines. But another massive Medicaid fraud story has been hiding in plain sight: politically connected blue-state union bosses “skimming” dues from Medicaid payments intended for home care providers.
The administration has already correctly identified the problem, now it just needs to use the tools it already has to stop this illegal diversion of tax dollars.
When Medicaid cuts checks for home care providers, who frequently are family members looking after disabled loved ones, that money is supposed to go straight to the provider. In fact, a rule from the Centers for Medicare and Medicaid Services in 2018 clarified that, under federal law, assigning Medicaid payments to a third party (such as a union) is prohibited.
Nevertheless, union bosses, led by the radical Service Employees International Union, enlisted leftist state governments to intercept a share of those Medicaid checks before caregivers ever saw the money. The result: well over $100 million a year in Medicaid monies being improperly diverted from paying for care for the disabled to bankrolling the radical political agenda of SEIU bigwigs.
The Biden administration even ran cover for the scheme — repealing the 2018 rule in 2022 — to ensure the SEIU and other union allies could use the money to back their hand-picked candidates. Never mind that a CMS rule cannot overturn the clear text of the law that doesn’t allow such dues skimming.
Recently, CMS Administrator Mehmet Oz took the step of sending letters to nine states, demanding proof that home care workers explicitly consented before the state deducted union dues from their Medicaid payments. Dr. Oz’s letters state there is “no grace period” for noncompliant states, but there is no indication that the states have stopped any deductions by the letters’ Aug. 6 deadline.
That is why the Trump administration needs to go further to stop this improper diversion of Medicaid funds.
Under two U.S. Supreme Court decisions, both argued and won by National Right to Work Foundation staff attorneys, such funds cannot be deducted without a provider’s affirmative consent. But given numerous examples of union-dominated states like California ignoring this requirement, even in the face of widespread evidence that unions collected “authorizations” under threats and fraud, it is clear such states cannot be counted on to police themselves.
The more comprehensive solution is for the Trump administration to demand states adhere to federal law’s clear prohibition, as clarified in the 2018 rulemaking, and stop any diversion of Medicaid payments to the SEIU or other unions. The statute is clear: “no payment … shall be made to anyone other than … the person or institution providing such [Medicaid-funded] care or service, under an assignment or power of attorney or otherwise.”
Enforcing the law by requiring that all Medicaid money go to the providers themselves doesn’t stop providers from voluntarily paying union dues. It just means unions have to collect their own dues, and providers have control of their money so they can decide if they want to send dues to the union, the same way millions of people regularly pay monthly bills.
If the dues are as voluntary as California and the SEIU claims, then dues collections can be made outside the state Medicaid system without violating federal law’s prohibition on the diversion of payments.
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On the other hand, if states refuse to stop skimming dues, they are effectively admitting that Medicaid providers would never have agreed to such deductions voluntarily. If not, why fight so hard for the skim to continue?
If California and other union-dominated states refuse to stop diverting Medicaid funds to unions and union PACs, then federal Medicaid funds should be withheld until they agree to stop the illegal dues skim. Medicaid fraud is bad enough, but states allowing union bosses to illegally siphon tax dollars that are then used to buy political influence is just plain corrupt.
Mark Mix is president of the National Right to Work Foundation and National Right to Work Committee.