Freedom Foundation

Wisconsin Senator Ron Johnson tackles Medicaid dues skimming

U.S. Sen. Ron Johnson (R-Wisconsin), who chairs the Senate Homeland Security and Governmental Affairs Committee, wrote a letter to the Centers for Medicare and Medicaid Services (CMS) seeking, “…information about the practice of government employee unions ‘skimming’ federal dollars from Medicaid beneficiaries before the payments are passed on to the recipients.”

Housed within the Department of Health and Human Services, CMS is the agency responsible for administering and overseeing Medicaid.

As the Freedom Foundation has documented, states around the country — including all three West Coast states in which the Freedom Foundation operates — withhold union dues from payments to home care aides serving Medicaid-eligible disabled and elderly clients.

Even though the U.S. Supreme Court’s 2014 decision in Harris v. Quinn established that caregivers could not be forced to pay union dues, states’ practice of acting as dues collectors for unions has enabled a host of coercive practices designed to keep caregivers paying dues to politically connected unions.

Beginning last year, the Freedom Foundation began calling for federal action to put a stop to the diversion of Medicaid funds to unions, with op-eds on the subject published in the Washington Examiner, Bend Bulletin, and Orange County Register. After speaking at the Freedom Foundation’s 2017 annual dinners, former Wall Street Journal contributor and prominent CEO Andy Puzder penned an op-ed for Fox News echoing the call for federal intervention.

In the first sign of federal action on the issue, U.S. Rep. Cathy McMorris-Rodgers (R-WA) announced in January her intention to introduce legislation to put a stop to union dues skimming from Medicaid.

Sen. Johnson’s letter to CMS is a big step towards highlighting this important issue for federal regulators. The full text of the letter is available below:

Dear Administrator Verma:

The Committee on Homeland Security and Governmental Affairs is continuing to conduct oversight on the rising costs of the Medicaid program. I respectfully request information about the practice of union “dues skimming” from home health care Medicaid recipients.

In 2016, American taxpayers spent $565.5 billion on the Medicaid program. Although this funding is intended to help low-income families and the disabled, eleven states allow unions to classify personal home health care workers—including family caregivers—as government employees for the purposes of collecting union dues. This classification allows states to skim an estimated $200 million each year in union dues—taxpayer money that would otherwise go to the care of Medicaid recipients.

Federal Medicaid law prohibits payments for care to any entity other than the individual providing the care. In addition, in 2014, the Supreme Court held that states may not collect union dues from home health care providers without their consent. Even so, some home health care workers say that unions have been skimming dues without their consent.

I respectfully encourage CMS to review this practice and determine whether changes to law or regulation are necessary to ensure that Medicaid funds are provided to the program’s intended beneficiaries. In addition, in order to assist the Committee’s oversight of this issue, please provide the following information about the efforts of CMS to address “dues skimming” from home health care Medicaid recipients:

  1. Please explain what actions CMS is taking to prevent states from “skimming” union dues from Medicaid payments without the consent of the home health care provider.
  2. For each fiscal year since 2009, please provide the amount of Medicaid funds intended for home health care workers that states have diverted for union dues, organized by state and fiscal year.
  3. Please produce all legal memoranda, guidance documents, or other written material referring or relating to the diversion of Medicaid funds for home healthcare services to third parties other than the healthcare provider.

Please respond as soon as possible but no later than 5:00 p.m. on May 14, 2018, so that the Committee may begin to receive responsive material.