CMS Proposes New Payment Rule That Will Negatively Affect Some Employee Labor Organizations

This is a brief post about a CMS proposed rule that sort of slipped under the radar last week.  But it has the potential to raise some eyebrows because it is clearly designed to make it harder for labor unions to collect dues from some home health care workers who are paid directly by Medicaid.

Section 1902(a)(32) of the Social Security Act prohibits reassignment of Medicaid funds, and only allows Medicaid funds to be paid directly to individuals performing health care services, with limited exceptions.  For example, payment can be made to the employer of a physician or a dentist.  Payment can also be made to the business agent (such as a billing service) of the provider.  But the statute and regulations contain very few other exceptions.

In 2014, CMS created an additional exception.  Under that policy, a state Medicaid plan could pay “a third party on behalf of [an] individual practitioner” for services such as health insurance, skills training, and other benefits.  Press reports at the time suggested that the new exception was intended to allow unions organizing health care workers to collect union dues for home health care aides directly from Medicaid payments for services provided by these workers.  Thus, payment went directly to the union from Medicaid – seemingly in contravention of the anti-reassignment rule in the statute.

On July 12, CMS issued a proposed rule that would repeal the 2014 policy.  CMS said that the policy “is overbroad, and insufficiently linked to the exceptions expressly permitted in the statute.”  Because Congress seems to “have foreclosed” the policy, CMS is now proposing to reverse it.

CMS notes in the proposed rule that unions organizing health care workers may have collected $71 million as a result of the reassignment that the 2014 policy permits.  The agency goes on to say that one effect of the proposed rule, if finalized, would be that states would stop reassigning homecare worker dues to unions.

The agency is soliciting comments for 30 days, through August 13, 2018.

Leave a Reply

Your email address will not be published. Required fields are marked *