The Trump administration told states on Thursday to stop diverting Medicaid funds for home healthcare providers to unions.

The change will cut off a key source of funds for public sector labor groups, who have made a major push over the last decade and a half to get friendly states to declare the providers public employees and put them under collective bargaining contracts, often with little input from the providers themselves.

Many states use Medicaid funds to subsidize home healthcare providers, who are often people taking care of ailing family members at home. A new final rulemaking issued by the Department of Health and Human Services strictly limited the cases where states could divert those Medicaid payments to third parties, removing unions from the list.

"[O]ne likely impact of this rulemaking is that states will stop redirecting a portion of home-care workers’ payments to unions for membership dues. We estimated that unions may currently collect as much as $71 million from such assignments," the ruling stated.

Labor groups, such as the Service Employees International Union and the American Federation of State, County and Municipal Employees, have pushed for more than a decade to get friendly governors and legislatures to declare the providers state employees eligible for organizing, despite the fact that most work from home.

Some providers objected to the states' actions, arguing it provided no benefit to them while sending part of their funds to unions. The Supreme Court ruled in the 2014 decision Harris v. Quinn that Illinois state-subsidized home healthcare workers were not state employees eligible for unionization, voiding a 2004 policy by then-Gov. Rod Blagojevich, a Democrat and staunch union ally. The case was limited to Illinois, however, and unions have been careful to avoid any follow-up cases that might expand on Quinn.

The National Right to Work Legal Defense Foundation, which represented the providers in Harris v. Quinn, applauded Thursday's announcement. "Today, this long-overdue rule closes the illegal loophole created by the Obama administration that that has provided union officials with legal cover to siphon hundreds of millions of dollars in Medicaid funds into union political and lobbying activities," said the group's president, Mark Mix.

SEIU provided a statement from Carmen Roberts, a California home-care worker, who argued the rule change was a "blatant attempt to silence home-care workers and to undermine our dignity in the workplace. But we will continue to speak out together with seniors, people with disabilities and Fight for $15 and Union activists for the rights of all working people to form strong unions and the respect that our essential work deserves."

Freedom Foundation, a conservative nonprofit organization, estimated last year that eight states — California, Connecticut, Illinois, Massachusetts, Minnesota, Oregon, Vermont and Washington — received nearly $150 million in union dues in 2017 that would have otherwise gone directly to 350,000 caregivers. It estimated that $1.4 billion in Medicaid funds has gone to unions since 2000.

Thursday's rulemaking would not prevent the providers from joining unions if they wished but would require them to sign up and make the regular dues payments on their own.

“This final rule is intended to ensure that providers receive their complete payment, and that any circumstance where a state redirects part of a provider’s payment is clearly allowed under the law," said Centers for Medicare and Medicaid Services Administrator Seema Verma.

Pamela Harris, the lead plaintiff in Harris v. Quinn, told the Washington Examiner that the change would ensure that Medicaid dollars went directly to those in need. "On behalf of my family and countless others who are providing care for their disabled loved ones, I would like to express my gratitude to our administration for their leadership and applaud the work of the men and women who made this happen," she said.

[Also read: DOJ finalizes argument for gutting Obamacare]