GAO: Providers owe $2B in taxes, still get Medicare dollars

Healthcare providers owe the government more than $2 billion in back taxes, but those that owe are still allowed to collect Medicare payments, according to research by the Government Accountability Office. The GAO, which has looked at provider back taxes for years, told Congress that in 2006, more than 27,000 nursing homes, hospitals, physicians other providers owed back taxes while collecting Medicare reimbursement. That's about 6 percent of all Medicare providers. The bulk of the unpaid taxes are payroll taxes ($896 million), followed by individual income taxes ($581 million) and other taxes ($540 million).

Right now, the IRS uses an automated system to hold back a percentage of payments to any contractors who haven't paid taxes, but Medicare has no such system in place. However, CMS acting administrator Kerry Weems vowed that Medicare payments will be part of the IRS's program by October. If so, CMS has the potential to collect a huge volume of the uncollected $2 billion. After all, Medicare paid out $402 billion in benefits in 2006 alone.

To learn more about the GAO report:
- read this Washington Post piece

Related Article:
GAO: Thousands of Medicaid providers haven't paid taxes

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