GAO: Uncle Sam Paying Medical Providers But Not Vice Versa

June 20, 2008

Medicare pays out approximately $400 billion in benefits to 43 million Americans every year. Of course, some of this tax money comes from medical service providers, who send taxes to the IRS in April and receive payments all year long. At least, that is how it is supposed to work. Today’s Wall Street Journal reports on a Government Accountability Office (GAO) study released June 13:

27,000 doctors, hospitals, nursing homes and hospices paid by Medicare failed to pay more than $2 billion in federal taxes in 2006.

Now that is what I call cutting out the middleman. Apparently it is not the first time this back-and-forth in taxes has become a one-way flow:

The report, ordered by the Senate Homeland Security and Governmental Affairs Committee’s investigations panel, is the result of the third tax-fraud probe involving health-care providers. Last year, the GAO found 21,000 of Medicare’s doctors and outpatient services owed $1 billion in taxes through September 2005, and 30,000 providers of Medicaid services, the state-federal health-care program for the poor, owed more than $1 billion through September 2006.

Of course, if cutting out the middle man-as I humorously suggest-was a noble effort to reduce wasteful government paper pushing, they should have stopped receiving payments from Medicare. But I am sure that was just a minor detail they overlooked. A $2 billion minor detail.

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