A recent Government Accountability Office report highlights another way Medicare keeps its administrative costs down: sending checks to providers without bothering to check whether those providers owe back taxes.
According to today’s Washington Post:
Health‐care providers are allowed to collect millions of dollars in federal Medicare payments each year despite owing the government more than $2 billion in back taxes, congressional investigators said yesterday.
The Government Accountability Office found that more than 27,000 nursing homes, hospitals, physicians and other providers flouted the tax system while collecting Medicare fees in 2006. That represented 6 percent of all providers [who participate in] Medicare.…
Some cases cited in the new report were especially egregious. They included a nursing home operator with a history of asset concealment schemes who filed $15 million in Medicare claims while owing $7 million in unpaid taxes and establishing a charitable foundation that purchased luxury cars for the owner’s personal use.
And there was the hospital that collected $21 million in Medicare fees while owing $15 million in taxes, mostly for failing to forward to the Internal Revenue Service payroll taxes that were withheld from employees’ checks.
What’s that? This seems more like the IRS’s responsibility than Medicare’s? Perhaps. But even taking that into consideration, Medicare is still delinquent:
The IRS has an automated system to hold back a portion of payments to contractors who are delinquent on their taxes. Medicare officials have been slow to join, but Kerry Weems, acting administrator for the Centers for Medicare and Medicaid Services, said that all Medicare payments will be part of the program by October. “We take this issue very seriously,” he said.