Medicaid: Thousands of Medicaid Providers Abuse the Federal Tax System is the title of a new report from the Government Accountability Office.
The GAO found that of “over 30,000 Medicaid providers, about 5 percent of those paid in fiscal year 2006, had over $1 billion of unpaid federal taxes. These 30,000 providers were identified from a nonrepresentative selection of providers from seven states: California, Colorado, Florida, Maryland, New York, Pennsylvania, and Texas. This $1 billion estimate is understated because some Medicaid providers may have understated their income or not filed their tax returns. ”
A Wall Street Journal article says that Medicaid abuses present a greater challenge than Medicare. Medicare is a strictly federal program, but Medicaid is a joint program with more layers of bureaucracy. “Washington sends funding to states, which administer the program and make payments to providers…. [F]ederal tax officials say it is difficult to include Medicaid payments in a federal levy system…. The GAO said it is ‘concerned that CMS stated it would be inappropriate’ to keep tax cheaters out of Medicaid.”
The November 14, 2007 report was requested by the U.S. Senate Committee on Homeland Security and Governmental Affairs, Permanent Subcommittee on Investigations.