JLF Triangle Blog

GAO: Feds Send Medicaid Payments To Providers That Owe Back Taxes

You just cannot make it up. Here is the latest on your tax dollars at work. And the report only looked at three states.

In a report being released Thursday, the Government Accountability Office says Medicaid payments to doctors, hospitals and other providers aren’t technically considered federal funds, since they’re funneled through state health care programs.

Because of that glitch, the IRS can’t just shut off the payment spigot to collect tax debts. Investigators only looked at three states, so the full extent of the losses is even greater.

One dentist who received more than $100,000 from Medicaid while owing back income taxes was spending money on fine dining, trips, spas, shopping and wine, the report said.

In another case, a medical transport company received more than $1 million from Medicaid while owing millions in unpaid payroll taxes for its employees. Not paying the payroll taxes is a violation of federal law.

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