GAO Reports Tax Evasion by Medicare Contractors
The Government Accountability Office (GAO) published a report on March 19th detailing the amount of unpaid taxes attributed to healthcare providers treating or serving Medicare participants, including physicians. The GAO estimates that five percent of healthcare suppliers who billed Medicare during the first three quarters of 2005 failed to pay taxes potentially accounting for over $1 billion in unpaid taxes. Almost half the unpaid monies are payroll taxes not sent to the Internal Revenue Service (IRS); which is a federal felony.
In 2001, the GAO recommended coordination between Health and Human Services, which oversees Medicare, and the Treasury Department. The GAO suggested the effort to facilitate identification of delinquent tax payers and procurement of owed tax payments by garnishing payments to providers from Medicare. At that time, the two agency’s computer systems were incompatible. An upgrade to HHS computers in 2004 eliminated this problem.
The report is the result of an ongoing investigation of unpaid federal taxes attributed to government contractors.
March 20, 2007 Related topics: Legal & legislative, Ethics & Scandals